Dificultades normativas, sociales y económicas

MCA member companies account for an estimated 60% of the UK consulting industry and employ 30,000 of the approximately 80,000 consultants in the UK who between them generate £8.5bn fee income (MCA, 2014a). According to an MCA survey (2010c:10), the benefits to UK clients is equivalent in value to around £56bn. Figure 2- 7 shows how benefits were realised in client businesses, identifying specific benefits of the individual consulting projects.

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Figure 2-7: The benefits of using consultants (Czerniawska, 2006b:8)

Arguably, ‘more efficient processes’ and ‘specialist knowledge’ are linked categories, since consultants are more likely to have the specialist knowledge and tools to dissect, define and design fit-for-purpose processes to deliver requisite results for clients. Nonetheless, using consultants for short-term input highlights the growing complexity of business and the specialisation of labour in the economy as a whole, as well as the result of many years of structural change and organisational downsizing. Overall, therefore, despite apocryphal horror stories, the UK consulting industry makes a positive and quantifiable contribution to the UK economy (MCA, 2009).

Clients clearly believe they receive benefit from the consultancy input they buy, as shown in Figure 2-7, yet internal operating pressures and external selection pressures imposed by clients continue to challenge consultancy firms. It would seem that to succeed in the newly-emerging market, working out how to more readily and demonstrably satisfy client needs could be an imperative for growth, if not survival. 2.6 Chapter Summary

This chapter has discussed the history and evolution of consultancy. A number of key factors for future growth and success emerge.

Consultancy’s main asset lies in knowledge, in the form of intellectual capital,

proprietary methodologies and insights accumulated over repeated exposure to clients with similar problems. Its aim is to improve client business performance by providing

31%

6% 14%

34%

15%

Specialist knowledge and/or improved management capabilities

Increased revenue

Reduced costs

More efficient processes

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external and objective advice on issues that are demand-intensive and dissimilar. The nature of business consulting has meant that consultants have not secured control over a distinctive domain of knowledge. Rather, it is the type of knowledge and how

consultants apply it that is important in a particular client context. Acquiring and possessing knowledge from each client intervention provides more knowledge to sell, in any one of its competence guises and increases its competitive value. There is a preference to propose approaches and solutions based on consolidated blueprints, generally characterised by American pragmatism, notwithstanding the fact that much of the knowledge acquired on projects is tacit rather than explicit and can hardly be codified (Armbruster, 2006:166; Panetti, 2007).

In the absence of official professional status brand becomes important for customer retention and to an extent is a substitute for formal accreditation. As growth hinges on satisfaction, not just brand awareness, it can be assumed that clients have a level of satisfaction with the service they receive. Different services brought growth for modern advice-giving. Shop-floor automation and industrial efficiency was one strand,

particularly strong in mid-to-late 20th _{century Britain. Another strand was technological}

know-how transfer through management engineering. By dealing with efficiency issues and the creation and implementation of strategies for clients to better sell their products and services, consultants provide advice across all aspects of client organisations, giving them unprecedented access to influential people in business. The emergence of ‘business surveys’ and the expansion of consultant exposure to boardrooms, beginning the process of transmitting managerial ideas developed in myriad organisational

settings thus building networks and relationships.

The shaping of today’s industry was completed with a third strand of activity, the provision of management audits. Management audits not only provided the

foundations for the corporate governance infrastructure existing today, they were the first step towards commoditising consultancy work, thereby increasing profitability through the practice of ‘leveraging’, where more expensive consultants oversee a greater number of younger ones. An indirect consequence of leveraging was that experienced consultants had time to network socially and professionally, with each other and with senior executives they met through their boardroom work, a situation further facilitated by socioeconomic concentration, with business and consulting dominated by the upper-middle class. Relationships were built on social capital and shared background.

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Clients, from small to large companies operating across a wide spectrum of markets and industries, use consultancy for a broad range of services. Sought for their independence, expertise and ability to achieve results to deadlines, consulting is nonetheless a dispensable service. Growth has also meant increased client

experience, therefore familiarity, with consultants and consulting practices, creating an increase in transparency across firms. Transparency is due to clients shopping around leveraging their own contacts and knowledge when seeking firms with which to work. Technology contributes to transparency, since proprietary information can be sent anywhere electronically as do consultants moving between firms as well as from firms to clients as they seek better opportunities (Delong et al., 2007). Additionally, the post- Enron Sarbanes-Oxley legislative requirement for competition institutionalised

shopping around, affecting how clients engaged with consultants and the ensuing relationships. Firms responded by developing systems of relationship managers whose job was not to ensure client satisfaction but to systematically grow the accounts they were responsible for. Although arguably they could only succeed if clients were satisfied on an ongoing basis, the primary focus was internal, not client-driven. All these factors require the careful handling of consulting knowledge as well as the areas of uncertainty within the consulting relationship. The intellectual capital and the cultural matrix of the large consulting companies influence attempts to formalise, leverage and disseminate knowledge more systematically. Most companies use similar software packages and follow similar methods, re-badged in-house if needs be, and have systematised processes to spot business trends. This goes a long way to standardising the market and enabling replicability. However, given the discussion throughout this chapter, might it not be better to use knowledge of what clients need to influence what knowledge is formalised and how it is leveraged, disseminated and applied? Highlighting their client-driven approach could perhaps mitigate against institutionalised competition, more predictably win more work and thus achieve growth and client satisfaction.

Given how the industry has evolved during the 20th _{century, and the significant events}

of the first decade of this century, management consultancies might benefit from better understanding what really matters to clients. Technological developments have made consultant work more replicable and differentiation more recognisable. Changes in legislation, management styles and familiarity of dealing with consultants mean clients approach consultants differently. Knowledge of client processes and individuals, current proposal development practice and feedback from past and current

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assignments should be combined to inform responses to briefings and proposals. This thesis will explore what matters to clients when choosing from amongst consultants to establish how buyers pre-judge what will create satisfaction. How clients approach the purchase of consultancy, what key aspects affect their decision-making and what factors are important in a successful consulting pitch will all be examined. Once this has been ascertained, the study will then seek to establish if it is possible to develop a formal process to identify key contextual and relationship events which can influence the response content and consulting approach more favourably.

Capturing these features could provide a tool with which to approach an intangible but important feature of management consultancy work and provide consultants with an intervention-level reference point for customer drivers. Perhaps this could feasibly address the key challenge of sustainable growth whilst operating in a market where consultancy buyers increasingly exercise their powers of choice and squeeze margins ever lower.

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