Understanding Management Consulting in 5 minutes

1. Understanding
Management
Consulting in 5 minutes
Francisco Hernandez-Marcos
MBA2004/Group C2
London, 17 November 2002

2. WHAT´S MANAGEMENT CONSULTING?
35-year-old Executive Trainee:
Accountant:
•Management Consulting is full of topics and jokes
•Management Consulting is still something mysterious for many people
Client Team Member:
“I can't bear their arrogance
and manners”
“I can't help thinking why we
spend so much money in this
kind of services”
Experienced employee:
“They've no idea of how this
business did run, run and will run”
“Why my boss receives so easily this 24-
years-old recently graduated from
University?”
Competitors:
“Their way to copy
others is ‘doing
benchmarking’”
Journalist:
“Their success is based in their
huge network; they have
former employees in almost all
big companies”
Client Team Member:
“They make absurd
spreadsheet models to
conclude what I already
know”
CEO Assistant:
“They are so kind I'd like to
introduce my niece”

3. •Understanding the Business
•Understanding the Client
•Understanding the Consultants
•Understanding the Client Team Members
•Understanding Recommendations
CONTENT

4. MINUTE 1: THE BUSINESS
5
1
23
4
MEMORANDUM
FROM: _____
• ___________
• ___________
• ___________
• ___________
Question RecommendationTeam working Decision
Possible
consulting
involvement
Examples:
•What branches
should we close after
merging?
•Which
countries/Business
Units should I be?
•What would be my
new-business-unit
configuration
Tasks:
-Researching
-Conducting
_analysis
-Brainstorming
-Teamwork
-Reporting
Examples:
•List of branches to
close
•List of
countries/Business
Units
•Master document
with new business unit
configuration
guidelines

5. MINUTE 2: THE CLIENT
5
1
23
4
“If a make a strong position in this
unusual issue and then it fails, I’ll be
ruining my 20-year-old successful career”
•Circumstances make many outstanding executives become very risk averse over time
•Being immersed in the business can be a handicap when one needs to think openly
•Outsourcing part of the decision-making process is always tempting
“I’m not sure if my
team’s gonna be able
to tackle such a
difficult challenge”
“Would it be useful a
third-party opinion to
prevent us from forming
biased conclusions?”
“The impact is huge:
x,000 employees, €xxx
million in revenues, €yyy
million investment… ”
“Day to day work makes
very hard thinking about big
issues”

6. 5
1
23
4
The Myths: The Truths*:
* Desirable truths
•Hasn't enough knowledge
of the sector
•Repeats in public what the
client already knows
•Sometimes talks too much
•Invents models and
numbers to support his/her
ideas
•Is open-minded so can, and in
fact did, work in very different
contexts/sector
•Is able to raise and support
stagnated ideas/concepts
•Likes thinking in loud voice as
a means to foster further
discussion
•Builds up quantitative models
that are just another helpful piece
of information
MINUTE 3: THE CONSULTANT
Mission: Coordinating and managing the team to obtain the best output

7. MINUTE 4: THE CLIENT TEAM MEMBERS
5
1
23
4
•Right to be listened to
•Right to participate in a risk-free
environment
•Right to get home at due time
•Right to understand consultants’jargon
•Right to know where the project goes
•Right to learn from the experience
CTMs are vital for the
quality of the
recommendation.
CTM* BILL OF RIGHTS:
* Client team Members
Client Team Member:
“member of the team
who come from the
client organisation”

8. MINUTE 5: RECOMMENDATIONS
5
1
23
4
¶ Each project should end with a
document that states all the
conclusions of the work done, and
the final recommendation to the
overhead
¶ The decision on whether taking the
final recommendation or not always
lays in the client
¶ In many cases the document is
nothing but the corner stone of the
real project

9. CONCLUSIONS
Currently, business environment is so dynamic that the key differentiating skill
among companies is their ability to push up new challenges/projects

10. CONCLUSIONS
Currently, business environment is so dynamic that the key differentiating skill
among companies is their ability to push up new challenges/projects
Lack of leadership is actually a disease in bigger companies,
especially when dealing with unusual business

11. CONCLUSIONS
Currently, business environment is so dynamic that the key differentiating skill
among companies is their ability to push up new challenges/projects
Lack of leadership is actually a disease in bigger companies,
especially when dealing with unusual business
M. Consulting may be used by
companies to overcome this drawback

12. CONCLUSIONS
Currently, business environment is so dynamic that the key differentiating skill
among companies is their ability to push up new challenges/projects
Lack of leadership is actually a disease in bigger companies,
especially when dealing with unusual business
M. Consulting may be used by
companies to overcome this drawback
Management Consulting

13. Do we know now something more about…
… the Business?
… the Client?
… the Consultants?
… the Client Team Members?
… Recommendations?
CONTENT

14. MAIN PLAYERS IN MANAGEMENT CONSULTANCY
McKinsey&Co
A.T. Kearney
Boston Consulting Group
Bain&Co
Booz-Allen & Hamilton
Roland Berger
Arthur D. Little
CountriesCountries
44
N/A
32
N/A
N/A
22
25
BACK-UP
OfficesOffices
82
N/A
>50
N/A
85
32
>40
Market ShareMarket Share
21%
8%
6%
4%
4%
3%
2%
Income per
consultant
(Euro ,000)
Income per
consultant
(Euro ,000)
4 3 0
3 6 0
4 4 0
2 8 0
4 8 0
Source: Annual Reports: Management Consultants International 2001
N/A
N/A

15. DISCLAIMER
This presentation is based upon personal opinions. It does not
pretend to do an exhaustive analysis of the topic. However, the author
thinks it might be useful for the reader knowing some of the aspects
here presented before making his or her own opinion

16. THE END