A Consulting Paradigm Shift

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The traditional sense of management consulting sprouted into existence during the Second Industrial Revolution in the late 19th century. Manufacturing methods became more mechanized and electrified, and therefore more efficient; as a result, a need for process improvement emerged.

From there, consulting continued to grow to meet the strategic and organizational management needs of new and expanding firms. Of late, consulting has diverged into a multitude of specialties—information consulting, franchise consulting, professional engineering consulting, performance consulting, etc. While most believe that the further stratification and granularization of consulting fields is imminent, another alternative exists—the hybridization of consulting and staff augmentation.

The heart of consulting revolves around problem solving. Good consultants are able to identify or comprehend a client’s problem, parameterize the issue, develop potential solutions, and implement the chosen solution. Almost all consultants, good and bad, can identify a solution. When consulting engagements fail, it’s often because the incorrect solution was implemented or the right solution was implemented incorrectly.

Either the problem wasn’t properly understood, the parameters and constraints of the organization not fully documented or the solution wasn’t correctly rolled out and implemented. The common seam in those three potential fail points is simple: the consultant did not fully understand the client’s organization. This lack of understanding includes processes, procedures, office politics, employee morale, adoption, and so forth.

In traditional consulting, when a team is brought into an organization to solve a specific problem or set of problems, that consulting team is given a short amount of time, typically less than a month to perform the necessary background research to better understand the organization. This involves: studying organization charts, reviewing known policies and procedures, examining management decisions, and conducting interviews with key personnel and support staff.

The objective of this exercise is to glean as much information and data about a given organization within a reasonable timeframe. Due to the nature, priority, and criticality of the problem, most consulting teams are limited in the amount of time that they can spend studying the organization. Less time spent studying an organization leads to inadequate or improper knowledge, which leads to incorrectly identifying and implementing a solution, which in turn leads to the same organization’s problem not being solved.

Instead of attempting to cram the necessary research into a condensed window of time, or negotiating for a larger window of time that still won’t be enough, what if there was a way to guarantee that your consulting team had the in-depth institutional knowledge of your client’s company? This previous impossibility and perceived situational mirage is a reality when consulting and staff augmentation are integrated. When a management consulting firm contracts an employee out to a client, there are three major benefits that are realized, aside from the services and funds that are switching hands. First, a collaborative relationship is forged between the two companies, and if your company is sound, then that relationship is rooted in trust.

Second, the consultancy receives on-the-ground analysis of a client that it previously didn’t have access to. It’s one thing to read the process map that a department is supposed to follow. It’s another to be a contributing component of that process, and grasp an in-depth understanding of how the process is actually performed in real-life.

Third, the consulting firm gains control over the day-to-day execution of a client’s organization.

As an example, a resource is contracted out to fill the role of a financial analyst within the project management department for a client in the utility sector. While that resource is performing his/her daily functions and meeting client deliverables, the resource is acquiring institutional knowledge regarding the inner-workings of the client’s organization.

The type of institutional knowledge that is impossible to be learned in a cram session, but is the result of attending several client staff meetings, eating lunch with client management and field personnel, witnessing first-hand work-arounds to existing processes, and general hallway banter. This first-hand information is critical to truly understanding the client and having the ability to craft catered solutions that fit the mold of the company.

When a client starts to solicit proposals for their organization’s problem, the consultancy that employs the financial analyst will already have a map of the organization’s terrain, while the other bidding consultancies will still be trying to measure the organization’s topography.

Improper implementation of a solution is a common misstep in consulting engagements. The consulting and staff augmentation hybrid model counteracts this common occurrence by affording the consultancy control. Control and trust. The blended model gives the forward- looking consulting firm the ability to physically execute the chosen solution, whereas traditional consulting firms are placed on the sidelines monitoring and overseeing the implementation without the ability to directly govern their destiny.

The hybrid consultancy rolls out their new capital project close-out policy; a policy in which the financial analyst plays an integral role. In that scenario, the financial analyst is able to provide on-the-ground feedback regarding the relevancy and effectiveness of the new policy. Whether it’s recommending a simple tweak that the policy requires or advocating the new policy to the client’s internal financial analyst resources, the blended consultancy has a clear advantage over the traditional consultancy.

Like most fields, the further specialization of management consulting is still a fruitful path for those in the industry. But an under-utilized market, yet highly effective strategy is the grafting of management consulting and staff augmentation. The knowledge of a client’s organizational terrain, coupled with the organic leverage the hybrid consulting firms receive during implementation phases make the blending of consulting and staff augmentation a necessity for firms that strive to be ahead of the competition.

 

Kyle Loving is a manager at Motive Power, a management consulting firm which specializes in project management to help its clients effectively and efficiently manage their projects and organizations. Kyle resides in San Francisco and currently leads two billion-dollar portfolio management engagements as well as comprehensive project management services for a large capital electric construction engagement.

 

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