Introduction To Management Consulting

Licensed to:
Management Consulting
A Guide for Students
David Biggs
Publishing Director: Linden Harris
Publisher: Thomas Rennie
Development Editor: Jennifer Seth
Editorial Assistant: Charlotte Green
Content Project Editor: Alison Cooke
Head of Manufacturing: Jane Glendening
Senior Production Controller: Paul Herbert
Marketing Manager: Amanda Cheung
Typesetter: KnowledgeWorks Global, India
Cover design: AdamRenvoize
#2010, Cengage Learning EMEA
ALL RIGHTSRESERVED. No part of this work
covered by the copyright herein may be reproduced,
transmitted, stored or used in any formor by any
means graphic, electronic, or mechanical, including
but not limited to photocopying, recording, scanning,
digitizing, taping, Web distribution, information
networks, or informationstorageandretrieval systems,
except aspermittedunder Section107or 108of the
1976UnitedStatesCopyright Act, or applicable
copyright lawof another jurisdiction, without theprior
writtenpermissionof thepublisher.
While the publisher has taken all reasonable care in
the preparation of this book, the publisher makes no
representation, express or implied, with regard to the
accuracy of the information contained in this book and
cannot accept any legal responsibility or liability for
any errors or omissions fromthe book or the
consequences thereof.
Products andservices that arereferredto inthis book
may beeither trademarks and/or registeredtrademarks
of their respectiveowners. Thepublishers andauthor/s
make no claimtothese trademarks.
For product information and technology assistance,
contact emea.info@cengage.com.
For permission to use material from this text or product,
and for permission queries,
email clsuk.permissions@cengage.com.
The Author has asserted the right under the
Copyright, Designs and Patents Act 1988 to be
identified as Author of this Work.
British Library Cataloguing-in-Publication Data
A catalogue record for this book is available fromthe
British Library.
ISBN: 978-1-4080-0791-4
Cengage Learning EMEA
Cheriton House, North Way, Andover,
Hampshire, SP10 5BE, United Kingdom
Cengage Learning products are represented in
Canada by Nelson Education Ltd.
For your lifelong learning solutions, visit
www.cengage.co.uk
Purchase your next print book, e-book or e-chapter
at www.CengageBrain.com
Printed in Croatia
1 2 3 4 5 6 7 8 9 10 12 11 10
Copyright 2010 Cengage Learning, Inc. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part.
Licensed to:
PART I
An introduction to management
consulting
1 Management Consultancy: The Context of the
Industry
2 Benefits and Critiques of Consultancy
3 Different Types of Consultancy
1
Licensed to:
The first part of this book introduces the topic of management consultancy.
Chapter 1 creates a context for the book giving a historical overview of the in-
dustry. This is useful in providing a background to the industry describing the
factors that led to the rise or demise of consultancies over the years.
Chapter 2 takes the context further defining management consultancy as both
an industry and practice. It initially concentrates on the concept put forward by
the Management Consultancies Association of adding value. Criticism of man-
agement consultancy is introduced here from both an academic and practitioner
standpoint. Impression management, management rhetoric and related concepts
are critically appraised using the latest research providing a critical understanding
of consulting. The chapter then goes back to basics and asks the fundamental ques-
tion, Why use consultants? This question is answered using a well-known model
in psychology, the Johari window, but applied to an organizational setting. The
chapter then details research of what consultants and clients themselves have
agreed onWhy use consultants?
The final chapter in this section examines the different types of consultancies in
todays global economy. The issue of size is introduced, with the larger consultan-
cies compared with more specialist organizations. Different fields of consultancy
activity are detailed examining assignments for markets which include: SMEs,
public sector, private sector and international.
2 Part I An introduction to management consulting
Licensed to:
CHAPTER 1
Management consultancy: The
context of the industry
Learning Objectives
At the end of this chapter students will be able to:
l Understand the early origins of management consultancy and the key
figures involved
l Understand that applying solutions that fitted in with the client need
encouraged the early industry
l Be able to describe external events that stimulated the industry
l Understand patterns in the industry such as how the 70s and 80s were
similar to earlier periods of growth in the industry
l Recognize the context of the management consultancy industry today
The early history of McKinsey & Company
1920s
Management theory was still in its infancy when
James O. McKinsey (or Mac, as he was known by
friends and colleagues) founded the firm that
bears his name in 1926. He had left his academic
career as a professor of accounting at the Univer-
sity of Chicago to build a firm that provided finance
and budgeting services, but quickly gained a repu-
tation for providing advice on organization and
management issues.
Mac was determined to help senior manage-
ment in American companies solve their most im-
portant business problems. In an era when
management engineers were largely efficiency
experts, Mac set out to enlarge the professions
scope by persuading clients that his young firm
could not only help inefficient companies but
also assist healthy companies in reorienting
themselves to thrive in a turbulent business
environment.
"
Mini Case Study 1.1
3
Licensed to:
Introduction
As our opening case study demonstrates, the management consultancy industry
has an extensive history that can be traced back even further than the 1930s to the
nineteenth century (Ferguson, 2002). This chapter details the fascinating history of
the management consultancy industry using academic sources and material from
well-known consultancies. This involves examining how consultancies have
thrived, survived or died in a notoriously demanding industry. In detailing this
history, the text is able to describe the context of the industry, which then serves as
a background for many of the following chapters.
The History of Management Consultancy
The early years
With the onset of the industrial revolution in late eighteenth century Britain, the
sharing of management knowledge and ways to encourage productivity were
1930s
In 1933, the arrival of Marvin Bower provided
James O. McKinsey with a strong advocate and a
fellow visionary. Bower held both a J.D. and an
M.B.A. from Harvard University. He adamantly be-
lieved that management consulting should be held
to the same high standards for professional con-
duct and performance as law and medicine.
Following Macs early death, Bower began to
carefully shape the firm into its present form by in-
sisting on a few core principles:
l Client interests must be placed before those of
the firm.
l Engagements should only be undertaken when
the value to the client was expected to ex-
ceed the firms fees.
l The firms ownership should be restricted to ac-
tive partners.
Firm members must be professionals trained
and motivated to do outstanding work and make
a permanent career with the firm. By the end of
the 1930s, under Bowers stewardship, the term
management consulting began to replace man-
agement engineering, and the professional
management consultant was born. Bower, who
later became managing director, served clients
until the late 1980s and remained a valued friend
and counsellor to the firm until his death in 2003.
1940s
World War II profoundly affected the American
business landscape, and our work shifted to issues
of national import as we helped several major
companies convert their production facilities to
support US troops.
As our client base continued to grow, we estab-
lished new offices in Chicago, Los Angeles, and
San Francisco. As we grew, so too did our commit-
ment to our one firm concept. We believed then
(and now) that only by remaining a single organ-
ization, rather than a loose confederation of of-
fices, could we simultaneously deliver the best
possible client service and treat our own people
with utmost fairness and integrity.
Its our belief in one firm that allows us to view
our consultants as a global talent pool one we
can draw on as needed to provide the best service
to our clients, regardless of location.
Source: http://www.mckinsey.com/ Reproduced with permis-
sion of McKinsey & Company.
"
Licensed to:
common practices. Employees trained in one technique of manufacturing might
move to another employer and share what they had learnt (Evans, 2001; Fergu-
son, 2002). Internationally, this activity occurred also with less well developed
countries observing how things were done abroad. In Britain a century later in
1849, Harding and Pullein founded a partnership later joined by Frederick Whin-
ney that would be the British origins of Ernst & Young although the company
has extensive American roots being formed as separate partnerships in Chicago
and in Cleveland at the start of the twentieth century (Ernst & Young, 2009). So
what was happening in the US that made the industry possible? McKenna
(2006a) provides us with a good account of the early management consultancy
industry.
McKenna (2006a) explained that in the US during the 1870s, the traditional pat-
terns of employment were altered in what is described as a second industrial revo-
lution. Researchers and scientists often had to commercialize their own patents
externally and engineers started to sell their knowledge as consultants to the sci-
ence based industries (McKenna, 2006a). At the same time investments into these
industries produced much profit and as such directors of firms such as Standard
Oil, General Electric and AT&Temployed freelance engineers as either short-term
consultants or research staff thereby facilitating innovation within their industry
(McKenna, 2006a).
In the 1880s, two firms were created that can today be recognized as the begin-
nings of the management consultancy industry in the US (McKenna, 2006a). Dur-
ing 1886 a Massachusetts Institute of Technology (MIT) professor Dr Arthur
D. Little created the first management consultancy firm of his own name (Saint-
Martin, 2000). The company emphasized science, engineering and invention in its
original form. However in 2002, the company filed for bankruptcy although the
brand name was bought out by a French consultancy Altran Technologies so still
exists today (see http://www.adl.com/about-us.html for more details).
During the 1890s Frederick W. Taylor worked as a management consultant
(Riordan, 2009) performing studies at the time that would be influential in his
Scientific Management theories published in 1911 (Matthewman, Rose and
Hetherington, 2009). McKenna (2006a) stated that many individuals, such as
F.W. Taylor, worked at this time as consultants and many engineering based
firms started around this period. Indeed, Taylor may be thought of as the first
management consultant installing his systematic working practice for a fee
(Kipping, 2002).
It would be a while for the first management consultancies to emerge in the
US. Indeed, Arthur D. Little and other similar firms in the Boston region such as
Stone & Webster werent really the archetypal management consultancy and
were instead general management know how hired for a price (McKenna,
2006a). This was also the practice outside of the US although anecdotally some
argue that due to managers not wanting to appear incompetent and asking for
consultancy support the spread of management consultancy outside of the US
was limited.
Nevertheless, just before and during the early part of the twentieth century not-
able firms emerged in the US. During 1898, the practice that would become
Coopers & Lybrand and then PricewaterhouseCoopers was founded (Riordan,
2009). In 1914, Arthur Andersen and Clarence DeLany founded an accounting
practice that would become Arthur Andersen LLP. In addition, Edwin Booz
Chapter 1 Management consultancy: The context of the industry 5
Licensed to:
develops his own consultancy practice performing research for companies such as
Goodyear, the Canadian Pacific Railroad and Photographers Association of the
United States (Riordan, 2009). This company then becomes Booz and Company
and is regarded as one of the earliest true management consultancies (McKenna,
2006a).
In Europe, at the beginning of the twentieth century, organizational con-
sultancy became increasingly sort after by firms interested in what was hap-
pening in the US economy just as the actual process of manufacturing was
adopted by the US from Europe. In Sweden, Oskar Sillacuteen a professor at
the Stockholm School of Economics worked in both an academic role and also
part-time as a consultant in the newly established Industrial Office (Engwall,
Furusten and Wallerstedt, 2002). This meant that practical matters of business
in the growing Swedish economy could be addressed through academic in-
quiry and expertise a practice that still exists today (Wright, Clarysse, Lockett
and Knockaert, 2008) and that is highlighted in Thought Provoking points 1.1
and 1.2 below.
Academia in consultancy Positives
The link between academia and consultancy thrives today, with academics often be-
coming employed as part-time consultants. Academics who offer their skills as a con-
sultant are welcomed as they can provide a valuable academic rigor to consultancy
practices.
Academia in consultancy Negatives
Although individual academics working as consultants are often applauded, some
consultancies do not like it when universities in their own right as businesses bid for
management consultancy work. This is because universities invariably do not have
the same running costs of consultancies, e.g., the office space, support staff, IT, etc.
Universities in this regard are already being paid for by student fees and taxpayers
money and dont have to rely on consultancy income. Thus, there is unfair competi-
tion between consultancies and universities if the two compete for management
consultancy assignments.
During the early years of the twentieth century, well known promoters of
the theories of scientific management rose to fame in the US, including influ-
ential figures such as Henry Gantt who in 1910 published Work, Wages and
Profits (Riordan, 2009). Gantt was most famous for influencing the project man-
agement tradition with the chart that bears his name that marks time as a
Thought Provoking point 1.1
Licensed to:
resource. However, many of the proponents of F.W. Taylors theories, such as
Gantt, Frank Gilbreth, Harlow Person, Morris Cooke, etc., worked as independ-
ent consultants (McKenna, 2006a). Companies in the US such as Bedaux,
founded by a French immigrant in the US in 1916, went international to Eur-
ope and other regions from 1926 onwards (Kipping, 2002). Indeed, Bedaux
went from strength to strength and in the 1920s onwards spawned several sub-
sidiaries most notable of which was British Bedaux Ltd founded in the UK in
1926 (Ferguson, 2002).
In Europe, Berend Willem Berenschot joined an engineering practice in
1922 and strived to change the reputation of consultants who were seen as
reorganizers and drivers of efficiency (Karsten and van Veen, 2002). In 1925,
Berenschot actively supported the founding of an Institute for Efficiency
which enhanced the role of consultants within the Netherlands (Karsten and
van Veen, 2002). In Norway in 1928 Industrifondets Rasjonaliseringskontor
(IRAS) was established as the first consulting firm which would later be
merged into PA Consulting in 1989 (PA Consulting, 2009). Many of these
early European roots of consultancy were still strongly wedded to the prin-
ciples of scientific management, which came under increasing attack (Henry,
2002).
During the 1920s, America became increasingly disinterested with striving for
efficiency. This resulted in many of the firms wedded to scientific management
dying out during the 1930s (Henry, 2002). In Europe, Germany produced its own
version of scientific management called industrial rationalization. This was per-
ceived as a more humane version of scientific management which was subse-
quently adopted by other European countries (Ainamo and Tienari, 2002). The
exceptional companies that didnt perish with the fall in popularity of scientific
management tended to survive in the international market till the 1960s. These
surviving companies altered themselves drastically to survive, delivering more
services than those proposed by scientific management principles alone (Henry,
2002; McKenna, 2006a).
From the 1920s into the 1940s
In the early management consultancy industry it was the alliance between
engineers and accountants that paved the way forward rather than the rigid
principles of scientific management (McKenna, 2006a). In 1926, James
McKinsey founded a consultancy with his own name (see Mini Case Study
1.1 ) and soon after formed a partnership with Andrew Thomas Kearney
(Riordan, 2009). The firm described themselves at this point as consultants
and engineers but mainly completed auditing work for clients during this
early period (Riordan, 2009). This union is the start of the two consultancies
McKinsey & Company and A.T. Kearney both of which thrive in the twenty-
first century.
Booz Allen Hamilton also forms a partnership in 1929 hiring its third employee,
Jim Allen to form the core of the firm. Interestingly though, the initial formation of
the company is listed as 1914 (see Industry snapshot 1.1 for more details), a time
when Ed Booz allegedly shared an office with a man who sold bath towels
(Riordan, 2009).
Licensed to:
In the US during the 1930s, regulatory change increased the impact of the man-
agement consultancy industry. In 1929, the stock market crashed heralding the be-
ginning of the Great Depression (Djelic, 2004). McKenna argued that rather than
being a slow progress of evolution that strengthened the industry, it was the for-
mation of policies such as the Glass-Steagall Banking Act passed by the US Con-
gress in 1933 that stimulated the industry (McKenna 2006a). This legislation
prohibited commercial banks from collaborating with brokerage firms or partici-
pating in investment banking activities (Djelic, 2004). In essence, the act stopped
the practice of auditing by the banks putting this activity into the grasp of the early
management consultancy industry. At the same time, the US Securities and Ex-
change Commission prevented professionals such as lawyers, accountants, and
engineers from acting as consultants (McKenna, 2006a). This served as a stimulus
to the industry whereby the number of management consultancy firms grew from
an average of 100 in 1930 to 400 in 1940(ACME,
1
1964). Nevertheless, management
consultancies were still less common in the US and in Europe than other profes-
sionals such as accountants or engineers (McKenna, 1996).
However, by the end of the Second World War consultancies were increasingly
being used by corporate America (McKenna, 1996). Indeed, the growth rate of
management consultancies in the 1930s was about 15 per cent each year and this
continued on at about 10 per cent each year during the 1940s (McKenna, 1996;
2006). During this time, new consulting firms such as PAConsulting, Akins, Proud-
foot Consulting and Bossard Consultants were formed.
In 1939, James McKinsey died of pneumonia at the age of 48. This event caused
the original firm to split as Marvin Bower and Andrew Tom Kearney differed on
A summary of the history of Booz Allen Hamilton
In 1914, Edwin Booz had an idea. He believed that
companies would be more successful if they could
call on someone outside their own organizations for
expert, impartial advice. In doing so, he created a
new profession management consulting and the
firm that would bear his name, Booz Allen Hamilton.
In our role as consultants, Booz Allen has been
privileged to see, take part in, and catalyze many
key events in the spheres of both business and
government. We have been involved in the emer-
gence of modern corporations in the 1920s and
1930s, the Allied mobilization in World War II, the
beginning and end of the Cold War, the dawn
of the Space Age, the evolution of the personal
computer, the break-up of old telephone systems
and the creation of new ones, early public-private
sector work in the European Union, the emergence
of strong economies in Asia and South America,
the waves of deregulation in the 1980s, the move-
ment of environmental protection, and the birth of
the modern US National Football League.
In addition, we have been witness to or partici-
pant in the reunification of Germany, the Gulf Wars,
the response to the terrorist attacks of 9/11, the
rise and fall of business cycles, and dramatic shifts
in the ways that commerce, war, and peace have
been conducted.
Source: http://www.boozallen.com/about/history. Reproduced
with permission from Booz Allen Hamilton.
1
ACME served as the professional voice of the industry and still exists today rebranded as the Associ-
ation of Management Consulting Firms (AMCF)
Industry snapshot 1.1
Licensed to:
how the practice could grow. Kearney kept the Chicago office and renamed it
A.T. Kearney. Bower encouraged the development of McKinsey & Company by
bringing in fresh new talent. This talent, although lacking in business knowledge,
applied analytical techniques learnt from the major business schools of the day that
were directly relevant to industry (Riordan, 2009). Indeed, the practice of hiring
MBA students from the top business schools still exists today. Bower also insisted on
having the professional standards of a leading law firm, instigating three rules:
1. put the interests of the client ahead of revenues
2. tell the truth and dont be afraid to challenge a clients opinion, and
3. only agree to perform work that is necessary and something McKinsey can do well.
Cited from Riordan (2009)
Bower was adamant that creating the right impression was essential for the con-
sultancy role. Consultants, Bower allegedly said, should wear hats and long socks
although he later relaxed his ruling on wearing hats through his own actions (see
Industry snapshot 1.2).
Other companies in the US were also emerging during the 1940s. Proudfoot
Consulting, for instance, was founded by Alexander Proudfoot in 1946 who wanted
to partner with clients ensuring positive change (Alexander Proudfoot, 2009). The
company activity was implementing effective organizational change through
using, specialist knowledge and concepts such as the Produfoot Concept of Lost
Time (Alexander Proudfoot, 2009). The company exists today rebrauded in 2009
back to their original name the Alexander Proudfoot Company, who form part of
the Management consulting Group (Alexander Proudfoot, 2009)
Marvin Bower the father of management consultancy
Marvin Bower has been called the father of the
management consultancy industry (Byrne, 2003;
Edersheim, 2004). Marvin was born on the 1
st
Au-
gust 1903 raised in Cleveland. After high school,
Bower attended Brown College (Edersheim, 2004).
At Brown two professors caught the young
Bowers attention. The first was, not surprisingly
given Bowers business prowess, was an econom-
ics professor. The second was a psychology profes-
sor who demonstrated the importance of effective
communication and competencies in dealing with
people (Edersheim, 2004).
Indeed, Bower found using different techniques
in dealing with people extremely useful in a sum-
mer job working for Thompson, Hine and Flory
(TH&F). TH&F were given bad debts from firms that
supplied retailers but who had failed to recapture
the debt. Bower found that by successfully en-
gaging the retailers in person rather than by send-
ing a dunning letter that was more common in
the 1920s that companies that owed money were
much more likely to pay the debt (Edersheim,
2004).
Bower, with the finances received through vari-
ous summer jobs was able to fund himself through
law at the Harvard Law School (Edersheim, 2004).
After graduating, he worked for a Cleveland law
firm for a short while before returning back to
University to strengthen the business side of his
curriculum vitae (Edersheim, 2004). Bower then
graduated with an MBA from the fledgling Harvard
Business School and in 1930 worked for the
"
Licensed to:
corporate law practice at Jones, Day, Reavis & Pogue
in Cleveland (Edersheim, 2004; Hindle, 2002).
Although, some have said that Bowers first
choice of career was the legal profession (Hindle,
2002). Fortunately for us, Bower was still very much
attracted to business. The business side of Bower
was to be realised in 1933, when he caught the at-
tention of James McKinsey. McKinsey liked
Bowers ideas especially about the firm being a
professional management based practice (Martin,
2003). McKinsey consequently offered Bower a
job in the New York branch of the Chicago based
firm (Edersheim, 2004; Martin, 2003).
Following McKinseys death in 1937, the two
offices based in Chicago and New York split. The
Chicago office was taken over by AT Kearney but
in New York, Bower grew the business as McKin-
sey & Company (Martin, 2003). Bower was fierce
about quality and professional standards and up-
held these at all times (Edersheim, 2004).
Schleler, (2000) cites one example where Bower
demonstrated that giving the client the correct ad-
vice meant much more than business revenue. In
this example, the project results for an important
project were being delivered to a major client.
However, the presentation was being frequently
interrupted by the autocratic head of the company,
who was arguably the source of the companys
losses. After many frequent interruptions, Bower
stood up and said to the autocratic head, the main
problem in this company is you. This led to a
stunned silence. Nevertheless, many of the people
in the board meeting agreed with Bower. None-
theless, the rest of the board did not usurp the
head. This ultimately led to the consultancy team
not being hired again. Nevertheless, an important
principle was made that in detailing the truth, how-
ever unpalatable to the client, is in the long term
interests of the client and the consultancy and
should always take precedent over revenue (Mar-
tin, 2003).
Bowers professional approach was allied with
the ability to use effective interpersonal communi-
cation with the client. This often meant simplifying
concepts down so they made common sense
(Martin, 2003). Allied to this approach, Bower
brought in the brightest graduates of Harvard Busi-
ness School growing the McKinsey firm. Bower
would turn down work that was not in the firms
interest to pursue. He concentrated the firms prac-
tice not only on giving sound business advice but
also becoming almost business partners in ex-
change (Schleler, 2000). This meant that as Bower
once put it, If you looked after the client, the profits
would look after themselves (Hindle, 2008, p219).
Through his work at McKinsey, Bower took the
fledgling industry and set its course towards the
profession it has become. This included not only
the types of management consultancy services
that could be sold but also the professional stand-
ards it must uphold for it to be respected. Indeed,
throughout his life Bower regarded himself more
as a professional rather than as a businessman
(Edersheim, 2004). Some suggest that this profes-
sionalism is a return of Bowers want of being a
lawyer (Hindle, 2002). Conversely, it may be that
Bower took great pride in developing a professional
stance for the firm an aspect that James McKinsey
identified with back in 1933.
Bower served as managing director of McKin-
sey and Company from 1950 to 1967, remaining a
key leadership figure as director and partner until
1992. Bower died aged 99 on the 22
nd
January
2003 in Florida and his legacy, through his firm and
his influence on the industry, lives on.
References
Byrne, J.A. (2003), Goodbye to an ethicist. BusinessWeek;
2/10/2003, Issue 3819, p38
Edersheim, E.H. (2004), McKinseys Marvin Bower: Vision,
Leadership, and the Creation of Management Consult-
ing. New Jersey:John Wiley and Sons Inc
Hindle, T. (2008), Guide to Management Ideas & Gurus. Lon-
don:The Economist/Profile Books Ltd
Martin, D. (2003), . The New York Times. Retreived from
http://www.nytimes.com/2003/01/24/business/marvin-
bower-99-built-mckinsey-co.html#
Schleler, C. (2000), Consulting Innovator Marvin Bower: Put-
ting Customer Needs First Was A Key For Him. Investors
Business Daily. Retrieved from http://www.mckinsey.
com/aboutus/mckinseynews/pressarchive/pdf/mckinsey
IBDpt2.pdf
"
Licensed to:
In the UK, the engineering firm WS Atkins & Partners was established in 1938
by Sir William Atkins. This company rapidly expanded to include specialist ser-
vices such as engineering sciences, architecture and project management. Later
the firm would be one of the largest engineering and multidisciplinary consultan-
cies in the world with a sizeable management consultancy division. Also in the
UK, PA Consultants was founded in 1943 by Ernest Butten, a former employee of
Bedaux (Kipping, 2002). PA stands for Personnel Administration and the com-
pany was initially formed aiding the recruitment and development processes of
other organizations (PA Consulting, 2009). PA Consulting would become a sizeable
multidisciplinary consultancy with over 3000 people reported in 2008 (Inside Car-
eers, 2008). Ove Arup established offices in London and Dublin in 1946 founding
what would become a global firm of designers, engineers, planners and business
consultants which today has more than 9000 employees worldwide and an annual
turnover exceeding 475 million (Arup, 2009).
Consultancy firms in France were created during and after the Nazi German occu-
pation (Henry, 2002). In 1943 the Compagnie dorganization rationnele du travail,
which later became CORT Consultants was probably the first to be formed (Henry,
2002). After the defeat of Nazi Germany by the Allies, Europe needed much in the
way of rebuilding and restructuring. This profited engineering based consultancy
firms such as Arup and Atkins. Furthermore in France, Yves Bossard formed an or-
ganization in 1946 and into the early 1950s that would become Bossard Consultants,
a management consultancy with a distinct European accent (Henry, 2002; Riordan,
2009). Indeed, before its merger with CapGemini in 1996 Bossard Consultants had
800 consultants in total, 450 of which were based in France (Computergram, 1996).
In the Netherlands, there was a rapid programme of industrialization after the
economy had been severely damaged during the Second World War (Karsten and
van Veer, 2002). The Dutch government at this time embarked on massive training
initiatives for all types of roles supported by unions and employers. Nevertheless,
it lacked the facilities to deliver the training considered to be invaluable employ-
ability skills. And, just as in the US example with the Glass-Steagall Banking Act,
consultancies developed to meet this urgent demand offering training services
(Karsten and van Veer, 2002). Indeed, one of these Dutch companies, Berenschot
(founded by Berend Willem Berenschot who helped initiate the Dutch consult-
ancy industry in the 1920s) grew quickly and even began exporting consultancy
and training services to the US in 1951(Karsten and van Veer, 2002).
The 1950s and 1960s
McKenna argued that just as in the 1930s the adoption of specific legislation served
as a boost to the industry (McKenna, 2006a). The same was also the case in the
1950s, where policies aimed to restrict collusive information between firms and to
discourage monopolies served as a stimulant to the consultancy industry. Com-
puting firms such as IBM were prohibited from offering computer consultancy ad-
vice and gave the emerging field of information technology consulting to the
large accountancy firms (McKenna, 2006a; p. 21).
Arthur Andersen and Company benefited greatly from providing this service
into corporations encouraging the IT industry to evolve. Indeed, Andersens
were involved with the first installation of computer systems for General Electric
specifically for business purposes (McKenna, 2006a). Due to the anti-monopoly
Licensed to:
laws that restricted IBMs activities, other computer based consultancies de-
veloped. Indeed, IBM fell into decline up until 1991 when the last remnants of the
anti-trust legislation were lifted. Shortly after Lou Gerstner (a former McKinsey
consultant) took over the leadership of the company reigniting the consulting as-
pect of the group (Gerstner, 2002; McKenna, 2006a). IBMs changes at this time are
detailed in Chapter 3 where we examine large corporations in the industry. It must
also be noted that IBM was listed in 2008 as having the highest number of employ-
ees for a firm with a substantial consultancy element (Inside Careers, 2008).
The need for management consultancy services also brought the need for ex-
pertise. In the 1950s, recruitment for management consultancy talent was fierce es-
pecially in terms of hiring MBAs from leading business schools as firms followed
Bowers example in McKinsey & Company to recruit the best (Riordan, 2009).
James Allen being the sole surviving founder of Booz, Allen & Hamilton, restruc-
tured the consultancy by hiring large numbers of graduates who had strong ana-
lytical skills. Booz, Allen & Hamilton became a leading management consulting
firm by 1970 and is still strong today (see Industry snapshot 1.3).
During the 1950s most of the first generation consultancies diversified their activ-
ities from their original Taylorist inspired roots (Kipping, 2002). In the UK in 1956, the
Management Consultants Association (MCA) was formed by the big four consultan-
cies at the time which included: British Bedaux Ltd; Production Engineering; Urwick,
Orr and Partners; and PA Consulting. However, with the possible exception of PA
Consulting the market share of the big four declined from the 1960s and survived
only through mergers or takeovers of other companies in the 1980s and 1990s.
Nevertheless, the management consultancy industry was not in decline in-
stead there was a new breed of consultants (Kipping, 2002). The second generation
of consultancies emerged from the late 1950s from the US. Companies like Arthur
D. Little and Booz, Allen & Hamilton thrived. The difference between these con-
sultancies and the first generation was the focus on people rather than processes
and organization. In a 1968 interview, James Allen stated that:
The thing that gave management consulting its greatest impetus was the approach that
Ed Booz took, that is: thinking in terms of people and the organization of them as being
the key factors in successful management. This has been borne out by many individuals
who founded great corporations.
Higdon, 1969; p. 129
Booz Allens opening website greeting
Booz Allen Hamilton has been at the forefront of
strategy and technology consulting for 95 years.
Providing a broad range of services in strategy,
operations, organization and change, informa-
tion technology, systems engineering, and pro-
gram management, Booz Allen is committed to
delivering results that endure. Headquartered in
McLean, Virginia, Booz Allen has 20,000 em-
ployees and generates annual revenue of over
$4 billion.
Source: http://www.boozallen.com. Reproduced with permission
from Booz Allen Hamilton.
Licensed to:
McKinsey and Company had rapidly been taken over in terms of market share
during the 1950s by companies such as Booz Allen. Nevertheless, by 1959 the
organization had set up their first international office in London and by the end
of the 1960s had a third of its revenue being generated by international business
(Kipping, 2002).
Strategy also became an essential commodity of the management consultancy
industry and the re-emergence of some of the early firms not wedded to Taylorist
principles inspired other companies. Bruce Henderson started his career off in
General Electric as a strategic planner moving swiftly into the Arthur D. Little con-
sultancy practice. Then in 1963, Henderson set up the Boston Consulting Group,
the first pure strategy based consultancy (Kipping, 2002).
Indeed, in the 1960s the management consultancy industry was starting to es-
tablish itself as a multi-billion-dollar industry (Saint-Martin, 2000). During this
period, audit work had generally declined so many of the accountancy firms
looked for new areas to exploit, joining the consultancy industry. The big eight
firms then emerged at the end of the 1960s that had these accountancy roots bring-
ing more professionalism into the industry seen as particularly important in coun-
tries outside the US (Saint-Martin, 2000). The big eight consisted of:
1. Arthur Andersen
2. Coopers & Lybrand
3. Ernst & Whinney
4. Arthur Young
5. KPMG Peat Marwick
6. Deloitte, Haskins & Sells
7. Touche Ross
8. PriceWaterhouse
Quoted from Saint-Martin, 2000; p. 44
Nevertheless, there were plenty of other consultancies around in 1969 with Hig-
don (1969) citing 54 major consultancies in total. Table 1.1 demonstrates the major
consultancies listed in 1969 in rank of revenues based on Higdons work. However,
revenues cited in 1969 were converted to a comparable basis by multiplying by
growth in the CPI which rose from 34.8 in 1968 to 160 in 1996. Interestingly, the
consultancy ranked top in terms of revenue in Table 1.1, the Planning Research
Corporation, no longer trades today although during the 1970s they were in-
volved in project work as diverse as examining the effect of increased tax on cigar-
ettes through to creating FORTRAN compilers in the US. Other companies listed
as marked not applicable are where the revenues in 1996 were not available due to
the firms disappearance. Indeed, by 1996, 24 of the 54 companies listed had either
stopped trading or had been merged into other companies, so only 15 had sur-
vived into the late 1990s.
The 1970s and 1980s
The 1970s was a period of slow economic growth for many companies, although
consultancies such as the Boston Consulting Group (BCG), McKinsey & Company
Licensed to:
Table 1.1 Top consulting firms ranked by revenues in 1968
Firm
No of
consultants
Real
revenues 68
Real
revenues 96
Ave. growth
rate
Revenue
rank 68
Revenue
rank 96
Planning Research
Corporation
3000 236 #N/A #N/A 1 NA
Booz Allen & Hamilton 1500 215 1100 15% 2 8
Peat, Marwick, Mitchell & Co. 700 129 990 24% 3 10
McKinsey 462 103 1500 48% 4 4
WOFAC Company 550 69 #N/A #N/A 5 NA
Arthur D. Little 230 64 514 25% 6 15
Alexander Proudfoot PLC (UK) 300 64 165 6% 7 30
URS Corporation 400 53 #N/A #N/A 8 NA
H. B. Maynard & Company 450 43 #N/A #N/A 9 NA
Ernst & Ernst 400 43 1390 112% 10 5
Diebold Group 450 34 #N/A #N/A 11 NA
Lybrand, Ross & Montgomery 318 32 1324 143% 12 6
Management Science
America
300 32 #N/A #N/A 13 NA
A. T. Kearney 255 30 346 38% 14 20
Kurt Salmon Associates 200 28 62 4% 15 38
Lester B. Knight & Associates 225 28 #N/A #N/A 16 NA
Creasap, McCormick & Paget 160 26 #N/A #N/A 17 NA
Operations Research 240 23 #N/A #N/A 18 NA
Stone & Webster Consultants 275 21 #N/A #N/A 19 NA
Arthur Andersen & Company 150 21 4220 699% 20 1
Touche, Ross, Bailey & Smart 150 21 1045 173% 21 9
Auerbach Corporation 190 21 #N/A #N/A 22 NA
Price Waterhouse 125 21 1200 196% 23 7
Arthur Young & Co. 150 21 1390 228% 24 5
Worden & Risberg 150 17 #N/A #N/A 25 NA
Haskins & Sells 180 16 1045 230% 26 9
EBS Management
Consultants
100 13 #N/A #N/A 27 NA
Harbridge House 60 13 #N/A #N/A 28 >40
S. D. Leidesdorf & Co. 100 13 #N/A #N/A 29 NA
Bonner & Moore Associates 100 13 #N/A #N/A 30 NA
Glendinning Associates 100 13 #N/A #N/A 31 NA
Fantus Company 100 11 #N/A #N/A 32 NA
Case & Company 100 11 #N/A #N/A 33 NA
Donahue, Groover &
Associates
100 11 #N/A #N/A 34 NA
Woods, Gordon & Co. 125 11 #N/A #N/A 35 NA
George S. May 400 26 85 8% 36 36
Handley-Walker Company 60 9 #N/A #N/A 37 NA
S. J. Capelin Associates 70 9 #N/A #N/A 38 NA
R. Dixon Speas Associates 63 9 #N/A #N/A 39 NA
Source: http://www.careers-in-business.com/consulting/crank68.htm. Reproduced with permission from careers-in-business.com.
Licensed to:
and Booz Allen still remained successful. BCG, Booz Allen and other consultancies
created symbiotic links with leading business schools such as Harvard based in
Boston, Massachusetts. Organizational theories and techniques developed at lead-
ing business schools aided the creation of analytical tools and approaches. It was
from this type of link that the new field of strategic management emerged, which
set the groundwork for many consulting firms to follow (Riordan, 2009). Indeed,
Boston in the early 70s became almost a Mecca for consultancies where one appar-
ently could not walk the streets without bumping into a consultant (Riordan,
2009). Notable consultancies, such as formed by William W. Bain, developed dur-
ing this period combining client relationship management with analytical tech-
niques learnt from the business schools (Riordan, 2009).
During the 1970s, the IT industry filling the gap that IBM was forced out of by
federal law expanded rapidly. In 1977 Nolan, Norton & Company was formed spe-
cializing in information technology management consulting. The company was
subsequently bought out by KPMG and Richard Norton now works as an Ameri-
can business school professor (see http://drfd.hbs.edu/fit/public/facultyInfo.do?
facInfo5bio&facEmId5rnolan for more details). Indeed, other organizations, such
as Axent Technologies based in southern England that specialized in IT protection
and firewalls emerged. This company had originated as an idea in a consultancy
by individuals who thought computer systems of the future may be attacked from
outside by unscrupulous individuals. The consultancy decided not to develop the
idea; however, not disheartened the former consultants went it alone forming
their own company that was eventually merged with the Symantec Corporation
in 2000.
In the rest of Europe, similar expansion was also being made. The French
company Sogeti acquired two large IT services companies, CAP and Gemini
Computer Systems in 1975 eventually becoming Capgemini. During the later
70s and 80s, Capgemini became a European leader in consultancy expanding
into the American market and in 1989 was positioned as being among the five
leaders in its sector worldwide (see Industry snapshot 3.1). In the Dutch banking
sector, AD Little and McKinsey & Company both contributed towards the raft of
mergers and acquisitions that took place in the Netherlands (Arnoldus and
Dankers, 2005).
In the UK, the Bank of England was reorganized in a high profile assignment
that led McKinsey & Company to perform similar projects for the World Bank
(McKenna, 2006a). BCG also examined the British motorcycle industry focusing on
competitive strategy using theoretical business models from Japanese rather than
American sources (McKenna, 2006a).
The management consultancy industry continued to grow during the
1980s and into the 1990s (Fincham and Clark, 2003). By the end of the 1980s,
rather than there being just a handful of firms. The industry had significantly
changed, becoming one of the fastest growing aspects of most advanced
economies concerned with companies both big and small (Fincham and
Clark, 2003).
The 1990s into the twenty-first century
The expansion of the industry during the 1990s continued at a double digit pace
(McKenna, 2006a). In the UK, consultancy demonstrated consistent growth, with
Licensed to:
typical revenue returns increased by 19 per cent (Ferguson, 2002). Ferguson
argued that there were two main streams in consultancy: strategy and oper-
ations or performance improvement. Ferguson also noted that during this
period there was the development of e-business services and globalization of
consultancy (Ferguson, 2002). E-business arrived due to the development of the
Internet and this underpinned many of the developments associated with the
spread of IT through organizations. This included B2B, business to business
applications but also B2C, business to customer applications that was revolu-
tionized by the Internet and associated products such as instant messaging
(Bailey and Biggs, 2005).
However, as noted in this chapter this was not a young profession emerging
from the 1980s (Ferguson, 2002; McKenna, 2006a). Interestingly during this period,
academics became interested in the industry. Higdon (1969) was probably the
earliest academic book written on the subject, but during the 1990s notable figures
such as Robin Fincham, Timothy Clark, Matthias Kipping and Lars Engwall to
name but a few arose in the literature. Some of these early accounts were quite
scathing of the industry and will be examined in depth in later chapters, especially
in the next chapter.
Ironically though, some of the more practical consultancy books written high-
lighting the services of consultancies benefited these firms. Saint-Martin (2000)
stated that the consultancy that employed Hammer and Champy after their 1993
groundbreaking book on business process reengineering more than doubled its
annual revenue from $70 million to $160 million the year after. Other books have
also been published from consultancies such as Deloitte (Bishop and Hydoski,
2009), AT Kearney (Laudicina, 2004), BCG (Stern and Deimler, 2006) and McKinsey
& Company (Friga, 2009; Rasiel & Figa, 1999; 2001). Most consultancies also con-
tribute to leading business management publications such as the Harvard Busi-
ness Review or even publish their own journals, a few of which are shown in
Table 1.2.
Table 1.2
Journals produced by
leading consultancy
firms
Consultancy Journal Website journal (or example journal) located
Accenture Outlook http://www.accenture.com/Global/
Research_and_Insights/Outlook/default.htm
AT Kearney Executive Agenda http://www.atkearney.com/index.php/
Publications/ea-volume-xi-number-2.html
Booz Allen Hamilton Strategy & Business http://www.strategy-business.com
Boston Consulting
Group
Pespectives http://www.bcg.com/impact_expertise/
publications/files/Perspective_411_Richer_
Sourcing_Sept04.pdf
Deloitte Deloitte Research http://www.deloitte.com/dtt/section_node/
0,2332,sid%253D15288,00.html
McKinsey & Company McKinsey Quarterly http://www.mckinseyquarterly.com
Licensed to:
Naming consultancies in case studies
Many books written often do not mention the consultancies that the case studies are
from, presenting watered down versions of the original. Yet, consultancies have trad-
itionally done well from advertising what they do. For instance, a Director interested in
strategy will soon find the BCG book and guess what consultancy can help with strat-
egy, BCG of course. So in this text the author has invariably sought publish case studies
direct fromthe firms involved.
During the later 1980s and into the 1990s, Anglo-American consultancies started
to emerge as the dominant players in the management consultancy industry
(Saint-Martin, 2000). The Big six accountancy firms in 1989 became the Big five
in 1999 and are now the Big four in 2009 and comprise: PriceWaterhouseCoopers,
Ernst & Young, KPMG, and Deloitte. Only Accenture is now not listed as they do
not have anything to do with accountancy practice having had a rather problemat-
ic split with Arthur Andersen in 2000. The range and type of consultancies that
exist today are highlighted to a greater degree in Chapter 3 that examines the ex-
tent of the industry. Nevertheless, before we can explore the industry in depth, a
more critical examination of the industry and what it does is called for.
Conclusion
This chapter has presented a rather whistle stop tour of management consultancy
aimed to give context to the industry. Interestingly, several events that occurred
during the twentieth century really boosted the industry. And during its inception,
the industry has tried hard to rid itself of the criticisms it faced and present a pro-
fessional image (Higdon, 1969). The early years of the industry dominated by en-
gineers and accountants still exists in part today, with the Big four accountancy
firms completing consultancy as do engineering firms like Atkins and Arup. One
of the most recent developments was the rise of information technology based con-
sultancy practices. Again, this will be examined more in Chapter 3, but in essence
firms such as Capgemini, Hitachi Consulting and IBM without its historical restric-
tions have strengthened the management consultancy industry.
Chapter Summary
l Knowledge sharing of management and improving productivity has arguably
been around since the industrial revolution started in the UK in the mid
eighteenth century
l McKenna (2006a) argued that it was the second industrial revolution led by the
US that heralded the origins of the management consultancy industry
l Ernst & Young trace their history back to a British partnership formed in 1849
but the firm also has strong American roots
Licensed to:
l Arthur D. Little was formed by an MIT professor of the same name in 1886
l Consultancy served to stimulate the economies of countries such as Sweden
around the turn of the twentieth century
l F.W. Taylor was arguably one of the first freelance management consultants at
the turn of the twentieth century
l Taylors ideas gave a short boost to the industry but by the 1930s most firms
that did not go beyond his ideas failed
l Taylors ideas did go international but again were most famous in Germany
which produced its own industrial rationalization and then exported that to
other European countries such as Finland
l In America, in 1929 ACME was founded and later rebranded to be the
Association of Management Consulting Firms emphasizing the professional
nature of the industry
l Regulatory change of the 1930s, especially the Glass-Steagall Banking Act 1933,
stimulated the industry as banks could no longer conduct company audits
l Growth of the industry during the 1930s and 1940s was evident
l In the 1940s, leading consultancies hired top business school graduates as
opposed to industry experts changing recruitment practices
l After the Second World War, consultancy grew in Europe
l In the UK, the American company Bedaux spawned several consultancies that
founded the Management Consultancies Association in the 1950s to improve
the professionalism of the industry
l During the 1950s anti-monopoly legislation restricted IBMs position and led to
gaps in the market in consulting and IT that were rapidly filled by other
companies
l During the 1960s accountancy firms increasingly received more revenue from
their consultancy business
l The 1970s saw the economy slowing and more strategy based consultancies
emerged
l IT firms started getting into the consultancy market during the 1990s and the
anti-monopoly legislation was finally lifted from IBM in 1991
l Practitioner orientated books sold consultancy services and many of the top
consultancies hired authors to write practical guides about their service provision
l Now in the early part of the twenty-first century, the industry is dominated by
accounting practices, IT firms and engineers, all of whom have historical claims
to the industry
ReviewQuestions
1. When in the nineteenth century can the origins of Ernst & Young be traced to?
2. Although knowledge sharing was evident in the eighteenth century when does
McKenna (2006a) trace the origins of the management consultancy industry to?
Licensed to:
3. What are the positives and negatives of academia in consultancy?
4. Why did McKinsey and Company split in 1939?
5. What area of business management did Booz Allen and the Boston Consulting
Group specialize in?
6. What are the three dominating influences in management consultancy today?
Assignment Questions
1. Did the ideas of F.W. Taylor influence the early management consultancy industry
and did these ideas persist?
2. Critically discuss the differences between the European and US management
consultancy industries before the 1940s.
3. Describe Marvin Bowers impact on the management consultancy industry.
4. Describe how the Big 8 in 1969 became the Big 5 in 1999 and then the Big 4 in 2009.
Deloittes one firm strategy
By Angela Mitchell, Merlin Gardner
The consultancy market has experienced unpre-
cedented change through the 1990s and over the
last decade. Strong growth over this period has
been driven by waves of new ideas, not least the
introduction of technology in all its forms: from en-
terprise resourcing planning systems during the
boom years of the late 90s, through the inflation
and bursting of the internet bubble, a trend to-
wards offshoring, to todays market where cost re-
duction is the service in demand.
Throughout this time, the competitive land-
scape has been in flux. Of particular significance
was the major restructure in the early 2000s as
most of the big 5 professional services firms sold
off their consultancy practices in response to mar-
ket perceptions and regulatory pressures in the
aftermath of Enron. Ernst & Young, KPMG and Pri-
cewaterhouseCoopers all sold their consulting
businesses to CapGemini, BearingPoint and IBM
respectively. Deloitte, however, retained its consult-
ancy business and embarked on a new One Firm
strategy to maximize the opportunity from this
unique positioning.
This case study outlines how the delivery of an
end-to-end service, involving multiple service lines,
can add exponential value to the client. It also sets
out some of Deloittes lessons learned in organiz-
ing and incentivizing the practice to achieve this.
Traditionally, professional services firms have
gone to market and sold work by service line (for
example: consulting, audit, tax, corporate finance).
This model is not always conducive to offering the
best client service. Firstly, staff working in one area
may not understand the competencies and skills
offered by other parts of the firm, and so will miss
out on opportunities for these to provide more
rounded and complete client advice. Secondly, and
perhaps more seriously, the firms recognition and
reward structures may motivate staff to work in
service silos, delivering as much as possible of an
engagement from within their own team or div-
ision, when perhaps other teams have additional
"
Case Study 1.1
Licensed to:
or more relevant skills. The result is rarely the best
outcome for the client, who may receive very dif-
ferent service depending upon which part of the
firm was originally engaged. It is important to re-
member that clients do not care which service line
they are speaking to. They have a challenge and
they would like it solved. The best solution to this
challenge will often come from a multi-disciplinary
team, possessing a blend of different skills.
In 2000, Deloitte was perhaps best known as an
audit and financial advisory firm, but consultancy was
also a core and expanding part of the business. Hav-
ing retained its consultancy capability, whilst other
firms sold theirs, Deloitte had a valuable differentiator.
In particular, the firm was well positioned to provide
a broad and comprehensive service, supporting the
client from the start of an issue or initiative, through
to the implementation of a solution. Whilst many
firms could compete on advisory services and many
others could compete on implementation and oper-
ational services, few could offer such a full breadth of
support through the lifecycle of the business.
For example, consider a company that has en-
joyed success in its local market, but is now seek-
ing to develop and grow its business. Typically, this
will trigger a series of questions:
1. Which products and services should be de-
veloped? Where and how should they be
taken to market ?
2. What technology systems, processes and
organizational structures will best support
cost effective operations and the planned
strategic changes and growth?
3. How should the company be organized
and located to maximize investment incen-
tives and to minimize its tax burden?
4. What structure will best meet the com-
panys ongoing financing needs and how
should these needs be secured?
5. How should the organization plan and de-
liver this significant business change?
Organizations in such a position need a broad
consultancy advisor, and preferably one that can sup-
port them through the journey, from the initial strat-
egy through to its execution and implementation.
Emphasizing the breadth and integration of our
capability, we moved to a single brand, Deloitte in
2003, and subsequently introduced the One Firm
strategy in 2004. Our overall strategy was to focus
on the client, not the service organization, at a time
when other organizations were looking internally at
divesting and rebuilding their consulting businesses.
Deloittes approach was based on the following
strategic choices:
1. Collaborate as one Deloitte team, going to
market with a portfolio of businesses that
can team effectively to serve clients with
distinction.
2. Develop and maintain four world-class
businesses (audit, tax, consulting and cor-
porate finance).
3. Attract and retain the best people, becom-
ing known as the place where the best
choose to be.
4. Be a client-centric organization and deliver
exceptional client service with an unrelent-
ing focus on quality.
5. Own the high ground, leading the profes-
sion in restoring public trust in auditing and
business advisory services.
We planned to drive incremental value for our
clients by leveraging synergies across the different
facets of our capability. The One Firm approach
supported the delivery of more complex engage-
ments. By offering co-ordinated support across a
variety of different areas, clients received a more
joined up and valuable service. Client relationships
were strengthened and staff benefited from more
challenging and rewarding work.
The One Firm strategy started to break down in-
ternal barriers, with staff going to market as
Deloitte for all services, adopting an integrated ap-
proach to marketing supported by a high profile
Have you asked Deloitte? campaign. However, em-
bedding this culture needed considerable effort and
required incentives. Our lessons learned include:
l The approach requires staff (especially se-
nior managers and above) to understand all
the firms service lines. This does not mean
"
"
Licensed to:
Further Reading
Ferguson, M. (2002), The Rise of Management Consulting in Britain. Aldershot: Ashgate
Fincham, R. and Clark, T. (2003), Management consultancy: Issues, perspectives, and agendas, Inter-
national Studies of Management & Organization, 32(4), 318
Kipping, M. (2002), Trapped in their wave: The evolution of management consultancies, in Clark, T. and
Fincham, R. Eds Critical Consulting: New Perspectives on the Management Advice Industry. Oxford:
Blackwell Publishers Ltd
McKenna, C.D. (2006a), The Worlds Newest Profession: Management Consulting in the Twentieth Century.
New York: Cambridge University Press
Riordan, W. (2009), A brief history of the management consulting profession. Careers in Business
Retrieved from http://www.careers-in-business.com/consulting/hist.htm
Saint-Martin, D. (2000), Building the New Managerialist State: Consultants and the Politics of Public Sector
Reform in Comparative Perspective. Oxford: Oxford University Press
making a technology consultant an expert in
tax, for example, but it does mean that the
technology consultant needs to understand
where we can help clients on tax issues and
who to go to for advice on this internally.
l Firm-wide propositions are necessary so
that clients can understand the value of
having a broad and end-to-end service
offering at their disposal. We invested in
the development and marketing of pro-
positions such as Business Critical Pro-
grammes, Enterprise Cost Reduction and
Finance Transformation.
l It is key to focus on relationships within cur-
rent and target clients. We established
cross-firm client target lists, representing a
balance of industries and organizational ma-
turity. We targeted and approached these
organizations in a co-ordinated manner,
drawing on our full range of competencies.
l Forming multi-disciplinary client teams and
account development teams gives huge
benefits in cross-fertilization of ideas and
skills and understanding of other areas of
the business.
l It is important to formally recognize cross
service line activity and referrals. Our
assessments of partner and staff perform-
ance recognize sales for any service line as
strongly as the originators own service line.
l Communication of examples and reward-
ing of successes is important and needs to
be constantly reinforced.
l The co-ordinated approach needs to be
applied at all levels of the organization,
not just partners, in order for it to be
successful.
Deloittes strategy has:
l differentiated the firm in the market place
through unmatched breadth and depth of
services;
l created an ability to deliver comprehensive
solutions and become advisor of choice
for clients;
l introduced a more collaborative culture;
l facilitated the delivery of more challenging
and interesting engagements;
l through the above, created a reputation
that has helped the firm to attract and re-
tain the best talent.
However the market and competitor landscape
continues to evolve and as such so too does
Deloittes strategy and approach to maintain and
further expand its position.
Questions
1. In what ways might a consultancy structure
its workforce to maximize its success?
2. What advantages does a consultancy offer
compared to a team of contractors?
3. What are the key advantages of a full ser-
vice consultancy compared with a more
niche operator ?
"

Introduction To Management Consulting

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

Introduction To Management Consulting

Uploaded by

Copyright:

Available Formats

Licensed to:

You might also like