What Is Management Consulting? A Comprehensive Guide
Updated 27 March 2023
Management consultants are crucial as they provide valuable advice and assistance for a business to be successful. They are qualified, trained and experienced in finding solutions for problems that organisations commonly face. This is a rewarding career option for those who are interested in developing a specific set of skills. In this article, we examine what management consulting is, what management consultants do and why companies require their services.
What is management consulting?
Management consulting is a process that helps businesses improve their performance. The process may involve multiple phases. Management consultants identify complex problems and situations that hinder an organisation's performance and profits. They provide structured analyses, strategies and suggestions to solve problems in the domain of business management. The goal of management consulting is to improve and optimise performance, productivity and profit, while minimising losses and risks.
What does a management consultant do?
Management consultants are qualified and trained to take on a diverse range of responsibilities. They can be hired as an in-house consultant or be part of a consulting firm. Management consultants may focus on one or more areas of specialised expertise like finance, law or business development. Their primary duties include:
Understanding client business by engaging with all stakeholders
Collecting and analysing data
Interviewing executives, managers and other staff of a company
Facilitating employee discussions and workshops
Transforming collected data into consolidated information using spreadsheets and presentations
Travelling to client sites and company locations
Reviewing information to identify problems and form a hypothesis
Analysing financial data and identifying areas for cost-cutting as well as areas that need additional budgets
Creating action plans and recommending strategies to attain project goals
Presenting action plans to clients as well as other stakeholders
Assisting clients with the implementation of action plans by providing required resources
Liaising with clients to track the progress of ongoing action plans
Managing and overseeing a management consulting team
What skills do management consultants require?
If you are keen to pursue a career as a management consultant, in addition to pursuing formal educational qualifications, you may also try to develop the following skills:
Problem-solving and critical thinking skills
Identifying problems and providing solutions constitute the major responsibilities of a management consultant. They need to interpret data and analyse the cause of an issue to draw logical conclusions and recommend solutions. Hence, critical thinking and problem-solving skills are of great importance to a management consultant.
Some management consultant roles are people-centric. Interpersonal skills provide a foundation for a consulting role. Consultants may connect with clients, listen to them patiently and make suggestions and recommendations without sounding rude or patronising. They have to set up a comfortable working relationship with all business stakeholders, rather than create a confrontational environment.
Management consultants constantly interact with employees and the top management of companies. They may deploy strong verbal communication strategies that show empathy, understanding and expertise. Their suggestions and advice have to be objective and helpful. Since they may have to prepare reports, email, manuals and presentations, good written communication skills are also equally important.
Networking with peers and leaders is one of the useful methods to become a successful management consultant. Networking also allows consultants to promote a brand. By interacting with peers and leaders in the field, management consultants can stay updated on market trends and keep track of innovations or solutions that others have implemented to solve business problems.
Companies hire management consultants to work out solutions on their behalf. Consultants evaluate current scenarios in their client's business and weigh the impact of their decisions and advice to provide solutions accordingly based on sensible and objective opinions. A solid record of good judgement can give them a good reputation among clients.
Ability to work under pressure
Management consultants usually work on huge projects involving a lot of money and resources. There may be occasions when employees and management withhold data and crucial information. They also work under strict deadlines. Hence, the ability to work under pressure is a skill that consultants benefit from developing.
A management consultant may have to look for holistic solutions for a systemic issues. They may be faced with a range of solutions that have failed to work in the past for a particular client. Creative thinking ability can help them develop new and innovative solutions.
A management consultant may not be supervised on a day-to-day basis. Therefore, the ability to work independently and diligently is an important skill for them. Their job can present several challenges, and they may have to be enthusiastic and motivated in such circumstances.
Since they perform several tasks simultaneously, consultants have to be organised and meticulous. It is important for them to prioritise tasks and stick to strict schedules as much as possible. This enables them to work seamlessly with different groups of people from their own firm and the client's company.
What qualifications do management consultants require?
The basic qualification required to become a management consultant is a bachelor's degree from a recognised college or university. Companies with an in-house consulting team or consulting firms often prefer candidates with a bachelor's or master's degree from a top university. You may consider majoring in business management, economics, finance or accounting.
Popular undergraduate courses include B.Com (Bachelor of Commerce) or B.Sc. (Bachelor of Science) in Finance and Economics, and BBA (Bachelor of Business Administration). For a master's degree, you may consider pursuing an MBA (Master of Business Administration). Having some work experience in a related field is an added advantage.
What services do management consultants provide?
Some of the crucial services that management consultants provide are preparing feasibility studies, developing MIS, designing systems for budgeting and control, developing cost accounting systems and preparing appraisals for company policies. They also provide advice on incorporating basic principles of organisation and effective work planning. They assist management in finding solutions to specific business issues like capital utilisation, product pricing, documentation and legality. Consultants may also liaise with government departments on behalf of a company.
Why do companies hire management consultants?
There are several reasons why companies hire management consultants. Some of them are:
To provide an objective point of view
Sometimes, companies cannot find solutions to their problems using traditional methods and feel the need for new perspectives. The company's management sometimes may not accept that they need to change, or be resistant towards transformation. Management consultants can identify possible areas for improvement without bias.
To provide expertise
A company can also engage management consultants for major policy changes related to ownership, restructuring, diversification, transformation and expansion. A company may also hire management consultants to revamp its internal operations when it foresees an impending crisis. Companies often require specialised expertise in areas like marketing, customer service, accounting, human resource or sales.
For specialised skills
Companies may not always have professionals in particular fields like Six Sigma, supply chain management or financial organisation. Sometimes they need a person with a specific niche skill for a short duration. It would be expensive to maintain regular employees for short-term or seasonal requirements. In such cases, they hire management consultants with specialised skills and rely on their services for a short time period.
Companies may hire management consultants for their expertise in the following areas:
Strategic business management
Human resource management
Corporate social responsibility
To catalyse change
Companies may resist change for a variety of reasons. Sometimes they may hire a management consultant to help transform the company without being influenced by its internal politics and workplace dynamics. During changes and transformations, consultants are responsible for facilitating smooth transition of systems and processes.
To assist with down-sizing and reorganisation
Downsizing and laying off employees is a challenging task for many organisations. Many companies hire management consultants who specialise in this work. Similarly, if there are areas for improving employee productivity and the company has to introduce drastic measures, they can hire a consultant to implement new rules and regulations.
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