THE UNIVERSITY OF DODOMA

COLLEGE OF HUMANITIES AND SOCIAL SCIENCES

SCHOOL OF BUSINESS STUDIES AND ECONOMICS
DEPARTMENT OF BUSINESS ADMINISTRATION
MG 321:- MANAGEMENT CONSULTING

READING MANUAL

Prepared by

Mohamed A. Kaluse

© 2015

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CHAPTER ONE: NATURE AND SCOPE OF MANAGEMENT

CONSULTING

1.0 INTRODUCTION

The history of Consulting dates back to the 18th Century, during the

Industrial Revolution when various social, political and economic changes

were taking place in Western Europe and America. This was the period when

the capitalist economic system was taking root.

Pioneers of scientific management like Frederic W. Taylor, Lillian Gilbreth,

and Henry Gantt gave a major impetus to the development of consulting as

a profession. During the WWII there was an increased application of

scientific management principles in the army and the government.

Competition and efficiency become the major driving forces behind the

development of consulting as a profession while early consulting focused

mainly on management practices, that is, on technical and methodological

approaches in simplifying work processes and raising labor productivity. In

the modern times, however, consultancy focuses on all aspects of business

and non-business activities.

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For students and scholars, studying consultancy techniques assists them in

building up essential skills and abilities to become future consultants as

well as to sharpen their undercover character.

Introduction to consulting

‘’ Even consultancy has an origin’ ’

It is very important to point out that in French the word conseil is used for

the same purpose as ‘ consultant’ in English/American.

Indeed, ‘consilium’ ’ was first used in legal language to mean “a place where

people deliberate”, or “a get-together of people on purpose”. The correct

translation of this word into English is, of course, council, which we have

used, for example, in the European Council since 1979. Perhaps the word

counsellor would be more appropriate to use in this context?

“To consult” means “to get information” and not “to give information”.

So, is the consultant someone who seeks information but does not give

any? Writing that feels a little like a Dilbert storyline, and, of course, we

all know that such ‘ consultants’ exist.

The dictionary definition for the word counsellor (some who gives advice

about problems) seems much more appropriate than that for the word

‘ consultant’ (an expert who gives advice). It is obvious that everybody can

give advice and therefore be a consultant, but who actually dares to give

advice about problems? Only a real counsellor, of course.

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Consequently, the word ‘ consultancy’ must also be banished, although I

found the following definition in the same dictionary: “The practice of giving

expert advice within a particular field”.

Who is consultant?

Consultant is an expert or professional contractor in specific field who

provides unbiased opinions, advice and innovative ideas and solutions to a

client in return for a fee. The independence of the consultant is due to the

fact that he/she is not an employee of the company he/she is consulting,

and when this is the case then, the consultant becomes an external Expert.

On the other hand, a consultant who works dependently to the organization

he/she is consulting is known as internal or in-house consultant. This type

of consultant is common nowadays among large firms and he/she is a part

of a specific unit within the organization, that includes staff with highly

trained and experienced personnel in order to provide advisory services to

other departments within the organization.

Whether working internally or externally, and as part of his/her work, any

consultant is expected to describe the situation, make an independent

assessment, tell the truth about the situation and recommend frankly and

objectively.

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See the Poem from Rudyard Kipling ‘ IF’ to his Son

If you can keep your head when all about you

Are losing theirs and blaming it on you;
If you can trust yourself when all men doubt you,
But make allowance for their doubting too;
If you can wait and not be tired by waiting,
Or, being lied about, don’t deal in lies,
Or, being hated, don’t give way to hating,
And yet don’t look too good, nor talk too wise;
If you can dream – and not make dreams your master;
If you can think – and not make thoughts your aim;
If you can meet with triumph and disaster
And treat those two imposters just the same;
If you can bear to hear the truth you’ve spoken
Twisted by knaves to make a trap for fools,
Or watch the things you gave your life to broken,
And stoop and build ‘em up with worn out tools;
If you can make one heap of all your winnings
And risk it on one turn of pitch-and-toss,
And lose, and start again at your beginnings
And never breath a word about your loss;
If you can force your heart and nerve and sinew
To serve your turn long after they are gone,
And so hold on when there is nothing in you
Except the Will which says to them: “Hold on”;
If you can talk with crowds and keep your virtue,
Or walk with kings – nor lose the common touch;
If neither foes nor loving friends can hurt you;
If all men count with you, but none too much;
If you can fi ll the unforgiving minute
With sixty seconds’ worth of distance run –
Yours is the Earth and everything that’s in it,
And – which is more – you’ll be a Man my son

You may find it very strange to start the discussion of Consultant with a
poem. The reason is very simple: in this poem, the famous author Rudyard
Kipling addresses his thoughts to an imaginary son. He teaches him all the
things needed to be a man in the tough world in which we are living. In

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exactly the same way, I would like to analyse a large part of the poem and
adapt the explanation to the needs of a consultant.

Consultants must behave like normal people, with normal reactions and,
above all, they should be prepared to their job, just as Kipling tells his son to
be prepared for real life.

If you can keep your head when all about you

Are losing theirs and blaming it on you;

This is a very surprising statement: try to be cool and to avoid panic when
others are not capable of doing so. If, as a consultant, you can keep a cool
head, with clear ideas in a stressful situation, your reactions will be better
than those who cannot. It is up to you to calm the situation down, to look
beyond it and to find the right reaction.

If you can trust yourself when all men doubt you,

But make allowance for their doubting too;

Do not think that you are always right. Do not think that you are the only
person in the world who knows everything. But feel comfortable with your
feelings; do not hesitate if you think that you are right, but still try to
acknowledge other people’ s objections. This also means not going too fast,
and not forgetting to listen to others. Nevertheless, this sentence seems
quite correct as it gives you the power to react correctly if you are sure that
the way you are thinking is the only way logically possible.

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If you can wait and not be tired by waiting,

Or, being lied about, don’t deal in lies,

Patience is one of the major strengths a consultant should have. This does
not mean passively waiting. You cannot just sit and wait until a solution
comes to you; no, you should try to be patient while helping others to bring
you stones that can help you to create, in an unhurried fashion, a wall of
solutions. And never forget that many people will lie to you, not necessarily
on purpose, but often by omission or stupidity.

You should be able to forgive them, as well as helping them to find the
truth. Of course, all of this should never be a reason for you, the consultant,
to start lying yourself.

And yet don’t look too good, nor talk too wise;

Once again this is an important lesson in humility: you should not give the
impression of being TOO something, because that never helps. In addition,
the second part of the sentence is very basic for all consultants: do not use
complicated sentences, phrasing, or words unnecessarily.

The better you understand a problem, the easier it should be for you to
explain it. Your clients do not expect university vocabulary from you: what
they want from you is an understandable solution to their problem. It is up
to you to find a simple way to explain what exactly the problem is and how
you propose to help them to solve it.

If you can dream – and not make dreams your master;

If you can think – and not make thoughts your aim;

One of the most important characteristics of good consultants is that they

are able to think in an abstract way. They can ‘ dream’ of a solution.

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But, as mentioned in the poem, this is not enough because you cannot
simply ‘ dream’ – you have to find a realistic solution which can be adapted
to the situation. You need a lot of imagination because you have to be
capable of seeing the solution in the future. You should be able to ‘ see’
your client’ s company after the changes you would like to carry out. If you
can do this it will be easy for you to make realistic plans towards your
‘ dream solution’ . The approach is exactly the same for ‘ thoughts’ , of
course.

If you can meet with triumph and disaster

And treat those two imposters just the same;

Not every mission you will have in your consultancy career will be a
successful one. Once in a while it may happen that the solution you
implemented was not the right one; and maybe your client’ s company will
be in an even worse situation following your intervention. If this is the case
you should not be discouraged; on the contrary, you should learn from this
difficult experience and try to find out why you made this mistake. You can
and should learn a lot from your mistakes.

If you have had a huge success, you should not stop working or studying,
but rather you should try to stay humble, to study this success, and try to
find out if it was possible to do even better. That is the way you should
treat those two ‘ imposters’ just the same.

If you can talk with crowds and keep your virtue,

Or walk with kings – nor lose the common touch;

A consultant must try to speak with everybody (if necessary) in your client’ s

company. You should be able to speak with the management of the company,

keeping in mind that they are in charge of the staff and that you are

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responsible for finding a good solution for all the people working in this

company. But you should also be able to speak with the working class inside

this company, because they can very often explain why things go wrong. It is

they who do the job. Be humble, speak simply, and try to get them to help

you. By acting this way people will admire you, follow you and help you to

implement the solution you propose.

If neither foes nor loving friends can hurt you;

If all men count with you, but none too much;

You should be completely independent. Nobody should be able to attack

you morally or financially. You should be able to work in a calm atmosphere

where you can speak the truth and where you can act without having to take

into account the opinions of others. Everybody should consider what you

have told them, but you should also give them the opportunity to hold their

own opinion. Things can evolve and you should be aware of that and accept

that people can change their minds.

And then comes the final verse which we could easily adapt as follows:

And – which is more – you can be a consultant now.

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A Client

A client is a person or organization that is seeking professional advice from

a professional person, and in this case, the client has a problem that needs

solution and therefore contracts the consultant to provide them with the

required professional advice.

Clients use consultants due to the following reasons;

i. Extending staff: this is when the client lacks times and sufficient staff

to tackle a problem.

ii. Acquiring information: this is when the client lacks information on

environment, competition, business and technology trends or other

matters needed to make correct plans and decisions.

iii. Establishing new business contacts and linkages: this is when the

client needs help in finding suitable business contacts and negotiating

deals with them.

iv. Obtaining an impartial expert opinion: this is when the client needs,

whether formally or informally, an opinion independent of his/her

own.

v. Identifying, diagnosing and solving problems: this is when the

client needs help with any aspect and at any stage of problem

diagnosis and solving, including overall diagnosis of his/her business.

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 vi. Developing and implementing new methods and systems: this is

when the client wants to modernize their planning, scheduling,

control, management information and other systems.

vii. Planning and implementing organizational change: this is when the

client needs a professional change agent to help design and

implement an effective change strategy and overcome barriers to

change.

viii. Training and developing management and staff: this is when the

client wants to apply experience and know-how that is best acquired

through training.

ix. Any combination of (i) to (viii) above: this is when the client wants

to enhance impact by combining two or more items described above.

Consulting

Consulting is simply a business of providing professional advice to

organizations that are facing problems in performance and/or profitability,

and that are intending to improve efficiency and effectiveness in their

operations, or that are seeking to take up new business opportunities for

the purpose of enhancing performance of their operations.

Consultancy is also defined as “an advisory service contracted for and

provided to organizations by specially trained and qualified persons who

assist, in an objective manner, the client organization to identify problems,

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analyze such problems and recommend solutions to such problems” (Greiner

and Metzger, 1983)

In its totality, consulting is essentially a process of transferring professional

knowledge, skills and experience from the consultant to the client

organization. If the knowledge, skills and experience of the consultant

cannot be successfully transferred to the client to solve the problem(s), then

the consultant should count him/herself to have failed the assignment.

Essential Consulting Skills

Professionalism: what are the requirements for a good consultant?

A consultant must have a certain important skills such as knowledge,

attitudes and personality attributes which constitutes competency in

dealing with various situation effectively and make prospective client aware

of his/her capability.

These skills will not only enhance the consultant ability to carry out

consulting assignment or projects but also to improve his/her position with

wide range of the client.

These skills should enable consultants to

(a) acquire ability and confidence to carry out assignment in his/her

field of management

(b) Investigate an existing situation and design improvements.

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 (c) Develop a collaboration relationship with the client.

(d) Gain acceptances of the proposed changes and implement them

satisfactorily.

(e) Develop proficiency in his /her fields in discipline

(f) Satisfy the management of the consulting organization that he/she

is capable of working independently and under pressure to the

required standards.

The potential consulting skills a consultant needs to develop includes

(a) Project management skills

Important project management skills includes the following

 An ability to define objective and outcomes of the project

 An ability to develop formal plans

 An ability to sequence and prioritize tasks and divide

responsibilities for tasks

 An ability to manage the financial that are invested in the

consulting project.

 An ability to recognize human expertise necessary to deliver

the project.

 An ability to manage time.

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 (b) Analysis skills

A consulting exercise must do something for the client. It must offer the

client the chance of moving from where it is now to somewhere new and

better.

This demands both an analysis of the business’ current situation and

analysis of opportunity open to it. Analysis involves taking information

about client’ s organization and its situation and then processing that

information to enable effective to make. These skills includes

 An ability to identify what information is available in a particular

situation.

 An ability to identify what information is needed in particular

situation

 An ability to process the information to identify important

relationships within it.

 An ability to draw meaning from that information and use it to

support decision making.

 An ability to recognize client’ s strength and weakness

 An ability to recognize the opportunities and challenges the

environment offers the organization

 An ability to assess the client’ s financial position.

 An ability to assess the client’ s internal conditions

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  An ability to analyze the way in which decisions making occurs within

the organization.

(c) Relationship building skills.

 Ability to build rapport and trust with the client.

 Ability to question effectively
 Ability to communicate ideas clearly and precisely
 Ability to negotiate objectives and outcomes
 Ability to convince through verbal, written and visual media
 Ability to use information to make a case for a particular course of
action
 Ability to sell your proposals
 Capacity to effective team work
 Capacity to demonstrate leadership

However, a consultant needs more of personal attributes to perform any

given assignment. Therefore, a consultant should answer the following

questions:

1. What personal attributes do I need?

• Fearlessness

• Rapid framing

• Humour and perspective

• Confidence and self-esteem

• Intellect

• Active listening

• Comprehensive questioning

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•Clear language

• Glocal thinking

• ‘ Instantiation’

Fearlessness

The consultant has to be sure about his recommendations at the end of a

mission, and he should not fear the reaction of the company management,
even if he knows that what he is going to say will not be acceptable to them.

Imagine a consultant telling the management that the only problem in the
company, or the major cause of the company’ s inefficiency, is actually the
management itself. It is a strange situation, but the consultant has to tell
the truth even if he is apprehensive or fearful about the results of his
analysis.

Rapid framing

It is the role of the consultant to detect what has not been revealed, to make
up his mind, to build a frame as rapidly as possible so that he can start
working on this.

Therefore, it is important to be able to do ‘ rapid framing’ , just because

time is money. The shorter the framing period, the quicker people can feel
that the consultant knows what he is working on, and the faster he will be
accepted in what he does.

Humour and perspective

As in daily life, everything turns on humour and perspective. People with a

broad sense of humour tend to be intelligent because, once in a while they
manage to use it to diffuse a potentially dangerous situation.

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Putting things into a humorous context and giving humorous examples can
help both parties to relax, and even to better understand what is actually
meant.

In a similar way, a perspective ‘ way of thinking’ is also necessary. Those

who can put situations into perspective in the long term can explain better
why current situations are wrong.

Confidence and self-esteem

Confidence is required to be able to act and react, If the consultant is not

confident either in what he does or with the solutions he is defending, it is
not necessary to try to convince the management because they feel that the
consultant himself is unsure. And you should have plenty of self-esteem
because, without it, no one can expect the respect of others. But be careful –
this has nothing to do with being pretentious, which would be a negative
approach. In this context it simply means that a person has to know exactly
what he is worth and nothing more. Once he knows this it is clear that other
people will respect him for what he is, what he knows, and for the way he
behaves.

Intellect

This word, of course, is very close to ‘ intelligent’ but is more than just that.
An intelligent person has a lot of knowledge, and has probably studied a lot,
whereas a person with intellect knows how to use this knowledge, which is
extremely important.

The consultant should have enough experience in the field, and sufficient
intellectual background so that he can help any company in his area of
competence in a practical way, simply because he knows how to apply what
he has learned in the field.

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Active listening

What is active listening about? Well, when you want to learn a lot about a
person or a situation you have to listen – but active listening is more than
that. It is asking the right questions at the right time without interrupting
the speaker. It is being positive in your questioning;

It is helping the other party in the discussion to reveal everything he knows

about the problem. It is also showing the other person that you are
interested, even if it only concerns minor details. Active listening also
means avoiding speaking too much about one thing which might be hiding
others.

Comprehensive questioning

This is, of course, linked closely to comprehensive questioning. Both are

necessary because a lot of people never talk. A person may be frightened
when questioned by a consultant because he does not realise the
importance of the mission, and only answers precise questions. If the
consultant is a good questioner he will help the other person to overcome
his fear and through this approach will obtain the necessary information.

Most people think they use straightforward language, but unfortunately this
is not the case. In a consultancy job, speaking plainly and clearly is very
important because if people do not understand what a person is talking
about they cannot be helpful by giving correct information. This has a lot to
do with good pronunciation but much more to do with the use of the correct
vocabulary.

One should speak at the level the other understands. This means simply
that it is not practical to use academic vocabulary with less-well-educated
workers. It is not easy to ‘ translate’ a theoretical approach learned at
university into simple ‘ human’ language.

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Glocal thinking:

This famous phrase was ‘ invented’ during the time global thinking was
necessary, but when people forgot to do things locally. The contraction was
derived from think globally, act locally. Of course, this is applicable to
everybody in charge of changes and analysis: they need to apply what they
know in general (globally) and must apply it correctly in the field, where
they are working (locally).

Instantiation:

This word does not exist in any dictionary as far as I know, but it is a
powerful word. It is a compilation of instant and situation, and describes
exactly what it means: instant action in a given situation.

It is one of the characteristics of born leaders, but equally should be one of

good consultants, being able to take the right decisions immediately at the

right moment. Indeed, sometimes there is no time left to analyse or

reanalyse a problem, but a decision has to be made – those who can take the

right decisions at the right moment can help companies a lot.

They do not waste time but rapidly find and make the right conclusion; they

simply act without fear in order to avoid the situation deteriorating further.

Here we come back to the beginning, to instant decision-taking without fear

or apprehension.

2. What are my qualities?

This is a sort of analysis one makes (or better still, has to make) of himself

having experienced several difficult and complicated situations. The kind of

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questions people with certain responsibilities often ask include: did I take

the right decision? Did I act correctly? Am I still able to work as hard? Is

there any risk for other people? Would I accept others acting as I did, in the

way that I behave? Is what I am doing sustainable? All these elements can be

itemised in a structured list:

 Intellectual abilities

 Understanding people

 Communication

 Emotional maturity

 Stress resistance

 Personal drive and initiative

 Ethics and integrity

 Physical and mental health

Intellectual abilities

Do I have the right educational background to do this job? Do I know what it

is about?’ It is very important to have a global view on things, with a broad
background, where people can observe from different points of view so that
the global impression is closer to reality.

Understanding people

In order to understand people it is necessary to talk and listen a lot. Never

avoid contact with people from different origins – such as cultural,
hierarchical, levels and different educational backgrounds – because this is
exactly where you can learn a lot. Learn from the others and try to
understand what they mean, why their opinions differ to yours. Surely it is

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worth trying to find out why somebody reacts differently to you? In so
doing you have to analyse the behaviour of yourself and the other person.

Communication

Communication is not only the basis for business in general, but it is a

fundamental necessity for consultants. If you are unable to communicate
well would you be able to find out what the problem is? May be, but how
long would it take? Would you be able to implement your solution without
correct communication about it? No way! Therefore it is necessary to
analyse your communication capacities.

Emotional maturity

Emotional maturity has nothing to do with age; it is about how people react
in given circumstances, and what experiences they have.

Real business example

Imagine that you have to explain to a boss that the way he manages a
company is not the right one, and that the only way to ‘ save’ the business
is for him to leave the management. This is an emotional and complicated
situation. The person appearing in front of you is maybe the one who hired
you, the one who has given you the mission, and you have to tell him that
he is the real problem.

Stress resistance

Stress is not only due to an exaggerated amount of work – in which case it

would be easy to avoid it as it would be sensible to split the job into two
parts, create a new job and the stress would disappear. Stress is also due to
the complexity of the job.

Many people work in jobs they are not qualified for, and so they have to
work above their normal capacity all the time. This is not a good situation;
as such people have to put all their efforts into actually doing their daily

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job, leaving them no time or energy to think about what they are doing, or
to look for innovation or change. Sometimes, stress is also due to ‘ fear’ of
those above them, ‘ fear’ for the career, ‘ fear’ about what people think of
you.

In the consultancy business, the reasons for stress tend to be similar,

except that you always have to behave as an independent person without
any hierarchy. You have to act as if you were the only person responsible,
without having to take into consideration the position of the person facing
you. As a consultant, you have to convince yourself that you are working
objectively on a mission, and that all the people involved in this can be
changed, and are not necessarily the best ones for the job.

Personal drive and initiative

One of the characteristics you should enjoy observing when young

consultants start work in a company is their personal drive and initiative,
because it is in these two fields that the ‘ real consultants’ can be detected,
those who will make it, and the ‘ average’ ones. Those who are enthusiastic
and bring a personal touch to the business are pleasant to work with; if, in
addition, they take initiatives (even if they are not always the right or the
best ones) they can do a good job, because by acting like that they can
boost the mission. So if a person feels during this analysis phase that he
does not need initiative, it might be better to forget the dream of working as
a top-level consultant.

Ethics and integrity

Integrity means, Firm adherence to a code of especially moral or artistic

values:

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Why is ethical behaviour important?

The first response to that question is clear: because it is a matter of human

reflex, and because this is simply a question of respect for both the
profession and the clients. But is it really that simple?

If all consultants were real consultants, meaning that they were really
concerned about their clients, we would never have any problems because
even in difficult situations they (the consultants) would give objective, clear
information. They would inform their clients about the dramatic situation
they live in, and would never hide anything or forget to mention
irregularities. Unfortunately, not all consultants are honest and some are
easily influenced.

Management Consulting

The Institute of Consulting defines management consultancy as ‘ the

provision to management of objective advice and assistance relating to the
strategy, structure, management and operations of an organisation in
pursuit of its long-term purposes and objectives.

Such assistance may include the identification of options with

recommendations; the provision of an additional resource; and/or the
implementation of solutions.’

Other says that, management consulting refers to both the business and the

practice of helping organizations improve their performance, primarily

through the analysis of existing business problems and development of

plans for improvement. Management consulting provided professional

business knowledge such as organizational change management,

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development of coaching skills, technology implementation, strategy

development, or operational improvement services.

Although management consulting refers generally to the provision of

business consulting services, it has also numerous specializations, such as

information technology consulting, human resource consulting, and so

on.

CHARACTERISTICS OF MANAGEMENT CONSULTING

1. Transferring knowledge: Management consulting can be described as

transferring to client knowledge required for managing and operating

business and other organization. This knowledge must help the client

to be more effective in running and developing their business. Thus

knowledge transfer is a two way process : in enhancing their clients’

knowledge and capacity to act effectively , the consultants learn from

them and enhance their knowledge and capacity to advise their clients

, current and future , more effectively , in new situations and on new

issues.

2. Advice and assistance: Consulting is essentially an advisory service.

This means that, in principle, consultants are not used to run

organizations or to take decisions on behalf of managers. They have

no direct authority to decide on or implement changes. The

consultant’ s art consists in getting things done when you are not in
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 charge. The client in turn needs to become skilful in taking and using

the consultant’ s advice and avoid misunderstanding on who is

responsible for what.

3. Consultant’ s independence: independence is a salient feature of

consulting. A consultant must be in a position to make unbiased

assessment of any situation , tell the truth and recommend frankly

and objectively what the client organization needs to do without

having any second thoughts on how this might affect the consultant’ s

own interests

Facets of independence

 Technical independence: The consultant is in position to

formulate a technical opinion and provide advice independently

of what the client believes or wishes to hear.

 Financial independence: The consultant has no financial

interest in the course of action taken by the client. The desire to

get more business from the client in the future must not affect

the objectivity of the advice provided in the current assignment.

 Administrative independence: The consultant is not the

client’ s subordinates and cannot be affected by his or her

administrative decisions.

 Political independence: Neither the client organization’ s

management nor its employees can influence the consultant

using political power and connections.

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  Emotional independence: the consultant preserves personal

detachment and objectivity irrespective of empathy, friendship,

mutual trust, emotional affinities and other personal pressure

that may exist at the beginning or develop in course of

assignment.

4. Temporary service: Consulting is a temporary service. Clients turn

to consultant for help to be provided over a limited period of time, in

areas where they lack technical expertise or where additional

professional support is temporarily required. Sometimes the required

skills may be available in the organization but manager and staff

specialist cannot be released for a major problem or project.

5. Commercial service: a practitioner who does management consulting

for a living has to charge a fee for the work done for clients.

Consulting firms are sellers of professional services and clients are

buyers. A consulting assignment must therefore be not only a

technically justified activity but also a financially feasible and

profitable commercial undertaking according to both client’ s and

consultant’ s criteria. From client point of view, the benefits obtained

should exceed the cost incurred, including the fee paid to the

consultant and other costs to the client. From consultant point of view

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 consulting must be profitable activity as measured by normally

applied criteria.

1.1.5 Management Consultant

This essentially refers to an individual or organizations offering

management consultancy services to client organizations. Management

consultants are hired in order to provide objective advice, access to the

consultant’ s specialized expertise, or simply as temporary extra assistance

during a one-time project, where the client does not need hiring any more

employees.

As stated earlier, management consultants may specialize in areas such as

information technology consulting, human resource consulting, and the

like. “Boutique” consultancies are smaller management consultancies that

engage in one or a few of such specializations.

1.3 DEVELOPMENT OF MANAGEMENT CONSULTANCY- HISTORY AND

TREND

1.3.1 Background

The history of consulting started with increased application of scientific

management principles in the army and government during the 18th Century

Industrial Revolution within Europe and America. The development of

consultancy as a profession was greatly contributed by pioneers of

scientific management like Frederick W. Taylor, Lillian Gilbreth and Henry

27
Gantt. Competition and efficiency were the driving forces behind the

development of consultancy during this era of the Second World War. The

early consultancy activities concentrated on management practices such as

application of efficient techniques and approaches in order to simplify work

processes and to raise labor productivity.

Management consulting grew first in USA and later in the UK. This was due

to deep cultural factors: in USA it was accepted that management as well as

boards were not competent in all circumstances, therefore buying external

competence from the consultants was seen as a normal way to solve a

business problem. The securing of external competency by management is

referred to as “contractual” relation to management.

It was only after the Second World War, in the wake of the development of

the international trade led by the USA, that management consulting emerged

in Europe. Management consultancy grew relatively later in Europe than in

the USA because of emotional and cultural dimensions, which called for the

manager being bound to be competent in everything at all times. For this

reason, therefore, seeking and paying for external competency was

considered as inappropriate.

After the Second World War, a number of new management consulting firms

formed in the USA, most notably proud foot consulting, founded in 1946 by

Alexander Proud foot. This consulting firm implemented sustainable

operational improvements within its clients. Another consulting firm was

28
Boston Consulting Group founded in 1963, which implemented a

thorough analytical approach to the study of management and strategy. The

tools and approaches that define today’ s new field of strategic

management, setting a groundwork for many consulting firms to follow, is

as a result of the work done by Booz & Company, McKinsey, Boston

Consulting Group and the Harvard Business School between the period of

1960s and 1970s.

1.3.2 Structural change in the consulting sector

The consulting sector comprises of many large firms on one end, whose

origin and base is in the US, while only a few of them have roots and

headquarters in the UK. All of the large firms operate as international

professional service businesses, with offices, subsidiaries or associated

companies in many countries. Most of them provide a wide range of

services in all or several areas of management, and they normally combine

general management services to specialized services in functional and

technical areas. In addition, they have developed and aimed to maintain a

particular technical profile, for example;

 Andersen Consulting specializes in information technology.

 Arthur D. Little specializes in technology management.

 McKinsey specializes in strategy and organization.

 Roland Berger specializes in business strategy and restructuring, and

 Hay Group specializes in job evaluation and remuneration.

29
Some larger consultancies have chosen to specialize sectorally in health,

banking, insurance, telecommunications, chemical industries, etc.

At the opposite end, management consulting services are offered by

thousands of small firms and they consist of one or two to ten consultants.

These small firms have the following characteristics in common;

 They are either generalists or specialists.

 If they are generalists, they work mainly for smaller and medium-

sized enterprises in geographically limited areas, maintaining a

personalized relationship with the owner or general manager.

 If they are specialists, they aim to have a distinct product that is in

demand and offer a special service in which both small and large

clients are interested, for example, a training/consulting package for

better time management, organization of maintenance in textiles,

improving efficiency of sales agents, etc.

 Many of them are seasoned, all-round consultants who prefer

independence and do not want to be absorbed by larger consulting

firms.

 This group includes professors, authors of management books, retired

executives or senior civil servants who have some special knowledge

and know-how to sell and may be in great demand even by large and

sophisticated clients.

30
  Unfortunately, this group also, includes a certain number of

impostors who have a little to offer and would not be employed by a

larger professional firm, but who are able to sell their services to

poorly informed clients.

Between these two ends, there are medium-sized firms, which typically

employ 15 to 50 professionals. These firms are of many sorts. Some are

traditional consulting practices which started and continue to work as

generalists advising on a wide range of company organization and

performance problems of well established clients. If they find that a

problem requires specialized staff that they do not have, these firms would

either recommend another firm or subcontract the assignment to a

specialist with the client’ s agreement.

Other medium-sized consultancies have chosen to sell specialist expertise

in distinct areas of management, such as maintenance, logistics, project

management or sectoral expertise. They look for “niche” and they usually

find it by developing and marketing a unique highly specialized service.

No matter what size they are, consulting firms have been facing extensive

restructuring due to adjust themselves to changing demand and growing

competition. There have been many mergers of consultancies in the last ten

years. Large firms have acquired medium-sized firms because of their

specialist skills (e.g. in information technology or corporate strategy), to

31
gain access to markets in other countries or just to grow bigger and

stronger than competitors.

Medium-sized consulting firms have started forming international business

alliances to be able to face competition from large consultancies and deal

with issues requiring knowledge of the business environment and contacts

in several countries.

Further structural changes in the international management consulting

industry may be forthcoming. It appears that polarization is taking place,

and as a result of this, many large firms will become even larger, while the

small operators will be able to find enough work for which the large

consultancies are unsuited, or are too costly. Medium-sized firms on the

other hand, will find it difficult to maintain their identity, defining and

defending their market niche, and competing with large firms in terms of

offerings and quality, and in competing with small firms in terms of their

flexibility and price. Yet observers of the consulting industry believe that

due to their adaptability and creativity, the best medium-sized operators

will always have useful services to offer, and enough clients.

1.3.3 Competition in Consulting

The market for management consulting is liberal and open. Choices are free

and prices are not controlled. Entry is easy-meaning there is no need for any

license, certificate or authorization to start practicing consulting, except in

Austria. There are no mandatory conditions, procedures and techniques for

32
carrying out consulting, however, legislation must be respected in terms of

applying general conditions and rules under which services can be sold.

The consulting industry is self-regulated to some extent by voluntary

professional associations, in matters such as qualifications of consultants,

and professional standards. Furthermore, consultants who are not members

of associations are free to define and apply their own standards.

Although demand for consulting services has grown rapidly, and

opportunities for professional firms are increasing, the market for

consulting services has been highly competitive. Consultants compete for

clients, and against other consultants in terms of the following;

 They compete by aiming to acquire and preserve an image of highly

professional, competent and reliable professional service firms.

 They compete by being the first who offer a service in a new area of

interest to clients.

 They compete by widening the range of services to cater for clients’

needs in different areas and subjects.

 They compete by building up a rapport of confidence and long-term

collaborative relationship with current clients.

 They compete by marketing services actively, which includes

soliciting new clients and advertising.

 They compete across national borders and turning into global

professional service firms.

33
In light of such competition, clients benefit significantly. This is because

the clients can be more selective and demanding in searching for the best

expertise and the most reliable service, adjusted to their specific needs and

requirements.

However, the high competition has a negative impact on professional

standards. There are firms that have been unable to maintain high

standards or have purposely chosen to sacrifice standards to growth and

short-term profitability.

The most prevalent trend in the growth of management consulting is its

application in non-business related fields. As the need for professional and

specialized advice grows, other organizations such as government, quasi-

government, and non-profit agencies are turning to the same managerial

principles that have been helping the private sector for years.

Another important trend recently has been the setting up of internal

consulting groups by corporations. In this case, the corporations hire

internal management consultants either from within the corporation or from

external firms’ employees. Many corporations have internal groups of as

many as 25 to 30 full-time consultants.

34
1.4 WHY STUDY CONSULTANCY SKILLS?

Consulting is a profession. It creates employment opportunities. In

Tanzania, as the economy grows and businesses continue to face complex

business environment, more and more professionals such as economists,

accountants, marketers, environmentalists, are turning to consulting as

business. Universities have developed fully fledged departments and/or

directorates which are fully equipped to manage research and consultancy

activities to contribute to their income generation efforts. As seen earlier

on, consultants can either be self-employed (freelancer consultants) or can

be employed by a consulting firm for a salary. More specifically,

Consultancy Skills is studied for the following reasons;

 To be future consultants.

 As clients, to be able to identify areas needing any consultancy

services within organizations.

 To acquire skills in problem solving that may be helpful in dealing

with problems within the organizations.

 To be able to give proper advice to the organizations or employees

when faced with problems.

 To cultivated investigative zeal.

35
1.5 ABOUT CONSULTANTS

1.5.1 Essential Qualities of Consultants

Not everyone can be a consultant. Consultants normally show some unique

characteristics and qualities, some of which are as follows;

i. They must have substantial work experience and higher intellectual

ability acquired through training and long-time working in problem

prone organizations. They must be able to learn quickly, observe,

evaluate facts and make good judgment.

ii. They must demonstrate high level of creativity and innovation. The

consultant must know how to work with clients in helping to identify

and solve their problems. The consultant must realize that the clients

have varying needs and personalities, and more or less experienced in

using consultants. Therefore, the consultant is required to use various

methodological tools for helping the client to define problems and

analyze their causes, recognize the need for change, choose among

alternatives, overcome psychological and other barriers to change, as

well as implementing the right decisions. A successful consultant is

one that is often determined to be able to accurately the areas where

productivity and performance can be improved most instantly.

iii. In addition to management expertise, a consultant must possess

psycho-sociological and communication skills. The consultant must

be able to communicate skillfully, persuade and convince clients to

36
 accept recommendations made. This however, does not imply that

consultants should force their recommendations on clients. However,

good communication skills applied by the consultant are most likely

to convince the client to accept the techniques, appreciating and

accepting them.

iv. The consultant is an objective adviser, and should be able and willing

to tell the client the truth and give a totally independent and unbiased

opinion without having to worry about any possible consequences to

the consultant as a person and the consulting firm that employs

him/her.

v. The consultant should be independent of the client, any supervising

authority, organizations and their stakeholders, centre of political

power in the community and so on. Most consulting firms are owned

by consultants themselves and are fully independent. Some are owned

by banks governments, or other professional or business firms’

agencies. In these cases, it is necessary for the consultant to make

sure that the firm’ s ownership pattern does not constrain

independence and objectivity in any way.

vi. The consultant must abide by a professional code of ethics and

conduct. It is important that there is no misunderstanding between

the consultant and the client about the interpretation of this code and

the consultant’ s behavior. In general, a good consultant must show a

desire to help others, and admit mistakes and learn from failure.

37
vii. The consultant must have integrity, honesty and trustworthiness.

Without these characteristics a consultant is not likely to be a good

one. The client-consultant relationship is based on trust above all. In

particular, the client must be sure that the consultant is absolutely

honest with him/her and is guided by the principle of serving the

client’ s interest.

viii. The consultant must have the ability to work closely with the client

and the individuals in the client organization system, and he/she

should understand and respect them. Such behavior creates trust and

respect between the client and consultant. The client and his team

must feel comfortable in giving the consultant with the information

and logistical support that may be needed. Therefore, success of any

consulting assignment depends on the nature of working relationship

established between the client and the consultant.

ix. The consultant must be physically and mentally fit to be able to

sustain long hours of work. Consulting assignments have specific time

frame within which they have to be finished and submitted to the

client. Any delay without acceptable cause may lead to the client

revoking the contract and demand damages.

38
1.5.2 Types of Consultants

Broadly speaking, consultants can be categorized into External and Internal

Consultants.

1.5.2.1 External Consultants

The external consultant is not an employee of the client organization, and

he/she could be either employed by a registered consulting company or a

freelancer (i.e. self employed). External consultants can further be

categorized as;

i. Professional Consultants-which have to meet minimum prescribed

educational requirements, pass professional examinations and be

registered with a professional body before beginning practicing.

Examples of licensed consultants include Accountants and Auditors

who sat for and passed professional examinations, got registered by

the National Board of Accountancy and Auditors (NBAA), others

include building contractors, electrical engineers, etc.

ii. General Consultants-these need neither registration nor specific

education requirement, even though this can be an important factor in

getting clients.

39
Advantages of Engaging External Consultants

 They can be cheaper than employing fulltime internal consultants.

 They can possess detailed expert knowledge on the issues because

they devote most of their time building that specialized capacity.

 They enjoy some independence and can question anyone without fear

of being reprimanded or getting muddled into internal politics.

 With external consultants, senior management will feel free to discuss

sensitive issues better than it would have been with its own

subordinates.

 Because of their rich experience, external consultants are able to fast

identify the critical issues causing problems.

 With external consultants, management can learn faster simply by

observing a high-caliber consultant at work.

 The external consultants are useful when management wants to make

radical changes in the organization, such as retrenchment,

organizational restructuring, etc.

Disadvantages of Engaging External Consultants

 The external consultants may not be readily available at the time they

are needed, because of their other commitments. What they would do

is to reschedule the assignment to a later date for which the client

may not be prepared.

40
  The external consultants may not be willing to compromise with

clients on the excuse that they are defending their professionalism. As

a result, they may use this opportunity to advance their interests

rather than those of the client.

 The external consultants do not automatically get involved in the

implementation of their recommendations. If the client wants to have

them during the implementation stage, this has to be reflected onto

the contract and the client will have to pay for it.

1.5.2.2 Internal Consultants

An internal consultant is an employee of client organization, who provides

advice to his/her organization because of the specialized knowledge and

experience in a particular field, and does so normally without a fee. This is

also known as in-house consultant and has nowadays become common

among large firms. They are a part of a specific unit within the organization,

whose staff are highly trained and experienced in order to provide advisory

services to other functional units within the organization. Not only large

companies, but also government ministries are adapting the in-house

consultants.

41
Advantages of Internal Consultants

 Internal consultants are ideal for a quick fix of organizational

problems. This is because the process of acquiring them is relatively

shorter compared to that of external consultants, and therefore can be

instantly available to solve the problems.

 Since they are insiders to the organization, internal consultants know

the organizational environment better than external consultants, and

hence they can come up with more practical recommendations.

 It is less costly to engage internal consultants. This is because with

internal consultants, the client organization has to pay only

consultants’ salary and maybe some token allowances. On the other

hand, with external consultants, the client organization has to pay

consultancy fee, subsistence allowances, travel and many other costs.

Disadvantages of Internal Consultants

 Since they are the employees of the client organization, internal

consultants are said to be unlikely critical to the top management

even when it is obvious that the problem is caused by the executives’

bad behavior or wrong decisions. They may be pressurized to come

out with findings that do not associate the top management.

 Internal consultants are perceived not to bring in new experiences

from outside because of their limited exposure to outside. Therefore,

42
 they are unlikely to come up with concrete recommendations as the

external consultants would have.

1.5.2.3 Types of consulting expertise

There are two general types of consulting expertise; these are called

specialists and generalists. A consulting specialist tends to focus on one

area of practice such as a specific area of expertise or a specific industry.

They provide in-depth, state-of-the art knowledge that is usually beyond

the capability of most companies. A generalist focuses on a wider area

of consulting. These types of consultants typically go to work for a firm

that gives general type of advice to many different companies. They

provide breadth of experience for a client. A generalist normally has

advanced knowledge covering several industries or all major functions

and applies this experience to the client's problems. The practice of a

generalist is the practice of a general problem solver. The mastery and

integration of more than one specialty yield a more generalized ability to

solve problems. This means a generalist can take on problems that are

ordinarily of larger scope, scale, and complexity than those addressed by

specialists. This is not to say that specialists are not problem solvers,

too, because they are. It is to say that the scope, scale, and complexity of

the problems specialists attempt to solve are bounded by their

specialties.

43
 Generalists and specialists both seek out problems. Both also seek to

solve them. A major difference between the two lies in the kinds of

problems sought. A generalist will knowingly tackle problems that will or

could involve specialties beyond those which the generalist has already

mastered. A specialist who is content to remain a specialist will not.

1.5.3 The Importance of Consultants

Drucker (1979) points out that, consultants exist for two main reasons;

i. First, organizations demand services of experienced experts with

exposure not readily available within their organizations, in order to

provide them with professional advice.

ii. Secondly, business executives want objective insights into their

management problems.

Consultants exist because they play important role in organizational

development and success. The consultants’ roles include the following;

a) They provide unbiased expert advice to organizations, especially

when the consultants are not employees of the client organization and

therefore cannot take sides or fear being reprimanded by not

supporting management’ s point of view.

b) They help clients solve problems. Consultants originate expertise in

problem investigation techniques and process, and then they involve

44
 the client in problem identification, analysis and identification of the

most viable solution.

c) They bring about collective focus and commitment to solving the

problem. This is achieved by involving clients in problem

identification, analysis and design of appropriate solutions. This way

the client feels the ownership of the consultancy process and

internalizes the solutions.

d) They assist the client in implementing the agreed solution. However,

this depends on the nature of the consulting contract.

e) They would work under guidance of top management when the client

organization has clear knowledge of the problem as well as its

solutions, but is hesitating to effect the changes in fear of being

rejected by their subordinates. In this case, the employees tend to

readily support the consultant’ s recommendation since the consultant

is an outside person and has no stake in the organization.

f) By involving the client in the process, the consultant assists him/her

to acquire additional knowledge and skills which could be useful in

dealing with similar problems in future, without the client having to

hire the consultant for the matter.

In general, the consultant’ s role is one of productivity, performance

and/or profit improvement specialist. The consultant, in this case,

becomes a partner in profit improvement, because he/she identifies key

45
 areas where performance, productivity and profits can be increased and

costs can be reduced.

1.6 ABOUT CLIENTS

1.6.1 Why Clients Use Consultants

The driving forces behind the clients’ use of management consultants

include the following;

 Curiosity; admittedly or not, some managers do not pursue any clearly

defined purpose when inviting a consultant to their organization.

They invite them because he is a star or has a reputation of someone

who succeeds where everyone has failed.

 Insecurity; this is a more common reason, in which a manager may

feel insecure because of lack of information, growing criticism and

unrest within the company, increasingly aggressive competition, age,

fragile personal health or for any other reason. Turning to a

consultant is then a measure of relief-like hoping that a doctor will

tell them that they are not really sick and, if they are, will help them

recover.

 To have an alibi: in recruiting a consultant, some managers look for

an alibi, that is, they want to be able to refer to external authority in

justifying a decision, especially when the decision is an unpopular

one, or is likely to generate criticism or resistance, or a manager

46
 wants to show that he is aware of the problem and has looked into it

seriously-as witnessed by a consultant’ s report.

 Improved business results; in many cases, fortunately, managers use

consultants because they are willing to improve organizational

performance and business results. The manager’ s immediate

objective may be to prevent current performance from slipping, take

corrective measures when performance has deteriorated, or use the

consultant for future-oriented work such as analyzing trends,

identifying opportunities and developing medium and long-term

strategies, but the bottom line is improved performance.

 Learning; this is regarded as the modern philosophy justifying the use

of consultants. Assignments have two purposes: one is to solve a

specific problem by applying the consultant’ s expertise, and two, is to

transfer this expertise to managers and specialists in the client

company. Learning becomes a motive when a consultant is hired to

run a training course in a client organization and the client decides to

take on other work involved in using the result of that course for

making practical improvement. Alternatively, the consultant may be

hired so that the client can observe and learn the consultant’ s

diagnostic and problem-solving methodology at work, compare it with

his own and choose which is best. All in all, clients do not go to

consultants to find solution to one problem, but to acquire the

47
 consultant’ s special technical knowledge and learn skills used in

solving problems and implement change.

1.6.2 How Clients Use Consultants

Clients use their consultants in various ways depending on the

situational context. As stated earlier, these ways are explained in detail

as follows;

Extending Staff

Clients use consultants to supplement organization’ s staff when the

organization is applying an interim (temporary) staffing arrangement.

Usually, these consultants are specialists in areas such as information

technology, job evaluation, office administration, or even an executive.

Acquiring Information

Usually, when an organization seeks better, accurate and more reliable

information for the purpose of assessing a potential new market, or

comparing the organization’ s performance to that of other

organizations, they seek consultants. The assumption is, of course, that

the consulting firm already has such information in its data banks, files,

or can collect it using ways that the client cannot. For example, a

consultant can be recruited to perform market survey or customer

opinion research, then to evaluate it and present it to the client for

consideration. It is very important for the client to acquire information

48
from the consultant, because many clients, especially smaller businesses,

find it difficult to systematically collect and screen all information that

may be important to their businesses.

Establishing New Business Contacts and Linkages

Some clients recruit consultants in their search for new business

contacts, agents, representatives, suppliers, subcontractors, joint-

venture and merger partners, companies for acquisition and so on. In

this case, the consultant’ s task will involve identifying the suitable

parties, presenting their names to the client, assessing their suitability,

recommending a choice, and acting as an intermediary and/or facilitator

in preparing and negotiating the deal. Often these contacts would be in

countries outside the client’ s, and are not known to the client.

Obtaining an Impartial Expert Opinion

Due to independence and objectivity a professional consultant

possesses, he/she is able to give an impartial opinion about decisions

made by management. In other words, the client seeks the consultant’ s

expertise in order to confront, assess, evaluate and possibly correct the

client’ s own expertise.

A client may seek a consultant’ s impartial opinion for various reasons

such as, to obtain an expert opinion on the soundness of a major

decision faced by management, or as a sounding-board where

49
management periodically reviews important issues with a respected

consultant before taking a decision. In short, any client seeks a

consultant’ s impartial and unbiased opinion whenever the management

decisions risk being affected by lack of expertise, incomplete

information, company myopia or vested interests.

Identifying, Diagnosing and Solving Problems

Client use consultant’ s diagnostic skills and instruments for a wide

range of diagnostic functions: to diagnose the company and assess its

strengths and weaknesses, to analyze industry and market trends, to

assess company’ s competitive position, and to identify and analyze

problems in a specific area of management.

The diagnosis can either be comprehensive and cover the entire

business, or be focused in order to narrow a problem. Diagnosis may be

the only task for which a consulting contract has been signed. The client

will decide what action to take, and whether to pursue the project

without the consultant, or ask the consultant to come up with proposals

for appropriate solutions. The consultant will then works on these

solutions and propose one or more alternatives.

Developing and Implementing New Methods and Systems

Many clients use consultants to modernize their organizational planning

and control systems, which can be in any area of management. The

50
systems can be either custom-made (i.e. Specially developed for the

client) or standard (i.e. delivered by consultant without adaptation).

Nowadays, most consultants use proprietary systems, for which their

consulting firms hold copyright or is authorized by the copyright holder

to sell the system as part of their services.

In developing and implementing new methods and systems, the degree

of the consultant’ s involvement can vary from case to case. Many client

organizations prefer to retain the consultant until the system becomes

fully operational and achieves the promised effectiveness.

Why are consultants used? Five Generic purposes

Consulting purposes can looked at from several angles and described in

various ways as illustrated by this fig.1

Archiving organizational purpose

and objectives

Solve Identify Enhance Implem

Manag and Learning enting
ement Seize change
and opport
s
Busines unities
s
Proble
ms

51
 1. Achieving organizational purposes and objectives

All consulting to management and business tends to pursue a general

and overriding purpose of helping clients to achieve their business,

social or other goals. These goals may be defined in various ways:

customer satisfaction, competitive advantage, profitability, high

performance, effectiveness etc. the consulting has to add value to the

client organization, and this value should be a tangible and measurable

contribution to achieving the client’ s principal purposes.

What if the organization operates without any perspective, goal or

mission? What is your main contribution to this organization? May be

helping client organization to develop a vision of the future, set

ambitious but realistic goals, develop strategy, focus on results and start

viewing current problems and opportunities in the light of longer- term

and more fundamental organizational goals.

Solving management and business problems

The most frequently mentioned purpose of consulting is helping managers

and other decision makers with problem solving.

The consultant’ s task is described as a professional assistance in

identifying, diagnosing and solving problems concerning various areas and

aspects of management and business.

These problems can be categorized as corrective, progressive and creative.

52
  Corrective Problem

In the situation where the client faces the serious failure in any aspect of

business such as decline in production, falling of sales and profit, failure to

meet target etc, the problem is defined as a need to restore the origin

condition or corrective problem. This explains why the consultants are

sometimes referred as company doctors or business healers.

 Progressive Problem

The consultant takes an existing situation and seeks to improve it. The

consultant is commissioned to scent and seek opportunity to expand

situation. The organization may be performing well but the management

may realize that there still more rooms for business expansion given the

existing environment. The consultant is hired to explore those

opportunities and suggest the action to exploit it.

 Creative Problem.

The client contracts a consultant to create a complete new thing. For

example when a client wants to diversify the business and create new

sales for customer. In such assignment the client may have no idea about

the new project and may not provide any new information concern the

project. So the consultant has to generate some information that may

assist the client.

53
Identify and enhance new opportunities

Most consultants feel that, they can offer mach more than simply helping

organizations to get out of difficulties. They may be called to track back

deviations that has been taken place, find and correct the reasons for

them. Clients usually prefer using consultants for tracking new

opportunities. They consider consulting firm as a source of valuable

sources of information that can turned in to a wide range of initiatives

and innovative that help business.

Enhancing Learning

Many clients turn to consultants, not only to find a new solution to a

problem but also to acquire the consultant’ s special technical knowledge

and methods of assessing organizations, identifying problems and

opportunities, developing improvements and implementing changes.

The purpose is to empower the client by bringing new competence into

the organization and helping managers and staff to learn from their own

and the consultant’ s experience. In this way organizations are helped to

help themselves and become learning organizations. The learning effect

of consulting is most important and durable one. The choice of

consulting methods and degree of client’ s involvement can increase or

reduce this effect.

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 Planning and Implementing Organizational

Change

Change management
Sometimes consultants are known as change
involves identifying the need
for change, developing a agent. This is because they are helping client
change strategy, choosing
organizations to understand change, live with
and applying the right
approaches to encourage change and makes changes needed to survive
change and overcome
and be successfully in an environment where
barriers to change,
monitoring the change continuous change is only constant.
process, evaluating the
progress made and results It is fairly common to find a client possessing
obtained, and adjusting the
approach taken by the technical and managerial expertise to run
management at all stages of
the organization, but is insecure whenever
the change cycle.
organizational changes are expected and are

unavoidable. Often these changes will frustrate

the client because they affect deep-rooted relationships, work habits and

individual or group interests. In such situations, a client will seek

expertise from a consultant in terms of change management. In this case,

the consultant may provide expertise and advice on specific methods

and techniques that are being changed, and on how to deal with

interpersonal relations, conflicts, motivation, team building and other

issues in the field of organizational behavior. More emphasis will be put

in assignments where resistance to change can be expected and

management feels that its own change management skills are inadequate.

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 1.6.3.1 Consultant Selection Criteria

There are no standard criteria for choosing consultants. However, the

following eight criteria have helped many clients in appointing the right

consultants;

 Professional integrity

 Professional competence

 Rapport with the client

 Assignment design

 Capability to deliver

 Ability to mobilize further resources

 The cost of consulting services

 The reputation or image of the consultant.

Each of these shall be briefly explained as follows;

Professional Integrity

This is more of a fundamental condition of selection rather than a selection

criterion. If a client has any doubts about professional ethics and conduct of

a consultant, they should not consider selecting that consultant. Standards

of professional conduct can be observed or discussed with the consultant

during the selection process.

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Professional Competence

This is another criterion that can be treated as a condition of selection, such

that, only candidates who show required competence will be regarded as

eligible, and be judged by further criteria. The description of professional

competence of a consultant is difficult, but some obvious aspects of

technical competence may be as follows;

 The consultant’ s education, degrees, diplomas, further training and

development.

 The consultant’ s length and type of experience in management and

consulting.

 References provided by clients for whom the consultant has done

comparable work.

 Membership and work done in a professional association or institute

(which may have provided the consultant with a diploma as a

“Certified Consultant”)

 Books, articles, research papers and other technical documents

published by the consultant.

In addition to the above specifications, the following questions should be

asked in determining the professional competence of the consultant in

question;

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  How does a consultancy firm guides and supervise its consultants

working in field assignments and how does it ensure quality?

 Does the assignment require excellent knowledge of the client’ s

industry (sector) and practical

“Hard skills” is the consultant’ s
ability to understand and use experience? Does the consultant have
procedures, techniques and
systems that can be formally the required expertise in that sector?
structured, quantified and
described, and relatively easily  Does the consultant have an in-depth
transferred among people with
appropriate educational knowledge of social, political,
background. They are mostly
prevalent in financial analysis and economic, cultural, legal and
management, operations and
materials management, logistics or institutional settings of the country the
computerized information systems
client operates in?

“Soft Skills” involve human  What is the relative importance of a

attitudes, values, feelings,
relationship and behavioral consultant’ s “hard” and “soft” skills in
patterns. They are needed for
understanding and influencing the tackling a particular problem? Does the
human side of enterprise,
motivating people, resolving candidate’ s profile match the job
conflicts and managing changes
that affect human interests and profile?
feelings.
 Has the consultant done this type of

assignment before?

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Rapport with the Consultant

This is one of the safest criteria, because it embraces other criteria if the

client is a person of sound judgment and knows a consultant well. Rapport

with the consultant can develop from the following situations;

 When a client has worked with a consultant and knows him/her from

direct personal experience. If this experience has been positive or

even excellent, it has a great value for the client to take up this

consultant in other future assignments and to reduce risk of mistakes.

 When a client establishes a personal relationship with a new

consultant, without knowing each other before. In this case, the client

and the consultant would have a short time to get to understand each

other, therefore, they would get to know each other during

preliminary contacts and when a client interviews the consult, or

when the consultant performs a short diagnostic survey of the client

organization. During this short time, a rapport will be established and

a climate of mutual understanding will develop, or not.

 When a personal relationship is established outside the client’ s work

context, for example at a social gathering or a sports club, where the

client meets the consultant and becomes impressed by his

personality, to an extent of deciding to use the consultant as an

adviser. Indeed, this might be a way of initiating a productive work

experience.

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 CHAPTER TWO: CONSULTING INDUSTRY

2.1: MANAGEMENT CONSULTING, TRAINING AND RESEARCH

There is a very special relationship between management consulting on

the one hand and management training, development and research on

the other. It could even be argued that conceptually they constitute sub

sectors of the same profession, since they have the same object of study

and practical intervention and they tend to pursue the same ultimate

purposes. The differences are in the methodology and immediate

purposes.

2.1.1: Consulting and Training

There have, however, been signs of real progress in bridging the gap

between consulting and training in the field of management.

 Knowledge transfer and learning are among the main purposes of

consulting. In choosing working methods and collaborating with the

client, the consultant aims to pass on personal know-how and

experience. At the same time the consultant learns from the client.

 Consultants often view training (both informal and formal) as their

key intervention (negotiation) tool and use it extensively.

 Some consulting firms have established management development

and training centers as a special client service , which can be used in

conjunction with consulting assignments or separately.

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 Many consultants are part –time teachers or trainers in business

schools and other educational and training establishments.

 Conversely, more and more teachers and trainers of management also

practice consulting drawing from their consulting experience to make

training more relevant and practical and encouraging their students to

learn consulting approaches and methods.

 In some educational and training establishments , consulting has

become an institutional function , organized through special

departments and /or projects

 There are also hybrid firms and institutions, providing combined

consulting / training services and stressing the benefits that the client

can obtain from their approach.

2.1.2: Consulting and Research

There is close relationship between management consulting and

management research. In dealing with practical management problems,

consultants need to know the results of research and draw from them for

example before recommending an incentive technique it is better to

know whether any research has been done into the use of that technique

in conditions similar to those experienced by the client. Consulting

organization increasingly encourage their members not only to keep

informed about published results of management research, but also to

keep in touch with ongoing research projects and leading researchers.

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Research can benefit from links with consulting .the data collected in

client organization by consultants can serve wider research purposes.

Data from a number of organizations can be used for drawing general

conclusions on sectoral or other trends, without infringing

confidentiality. On becoming aware of this, many consulting firm have

also gone into research. They have their own research programme,

undertake contract research, and publish books based on their own

research, or they cooperate on research projects with universities and

individual researchers. Some consulting firms have gained the reputation

of being strongly research based. Business schools and research training

institutions are increasingly interested in testing and diffusion the

results of their research through consulting assignments.

Methodologically, consultants can learn a lot from researchers and vice

versa. Action research is an example of research that is on the border

with consulting. It aims simultaneously to solve a meaningful practical

problem and yield new knowledge about the social system under study.

Action research involves changing what is being investigated.

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 2.2: THE CONSULTANT CLIENT RELATIONSHIP

The consulting process involves two partners, the consultant and the client.

In theory it should be easy to put the consultant‘ s expertise to work on the

client’ s project, since it is fair to assume that both parties will do their best

to achieve the same purpose. But the reality is infinitely complex. The

consultant remains external to the organization, someone who supposed to

achieve a valid result in the client organization without being part of

administrative and human system. Quite independently of its technical

relevance and quality, the consultant’ s advice may or may not be

understood and accepted by the client. The consultant can upset other

people and hurt their feelings in many different ways. Rejection can take

many forms. Thousands of excellent consulting reports have been buried in

managers’ desks and never implemented although they were formally

accepted. Many consultants terminate their assignment with feelings of

bitterness and frustration. They absolutely sure that they have provided

excellent advice, yet the clients do not follow it. This underlies the critical

importance of creating and, maintaining an effective consultant –client

relationship.

Building this relationship is not easy. To achieve success, both consultants

and clients need to be aware of the human, cultural and other factors that

will affect relationship, and of the errors to be avoided when working

together. They must be prepared to make a special effort to build and

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maintain a relationship of understanding, collaboration and trust that

makes the effective intervention of an independent professional possible.

This can be accomplished by

2.2.1: Defining Expectations and Roles.

To begin with, the client and the consult may look differently at both the

expected outcome and the ways of carrying out the assignment. The client

may have only a vague idea of how consultants work and may be slightly

suspicious- possibly he/she has heard about consultants who try to

complicate every issue, require more information than really need, ask for

more time in order to justify longer assignment, and charge exorbitant fees

the client may be approaching the consultant with mixed feelings. But even

if there is no a priori suspicion, and fear on the client’ s side, there is a risk

of misunderstanding as regard objectives, ends results, roles, relationship

and other aspects of consulting assignment.

2.2.2: Joint Problem Definition

The problem, for which the consultant is brought in, needs to be well

defined. a manager who wants to call for a consultant’ s help should not

merely recognize a need for such help , but define the problem he/she sees

it, as precisely as possible. They are abounding to differences between

client and consultant definition. Both client and consultant should be

prepared to make changes in their initial definition of the problem and to

agree on joint definition. But this joint definition should not be considered
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as final. Once the assignment has started, detailed diagnostic work may

uncover new problems and new opportunities, requiring a redefinition of

the situation. The client’ s and consultant’ s definition of the problem lays

down the basis of sound working relations and mutual trust for the duration

of the assignment.

2.2.3: Results to Be Achieved.

The consultant and the client should clarify what the assignment should

achieve and how this achievement will be measured. This requires an

exchange of views on how each party regards consulting, how far the

consultant should continue working on an agreed task, and what his /her

responsibility to the client is.

2.2.4: The Consultant’ s and Client’ s Roles

It is important to determine how the assignment will be conducted by the

two parties.

There is a need for both parties to clarify what roles will be played in each

party, and what will be their mutual commitments. During the assignment

may unforeseen events may occur and the new facts may be uncovered so

that it becomes necessary to review the original definition of expectations

and roles. Both client and the consultant should be alert to this possibility

and be flexible enough to adjust their contract and work arrangements.

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2.2.5: The Client and the Consultant Systems (Organization).

When, how and between which individuals will the consultant–client

relationship be established? By definition, the client is the organization that

employs services of a consulting firm. Also the term client can be used to

mean an individuals or groups in the client organization who initiate the

recruitment of the consultant, discuss the job with him or her, collaborate

in the course of assignment, receive reports and recommend to higher

management whether or not to accept them and so on.

On the side of consultant; the consultant is a service firm but employs

individuals in various capacities who are involved in various ways of

negotiating, selling, preparing, managing and executing assignment. These

individuals enter into various relationships with client organizations, and

their internal units and individual employees.

In working with a client organization, consultants may face conflicting

expectations, hopes and fears, respect and disrespect, confidence and

distrust. Within the client’ s system the consultant needs to know; who

holds the real power for making decision related to assignment. Who has

the interest in the success and failure of the assignment? Who should keep

informed; whose direct collaboration is essential.

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2.3: DIMENSIONS OF THE CONSULTANT-CLIENT RELATIONSHIP

Different situations and client expectations lead to different definitions of

the consultant’ s roles and methods of intervention. Even if situations,

assignments strategies and consultant work methods exhibit considerable

differences, all consultants and clients will try to establish relationship in

which they can work together to achieve a common purpose. Three

dimensions of these relationships are critical. These dimensions are

essential in consulting and could be described as objectives to be pursued

in order to make the relationship fully productive and satisfying to both

sides.

2.3.1: Collaborative Relationship

Without client- consultant relationship, there is no effective consulting.

The degree and formal of consultant client relationship will differ from

one case to another but they should always be a strong spirit of

collaboration characterized by a shared desire to make an assignment

success by trust and respect and understanding of the other partners

technical and human roles.

Some client imagines that by actively collaborating with a consultant

they would actually being doing the job themselves and paying the

consultants a handsome fee for nothing. The consultant who insists on

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client collaboration may be compared to the guy who borrows your watch

to tell you the time.

Often the readiness to collaborate is tested at the fact finding stage. The

client may feel that the consultant should not be given all the data

requested and sometimes may instruct staff to withhold information.

This shows that the need for collaboration is not automatically perceive

by every client and therefore various misconceptions have to be

dispelled.

Why collaboration is essential? Reasons for client collaborations

a. There are many things that the consultant cannot do at all, or cannot

do properly, if the client is reluctant to collaborate.

b. Often higher management is unaware of the competence that exists in

the organization, and important strengths may be unknown to it.

Through collaboration the consultant can help clients to discover and

mobilize their own resources.

c. Collaboration is essential if the client is to be fully associated with the

definition of the problem and with the results of the assignment

consultants often emphasize that their client must own the problem

and its solution. The reason is that people often reject changes

proposed or imposed from the outside. But by collaborating on

solution the client is likely to be committed to it and will not put all

responsibility on to consultant.

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 d. Most importantly, unless the client collaborate in assignment he is

unlikely to learn from it. Learning does not occurs by defining terms

of references and accepting or rejecting final report but by joint work

at all stages of the assignment starting with problem definition and

diagnosis and ending with the implementation and assessment of the

results.

2.3.2: A Knowledge Based Relationships

The basis of the consultant–client relationship is knowledge transfer, both

to client from consultant and to consultant from client. Both parties have to

pursue joint development and transfer of knowledge as one of the key

purposes of the collaboration. This requires an understanding of the

process of knowledge creation and transfer and of their driving and

impeding forces as well as appropriate allocation of time and

responsibilities.

2.3.3: Relationships of trust.

Collaboration and knowledge-sharing generate trust. Trust must be earned,

and this means that the client must be convinced that the consultant merits

trust and will not betray it. Earning full trust of managers is not easy but it

is worth the effort. The benefits to the client of trust based relationship

with a consultant are obvious. In business management it is crucial to have

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colleagues and partners who can be trusted. This reduces risks involved in

choosing and employing consultants.

2.4: CONSULTING AND CHANGE

Change is the main reason of management consulting. A common

characteristic of different consulting assignment is that they are

intended to assist in planning and implementing changes in client.

An organizational change is full of difficulties and pitfalls. Often the

behaviors of those who strive to make changes generate resistance to

change and bring the whole process to a standstill. To avoid this, the

consultant needs to be aware of the complex relationships involved in

the change process and must know how to approach various change

situations and help people cope with change.

2.4.1: Nature of Change

The concept of change implies that there is an observable difference in a

situation, a person, a work team, an organization or relationship between

two successive points in time. The questions to be asked here are

 How does this difference occur?

 What are its causes?

 What does it mean to a manager or consultant?

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 Causes of Changes

Changes can be internally initiated or externally induced.

Internally induced changes can result of the following

 Dissatisfaction with the existing situation by

employee/community. They desire for a better situation.

 Responding to emerging new opportunities. Exploitation of the

emerging opportunities may require new policies, organizational

structure, participatory organs etc.

 Management desire to grow and maximizes returns to

shareholders. To achieve that the organization may need to

reorganize it. Such organization may require introduction of

branches, product diversification, and geographical spread.

Externally induced changes may be a result of the following

 Change in government policy like privatization

 Legislation –anti monopoly

 Globalization

 New technology

Types of changes

Organizational change is about a significant change in the organization. This

may includes reorganization of the whole organization, adding a major new

71
product/service, processes and tools for managing the people side of change

at the organizational level. This is in contrast to smaller changes such as

adapting a new computer procedure.

Organizations do not just make changes for it own sake, there are forces

pushing organizations to make changes. These forces include environmental

forces and internal force. Environmental forces are external to the

organization and the organization has no control over them. Examples are

such as changes in business relationships, changes in technology, markets,

government regulations etc. once they occur they impact on the operations of

the organization positively and negatively. Organizations react to these

changes by formulating strategies, either to exploit the emerging

opportunities or mitigate their negative impacts.

Internal forces arise from events within the organization. They can be

initiated by top management, floor workers or trade unions. Since they are

internal the organization has powers over them. Such changes include

demand for high pay by trade unions, downsizing the organization,

privatization etc.

There are different types of changes that can take place at the

organizational level.

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 a. Organizational change:

An organization wide change touches the whole organization. This may

include major restructuring, complete change of business, downsizing the

business, cultural changes etc. usually, organizations must undertake

organization wide change to evolve to a different level in their cycle, for

example launching and publicizing products that will change consumer

taste or pioneering new technologies that become dominant and change the

shape of the whole industrial and service sectors. Thus they modify the

business environment both nationally and internationally.

b. Subsystem change.

This change can affect a section of the organization while the larger part of

the organization remains untouched. Examples of a change in a subsystem

might include additional or removal of a product or service, reorganization

of a certain department, or implementation of a new process to deliver

products or service better (e.g. computerizing the accounting operations). In

university settings it may involve breaking up an existing department into

two or more departments, privatization of the security services,

introduction of evening learning courses etc.

c. Transformational change

Transformational changes sometimes referred to as radical change. This

may include changing an organization‘ s structure and culture from

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traditional top down, hierarchical structure to a large amount of self

directing teams.

d. Incremental change

These are small changes that are introduced in the organization on a

continuous manner. Changes are continuously being introduced by

departmental heads/leaders to improve operational efficiency at

departmental level. Such changes may sometimes go unnoticed by the top

leadership. Examples implementation of new computer system to increase

efficiencies, introduction of a new filling system and student registration

system.

e. Remedial changes.

Change can be intended to remedy current situations, for example to

improve the poor performance of a product on the entire organization,

reduce the amount of rejects in the production process, help the

organization to become much more proactive and less reactive to changes,

or address large budget deficits. In most cases Remedial changes often

seem more focused more and urgent because they are addressing a current

major problem. For example in order to overcome shortage of teachers in

primary and secondary schools, the government introduced the teacher

training course for a short time.

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 f. Developmental changes

Change can also be developmental – to make a successful situation even

more successfully. For example expand the amount of customers served,

increase students enrolment, duplicate successful products/services,

develop a new market niche etc. development projects can seem more

general and vague than remedial , depending o how specific goals are and

how important it is for members of the organization to achieve those goals.

g. Unplanned change

Unplanned change usually occurs because of a major, sudden surprise to

the organization which causes its members to respond in a highly reactive

and disorganized fashion. Unplanned change might occur when suddenly

potential staff leaves the organization, significant public relations problems

occur, poor product performance quickly results in lost of customers or

other disruptive situation arise.

h. Planned change

Planned change occurs when leaders in the organization recognize the need

for a major change and proactively organize a plan to accomplish the

change. Planned change occurs with successful implementation of strategic

plan, plan for reorganization, or other implementation of a change of this

magnitude.

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 2.4.2: The Change Problem and Process

Successful change requires more than a process, technology or policy. It

requires the engagement and participation of the people involved. The

strategies to address change problem will differ from one organization to

another. The change process goes through 3 stages

1st stage

Unfreezing: This involves dismantling the existing mindset so that changes

can be introduced. The role of management in this case is to sensitize

employees or people who would be affected by the intended changes and

reasons why such changes need to be taken and the impact of such changes.

This is the stage where stockholder’ s minds are prepared to accept changes.

This can be done through short course and seminars.

2nd stage

Changing: This is the period in which changes take place. It is a period of

transition and confusion. The old ways of doing things are being challenged

and stakeholders are not yet clear of what would eventually happen. The

sub- process of changing involves two elements:

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  Identification where the people concerned test out the proposed

change, following the external motives presented to them by

management or a consultant.

 Internalization where individuals translate the general objectives

and principles of change into specific personal goals and rules.

This process may be quite difficult , usually requiring a

considerable efforts by the person concerned and a great deal of

patience, creativity and imagination on the part of the consultant

in assisting the change , to convert the external ( general) motives

to internal (specific and personal) motives for the accepting the

change proposed.

3rd stage:

Refreezing: At this stage, the new mindset is crystallizing and one’ s

comfort level is returning to previous level. Changes are happening and the

concerned parties can now tell what is expected of the future. Some of their

worries are being cleared and the stakeholders are re-adjusting to the new

environment.

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 2.4.3: Resistance to Change.

Generally people can adopt themselves to changes and design strategies to

cope with such changes. They accept changes as natural fact of life. Yet they

resist changes. There are several reasons which may cause people to resist

changes. These includes

i. People may fear losing their jobs , changes in conditional of work ,

increase in the workload , loss of income , loss of status, power base

etc.

ii. When people are not properly informed of the coming changes, they

may see those changes as useless and upsetting for no good reason.

iii. People may resist changes simply because they are being imposed on

them. The concerned people may feel ignored. Management may see

the problem and the necessity for changes to resolve the anticipated

problem.

iv. The need for change may be there and people my see and appreciate

it. And yet they may resist it simply because the person championing

the changes is not trustworthy and respectful.

v. Cultures that value traditions can cause employees/ people to resist

changes. Any changes in an organization that will disturb established

practices, habits and relations may be resisted because it may be

perceived that such changes will lead to frustration and unhappiness.

Such practices and habits may include employee motivation,

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 assistance in times of difficulties (like funeral), and the participatory

nature in decision making process and may others.

vi. Resistance to changes in an organization is not only confined to

employees. Resistance to change can be lead by management,

especially populist leaders, who may not want to lose their popularity

among employees.

vii. Some changes require employees/people to improve working skills. It

may mean going for training. This may lead to loss of positions, some

may feel they do not have ability to learn new skills or some they are

about to retire.

2.4.4: Managing Organizational Change

Managing change refers to the making of changes a in a planned and

systematic way. Changes which are being managed lie within the

organization and that organization has the power to control and manipulate

such changes. Some of these changes may be introduction of a new product,

retrenchment of some employees.

To avoid disastrous consequences, change must be managed in an orderly

manner. Generally managing change involves influencing change in

behavior, attitude, skills relationships and organizational practices. When

the organization does not possess adequate knowledge, skills and

experience to steer that changes, the service of experienced consultant can

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be sought. Consultants are change agents who manage change for their

client.

Therefore the consultants as change agents assist their client in various way

including

 Assessing the need for change

 Designing the plan for change

 Coaching those who will lead others through the transition to change

 Helping others adapt to change

 Dealing with resistance to change

The consultant as the change agent must possess the following critical skills

in order to be able to play the change agent role effectively. Those skills are

such as

i. Political skills: Any change agent must recognize the fact that

organizations are intensely political. Consultants should join in

the game and becomes politician but must have a better

understanding of these politics and their (intricacies) ins and

outs if they are to be prescribing the correct solutions to

organizational problems.

ii. Analytical skills: Consultants cannot afford to do some guess

work; they need to possess skills related to workflow operations

and financial analysis. They need to be well versed with data /

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 information gathering techniques, data analysis, presentation

and dissemination.

iii. People skills: People in any organization, they come in

different colors, nationalities, gender, languages, ability levels

and many other characteristics. The management should be

able to deal with all these. Consultants should possess

interpersonal skills. Consultant must be able to listen actively,

reflect, lead discussion, recognize, draw out useful ides and

develop them. The greatest job of a change agent is to reconcile

and resolve any conflict or potential conflict between and

among the diverse employees in the organization.

iv. Business skills: change agent/ consultant should be very well

versed with how the business operates. What is the nature of

the business ; the products , the markets , customers , the

marketing systems , the problems etc

2.4.5: The Change Management Techniques

The management, with help of consultants, can use all or combination of

the following techniques to manage change.

These techniques can be applied for various stages of change process to

demonstrate the need for change , develop an action program, reduce

resistance , help people cope with new task and conditions , generate

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commitment accelerate implementation gear initiative and creativity

towards priority goals

i. Training and development.

If properly used, training can be powerful technique of change

management. Training can be provided by consultants, professional trainers

or management. Management workshops both external and in company can

be used to sensitize managers and staff to the need for change and the

positive contribution of such changes to the staff in the organization. The

whole exercise is part of capacity building among employees. The

management should be open and tell the truth about the negative impact

the changes may have on employees (such as reduced income, increased

workload etc) and the options available. Training provides employees new

knowledge, skills and abilities to cope with changes. Provision of this

missing technical information enhances employees’ self confidence.

ii. Action learning

Managers and employees learn best by solving problems on their own or

form others with similar experience. The change agent needs to organize

forums for sharing experiences, arrange for study tours to institutions /

organization which undergoing similar changes. Tailor –made training can

also be arranged to provide employees with missing technical information

and skills.

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 iii. Team building

When people are tasked to work in group they become more dynamic. This

dynamism can be exploited to improve individual and organization

behavior. Through teams they gather courage and confidence. The level of

resistance declines. For effective management of change team building

should not be a one- off activity but rather it should be repeated several

times until desired change is achieved.

iv. Meetings

Meetings or workshops which are use for many purposes can also be

designed to bring about and manage change. The focus of the meeting is

to enable various individuals to work on the problem face to face. The

meeting should be facilitated by neutral person who has no stake in the

organization. His role is to facilitated discussion, guide and where

appropriate inject his own experiences from other institutions until the

meeting reaches some consensus and charts the way forward.

v. New organizational unit

The new units may be established if management has made up its mind

to go ahead with change measure like to develop and start marketing new

service and decides that adequate resources and facilities must be fully

assigned to it from the beginning.

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 vi. Experiments

Experiments are used to test a change process or its results on limited

scale e.g. one or two organizational units, or over a short time. Example

flexible working hours or a new bonus scheme may first be applied on

experimental basis in selected department

vii. Pilot projects

A pilot project may be used to check on a limited scale whether a new

scheme is feasible and adjustment will be necessary before the scheme is

introduced on a larger scale. A great deal of information can be drawn from

properly prepared and properly monitored pilot project and in this way the

risks involved in an important new scheme is minimized.

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 2.5: PROFESSIONALISM IN CONSULTING

2.5.1: What is Profession?

Criteria normally used to define a profession. These criteria are such as

 Knowledge and skills

There is a body of knowledge proper to profession, which can be acquired

through a system of professional education and training. The necessary

level of professional expertise is not reached without a certain number of

years of practical experience in addition to completed higher education,

under coaching of senior members of the profession.

The professions tends to have their own criteria and systems for verifying

and assessing required knowledge and experience , including examinations

on entry, assessment by professional bodies, testing the results of further

training and similar.

 The concept of service and social interest

Professions put their knowledge and experience at the disposal of clients as a

service against appropriate remuneration. The real professionals are

characterized by the “service ethos” (culture, philosophy): they serve client’ s

needs and interests, to which they subordinate their own self interest. They

view individual client interest form wider social perspective and keep

broader social needs and interest in mind when serving individual clients.

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  Ethical norms

There is a set of recognized ethical norms, shared and applied by the

members of the profession. These norms define what is proper and what

improper behavior in providing a professional service is. They demand

more than respecting the law: behavior that is perfectly legal may not

always be ethical judged by the profession’ s norms.

 Community sanction and enforcement

In the community in which the profession operates and the clientele is

served recognize the social role, the status, and the ethical and behavioral

norms of the profession. There may be explicit recognition; this may

include definition of educational or other standards required and special

examinations to be passed, as well as of behaviors considered as

unprofessional and illegal and of corresponding sanctions.

 Self-discipline and self -control

While serving client an individual member of the profession applies self-

discipline and self- control in observing the profession’ s behavioral norms.

The profession organizes itself in one or more voluntary membership

institutions (associations, institutes, chambers etc) thus exercising

collective self-regulations and self control over the application of an

accepted code of professional conduct and over the development of the

profession.

Question: “Management consulting is a profession or not?”

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 2.5.2: The profession approach to consulting

Any consultant whose ambition is to become a real professional must

clarify his or her own conception of ethics and the norms to be observed

in working for clients.

The characteristics of a professional approach to consulting include the

following

 Technical competence

The consultant’ s technical competence is the basis of his professional

approach. Consultant must possess the sort of knowledge and skills

needed by particular client.

The consultant must be able and willing to critically assess his own

knowledge and skills when considering a new assignment or when

reaching a point in a current assignment where different competencies

are required.

Professional consultants refrain from assignment which are outside

his/her field of competency.

 The client interest.

`During consulting assignment, the consultant makes his competence and

time fully available to the client, with the objective of achieving the best

possible results in the client‘ s interest. In agreeing to serve a client, the

consultant must be sure that his and clients’ interest do not conflict.

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  Impartiality and objectivity

Clients who turn to professional consultant believe that they will receive

impartial and objective advice. They assume that the consultant will be free

of any biases, prejudiced, preconceived ideas or prefabricated and

prepackaged solutions that may have worked in other contexts but may be

totally inappropriate.

 Confidentially

Confidentiality is another universal principle of work done by

professional consultants to their clients. Management consultants engage

themselves neither to disclose any confidential information about clients

nor to make any use of the information to obtain benefits personally for

their firms of other clients.

 Value for money

The fees charged to clients raise several ethical questions professional are

concerned about relationship between the benefits drawn by the client and

the cost of the assignment. If they feel that the outcome does not justify the

price or that the benefit will be done or too small, they warn the client

before the job starts.

Charging excessive fees to uninformed clients is clearly unprofessional.

Undercutting fees and working at a loss in the hope that this will eliminate

competition is unprofessional.

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2.5.3: Principles for Ethical Consulting

Ethics involves learning what is right or wrong, and then doing the right

thing. In consulting, the right thing is not always easy to identify. Ethics

includes the fundamental ground rules by which we live our lives. Values

that guide how we ought to behave are considered moral values, for

example, values such as respect, honesty, fairness and responsibility.

Statements around how these values are applied are sometimes called moral

or ethical principles.

Ethical consultants must have a set of principles, which defines ethical

behavior and guides the consultants’ actions toward those behaviors. This

is true whether you are an external consultant or an internal leader wanting

to lead employees fairly and equally.

Those principles are documented as a code of ethics. A consultant must be

able to recognize ethical dilemmas and have at least one tool to use to

address the dilemma.

2.5.3.1: Codes of Ethics to Avoid Behaviors that Perceived as Unethical

It is critical that a consultant should establish some major principles, or

guideposts, to ensure that he/she consult in a manner that is fair and

equitable and also that minimizes liabilities as a consultant. Those

principles are “inner compass” in the middle of the confusion and

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complexity that are typical at various times in an organizational change

effort. Many times, consultants start developing that compass by

developing descriptions of their mission and vision for their consulting

work and the way that they want to work.

Consultants might refine description of their preferred values and

behaviors by developing a code of ethics or conduct of conduct. Here are

some important ethical guidelines for consultants during organizational

change.

1. Do no harm to your client.

2. Keep client information private unless the client or law requests

otherwise.

3. Do not create dependence by you on your client, nor by your client on

you.

4. Anticipate and avoid conflicts of interest (for example, representing

two opposing interests at once).

5. Do not act in the official capacity as an advocate for your client.

6. Do not go beyond your own expertise.

7. Do not skip the discovery phase of consulting.

8. Treat others the way you want them to treat you.

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2.5.3.2: Avoiding Behaviors That Clients Perceive as Unethical

To avoid unethical behaviors, consultant also should develop strong self-

awareness, including about own biases and assumptions and about the

limits of own expertise. This self-understanding is critically important.

When first establishing a relationship with a client’ s organization,

consultant should make every effort to learn the culture, or personality, of

the client organization. The culture is reflected in a variety of values, some

of them actually enacted and others that are preferred by members of the

client organization.

Ethical behaviors should conform to the values of that culture, as well as

own professional values.

Examples of a Consultant’ s Unethical Behaviors

To further your understanding of ethics, it might help to consider examples

of unethical behaviors.

Ethics is often a highly subjective matter. Consequently, not everyone might

agree that all of the following are examples of unethical behaviors.

1. Because the consultant wants to have a good relationship with the

client, the consultant quickly adopts the client’ s perspective on all

issues and does not voice any disagreement with the client, thereby

colluding with the client.

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2. Because the consultant offered guidance or advice that was well

beyond their expertise, the client’ s organization implemented action

plans that were destructive to the organization.

3. Because the consultant did not conduct enough discovery (or

“diagnosis”) to further examine the client’ s reported issue, the

client’ s organization implemented action plans that were incomplete

or destructive to the organization.

4. Because the consultant wanted the client to promptly do as the

consultant advised, the consultant pushed their point of view well

beyond what the evidence of the discovery process revealed in the

client’ s organization.

5. Because the client wanted the consultant to come to the same

conclusion about the issue as the client, the client somehow did not

tell “the whole story” to the consultant who, in turn, made the wrong

recommendations based on inadequate information.

6. Because the consultant wanted to further help the client’ s

organization, the consultant did not terminate the current consulting

project when the outcomes (that were specified in the project’ s work

plan) are achieved.

7. Because the consultant wanted to help the overall community, the

consultant told investors information that the client believed was

being held in confidence between the consultant and client.

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 8. During the discovery phase of the consulting process when

interviewing one of the entry level employees, the consultant tried to

build trust with the employee by sharing his or her confidential

impressions of what he or she has concluded about the top

management so far.

2.6: CONSULTING PROCESS

The consultant is a professional who follows a process. The consultant is a

problem-solver and wants to always be prepared to achieve, avoid or

preserve something for the client.

The consulting process is the consultants and clients joint activity aimed at

solving a distinct problem and implementing the desired changes in the

client organization. The process has beginning and end.

Between this two points i.e. beginning and end points the process and be

subdivided into several sub-stages. This helps both consultant and client to

be systematic and methodological, proceeding from stage to stage.

There are several models of consulting process, for the purpose of this

course, the five stage model has been chosen. The model includes entry,

data collection and diagnosis, feedback and recommendations,

implementations and termination.

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When applying this model to a concrete situation it is possible to omit one

or more stages or let some stages overlap. For example implementation may

start before a recommendation is completed or detailed diagnosis may not

be necessary or integrated with the development of the proposals.

This is a general model and a consultant may find it best to amend it to

something that suits own particular work and style. A consultant may need

to customize a process for a particular assignment.

The consulting process model

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1 Entry.

In the entry step, communication skills are the key. The

consultants must listen to the person describe their problem,

what they think may be wrong and their ideas for how to resolve

it. This stage Consist of sub-process as follow

 Agree on brief and scope.

The purpose of the initial meeting is to discuss the client's

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requirements. The potential client will explain his

requirements as he perceives them and the consultants will

confirm their ability to satisfy the client's needs.

 Plan the project.

Consultants conceptualize the engagement and structure the

solution into stages of work with time/task analysis. This

defines how the issue is to be handled. It also estimates the

manpower requirement, potential constraints, and engagement

fees, then a decision whether to proceed to the proposal stage

is made

 Prepare the proposal.

The consultant prepares the proposal documents to the client on

understanding of the engagement and specific objectives to be

achieved. It also defines approach to the engagement. In addition,

this proposal will serve as a legally binding contract.

 Contract.

This step involves defining the role of both consultant and the

client. both parties must be clear about their role in the process

of finding a solution, what steps are involved, determining how

much time it will take and how much it will cost (if appropriate).

The skills needed here are creativity (creating a plan), flexibility

(being adaptable to client's needs), partnership (working with

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 client to define the scope of the problem-solving "project") and

vision (seeing beyond your first impressions).

2. Data Collection and Diagnosis. The next step is gathering all the

facts needed, contacting people who may provide more information and

organizing that information.

 Develop framework for analysis:

The nature of the engagement will determine research

methodology and the diagnostic techniques to be used. In general,

a framework will be developed to identify the type of data

required. This process may involve strategic analysis and

operational analysis. The strategic analysis assesses the

organization's main activities, its objectives, and the environment

within which the processes take place. It also identifies potential

areas where competitiveness and profitability may be improved.

Operational analysis examines the organization from a day-to-day

operational perspective.

 Collect data and carry out diagnosis

The data collected maybe internal, external, subjective, or

objective. Once the data are collected, a diagnosis will be carried

out to clarify the main issues. Diagnosis may include examining

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 the external environment, technology, economics of business, and

human factors of the organization. Diagnosis step involves

creativity (seeing the patterns in the data), flexibility (trying

different approaches) and leadership (organizing information into

a coherent fashion).

Generally, the key skills needed in this stage are respect (for the

people you contact for more information), partnership (working with

the various people involved) and communication (listening to them,

understanding what they saying and transforming into something

tangible). In many situations, consultant must use appropriate

respect when obtaining confidential information that needs to be

protected or limited to those who need to know.

3. Feedback and recommendations.

A consultant needs to report the findings from stage 2. That is to take

the mountain of information that has been collected and reduce it so

that it can be managed and understood.

A consultant must also decide how to involve the client in the process of

analyzing the information. He/she should be prepared to encounter

resistance when giving feedback to the organization. The more high-

profile the project, the more resistance are likely to be encountered. The

consultant must handle this resistance before an appropriate decision

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 can be made about how to proceed. This stage is pretty much what

others call the planning stage and includes setting the goals for the

project and selecting the best action steps. Communication plays a huge

part in this step as it does flexibility if the client wants to change the

process or does not agree with interpretation of the data that have

gathered.

4. Implementation

As the name implies, this step involves taking everything that has been

decided previously and implementing the solution decided upon. Often, the

implementation falls to the client organization, but sometimes the

consultant will remain deeply involved in the implementation.

Sometimes projects start implementation with an educational event. It may

require a single meeting to get different parts of the organization together

to address a problem or it may be a training session. In these cases, the

consultant is usually involved in rather complicated design work and in

running the meeting or training session.

Communication is important in letting people know the decision and what

is expected of them. Partnership and leadership skills are important in

guiding people to accept the decision and the actions they must perform.

The consultant may need to use flexibility and creativity if some people

resist the decision or the action required.

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5. Termination This step starts by looking back at the entire process

and reviews what happened, Is the client satisfied? Were expectations

met? Are there new issues that have been surfaced and that need to be

addressed? Evaluation will also occur along the way as checkpoints in a

large project. The evaluation provides an opportunity to use whatever

was learned in a positive way for the future. Thereafter is the official end

to a project. In other situations, the final step is the acknowledgement

that it is done and people can move onto something else, requiring

leadership skills.

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 CHAPTER THREE: SECURING OF CONSULTING

ASSIGNMENTS

Securing consultancy assignments can be done using two alternatives;

i. Waiting for the clients to knock on the consultant’ s door.

ii. Going out and meet clients to seek for such consultancies. This is the

most effective alternative as it is likely to generate more consulting

assignments.

How to Secure Consulting Assignments

There are many methods used. But the choice of the method to be used

depends on the following factors;

i. Value of the assignment.

ii. The financer.

iii. Availability of consultants in similar line of work.

iv. Costs and benefit of the project.

The role of the consultant is to be familiar with each method and know how

to respond to opportunities.

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The methods are;

i. Open Competition

The opportunity is put open to all qualified consultants. This method

provides equal opportunities to all the qualified consultants as well as

enabling the prospective client source the best consultant in terms of

technical capacity and price. In this process, the bids to procure goods,

works or services are invited, received, opened and evaluated, and the

contract is then awarded to the best evaluated bid. The process goes

through the following steps:

1. Advertisement for pre-qualification or invitation for bids.

2. Preparation of list of interested firms

3. Issuance of invitation for bids containing letter of invitation,

instructions to firms and draft contract.

4. Preparation and submission of bids

5. Opening of bids (technical/financial)

6. Evaluation of bids (technical/financial)

7. Notification and award of contract.

8. Finalization and signing of contract.

9. Contract management.

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ii. Restricted Competition

It is a competition by direct invitation without open participation. It is used

for goods and work of specialized nature or available from a limited number

of suppliers. Research, training and other services of similar nature can be

procured through this method.

iii. Request for Quotation

This method is based on comparing price quotations obtained from several

firms, preferably from three to five firms, national or international, in order

to assure competitive prices. It is appropriate for procuring small value

goods of standard specifications or contracting of smaller works. A request

for quotation should include description of goods or scope of works, as well

as desired delivery or completion period. Price quotations may be

submitted by fax or mail and are not to a formal invitation, acceptance

opening and evaluation process; instead the process follows sound private

sector practices which take into consideration price, quality, delivery and

standardization aspects of goods and works.

iv. Single Source/Direct Contracting

This method without competition may be appropriate for goods, works and

services of even smaller value. It may be suitable also under the following

circumstances:

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  An existing contract of goods, services or works, which has been

awarded earlier, may be extended for additional goods, services or

works of a similar nature. For example, a building contractor may

have been contracted to build a small lecture theater but before the

work is completed, the same contractor may be requested to construct

a small office adjacent to the lecture hall in order to utilize the

remaining space.

 In procuring standardized spare parts and goods in order for them to

be compatible with existing goods from the original supplier at a

reasonable price, because maybe if the client attempts to procure

from a different source, the parts and goods may not be compatible.

 The required item is of proprietary nature and can be obtained from

only one source or only one firm is fully qualified with fully clear cost

advantages over others or has the exceptional experience.

v. Qualification of firm

This method may be used where the cost of preparing, distributing and

evaluation of bids would outweigh the perceived benefits and therefore is

common in very small consulting assignments for which the need for

inviting, preparing and evaluating consulting proposal in a competitive

process is not justified. In such cases, the client prepares Terms of

Reference, requests for expression of interest from a restricted number of

potential consultants (at least three firms), together with some additional
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 information on their experience and qualification relevant to the assignment

and then selects the consultant/consulting firm with the most appropriate

experience. The selected consultant/firm is then requested to submit

technical and financial proposal for negotiating a contract.

vi. Individual Selection

Individual consultants are generally employed on assignments where the

qualification and experience of the individual are the paramount

requirements without any need for other professional support. The

individual consultants are selected based on their qualifications and

experience for the assignment by comparing their CVs and/or references.

The individual should be fully capable of carrying out the assignment. The

capability is judged on basis of academic background, knowledge and

experience.

vii. Repetitive Procurement

Goods and services such as office supplies, technical services, etc that are

typically suitable for repetitive needs, may be procured through restricted

tendering, provided the goods and services have been originally provided

through a competitive process. Under this procedure, bids may be invited

from those who had submitted responsive bids for the earlier purchase

order or contract. In exceptional cases bids with superiority in terms of

price, reliability and performance may win the tender of supplying the

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additional goods instead of placing a repeat order with the supplier with

whom it had previously dealt with.

How to Respond to Enquiries for Consulting Expertise

First a client sends in a Request for Information (RFI) or Expression of

Interest (EOI) when they are not sure about specifications and methodology

or they need it for shortlisting consultants to the next stage.

Once they have a response on their RFI, then they shortlist the consultants,

and then tell them (the shortlisted ones) to bring in Request for Proposal

(RFP).

Note: the information and language used in the RFI may also be used in RFP,

so it reduces the burden for the consultant.

The question is: with what information should the consultant respond to an

RFI? It is listed as follows;

i. Technical scope

ii. Specifications

iii. Contract type

iv. Contract transport vehicle

v. Pricing

vi. Certification

vii. Methodology

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Note: the consultant is supposed to provide all information that makes you

stand out from competitors but also should keep it real.

Request for Proposals (RFP)

This is like a test to the consultant, from the client. The scope of preparing

an RFP includes when the consultancy services are procured through:

i. International competitive bidding and

ii. National competitive bidding.

In Tanzania, the consultancy services procurement process is guided by the

Procurement Act. Different donors or international organizations have put

in place their own policies.

International Competitive Bidding is used when a country has secured

funding from international organizations in order to procure consulting

services. The donor tells them how to procure such services and the process

should be open to all consulting firms in the world or to selected countries

in the world. International bidding can also be used for locally mobilized

funds because of;

i. Size of the project- when the project is so big that the local firms lack

the resources to supply such services.

ii. Complex technology- when the project necessitates the use of complex

technology that cannot be obtained locally.

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iii. Lower prices- when the purpose of international procurement is to get

lower prices due to increased competition.

iv. Expanded experience- when a firm wants to explore expanded

experience on the services in an international arena.

v. Technology transfer- when a project intends is done with an intention

of transferring technology from a developed to a less developed

country.

National Competitive Bidding includes a process where only consulting

firms based in a country are allowed to bid. These firms may be local or

international firms that are registered in the home country. Even small

projects funded by donors use this method. This method is used because

of;

i. Building the capacity of local firms.

ii. Small value of assignments may not attract international consulting

firms.

An RFP should be sent along with a Letter of Invitation. The Letter of

Invitation should contain a brief description of the assignment, Terms of

Reference, Reference to selection procedures, and sometimes budget for the

assignment and the time frame allowed for submission.

What does an RFP include? An RFP includes a Technical Proposal and a

Financial Proposal. Clients are very serious with the RFPs, from which they

look for the following information;

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 i. Technical capabilities.

ii. The outputs.

iii. Sufficient information.

The Consulting Proposal/Project Proposal

The consulting proposal / project proposal is the statement to the client of

what the project is about and what it will do for business. The proposal is

what the client buying from the consultant. It needs to present what the

consultant has to offer in a positive light.

Proposal submitted to the client is an important selling document. A

consultant must be able to describe clearly on paper his /her vision of how

to execute the assignment in understandable way.

Functions of the proposal

Manage the client’ s expectations.

To state what the consulting exercise aims to achieve and to get the client’ s

commitment. In short to sell what the consultant has to offer.

Contents of the proposal

The format of the project proposal varies from client to client. The proposal

needs to be brief and must make an impact. It must speak for itself. This

facilitates study by the client and his evaluation of alternative proposals

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received from several consultants. The key elements which included in the

proposal are as follows.

A title: A short title for the project preferably the client company’ s name

and brief descriptive phrase.

Client’ s requirements: This is the brief statement about the company, the

opportunities or issues it faces and the scope of the project. The statement

should aim to convey the fact that the consultant understands the key

issues and is committed to addressing them.

Overall aim: This is the statement of what the project aims to achieve in

broad terms.

Objectives: This is the list of the detailed objectives for the project.

Objectives should be active. A good way of starting the list is to use the

phrase. This consulting exercise aims to …..

Outcomes: They are statement of what the business will be able to do as

result of receiving the consulting exercise and the delivers of its objectives.

A good way to start the list is to use the phrase. As a result of this consulting

exercise the business will be able to……

Approach and Work Plan: This section provides an opportunity for

consulting group to describe how it will address exercise. It shows the

description of the consulting group's overall work approach and the

deliverables (reports, briefings, training sessions, publications, etc.) the

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client will receive. Typically the work plan would include a description of

each task and a chart showing the sequencing of tasks and the timeline for

implementation. This section is an opportunity for the consulting team to

indicate what it has to offer, the emphasis should be on the why what the

group can offer is different or special.

Time plan: Indication of when the job will be done and how many hours it

will take.

Fees: Fees are statement of how much it will cost the client , the nature of

the fee structure (fixed fee based on hours; fixed fee based on overall

project, contingent fees, etc.), and what the payment schedule will be (lump

sum, staggered payments, etc.).

Evaluation of the Proposals and Selection of the Consultants

This process first begins with the opening of the Technical proposals which

is later followed by evaluation of the bids. In opening of the Technical

Proposals;

 All representatives of the bidding companies must be present.

 The names of the bidders are read out loud.

 The Technical Proposals are kept separate envelopes from the

Financial Proposals.

 No Technical Proposal is rejected at the time of opening, except the

late submitted ones.

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  After the reading of each Technical Proposal, each representative

signs their companies’ respective Technical Proposal.

Evaluation is usually in two stages. The technical proposal is evaluated first

and is rejected only when it fails to conform to the terms of reference and

its related financial proposal is returned to the respective consultants. If the

technical proposal is accepted then its respective financial proposal will be

evaluated as well.

In this process the following issues take place;

 Client forms an Evaluation Team before the proposals arrive. It cross-

checks each proposal.

 Any proposal not meeting the terms of reference is rejected.

 The evaluators will consider issues like;

i. Experience in the field of assignment.

ii. Proposed work plan and response to the terms of reference.

iii. Personnel composition and their participation in local bids (in

case of international bids).

iv. The CV of each expert.

Each of the above items (i) to (iii) are given are percentages out of 100%.

Experience is usually given bigger weight followed by personnel. Scrutiny of

the CV is given 100% and the CV of the Team leader is usually higher in

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weight. This evaluation criterion and their relative weights are included in

the RFP so that so that every bidder knows it.

If the evaluation is to be based strictly on technical criteria, the

firm/consultant scoring the highest should be selected for contract

negotiations and only the price envelope of that firm should be opened. If

the evaluation is to be based on both technical criteria and price, the

envelopes containing the financial proposals of acceptable technical

proposals will also be opened.

In this case only firms/consultants scoring the minimum points should be

considered as having met the minimum requirements of the RFP. Once the

technical proposals have been evaluated, they are ranked in order of

technical preference. Those failing to meet the minimum requirements of

the RFP are rejected.

Selection of Consultants

This is done using the following alternatives;

i. Quality-Based Selection (QBS) - considers technical merit alone for a

firm that has submitted the best Technical Proposal.

ii. Quality and Cost-Based Selection (QCBS) - price is used in addition to

technical merit.

iii. Least Cost Selection Method – (LCSM) – price is the major determining

factor.

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iv. Fixed-Budget Selection (FBS) - is used for simple, clearly defined

projects with budgetary restrictions.

Principles Governing the Consultant Procurement Process

1. Economy

2. Efficiency

3. Competition

4. Equality

5. Transparency

6. Due process-fairness

7. Publicity.

Negotiating for the Assignment

The selected consultant then needs to negotiate on the assignment in the

following aspects;

 Terms of Reference and Work Plan, inputs and outputs, time schedule,

etc

 Conditions of contract, including price adjustment, contingencies,

guarantees, insurance, professional liability, etc

 Financial terms including fees, payment terms and conditions, other

reimbursable costs.

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 CHAPTER FOUR: CONDUCTING AND MANAGING THE

CONSULTANCY PROCESS

ESTABLISHING A CONSULTANCY FIRM

When launching a consulting practice, or thinking of doing so, the following

questions must be answered:

1. What Business Are You In?

Defining market niche and value proposition is essential for great

consulting success. You must differentiate yourself by the way you

offer your services and must find a way to emphasize a value-added

over and above competitors. To simply proclaim that you offer

“accurate” and “timely” consulting services may not be enough to

differentiate you from your competitors. Instead, for example in

insurance service, value proposition such as “fast service” or

“personal service” or “deep experience with problems in your

industry” could create a competitive edge for the firm.

Another important factor about company image is how you charge

your clients and how this differentiates you from the competitors.

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2. How Have You Organized Your Practice?

i. Organize your practice in a way that prevents the consultant

getting distracted from what should be the priorities, i.e.

keeping up with trends in the market and new professional

knowledge.

ii. Getting and updating technological tools: Today, Information and

Communication Technology (ICT) is fast revolutionalizing the

way we perform our work. Therefore consultants need to be well

informed of ICT and may need appropriate gadgets such as

desktop, laptop, cell phone, fax machines, etc. Invest in them as

best as you can and keep them up-to-date.

iii. Arrange an office: whether you decide operating at your home

or outside of it, set up an office space so that you can be

psychologically in tune with your work. Design your office in

such a way that it is conveniently located, attractive but less

expensive.

iv. Set time as an ally: time management is crucial here; therefore

assignments should be finished within the agreed time

schedules. Unnecessary delays will chase potential and repeat

customers away. If some reasons you are expecting delays,

make it known to your client and discuss about it.

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 3. Do You Stand Out From the Crowd?

What makes you more special than others? Are you better known in the

market than competitors? Are you known as a good performer or bad

performer? These are some of the questions that you need to ask

yourself and provide answers. In general, once you have defined your

value proposition and organized your practice, you should spread the

good news about what you offer, i.e. perform marketing of your service.

You may do this using a brochure with a logo, address, and company

name for start-ups. Later on use more sophisticated means of

communication such as e-mails and website.

4. How Is Your Attitude?

Have an attitude of turning crises in the market into opportunities. Also

have an attitude towards actions that can keep your mental and physical

uprightness, such as taking vacations, spending fun time with your family

and friends and so on.

The Practical Part of the Process of Starting a Consultancy Firm

1. Assess Your Own Expertise, Competence and Commitment.

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  Differentiate your areas of expertise and areas of interest and

concentrate in those areas in which you can perform better than

competitors.

 Assess the consulting rights and the conditions under which you

can consult. This is a problem for those who are employed as

the employer may not give them permission to do part-time

consulting. For example lecturers and professors may not be

allowed to own private consulting firms as they will be

competing with the activities of the University of consulting as

income generating activities.

 Do not take up consulting as a replacement for your lack of

employment.

2. Specify and Decide on the Nature of the Consulting Business.

 Make sure that the services you will produce can be sold in the

market.

 Be very specific on the type of consulting firm you want to start

(see Types of Consulting Firms)

 Specialize in those areas you can outperform the competitors.

3. Decide on the Business Name

You can set a name under your name or any other name, or specifying

the major benefit of the consulting business. Generally, the name

should be chosen properly and be made to be short, clear and

attractive and not abusive in another language.

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4. Decide on the Location of your Business Office

5. Work out on Legal Aspects of your organization.

6. Comply with registration and legal requirements and decide on a form

of business you want to operate in (sole proprietorship, partnership

or corporation).

7. Prepare a business Plan.

The plan should include specific services to be offered, marketing

strategy, a financial plan, and a marketing plan. It is used as;

 A business checklist- keeps the whole process of starting and

organizing a business more organized.

 A communication tool- among stakeholders, like employees,

investors, financers, advisers, and the like.

 Making the business idea real- giving tangibility to an existing

business idea.

 Business Plan as a Performance tool- guides through operation

process and enable realization of goals.

 Business Plan as a Motivating tool- businessperson gets to

communicate how well he understands business and pushes

them towards achievement of the business goals.

 Business Plan as a Roadmap- on its completion it gives a

business owner and operators goals and direction at all times.

8. Prepare a Marketing Plan.

This includes four steps;

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 i. Situation Analysis.

ii. Determining marketing objectives of your firm.

iii. Deciding on the target markets you want to enter.

iv. Designing a strategic marketing mix.

9. Recruit and Select Consultants.

Although there are different criteria for recruiting consultants, the

most common considerations are personal qualities, education,

practical experience and age.

10. Set up a Monitoring and Evaluation System (MES) for the

Consulting firm.

MES gives information on whether the business and marketing plans

are being executed as planned, i.e. if the objectives and targets are

being met or not. It is a continuous process with a purpose to

determine systematically and effectively as possible the relevance,

effectiveness, and impact of the activities of the organization in the

light of its objectives and performance targets.

MES performs two important roles as shown below;

i. A management tool through; a) developing an ongoing picture of

company’ s performance b). Maintaining quality control, cost

efficiency and cost effectiveness and c). Facilitating a regular

review and planning of work schedules and budgets d). Assisting

in identifying constraints and problems at an early stage and

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 highlighting new opportunities for exploitation and e). Identifying

the need to make adjustments.

ii. As a communication tool through; a). Acting as an internal

communication system in which information flows both in

horizontal and vertical directions among the investors and with

the employees. And b). Sharing experiences, results and lessons

learned among concerned shareholders.

Aspects to be monitored and evaluate in the consulting firm include;

 Growth in operating income.

 Growth in operating costs.

 Growth in market share

 Budgets- the proposed vs. the actual achievement

 Implementation status of the business plans

 Implementation status of the marketing plans.

How to Succeed in Consulting Business

 Develop your requisite consulting skills- be skilled at problem-

solving, communication and management skills.

 Educate yourself about your new profession- keep up with current

management issues.

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  Know what to expect from the job- familiarize yourself with the job

titles, specializations, and typical consultancy job cycles and learn

how to write proposals.

 Get experience-through volunteering to consult for non-profit

organization as a pro bono work, take up an internship or be

embedded in a team of experienced consultants and be prepared to be

paid less.

 Decide where you want to work- for multinational firms, small firms,

corporations, non-profit and government institutions.

 Familiarize yourself with the consulting job hunt process- know the

interview process, personality outlook, resume questions,

communication and business case questions as well as presentation

process.

MANAGING CONSULTING ASSIGNMENTS

Effective process of securing the assignment would be meaningless without

a professional execution of the assignment. To succeed in implementation

of the consulting assignments, the following should be done:

a) Structure and Schedule the Assignment. This will show, among other

things, the start and the end of the assignment, the objectives of the

assignment, detailed work plan, consultant/client responsibilities,

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resources requirement, required skills, methodology to be used, and

many other aspects. This can be done if the nature of the assignment

is well understood and the assignment is well defined in the proposal

to the client. This process can be effective by;

 Appoint a team leader/project manager. The team leader must be

a senior and experienced consultant and it can be a specialized

single person or a group of team leaders each with specific

expertise (for interdisciplinary assignments). The major

functions of the team leader should include time allocation to

various activity components, work scheduling and organization,

reporting and providing overall linkage between the field

consultants and the head office and client. In order to be

effective, team leader(s) must be given full responsibility and

authority.

 Schedule the assignment. This can be done through the following

process;

i. Establishing a clear work plan with responsible persons

and then discussing it with the rest of the consulting team.

ii. Assembling the consulting team, matching their technical

profiles with those of the assignment.

iii. Selecting a team of consultants whose habits, interests and

personalities will be tolerated by the client.

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 iv. Ensuring that the members of the consulting team can get

along well, otherwise the assignment is likely to fail.

b) Make the Necessary arrangements ready to start the assignment. A

number of actions should be taken as follows:

 Assign the counterpart consultant-who is an overall consultant

to backstop the operating consultant.

 Provide special training to consultants (where necessary). This

training is organized and paid for by the consulting

organization to enable consultants have common understanding

of the assignment and the methodology to be used. In some

cases the training can be organized by the client using

specialized training consultants.

 Provide the operating consultants with a decent working office

fully equipped with the necessary working facilities. The office

can be provided by the client or by the consulting organization.

 Before moving into the field, brief the consultants on the nature,

magnitude and conditions for the assignment

 Introduce the consultants to the client. It is at this stage that a

concrete working relationship begins to be built. The client on

their part must ensure that the consultants are introduced to the

personnel with whom they will work.

c) Managing the Assignment Execution Process. This is the most

delicate part and hence it requires a proper working relationship

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 among the consultants on one hand and the client system on the

other. The team leader has to ensure that the consultants work as a

team and that the implementation proceeds as per work plan. The

consultants on the field must demonstrate self-discipline and self

control. There should be a clear system though which supervisors and

the client can exercise control over the operating consultants. The

organization should design a monitoring, evaluation and feedback

mechanism so that any divergences from the plan are noted early

enough and remedial measures taken before things go out of control.

The important aspects to monitor and control on a continuous costs

and budgets, otherwise the company may go into losses.

d) Keeping records and provide reports regularly. The head office and

the client should be informed of what is happening in the field

through periodic reports submitted by the team leader. Consultants

on the field should be required to prepare Status Reports on weekly

basis detailing the output the consultant has produced within that

period. This report should be based on well established targets.

Reports will address progress achieved so far and in relation to the

planned targets, payments paid by the client as per the contract and

those paid by the consulting organization. The reports will identify

constraints and tentative suggestions on alternative solutions. The

report prepared by the field team and submitted to the head office

should be approved by the client.

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Key Factors for Success of Consulting Assignments

 Do proper planning before embarking on implementation.

 Spend enough time in understanding the cues and clues.

 Hold discussions with consultants and summarize all the issues raised

for future references.

 In-depth discussion on the contract and agreements to ensure action

is based on solid base.

 Pay attention to the political processes of the client’ s organization

and reach out to all relevant people.

 Delivery of output on time and to the required quality.

 Establishing management structures which would allow the

participation of all consultants in problem resolution.

 Having a good working relationship with the client system.

Key Factors for Failure of Consulting Assignments

 Not involving influential people early enough.

 Consultants proposing solutions before problems are adequately

diagnosed.

 Presenting reports full of content without regard to the process of

discussion (methodology)

 Moving too quickly, causing surprises and creating defensive behavior

to clients.

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 Not recognizing the effect of change in one part of the system on

another part of it.

 Not providing consultants with the minimum working facilities.

 Not being close to the client.

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 CHAPTER FIVE: MARKETING CONSULTANCY SERVICES

Basic Principles

i. Do not sell more than you can deliver.

ii. Do not misinterpret yourself- not boasting of providing expertise in

almost every area.

iii. Do not defame other consultants.

iv. Always remember that you are marketing a professional service, so

aim at high technical performance in the execution of assignments.

v. Consider the client’ s needs and desires as your focus in all your

marketing efforts.

Things that clients value the most from consultants;

 Professional reputation and image of the consultant.

 Past experiences in similar assignments.

 Personal ability to cooperate with the client during the consulting

process.

 Personality and habits.

 Attitude towards the client.

 Technical expertise.

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Strategies to Market Consulting Firms

In consulting industry, there are two aspects that need to be marketed;

i. The consulting firm

ii. The consulting assignment

Marketing Consulting Firms

This has two objectives;

i. Building strong public relations and image with potential clients, and

this is accomplished through advertisements.

ii. Arousing client interest by providing him/her with other technical

service (information, training, etc)

Some techniques used in marketing consulting firms include;

i. Working the referrals- by word of mouth.

ii. Personal Selling- one to one selling through an interaction between the

consultant and the client.

iii. Professional publications- can be demonstrated through writings such

as books for managers, articles on management and industry,

occasional papers, newsletters, etc.

iv. Creating Favorable links and relationships with public information

media, such as radio, TV stations and print media.

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 v. Management seminars- workshops, round table discussions and

conferences.

vi. Advertising.

vii. Direct Mail publicity materials.

viii. Exhibitions of materials and services.

ix. Internet marketing.

x. Socialization with potential clients.

xi. Voluntary social work

xii. Directories

xiii. Responding to enquiries.

xiv. Location of office facilities.

xv. Name and logo

Marketing Consulting Assignments

The traditional method to market consulting assignments is by the

consultants to wait for clients to come asking for advice, through physical

visits, letters or telephone calls. Other more effective ways include;

i. Making direct cold contacts with potential clients.

ii. Contacts through referrals.

iii. Responding to invitations to submit proposals/bids.

iv. Marketing during the entry phase- a technically and professionally

written report markets the consultant as well as the company.

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v. Marketing during assignment execution. Consider the following

aspects;

 Be alert to signs of client’ s unhappiness.

 Keep client informed about the progress.

 Keep watch for new assignment opportunities emerging

 Regard current assignment as a referral needed for further

marketing

 Build a collaborative relationship with the client system

 Demonstrate good/ethical behavior

 Observe time frames and appointments

 Keep clients informed about your whereabouts during the whole

assignment period

 Inform your clients whenever you are in problem that would

likely affect the execution of the assignment.

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Strategy for Marketing Newly formed Consultancy Firms

If a firm has never done business with a particular company and does not

know anyone who can refer it to the executives, the best method is for it to

begin the process of developing a new professional relationship as follows;

i. A personal letter- among the various strategies a well-written and

intriguing letter stands out far as the most powerful method for

initiating a new relationship. The letter has to be written in the right

tone and needs focus on a specific issue that the executives are likely

to be connected about. The key success in this strategy is that the

introductory letter should raise curiosity on the part of the reader

rather than attempt to satisfy it.

ii. Authorship of a book or article on topical issues or issues that are

really troubling business executives.

iii. Having a website where the important information about the

consulting firm is posted.

iv. Attendance at selected meetings with an audience comprising other

executives, and

v. Consistent appearances in relevant professional journals or other

media over an extended period of time.

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PRICING CONSULTING ASSIGNMENTS

The consultant, before fixing the fee for the assignment, has to distinguish

between chargeable and non-chargeable services. Chargeable services are

those services performed by the consultant that have a direct bearing on the

assignment. Any other services performed by the consultant that are not

directly linked to the assignment should not be charged to the client. Such

costs include administrative costs and costs associated with inefficiencies

on the part of the consultant.

Consultancy firms are business organizations. Therefore the price they

charge must pay the full cost of executing the assignment and generate

profits for business to grow and prosper. However, the price so set must

convince both the clients and the consultants that the cost, fees and other

financial terms are correct and fair.

What should not be charged? Travel time to and from the client’ s location.

For example, you have secured a consulting assignment with a client located

in Mbeya region and you located in Dar es Salaam, how will you consider

travel costs and subsistence allowance on the way? There are several

approaches to this issue. Some consultants would charge the client in a full

rate on the argument that once they have left their offices they are no

longer free to do their own work. In other words, they are already tied to the

assignment and all the time has to be paid for by the client. The other

alternative is charge a reduced rate considering that the consultant was

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actually not fully involved in the execution of the assignment. In other

words, there is sharing of costs between the consultant and the client. The

third option is to charge nothing. Supervision, technical guidance and

assignment control may be charged or not. If it is to be charged, precise

information will be needed to substantiate. Other costs that should not be

charged include annual leave, public holidays, days reserved for sickness

and time wasted by the consultant for no obvious reason.

Pricing Strategy

Pricing is an important strategic issue because it is related to service

positioning. Furthermore, pricing affects other marketing mix elements

such as service features and promotion. A general process for setting price

is as follows;

1. Develop marketing strategy-perform consultancy marketing analysis,

segmentation, targeting and positioning.

2. Make marketing mix decisions-define the types of services you are

going to provide, mode of reaching the customers and promotional

strategies.

3. Estimate the size of the demand- estimate the size of the market, the

growth potential, its behavior for each kind of service expected to be

offered and how demand varies with price.

4. Understand the environmental factors-evaluate likely competitor

actions, understand legal constraints, etc.

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 5. Setting Pricing Objectives-such as profit maximization, revenue

maximization, or price stabilization.

Consultants have many strategies to pursue. Which strategy they may

pursue will depend on the obtaining conditions in the market in which they

operate, their own experience, the time they have been in the business, the

size of the market and the long-term objectives of the consulting firm. The

nature of client and of the funding agent may also influence in the pricing

strategy.

In any case, market considerations play a critical role in setting prices/fees.

Consider what fee is appropriate in the market and whether clients will be

willing and able to pay-the law of market. Therefore, consultants can use

one or a mixture of the following pricing strategies;

i. Competitor’ s fees-find out how competitors determine fees, their

pricing policy and what clients think about these prices and then

price your assignments accordingly. Do not aim to out-compete

your competitors, but to compare with them in the market. This

strategy is normally followed up by firms that are not large enough

to influence the market.

ii. Normal fees-are fees established by professional associations as

minimum but can be negotiated upward with justification. The

consultant must be able to explain and convince the client about the

fee and how that fee was reached. Pricing below the normal fee may

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 not be accepted by the consultancy association unless the action is

backed by concrete reasons and the phenomenon is temporary.

Pricing below the normal fee means undercutting members in the

market.

iii. Differential fees-for different market segments. The consultant

studies the nature and size of the market in which they operate,

divide it into segments and then charge different fees.

iv. Promotional fees-charging much lower than normal fees. These prices

are temporary and are used mainly by young

consultants/consulting firms or when attempting to enter new areas

of consulting. The prices are later gradually increased to

comparable levels to competitors.

v. Skimming fees-this means setting a high consulting price and to

those customers who are less price sensitive. It is a strategy to

pursue the objective of profit maximization and is most appropriate

when the clients are not price sensitive, large costs savings are not

expected at high volumes, or consultant/firm does not have the

resources to finance the large capital expenditures necessary for

high volume production with initially low profit margins.

vi. Subsidized fees-the consulting firm charges a lower fee for specific

sectors of business. The difference is paid for by the government.

The aim of the government in this case is to promote the use of

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 consulting profession by local firms. Subsidies could be extended to

the cooperative sector and small businesses.

vii. Client-determined fees- client fixes the maximum fee beyond which

they cannot accept. It is a ‘ take it or leave it’ situation. It is up to

the consultant to weigh and decide. In any case, the given fee

should be the one that covers the operational costs and generate

reasonable profit margin.

viii. Dumping fees-are normally below the cost of operations and usually

practiced by large firms which are either entering into a new market

or want to out-compete the established consultants. They are

willing to incur losses in initial days but expect to make rip of

profits in future. Like promotional fees, they are temporary.

However, dumping prices are not acceptable in most countries and

by professional consulting firms.

ix. Consultant’ s image-based fees-a consulting firm of a higher standing

charge relatively higher fee than inexperienced consultants.

Charging a lower fee may be interpreted as being desperate and a

sign of incompetence. Most international consulting firms in

Tanzania, including individual expatriate consultants tend to charge

fees based on this consideration.

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Setting Fees for Chargeable Services

To a consultant, overpricing may price him out of the market while under

pricing may lead to underpayment where some of the actual costs may not

be covered by the client. The price a consultant charges to its clients

depends on some of the following aspects;

i. The consultant’ s perceived capability to deliver the expected

results.

ii. The lifestyle the consultant wants to pursue.

iii. What the market will bear in terms of demand, price structure as

well as the perceived value of the consultant’ s services.

iv. Other considerations such as the type and value of the

assignment: the work program, time schedule, inputs and outputs,

the norm of such assignments and the sector; and budget

constraints.

When pricing consultancy assignments, consultants must observe the

following;

 Fees must be set on the basis of sound and reasonable ground.

 The cost of production (fixed and variable costs) as indicators of

price.

 Fee determination must be based on an assignment.

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  The fee structure/components should be clear and explicit, preferably

broken down into consultancy fee and reimbursable costs.

 Once the fees have been discussed and agreed upon by both parties,

consultants should never increase them during executing the

assignment.

 Quote the fees and other costs with confidence and resist any

pressure from the client to lower the fee for no justifiable reasons.

 Arrange the payment modalities in a way that is convenient to client

and not to the consultant.

Types of Fees

a) Per Unit of Time Fee-usually charged per one working day or per

week/month or for longer-term assignments. The following aspects

should be observed;

 Only days spent working for the client should be charged.

 Junior consultants are usually paid less than experienced

consultants

 Client billed on basis of agreed schedule not at the will of the

consultant.

Weaknesses of the method include;

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  Clients are billed for time worked and not for work accomplished.

There should be a close supervision by the client to ensure that

work will be accomplished and planned.

 May encourage consultants to take more time than necessary.

b) Flat Fee (Lump Sum)-consultants are paid only after completing a

precisely defined job. This is the most common approach. Under this

approach the client;

 Knows how much the whole assignment will cost him/her.

 Knows the time to be spent on job

 May withhold payment for job not completed.

Weaknesses of this method:

 The work may take longer than planned because of inefficiencies on

the side of the client.

 Clients may pay too much for work completed within shorter time

than expected.

c) Contingency Fees-are paid upon successful fixing of the agreed problem

(i.e. no cure no pay). The size of the fee depends on the size of the

result.

Problems of this type of fee are;

 The consultant may be tempted to focus on easy short-term

improvements for quick results, rather than on long-term

improvements which will bring in bigger results in future.

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  The client and consultant may measure results differently,

something that may lead to friction and conflict.

 Results may not be achieved due to fault of client. Who is to be

blamed?

 If the results take long to be measured after completion of the

assignment, how can the consultant be paid?

d) Retainer Fees- A fixed fee is paid monthly or yearly. Within that period

the client is entitled to seek advice from the consultant. Retainer fees are

calculated on the basis of number of days the consultant will be engaged

by the client. While the retainer fee guarantees the consultant with

regular income flows, it can hamper his acceptance of other assignments.

To avoid putting the consultant in dilemma, retainer fee has to be based

on an elaborate Time Table to indicate when the consultant will be

demanded, the duration, etc.

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 REVIEW QUESTIONS

1. a). Distinguish internal consulting from external consulting.

b).You are faced with a business problem. You have therefore decided to

engage an external consultant. What factors would you consider for such

a consultant?

2. Distinguish the role of a consultant from that of a client in the

consulting process. Identify and discuss the various consulting problems

that clients may face. Demonstrate with practical examples.

3. a). Identify and discuss FIVE ways consultants can secure consulting

assignments.

b). It is often said that securing an assignment is much easier than

managing the assignment successfully. Clearly identify and discuss the

basic issue you would consider in managing assignments more

effectively.

4. a). Distinguish between open competition and restricted competition.

b). Distinguish between a Technical Proposal and Financial Proposal.

5. Identify and discuss any FIVE principles governing the procurement

process.

6. It is often argued that entry phase in the consulting process is critical.

Clearly discuss this statement.

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7. Differentiate the role of the client from that of the client in the

consulting process.

8. a).What do you understand by a “consulting contract”?

b). Why should a consultant enter into a signed contract before

embarking on the extension of the assignment?

9. Differentiate Transformational Change from Remedial Change, giving

theoretical examples.

10. What factors may cause employees to resist anticipated changes in an

organization?

11. If you were a manager managing change in the organization, what

techniques would you use to minimize employee’ s resistance to

anticipated changes?

12. How does marketing of physical goods differ from marketing of

consultancy services?

13. ‘ Marketing of consultancy service is more than selling the service’ .

Clearly elaborate on this statement.

14. You just formed your own consulting company in the city of Dar es

Salaam. Detail all the technique you would use to gain entry into the Dar

es Salaam consulting market.

15. a). Distinguish chargeable services from non-chargeable services.

b). Why is environmental analysis important in determining consultancy

fees?

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16. Outline and discuss the critical aspects that influence the pricing of

consultancy services.

17. a). Distinguish between contingency fees from retainer fees.

b). what factors would influence the use of retainer fees in paying for

consultancy assignments?

18. You are a practicing professional accountant working for a large

multinational firm. You have now decided to start your own audit firm

in Arusha. Outline and discuss the major issues you would consider

before you settle down to your new business.

19. Identify and discuss the major activities you would carry out in

preparing a marketing plan of your newly formed consulting firm.

20. What are the similarities and difference between internal and external

consultants

21. Both internal and external consultants add different value, clients can

assess their needs and make the choice of which to use based on the

contribution each makes. What situation makes client either to choose

internal or external consultant?

22. Masanja consulting firm works in XYZ Company. His main role in

client organization is to help the management on finding new areas of

investments. Unfortunately Masanja goes beyond his duties and start to

help staff and managers on how to use new computerized accounting

system. As a future consultant, critically; discuss this scenario.

23. What is the difference between consulting and research?

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24. The management consulting is a profession .Discuss.

25. What are the advantages of collaborative consulting?

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