"Management consulting has become the most dynamic instrument for disseminating advanced management technologies, more than courses and books…" - Edgar Schein.
Management consultancies currently have a powerful influence on the way companies operate and government agencies operate, the ILO says. It is one of the fastest growing industries in the contemporary world.
According to Rasaam-Dates (1996), in the early 1990s, in Europe they were growing 25-30% annually and $ 25-30 billion, as an annual average, were moving in services of this type. Cohen (2003) estimates that in the US it has grown from $ 10-15 billion to $ 100 billion in a decade.
Among the reasons that explain this "boom" are the following:
- Competition in markets has become more intense. Changes in the environment of organizations (technologies, products, markets, customer demands) have accelerated, increasing levels of uncertainty. New information technologies have significantly changed the way of doing business. The deregulation of markets has multiplied the presence of offers and competitors in the markets. The speed with which new management approaches emerge has made it impossible for companies to assimilate and introduce themselves with the required speed, without the help from external specialists. The tendency to outsource professional services, seeking the most qualified answers, with lower fixed costs.
According to the ILO, the UK Institute of Business Consultants defines business consulting as follows:
“Service provided by an independent and qualified person or persons in the identification and investigation of problems related to: policies, organization, procedures and methods; recommendation of appropriate measures and provision of assistance in the implementation of those recommendations. "
Among the characteristics that the ILO identifies in this type of services are the following:
- It is an independent service. It is characterized by the impartiality of the consultant, which is a fundamental feature of his role. This means a complex relationship with client organizations. The consultant does not have direct authority to make and execute decisions. But, it knows how to act as a promoter of changes, and must ensure maximum customer participation in everything it does. It is an advisory service. This means that consultants are not hired to lead organizations, or to make decisions on behalf of their managers. Their role is to act as consultants, with responsibility for the quality and integrity of their work. It is a service that provides professional knowledge and skills. This involves two things: first,The consultant is a professional who has accumulated sufficient knowledge and experiences that he can make available to organizations. What distinguishes him is that he has passed through different companies and acquired the necessary skills to identify problems and help the organization find solutions; Second, that as part of their work, the consultant must contribute to the development of the knowledge and abilities of the members of the organization for their best performance. The consultancy does not provide miracle solutions. It would be a mistake to suppose that once a consultant is hired, the difficulties disappear. Consulting is a difficult job, based on the analysis of concrete facts and the search for original, but feasible solutions.what distinguishes it is that it has gone through different companies and acquired the necessary skills to identify problems and help the organization find solutions; Second, that as part of their work, the consultant must contribute to the development of the knowledge and abilities of the members of the organization for their best performance. The consultancy does not provide miracle solutions. It would be a mistake to suppose that, once a consultant is hired, the difficulties disappear. Consulting is a difficult job, based on the analysis of concrete facts and the search for original, but feasible solutions.what distinguishes it is that it has gone through different companies and acquired the necessary skills to identify problems and help the organization find solutions; Second, that as part of their work, the consultant must contribute to the development of the knowledge and abilities of the members of the organization for their best performance. The consultancy does not provide miracle solutions. It would be a mistake to suppose that, once a consultant is hired, the difficulties disappear. Consulting is a difficult job, based on the analysis of concrete facts and the search for original, but feasible solutions.the consultant must contribute to the development of the knowledge and capacities of the members of the organization for their best performance. The consultancy does not provide miracle solutions. It would be a mistake to suppose that, once a consultant is hired, the difficulties disappear. Consulting is a difficult job, based on the analysis of concrete facts and the search for original, but feasible solutions.the consultant must contribute to the development of the knowledge and capacities of the members of the organization for their best performance. The consultancy does not provide miracle solutions. It would be a mistake to suppose that, once a consultant is hired, the difficulties disappear. Consulting is a difficult job, based on the analysis of concrete facts and the search for original, but feasible solutions.
The commitment and dedication of the company management in solving their problems and the consultant-client cooperation are as important to the final result as the quality of the consultant's work.
Impacts of the consulting boom
Among the main impacts of the consulting boom, the following can be highlighted:
- Profusion of bibliography on the subject.
Among the most addressed topics are: Approaches and tools (Schein, 1987); Models and Techniques (ILO 1997, 2002); Personal experiences (Bermont, 1997); Sequence and activities (Cohen, 2003); Problems and suggestions (Block, 2002).
- Advisory service offers.
In addition to the more traditional services, in the sphere of accounting, financial consulting, marketing, quality systems, to name a few, specialized consultative actions such as “reengineering of organizational processes” are incorporated (in the first two years that they started, they generated a volume of 20 billion dollars in the US), design of organizational strategies and change programs, among others.
- Training programs.
Universities and management training centers are starting to offer workshops, courses, diplomas and, to a lesser extent, Master's programs in management consulting.
- Professional organizations.
Organizations of "consultants" are increasing. In the case of Latin America, in recent years the presence of representations of international consulting firms such as Price Water House & Cooper, Ernest & Young, among others, has multiplied.
Added to this are the "consultants" who act as representatives of management "gurus" who have developed approaches and technologies for advanced management processes such as: Covey, Senge, Blanchard, Fisher, Karras, Hammer, among others.
In the academic sphere, an important impact is the identification of consulting as part of the process of generation, use and dissemination of management knowledge and technologies. At this level, consulting can be considered as a trilogy, integrating with teaching-learning processes and scientific research.
The teaching-learning processes, both in university academic programs and in management training activities, have as central objectives: the transmission of knowledge and the development of skills.
Scientific research corresponds to the generation of knowledge and methodologies. To consulting, the integration of knowledge and experiences, its use in solving business problems and generating new knowledge.
Between these three types of activities there must be a very close relationship. For greater effectiveness of the impact of these three components, the institutions and consultants must establish permanent feedback between them. Through research, identify new knowledge systems and approaches, incorporate them into teaching-learning processes (includes management workshops and academic programs), use them in consultancies. In addition, use the latter as processes that provide new knowledge, for which it is necessary to systematize the results that are obtained.
Why and what are consultants used for?
For Peter Block, a leading international consultant and author of books on the subject, the main goals of a consultant are:
1-Establish a collaboration link.
2-Solve problems so that they remain resolved.
3-Ensure that attention is given to both technical-commercial problems and interpersonal relationships.
A secondary goal is "to get managers excited and engaged in applying the results of the consultancy, so that the final report is not covered up." Block emphasizes that, "rather than solving problems for the company-client, the consultant must teach them how they can act to solve them on their own."
For the ILO, the reasons why consultants are used are as follows:
- To provide special knowledge and skills, to provide intensive help on a temporary basis, to give an impartial point of view, to give management arguments that justify predetermined decisions.
In these and other references by different authors, three aspects that characterize consulting work stand out, unlike other professional activities, such as:
1-The solution of business problems.
2-The management and interaction between technical and organizational problems with human relations systems in the organization.
3-The preparation of the members of the organization so that they develop their capacities for the solution of their problems.
On the latter, Lyndon Urwick (Kubr 1994) has noted that "the only job that is really worth doing as a consultant is one that instructs, that teaches clients and their staff to better manage their businesses."
Management consulting models
Schein identifies three management consulting models: the acquisition of an “Expert” service, the “Doctor-Patient” model, and the “Process Consulting”.
In acquiring an "Expert Service", the client has defined what the problem is, what type of help is required and who should go to obtain it.
Examples of this type of consulting can be:
- Hiring a systems analyst to design a computer program, a lawyer to assess the legal consequences of a given action, a finance specialist to assess the financial situation of the company.
In this case, the client's message to the consultant may be: "This is my problem, find the answer and tell me how much it will cost."
The conditions for this Model to work effectively are that the client:
- You have correctly diagnosed the problem, You have correctly identified the ability of the consultant to provide experienced advice, You have correctly stated the problem and the kind of expert or information to be obtained, You have considered and accepted the potential consequences of obtaining the information or service.
The "Doctor-Patient" model is a variant of the "expert" model, but in this case the consultant is asked to make a diagnosis and recommend the type of information and experience that will solve the problem.
In this case, the client experiences some discomfort or observes unsatisfactory symptoms in some sphere of the company's activity, but does not really know what is wrong, or how to fix it. Your message to the consultant might be: "Please find out what's wrong and recommend what we need to do to improve it."
The conditions for this model to work effectively are the following:
- The consultant's diagnosis process will be considered beneficial. The client has correctly interpreted the organization's symptoms and has located the “sick area.” The person or group identified as “sick” will reveal the pertinent information necessary to carry out a Valid diagnosis, that is, they will not hide data or exaggerate symptoms. The client will understand and correctly interpret the consultant's diagnosis. The client may remain “healthy” after the consultant leaves.
In the "Process Consulting" (CP), the consultant performs a set of activities that help the client to perceive, understand and act on the events of the process that occur in their environment, in order to improve the organization's situation. The consultant tries to give the client an idea about what is happening around him, within him, and between him and other people or entities. Based on this, it helps the client to decide what to do to improve the situation.
The consultant who is guided by the CP "model" starts with very different ideas about the nature of the client system and the goals of the consulting process. The fundamental premise of the CP is that "the problem belongs to the client and will continue to be so throughout the entire consulting process." "It is your problem, but I will help you solve it," is the consultant's approach. Your role is more as a facilitator than an expert.
Consistent with this, the client, with the help of the consultant, is the one who “makes” the diagnosis of “their problem”, and actively participates in the preparation of the recommendations and their implementation in practice.
In the experiences of Schein and other consultants, the Process Consulting model is the most appropriate when the following conditions exist:
- The client feels some discomfort, but does not know its origin and does not know what to do about it. The client does not know what kind of help is available, nor what consultant can provide the kind of help he needs. The problem is of such a nature that the The client not only needs help defining what is wrong, but would benefit from participating in the diagnosis process. The client has a “constructive intention”, based on goals and values that the consultant can accept, and has some capacity to participate in a helping relationship. (The consultancy will not work if the client has hidden goals and values that the consultant does not know, or does not accept) Ultimately, the client is the only one who knows what form of intervention will work in that situation.The client is able to learn to make diagnoses and solve their own organizational problems.
Types of consultants
Regardless of the model used, consultants may be "external" to the organization, which is the most general case when it is desired to apply approaches or techniques on which the organization does not have specialists; or internal, when managers or specialists from the organization itself are used.
Among the advantages of "external consultants" it is pointed out that: it is independent, it has a "fresh, impartial and uncompromised" judgment on the problems of the organization, it manages experiences of other organizations, it can have more credibility than members of the organization.
Among the disadvantages are that: you do not know the structure, the organizational culture or the company, therefore, you must spend some time getting acquainted with the environment, although you will never know the organization as those who "live" in it.
In the case of the "internal consultants" among its advantages are that: they know the structure, the people and the procedures, it is "available" all the time, it is a specialist in some area of the company, it knows the problems in depth.
Among the disadvantages are that: he is considered to be from the “family” and, therefore, he may have less credibility and authority than an outsider, he may be influenced by the “history” and prejudices about processes and people, he cannot contribute experiences of others places.
The most effective practice, which is the one we apply at the CETED (Center for Studies in Management Techniques) of the University of Havana, is the use of a mixed team, made up of internal and external consultants, in which the latter are They deal with the design of the Consulting Program, the training of internal consultants and acting as facilitators in group dynamics and the integration of information from different sources, in addition to transmitting experiences of other organizations, known from previous works, by exchanges with others. consultants, for the specialized bibliography, or for their academic activity.
Some ethical principles and work criteria.
The work of a consultant, especially if it is external, is complex, it is integrated in a medium that is not known and in which it is not known. Therefore, one of the first things you should do is win the trust of the members of the organization.
An important role is played in this by the ethical behavior it assumes and the way it relates to the members of the organization. Some of the suggestions made by different specialists are as follows.
- Show modesty and respect for the criteria of the members of the organization. Work with organization and discipline. Avoid confrontation with company personnel, act as a mediator in handling conflicts that arise, or are identified, during the consulting process.. Have the capacity and patience to listen to the arguments of the organization's staff. Guarantee absolute confidentiality in the handling of the information that comes to be known, or is generated, during the consulting process. The experiences that you know of other companies, which may be useful, should be handled in such a way that their origin cannot be identified. Train the members of the organization in the knowledge and skills that are necessary and be able to transmit them. In addition to being a "facilitator",the consultant must feel and act as a trainer. Seek that the solution proposals "come out" of the members of the organization, generate sufficient synergy and security so that they feel that "they can get to solve their problems".
