Management consulting

Managing knowledge
in 21st Century
 Human
capital

Network Social
Capital capital

Client Structural
Capital capital

Organizational
Capital
 Human Capital – Intellectual Capital

Human Capital Intellectual Capital

Staffing Development

Employee
Human Products and
Knowledge capital services which
Skills Network Social
Capital capital have market
Experience IC value
Client Structural
Communication Capital capital
Organizational
Capital
Performance
Management
Remuneration
and Reward
 Structure of Lecture
Human
capital
• Part -1 Network
Capital
Social
capital
– Level of analysis
• Organisational perspective Client
Capital
Structural
capital
– Framework for analysis Organizational
Capital
• Management of knowledge (reactor model)
• Part - 2
– Level of analysis
• Work process
– Framework for analysis
• Identity model
• HRM issues in both parts
– Recruitment and selection of consultants
– Promotion policies – ‘up-or-out’ principle
– The boundaries of HRM practices
 Objectives
• To understand the characteristics of the management
consulting industry
– History
– Types of organisations
– Types of consultancy activities
• Typology of human capital
– According to the client interface process
– Career structures within management consultancy
– The role of consultants as knowledge brokers
• Typology of client capital
– The consulting firm – client relationships Human
• The HRM practice focus:
capital
Network Social
Capital capital
– Recruiting human capital
– Managing across boundaries Client Structural
Capital capital
Organizational
Capital
 History
• Management as a unique field of study
• Arthur D.Little (1890s)
• McKinsey & Company
– First management and strategy consultancy
– Founded by James McKinsey in 1926 (Chicago)
– Hiring of bright young MBAs
• Rise of management consultancy after World War II
– Development of tools for strategic management
– Boston Consulting Group (1963), McKinsey&Co, Harvard Business
School
– Bain&Co - focus on shareholder wealth
• Consulting within accountancy and technology firms
– PwC and IBM
• Niche consultancy firms
– Corporate social responsibiity
 Types of firms in the industry
• Accountancy firms offering consultancy
• Large non-accounting consultancies
• Small specialist boutiques
• Gurus
• Independents
Types of Consultancy services

Strategy HR

Process
Marketing
and Management
Operations consulting

Org design Change

Infotech
 Major consultancies
• Bain & Company
• Boston Consulting Group
• Deloitte & Touche
• Ernst & Young
• A.T. Kearny
• KPMG
• Arthur D.Little
• McKinsey & Co
• Mercer
• PriceWaterhouse Coopers
 Different types of consulting services: A
knowledge-based view
Competitive strategy Bespoke
Productise

Economic model Expert economics

Reuse economics
KM strategy Person-to-person
People-to-documents
Technology IT enables personal
IT focus
Build experience
Buy experience
HRM Reward for
Reward for
knowledge creation and
contribution to document
sharing
database

Example McKinsey & Company

Ernst & Young
 Typology of Human Capital
• The consultancy process
• Career structures
• Consultants as brokers of human capital
– Boundary spanning
 The consultancy process:
Your experience
• Paired assignment
• Identify a consultancy experience that you have
been part of.
• Characterise the individual stages of the
consultancy process
• Interview your partner and identify:
– Which skills were developed at each stage of the
consultancy process
– Which other knowledge resources did you rely upon
during this process
• Summarise your findings and be prepared to
feed back to the group
 The career structure
• Analysts
• Consultants
• Senior Consultants
• Business development managers
• Directors/Partners
 The McKinsey Facilitator case
• Specific type of human capital
• Across boundaries
• How would you design the recruitment
process to capture this human capital?
Components of a high performing culture

• General business knowledge

•IQ
• Understanding of client context
• Logical problem solving

• Creates environment of
•EQ
trust
• Manages group dynamics
• High awareness of
• emotions
High self knowledge
•SQ • Experience of own
transformational journey
• Sense of vocation
Using external facilitators poses a challenge to many
forms of intellectual capital flows

Clients Facilitators
Facilitator network: HC viewpoint

HC External pool of
facilitators
boundary External
Externalskill
skillexperts
experts

Facilitators
Clients within Clients
clients
Focal Regions
Practice
Group Other
Practice
Groups

Clients

External skill experts

Clients
 Mindsets are often misunderstood and ignored

•What we
see and Be-
usually try to haviour
change
Thoughts
•What we
and feelings
cannot see,
make
Values A desire to change
assumptions ends up like most
about and and beliefs
New Year’s
often do not Needs – resolutions if root
address met and unmet causes are not
identified and
addressed
The first step in mindset change is a new level of personal
understanding

•Requires practice

•Requires a choice

•Requires insight
 The first step in mindset change is a new level of personal
understanding

“You cannot solve

a problem from the
•Requires practice same level of
consciousness that
created the problem
in the first place”
•Requires a choice
Albert Einstein

•Requires insight
 The McKinsey Facilitator case
• How would you design the recruitment
process to capture this human capital?
Facilitator network: OC viewpoint
External pool of
facilitators

External skill
Facilitators experts
within
Clients clients

Focal Regions
Practice
Group Other
Practice
Groups Clients

Clients

External skill experts

Clients

Recruitment & development

Client delivery processes
processes
 Positioning in the lecture
• Nature of the industry
• Typology of human capital
– Consulting process
– Career structure
– Knowledge brokers
• Now we turn to the human-client capital
interface
– We take a closer look at how clients perceive
consultants?
 IDEA SUBMISSION PROCESS
5. Stick hexagon on
•Workshop hexagon wall with
room similar ideas and
•1. Group discussion rejoin group
on topic/idea 4. Receive
hexagon at
idea table
and write on
idea no. and
• Individual or group write up title
idea cover sheet and attach
3. Submit written
backup materials (others at
materials at idea
table may start on another In
table tray
idea at this time if
appropriate •Door to
patio Filing

•Cassette record •Patio •Wall

sheet

2. Individual(s) go outside – Video station helper puts idea no.

to record 2–3 minute stick on to idea coversheet and onto
video to explain idea video cassette record sheet. Records
idea title onto cassette record sheet
– Individual(s) write idea no. and idea
title on directors board—hold up at
•Video station start of recording
helper with stickers
– Record 2–3 mins video
of idea number
 The perception of Human Capital
• The ability to learn in practice
• Why smart people don’t learn
• The impact on organisational learning
• The impact on social capital
• The impact upon the client relationship
– social construction of learning
 The client-consultant relationship
• Human capital and its link to client capital
• Dimensions for analysis
– Strength of ties
• frequency
– Relational
• trust
– Cognitive
• Shared mental models
• Giving answers or shaping futures
The nature of relationships
Social capital Morphology Structural density Structural holes
(between facilitators) X

Trust: Deep Resilient

Nature X
Positional X Generalized

Social capital Morphology Structural density X

(between sponsors)
Trust: Deep Resilient
Nature X
Positional Dyadic Generalized
X
Client-and-network Morphology X Structural holes
capital
Trust: Deep Resilient
(between internal
Nature X
and external
facilitators) Positional Dyadic Generalized
X
Organisational Flexibility Mechanistic Adaptive
capital: X
HRM process
Client relationship Flexibility Mechanistic Adaptive
process X
 Facilitator network: SC & CNC viewpoint

External pool of
facilitators
External
Externalskill
skillexperts
experts

Facilitators
Clients within Clients
clients
Focal Regions
Practice
Group Other
Practice
Groups

Clients

External skill experts

Clients

Dense: Deep and Structural holes: resilient and Structural holes: Dense:

dyadic trust generalised trust Deep and dyadic trust Resilient and dyadic trust
 Books about management
consulting
• Flawless Consulting, Peter Block, ISBN 0-7879-4803-9
• Guerrilla Marketing for Consulting, Jay Conrad Levinson and
Michael W. McLaughlin, ISBN 0-471-61873-X
• Managing at the Speed of Change, Daryl Conner, ISBN 0-471-
97494-3
• Managing the Professional Services Firm, David Maister, ISBN 0-
7432-3156-2
• The Professional Services Firm Bible, John Baschab, ISBN 0-471-
66048-5
• Managing Transitions, William Bridges, ISBN 1-85788-341-1
• Management Consulting: A Guide to the Profession, Milan Kubr
(ed.), ISBN 92-2-109519-3
• The World's Newest Profession: Management Consulting in the
Twentieth Century, Christopher D. McKenna, ISBN 0-521-81039-6