Introduction to Management
Consulting
Ishwar Kumar
Faculty, IMT Nagpur
Overview of Indian Consulting Industry
• The consulting industry is diverse, consisting of large number of big and small
organizations, including global strategy firms (BCG, Bain & Company, A T Kearney)
consulting arms of technology firms (such as IBM and Accenture) and the big-four
accounting firms (such as PwC and KPMG), and a host of niche consulting firms
(including Universal Consulting, Avalon Consulting, and Oliver Wyman).
• Around 1000-1200 high value assignments are awarded every year, catering to an
overall US$500-800 million market
• Indian clients, despite being value conscious, are engaging a variety of consulting
firms to address specific concerns.
• Three major trends: increasing importance of high-end strategy consulting,
evolution of greater market segmentation, and focus on the outcomes of the
consulting assignment.
• Indian clients are culturally distinct from the Western markets
Overview of Consulting Industry
Overview of Consulting Industry
Overview of Consulting Industry
Overview of Consulting Industry
Fees in the consulting Industry
Average
revenue/
consultant
No of consultants (in logarithmic scale)
Overview of Consulting Industry
Overview of Consulting Industry
Overview of Consulting Industry
Definition of “Consulting Management” by different scholars
Author Title Definition
Kubr, M. Management ‘Management consulting is an independent advisory service
consulting: A guide to assisting managers and organizations to achieve organizational
the profession (2002) purposes and objectives by solving management and business
problems, identifying, and seizing new opportunities,
enhancing learning and implementing changes’
UK Institute Guide to membership ‘The service provided by an independent and qualified person
of (1974) or persons in identifying and investigating problems concerned
Management with policy, organization, procedures, and methods;
Consultants recommending appropriate action and helping to implement
these recommendations’
Alvesson, M.; Professionalism and ‘a management consultant is said to be in a position to make an
Johansson, politics in unbiased assessment of any situation, tell the truth and
A.W. management recommend frankly and objectively what the client
consultancy work organization needs to do without having any second thoughts
(2000) on how this might affect his or her interests.’
Definition of “Consulting Management” by different scholars
Author Title Definition
Wallace, Psychological ‘Consulting is a complex professional activity in which the
W.A.; Hall, consultation : consultant provides technical and problem-solving skills,
D.L. Perspectives and specialized knowledge, and work systems and processes to
applications (1996) improve the function and outcomes of the consultee’
Block, P. Flawless consulting: A A person who is in the position to exert an influence on an
guide to getting your individual, a group, or an organization but who does not
expertise (1999) possess a direct power to implement ‘change’ or interventions’
Fritz Steele “… any form of providing help on the content, process, or
structure of a task or series of tasks, where the consultant is not
actually responsible for doing the task itself but is helping those
who are.”
Peter Block “You are consulting any time you are trying to change or
improve a situation but have no direct control over the
implementation… Most people in staff roles in organizations
are really consultants even if they don’t officially call
themselves consultants”
Definition of “Consulting Management” by different scholars
Author Title Definition
Larry Greiner and “ Management consulting is an advisory service contracted and
Robert Metzger provided to organizations by specially trained and qualified
persons…”
“assist in an objective and independent manner the client
organization to :
Identify the problems
Analyze such problems
Recommend solutions to these problems
Help when requested in the implementation”
International “Management consulting is the provision of independent advice
Council of and assistance about the process of management to clients with
Management management responsibilities”
Consulting
Institutes (ICMCI),
What is management Consulting?
Professional services firms that provides:
• Analyzing complex business situations
• Developing insights and conclusions around that analysis
• Making recommendations on what to do next based on analysis, insights
and conclusions
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
History
• Consulting within accountancy and technology firms
PwC, EY, KPMG, Deloitte, and IBM, Accenture, HP
• Niche consultancy firms
Corporate social responsibility
Risk Management, Governance, Regulation, Compliance, Assurance,
Data Protection.
Stages in the History of Consulting:
1st. The Need for Operations Efficiency in the Early 20th Century
• During the late nineteenth and early twentieth centuries, the first
demand for Work Rationalization arose, which led to creation of
management consulting firms to provide consultancy for
organizational process, and machinery expertise.
• When Arthur D. Little (1886) began his career as a general
management service, he eventually specialized on technical and
management engineering, leveraging on the theories of Taylor and
Babbage, who advocated specialization. For the first time, “scientific
management” was introduced by them.
• Using these techniques, firms can increase their operational efficiency
by analyzing and optimizing each step of a task.
• They were avidly accepted by U.S. factory managers in the early 20th
century as they scrambled for efficiency and required measures to
speed up their workers’ performance.
Stages in the History of Consulting:
2nd. The Emergence of Management Consultancy
• The boundaries of Management Consulting became clearer and more
substantial as the service evolved. Clients began to recognize the need
for Management Consulting and the benefits it could give.
• Management consulting is a service that assists managers in making
choices. It is both knowledge-intensive and self-sufficient. The work is
organized as a standalone project that can be completed part-time or
full-time.
• New kinds of manufacturing, as Marc Baaji points out, sparked growth
and increased capital requirements much beyond a company’s
traditional financial capabilities. At the same time, there was a huge
increase in the need for expertise and professional business
management.
Stages in the History of Consulting:
3rd. Growth, Profitability, and Challenges During the 2nd Industrial
Revolution
• The second industrial revolution paved the way for expansion and
profitability in the third phase of the history of consulting. However, it
brought with it a slew of problems that management couldn’t always
solve on their own, particularly because investors weren’t as active in
day-to-day operations as most owners were.
• The divide between factory management and ownership evolved into
chasms. Neither owners nor entrepreneurs, professional managers
were. They sought guidance from consultants when faced with the
task of making significant complex judgments.
• Whether it was the US government engaging Booz Allen and Hamilton
or the French government establishing scientific management in its
defense industry, governments began to seek assistance from
consultants.
Stages in the History of Consulting:
4th. Demand for Financial Advice Following the Great Depression of the 1920s
• Following the great financial crisis of 1929, The Glass-Steagall
Banking Act in 1933 stopped banks from getting actively involved in
re-organizations and consulting activities. This new law triggered
rapid growth in demand for expert advice in banking, finance,
management, strategy, and organization, which boosted the
consulting industry.
• McKinsey & Company, founded in 1926, was one of the first
contemporary consulting firms to specialize in both accounting and
strategy. The firm experimented with novel business growth tactics
as banks and large accountancy firms were going out due to
regulations. It gained corporate clients by leveraging the results of a
general poll of company executives.
Stages in the History of Consulting:
5th. Major Strategy Frameworks Created in the 1950s & 1960s
• According to Raymond Chandler, the structure follows Strategy as a
mechanism of implementation. In terms of consulting, strategic
consulting appears to have followed the organizational efficiency form
of the service. The BCG produced many strategy frameworks that are
still in use today under Bruce Henderson’s guidance.
The two great examples would include:
• The “Growth-share Matrix” helps companies evaluate where and how
to allocate cash among their business units, and
• The “Experience Curve” models the evolution of costs with the number
of units produced for the first time.
Stages in the History of Consulting:
6th. The Emergence of IT Consulting And The Big Four
• The need for strategy and organizational consulting grew substantially in the 1980s and
1990s. Meanwhile, the demand for IT guidance and knowledge expanded at an
exponential rate. The number of consultants and the scope of their work increased
dramatically, expanding across Europe, Asia, and South America.
• IT Consulting and the Big Accounting Firms mark a major development in Consulting.
• The widespread usage of computer technology in economic and business terms brought
in a new consulting industry.
• IT consulting became a significant new market segment. However, due to antitrust
concerns, computer makers were barred from selling their expertise. As a result,
independent vendors began to offer IT consulting services. It led to the founding of EDS
(Electronic Data Systems) by former IBM employee Ross Perot.
• The Big Four, who were The Big Six at the time, quickly expanded their services to
include consulting in addition to accounting and auditing. Seeing an opportunity to
expand their consulting market share, they occupied the IT Consulting niche market,
assisting clients in implementing enterprise resource planning (ERP) systems across the
globe, among other services. By mid-1990, they had surpassed the majority of other
consultancies in size. The majority of them ultimately disbanded as a result of the Enron
Scandal.
• Based on numerical methods, IT consulting is the largest and fastest-growing segment
of management consulting, with only operational excellence coming close.
Stages in the History of Consulting:
7th. The Business of Excellence
• McKinsey was the first to establish the concept of “scaling up” success through
excellence in the 1980s, therefore we should thank them for introducing the
concept of “business excellence.” McKinsey introduced the 7-S framework by
leveraging the work of Peters and Waterman from the book “In Search of
Excellence.”
• This framework served as the foundation for linking strategy, organization,
and culture, and was also inspired by Nadler and Tushman’s Congruence Model
and Galbraith’s Star Model. Competencies and, later, capabilities were
identified as sources of competitive advantage.
• McKinsey & Company is still a consulting sector leader today. The organization
has offered Operations Excellence programs since the mid-1990s, and most
large consultancies have embraced the same product to the point of
commoditization. Furthermore, in today’s increasingly competitive world, true
excellence across the board is required. Consider excellence in manufacturing,
research and development, marketing and sales, and so on.
Stages in the History of Consulting: 8th. The Segmentation and Specialization Era
• It is always difficult for consulting firms that were formerly leaders in one discipline
of management consulting to achieve a similar position in a new field.
Diversification is difficult. Specialization by capability and industry sector is the
most reasonable strategy. It has been a major role in the expansion of management
consulting into various specialties as such below:
• Strategic management
• Information technology (IT) consulting
• Human resource consulting
• Digital management consulting
• Operations management consulting
• Engineering management
• Management science
• Research and development consulting
• Others such as disruptive innovation, branding, sustainability, etc.
Stages in the History of Consulting: 8th. The Segmentation and Specialization Era
Besides this segmentation, Consultants also began to focus more on specific industry verticals. The following
are the five industries with the highest demand for consulting services:
• Financial services
• Public sector
• Health & Life Sciences
• Manufacturing
• Energy & Environment
Moreover, there are other dimensions to consider as well when looking at consulting firms. Management
consulting is made up of different levels of specialization. While we already had the generalists, we now have
other degrees of specialization as well. They are as follows:
• The specialists
• The niche players.
• The pure players
• The hybrids
Paradigm shifts in Management Consulting (Source: Stryker 2011)
Period Perspectives
Scientific Management Behavioural Management
Early • Few consulting firms • No consulting firms
1890-1920 • Use of scientific method • Based on scientific method
• Emphasize on efficiency • Emphasize on effectiveness
• Principles of management articulated Accent on employee education
• Time-motion studies
• Accent on material incentives
Middle • Private sector consulting • Consulting institutes
1920-1940 • Extended scientific method • Based on behavior studies
• Emphasize on efficiency • Emphasize on effectiveness
• Principles of management extended • Employee-centered
• Work simplification management
• Accent on material and individual • Accent on personnel department
incentives
Paradigm shifts in Management Consulting (Source: Stryker 2011)
Period Perspectives
Scientific Management Behavioural Management
Modern • Public-private sector consulting • Public-private sector consulting
1940 • Based on Operations Research methods • Based on Organization
onwards and techniques Development methods and
• Emphasize on efficiency techniques
• Generalized management principles • Emphasize on effectiveness
• Methods analysis • Participative management
• Accent on material and individual • Accent on personnel training and
incentives counselling
• International consulting
Emergence of Management Consulting Fields (Baaij, 2013)
Factors leading to the growth in demand for consultants (Orr & Orr, 2013)
Why do consulting firms exist?
Job roles of some of the major types of
management consultants
Consultants Job role
Strategy Consultants They guide clients in different areas of business, including business
transformation, corporate strategy, and digital and invention
capabilities
Operations Consultants They guide clients about business process optimizations to enhance
operational business potential.
Human Capital Consultants They serve clients with changing management solutions and adapt
them to any business changes that may influence the employees.
Financial Advisory They advise clients about mergers & acquisitions, economic advisory,
Consultants and business restructuring to ensure business success. They contribute
to boosting business productivity; hence, these consultants can get a
better management consultant salary.
Information Technology They provide and execute technological solutions for the client.
Consultants
Core skills & soft skills required to be a management consultant
• Dedication and self-motivation – Typically, Management Consultants work at the client’s
office independent of the guidance of their seniors. Hence, they must have both self-
discipline and motivation to meet the set deadlines in time.
• Creativity – Since a large part of their job requires Management Consultants to find unique
solutions and strategies to combat business challenges, they must have a creative bent of
mind. Also, they must possess the flexibility and skill to handle any unforeseen
situation. They need to think out of the box. This is because resolution need not always be
traditional in nature.
• Organizational skills – Management Consultants must be organized in their approach and
implement the correct solutions in a stepwise manner to help businesses reap optimum
benefits. Besides, being organized also helps save valuable time.
• Analytical and problem-solving skills – Management Consultants have to conduct
extensive research and analyze business data to understand the problems at hand and
recommend solutions accordingly.
• Listening, verbal communication, and interpersonal skills – The job of a Management
Consultant demands a substantial amount of interaction with people from various
backgrounds and skillsets. Thus, Management Consultants must have excellent listening and
communication skills to deal with people and situations diplomatically.
Core skills & soft skills required to be a management consultant
• Presentation skills – Since Management Consultants need to communicate their findings
and solutions to clients and other stakeholders, they must be able to create apt visual and
written presentations for the same.
• Written Communication– Clients need regular written reports to supervise a company
project’s progress. Management consultants should be able to produce documents with
understandable and concise information.
• Time Management Skills – Management Consultants either charge companies on an hourly
basis or under a fixed-fee agreement. Hence, clients always value such consultants who can
actively manage their time and get the work done within the stipulated period.
• Decision Making– They need to make decisions that are based on analysis. They should
know how to explore possible options and derive probable outcomes. Moreover, they will
encounter inevitable conflicts that can be successfully managed with this skill. This skill is
one of the key reasons why the consultant salary is high for deserving candidates.
• Critical Thinking– One of their duties is to break down complex issues in an organized
manner. They use management consulting frameworks and several other tools for in-depth
analysis of business cases.
• Research– All recommendations should have credible bases. Thus, they always perform
research on best industry practices, market trends, competitor’s status, and many other
topics pertinent to the business issue.
Core skills & soft skills required to be a management consultant
• Computer Proficiency– It is a fundamental requirement for most jobs currently. Management
consultants need to prepare reports, make calculations, and present recommendations to high-
level management.
• Numerical Reasoning– Numbers are crucial in this job position. They assess financial reports,
market studies, and many other documents with statistical figures. So, they should enhance their
numerical reasoning skills before presenting their application to potential employers. Acquiring
numerical reasoning skills can add up to the consultant salary.
• Collaboration– A management consulting project can’t be completed solely. They need to
partner with other consultant leads to ensure the efficient flow of the project. Collaboration helps
them contribute to better results.
• Stress Management– A heavy workload can lead to fatigue and stress. They should learn to
manage their mental health and happiness. They must know how to balance work and mental
health.
• Flexibility– They may need to travel to various places and cities. They may not enjoy their job if
they are not flexible with new cultures, eating habits, climate, etc. They should be prepared to
face any challenge in the working environment. Along with offering a decent consultant salary in
India, this job role prepares them for how to tackle real-world challenges.
• Leadership Skills– One of their prominent responsibilities is to ensure team productivity and
propel the conversation forward. They can achieve these with leadership skills. It also helps in
achieving business goals faster. They must take bold initiative and guide the discussion in the
direction that leads to faster solutions.
Responsibilities of a Management Consultant
• Learn about the client’s business challenges and present strategies to understand their specific
needs.
• Review internal client company data (for example, financial statements, payroll information,
existing computer systems, business technologies, etc.).
• Interview the client’s employees, management team, and other personnel involved in the
business.
• Identify issues to form plausible hypotheses and solutions and prepare business proposals and
presentations for the client.
• Communicate the strategy and goals (that is, the result) that will be accomplished upon project
completion.
• Outline the scope of the work and create detailed logical schedules, milestones, and resources
required to meet the newly formed business objectives.
• Conduct regular meetings with the company’s senior stakeholders, company staff, and
internal/external project teams to ensure smooth workflow progress.
• Make recommendations to the management through presentations or written reports.
• Conduct training classes and workshops (if required) for company employees to inspire faster
adoption of new strategies and higher productivity at the workplace.
Responsibilities of a management
consultant
Core specialization domains of Management
Consultancy
• Marketing
• e-commerce
• Human resources
• Business strategy
• Inventory control
• Business restructuring
• Information technology
• Supply chain management
• Financial and management controls
Types of firms in the industry
• Accountancy firms offering consultancy
• Large non-accounting consultancies
• Small specialist boutiques
• Gurus
• Independents
Career structure in Consulting
• Business Analysts
• Consultants
• Senior Consultants
• Principal Consultant
• Business Development Managers
• Directors/Partners
Traits of management consultants
Consultants should possess:
• Excellent logical problem-solving skills
• Strong analytical skills
• Interpersonal skills
• Strong academic background
What is required to be a consultant?
• Intelligence Quotient (IQ) measures intelligence
• General business knowledge
• Understanding of client context
• Logical problem solving
• Emotional Quotient (EQ) means emotional intelligence
• Creates environment of trust
• Manages group dynamics
• High awareness of emotions
• Social Quotient (SQ) means social intelligence
• High self knowledge
• Experience of own transformational journey
• Sense of vocation
• Everyday is different – no
two days are alike
• Firms have a 9-6 work culture
only on paper
What do • Consultants need to travel
consultants to client locations
• Consultant lifestyle is
typically do? dedicated by culture of the
firm, client industry and
client themselves
Why management consulting as a career?
Learning On the job/hands-on
Higher compensation
opportunities experience
One of the largest
Networking/incredible Open doors to other
recruiters of business
peer-group industries
students
How do you get there?
Laterals - People with
Freshers -Campus/off
industry experience
campus for college
typically with 5+ years
and business students
experience
Generic Consulting Purposes
Why do companies hire consultants?
How are Consultants used ?
• Providing information
• Providing specialist resources
• Establishing business contacts and linkages
• Providing expert opinion
• Doing diagnostic work
• Developing proposals
• Planning and managing organizational changes
• Training and development of management and staff
• Counseling and coaching
Consulting Process and Stages
The Consulting Process
The Consulting Process
The Consulting Process
The Consulting Process
The Consulting Process
The Consulting Process
Consulting & Research
Thank You
