MANAGEMENT CONSULTING AN OVERVIEW Matthias Kipping Schulich School of Business Toronto, Canada
Overview <ul><li>Definitions </li></ul><ul><li>Assets of Consulting Firms </li></ul><ul><li>Evolution of the Industry </li...
How it works Clients Consulting Firm Assets Consultants Better performance   (benchmarks) New knowledge   <ul><li>Knowle...
How it evolved Dominant Client Firm Type Period Dominance Prominent Consultancies Scientific Management Production Unit 19...
Why marketing? <ul><li>To establish and maintain reputation </li></ul><ul><li>QUESTIONS: </li></ul><ul><ul><li>How do cons...
Unique product <ul><li>Attempts to create proprietary approaches </li></ul><ul><ul><li>Bedaux / MTM systems (shop floor ef...
Difficult to sustain <ul><li>Success eliminates the market for product </li></ul><ul><ul><li>McKinsey decentralised many E...
Sales efforts and incentives <ul><li>Contact potential clients directly, repeatedly </li></ul><ul><ul><li>Through mail sho...
Works only in the short-term <ul><li>Very fast initial expansion </li></ul><ul><ul><li>Example George S. May </li></ul></u...
Advertising for image building <ul><li>Used since beginning of century </li></ul><ul><ul><li>Usually quite boring style </...
 
 
Use of television and stars <ul><li>Early examples:  Reach for the moon , shark </li></ul><ul><li>Change of  name  on 1 Ja...
 
 
 
 
 
Relationship marketing <ul><li>Building trust-based personal relations </li></ul><ul><ul><li>between consulting partner an...
Why long-term relationship?  <ul><li>Provides the consultancy with a stable income stream and… </li></ul><ul><li>reduces t...
How McKinsey does it <ul><li>Famous “up or out” policy </li></ul><ul><ul><li>Only 1 out of 10 recruits makes partner </li>...
 
Upcoming SlideShare
Loading in...5
×

Management Consulting Overview

1,985

Published on

A presentation a professor of mine put together for our class. Helped me decide I wanted to be a consultant.

0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total Views
1,985
On Slideshare
0
From Embeds
0
Number of Embeds
0
Actions
Shares
0
Downloads
0
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

Management Consulting Overview

  1. 1. MANAGEMENT CONSULTING AN OVERVIEW Matthias Kipping Schulich School of Business Toronto, Canada
  2. 2. Overview <ul><li>Definitions </li></ul><ul><li>Assets of Consulting Firms </li></ul><ul><li>Evolution of the Industry </li></ul><ul><li>How Consultants Market Themselves </li></ul><ul><li>Responsibilities and Risks </li></ul><ul><ul><li>McKinsey at Enron </li></ul></ul>
  3. 3. How it works Clients Consulting Firm Assets Consultants Better performance  (benchmarks) New knowledge  <ul><li>Knowledge </li></ul><ul><li>Expertise </li></ul><ul><li>Analytical Tools </li></ul><ul><li>Process </li></ul> Experience/Education  Intense Training Legitimacy  Enhanced reputation  Reputation (Image)  Top Schools  Improve CV Confidence/Trust  Recommendations  Networks  Alumni Network  New Contacts
  4. 4. How it evolved Dominant Client Firm Type Period Dominance Prominent Consultancies Scientific Management Production Unit 1900s-80s 1930s-50s Emerson, Bedaux, Big 4, Maynard , Strategy & Structure Co rporation (M-form) 1930s-?? 1960s-80s BAH, McKinsey , ATK , ADL, BCG Information & Communication Network Organisation 1950s-?? 1990s-?? IBM, Accenture , Capgemini , EDS/HP
  5. 5. Why marketing? <ul><li>To establish and maintain reputation </li></ul><ul><li>QUESTIONS: </li></ul><ul><ul><li>How do consultants get their foot in the door for the first time? </li></ul></ul><ul><ul><li>How do they retain their clients subsequently? </li></ul></ul>
  6. 6. Unique product <ul><li>Attempts to create proprietary approaches </li></ul><ul><ul><li>Bedaux / MTM systems (shop floor efficiency) </li></ul></ul><ul><ul><li>Multidivisional form (corporate organization) </li></ul></ul><ul><ul><li>Business Process Re-engineering (value chain) </li></ul></ul><ul><ul><li>Data bases (e.g. benchmarking; remuneration) </li></ul></ul><ul><li>Efforts to make them widely known </li></ul><ul><ul><li>Publications (e.g. In Search of Excellence) </li></ul></ul><ul><ul><li>Teaching at Business Schools </li></ul></ul><ul><ul><li>Presentations to managers (at conferences) </li></ul></ul>
  7. 7. Difficult to sustain <ul><li>Success eliminates the market for product </li></ul><ul><ul><li>McKinsey decentralised many European companies </li></ul></ul><ul><li>Competitors imitate: Commodification </li></ul><ul><ul><li>Consultancies “invent” own version of BPR </li></ul></ul><ul><li>New “fads” appear with increasing speed </li></ul><ul><ul><li>From JIT to TQM to BPR to CRM </li></ul></ul><ul><li>Consultants: Creators and Victims of “Management Fashions” </li></ul>
  8. 8. Sales efforts and incentives <ul><li>Contact potential clients directly, repeatedly </li></ul><ul><ul><li>Through mail shots, phone calls, etc. </li></ul></ul><ul><li>Separate sales efforts from consulting </li></ul><ul><ul><li>Different people sell and carry out projects </li></ul></ul><ul><li>Provide consultants with sales incentives </li></ul><ul><ul><li>Relate part of the pay to successful selling </li></ul></ul><ul><ul><li>Make promotion dependent on new sales </li></ul></ul>
  9. 9. Works only in the short-term <ul><li>Very fast initial expansion </li></ul><ul><ul><li>Example George S. May </li></ul></ul><ul><li>BUT: Many clients complain very soon </li></ul><ul><ul><li>About unrealistic promises of sales staff </li></ul></ul><ul><li>Consulting firm looses market share </li></ul><ul><ul><li>Some even collapse completely </li></ul></ul><ul><li>Often creates bad reputation </li></ul><ul><ul><li>For consulting firm and industry as a whole </li></ul></ul>
  10. 10. Advertising for image building <ul><li>Used since beginning of century </li></ul><ul><ul><li>Usually quite boring style </li></ul></ul><ul><li>Not allowed by professional rules </li></ul><ul><ul><li>But often hidden as job advert </li></ul></ul><ul><li>Has become more widespread </li></ul><ul><ul><li>Pioneering role of Andersen Consulting </li></ul></ul><ul><ul><li>Taken on by other large consultancies </li></ul></ul>
  11. 13. Use of television and stars <ul><li>Early examples: Reach for the moon , shark </li></ul><ul><li>Change of name on 1 January 2001 </li></ul><ul><li>Recent campaigns </li></ul><ul><ul><li>Ideas </li></ul></ul><ul><ul><li>Be a Tiger: Remake , Revision , Invention </li></ul></ul>
  12. 16.
  13. 17.
  14. 21. Relationship marketing <ul><li>Building trust-based personal relations </li></ul><ul><ul><li>between consulting partner and client CEO </li></ul></ul><ul><li>Often based on similar background </li></ul><ul><ul><li>Culture, education (“old schools ties”), etc. </li></ul></ul><ul><li>BUT: There are also some problems </li></ul><ul><ul><li>Spin-offs: Partners leave with clients </li></ul></ul><ul><ul><li>International expansion: need for “bridges” </li></ul></ul>
  15. 22. Why long-term relationship? <ul><li>Provides the consultancy with a stable income stream and… </li></ul><ul><li>reduces the costly efforts to identify and sign up new clients </li></ul><ul><li>Clients have a better idea about the quality of the consulting service and… </li></ul><ul><li>only need to disclose confidential information to one consulting firm </li></ul>
  16. 23. How McKinsey does it <ul><li>Famous “up or out” policy </li></ul><ul><ul><li>Only 1 out of 10 recruits makes partner </li></ul></ul><ul><li>Former consultants in top positions </li></ul><ul><ul><li>CEOs of potential client companies (e.g. IBM) </li></ul></ul><ul><li>McKinsey maintains this network </li></ul><ul><ul><li>Through newsletter, social events, etc. </li></ul></ul>
  1. A particular slide catching your eye?

    Clipping is a handy way to collect important slides you want to go back to later.

×