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Management Consulting
Management consulting is the industry of advising businesses on their strategy or management practices. Management consultants bring a toolkit of industry best practices, proprietary analytical techniques and general business knowledge to their engagements. Consulting firms vary in size and structure, from the "Big 4" to smaller, boutique consultancies that may have just one or several permanent staff. Generally, management consultants combine top academics with an industry background to perform deep analysis on organizational issues.
Management consultants are used by businesses for a variety of reasons, including simple politics. In some cases, it is more efficient to bring in consultants than to build an internal team to address a project, especially when that project is short-lived, such as a one-time restructuring. Other times, the "objective" recommendations of external experts make it easier for management to build consensus on a course of action: a well-documented and research-supported consulting report can gain internal buy-in faster than something produced by an in-house department. Management consulting teams can also be brought in for a fresh perspective, deeper industry expertise, or to solve short-term staffing shortages.
The main types of projects in management consulting concern business strategy, organizational structure, and operations. Strategic planning is such a large part of management consulting work that the term "Strategy consulting" is almost interchangeable. Consultants are also often brought in for change management [LINK TO ARTICLE] projects, and are valued as objective external agents who can affect change without being subject to the inertia of an ongoing business.
The steps of a consulting project usually include data gathering, analysis, and recommendations. Consultants begin by interviewing stakeholders at the client company, and gathering any internal data and external data deemed necessary. After that, rigorous and exhaustive analysis takes place, usually performed along the lines of the consulting firm's techniques or frameworks. The recommendations arising from the analysis are presented to clients, usually in the form of a slide presentation, although often including text reports and appendices that cite all the data sources and explain how the conclusions were reached. Management consulting presentations are known for being information-dense, with a lot of text and graphics on each slide.
The industry is not without its critics. One criticism of management consulting is that it's only concerned with analysis, whereas the truly challenging part of business is the implementation. In fact, there are cases where a company hires consultants but fails to benefit from their recommendations because of implementation problems, which could be overlooked by consultants with little operational experience. However, this problem can be mitigated by assigning internal experts to work with external consultants, or structuring a consulting engagement to include getting involved with the implementation.
Another criticism has to do with organizational politics - some claim that consultants are used to promote the agendas of the managers who hire them, and thus strive to come up with recommendations that agree with that manager's opinions rather than truly objective work. While this sort of outcome is possible, it is a given that large organizations have internal politics, and bringing in external experts is only one tool that is used for internal consensus-building. Some argue that management consultants are too expensive and not the best use of resources for a firm, or that industry "best practices" are not necessarily transferable between firms.
Despite these criticisms, the management consulting industry is robust, and continues to attract some of the world's brightest, best-educated professionals. When used correctly, with an eye to benefits and risks, management consultants are valuable contributors to the businesses that employ them.
