Consultant

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A consultant (from Latin: consultare "to deliberate")[1] is a professional (also known as Expert, Specialist, see variations of meaning below) who provides advice and further purposeful activities in an area of specialization.[2][3][4][5][6][7][8][9]

Definition and distinction[edit]

Consultant Peter Block defines a consultant as "someone who has influence over an individual, group, or organization, but who has no direct authority to implement changes". He contrasts this with a surrogate manager, who is a person who "acts on behalf of, or in place of, a manager". The key difference is that a consultant never makes decisions for the individual or group, whereas a surrogate manager does make decisions.[4] Consultancy UK defines the role as providing "professional or expert advice in a particular field of science or business to either an organisation or individual".[10]

The Harvard Business School provides a more specific definition of a consultant as someone who advises on "how to modify, proceed in, or streamline a given process within a specialized field".[11]

In his book, The Consulting Bible, Alan Weiss defines that "When we [consultants] walk away from a client, the client's conditions should be better than it was before we arrived or we've failed."[12] There is no legal protection given to the job title 'consultant'.[10]

Subject-matter expert (SME) vs. Consultant[edit]

According to Institute of Management Consultants USA, "The value of a consultant [as compared to a Subject-matter expert (SME)[13][14][15]] is to be able to correctly diagnose and effectively transform an often ill-defined problem and apply information, resources and processes to create a workable and usable solution. Some experts are good consultants and vice versa, some are neither, few are both."[16] Another differentiation perspective would be that a consultant sells advice, but an expert sells his expertise; or of Consultants vs. Coaches[17] or SMEs vs. Team Leaders.[18]

Contractor vs. Consultant[edit]

The consultant is in a role of sharing her or his knowledge and advice, whereas the contractor builds something for the client.[19]

Consultants' view of a consultant[edit]

A study found that business consultants maintain a very humble approach in their partnership with the client and believe that the ultimate goal is to make the customer move forward. Further, consultants are conscious in amount of control and discretion which comes from the customer and understand that criticism of their role is part of the work and sometimes even justified.[20]

Role of a consultant[edit]

The role of consultant outside the medical sphere (where the term is used specifically for a grade of doctor) can fall under one of two general categories:

  • Internal consultant:[21] someone who is employed by and operates within a client-organization[22] (maybe as part of an internal consultancy unit[23]); or
  • External consultant:[21] someone who is employed externally to the client (either by a consulting firm or some other agency) whose expertise is provided as part of a contract for a fee or rate.[24]

Business case for hiring a consultant[edit]

Traditionally, by hiring a consultant, clients have access to deeper levels of expertise than would be financially feasible for them to retain in-house on a long-term basis.[25][26] Moreover, clients can control their expenditures on consulting services by only purchasing as much services from the outside consultant as desired. Additionally, consultants are key persons with specific domain-skills in creating strategies,[8] leading change[27][28][29] (e.g. digitalization[30][31][32]), leadership coaching,[33] interim management[34] (also called consultant manager[35]), etc.[6]

Another business-case is that a consultant can save the company money: for example, a specialist tax-consultant who saves the company 20% on its taxes, and only charges 10% in fees, enables the company to save 10% without having spent anything on the consultant.[19]

In the UK government sector, since 2010 the Cabinet Office has required government departments to implement spending controls which restrict the appointment of consultants and temporary staff in order to reduce consultancy expenditure and ensure that the use of consultants offers value for money.[36] Government guidance requires information on all spend on consultancy and professional services valued at £100,000 or above (excluding recoverable VAT), and/or of a duration of three months or longer, to be submitted to the Cabinet Office.[37] A National Audit Office report published in 2015 recommended that all UK government departments adopt a "strategic plan" to assess their current skills and expected "skill gaps", so that their future need for consultants and temporary staff could be better predicted.[36]

Delivery of service[edit]

Consultants provide their advice to their clients in a variety of forms. Reports and presentations are often used.[38] Advice can be general (high degree of quality of communication) and also domain-focused.[39] However, in some specialized fields, the consultant may develop customized software or other products for the client.[40] Depending on the nature (also named mandate or statement of work or assignment) of the consulting services and the wishes of the client, the advice from the consultant may be made public, by placing the report or presentation online, or the advice may be kept confidential (under a Non-disclosure agreement or within the clients-company), and only given to the senior executives of the organization.

Employment status and career distinction[edit]

Consultants work for (consulting) firms or as freelance contractors. A consultant distinguishes from a temporary worker insofar as she or he has, as detailed above, a highly specialized career and domain knowledge.[41] This could be true for a temporary worker too, however, for example a medical consultant will rather unlikely suddenly become a hotel receptionist, whereas a temporary worker might change domains and branches more frequently. Furthermore, a consultant usually signs a service-type employee contract (known as fixed-term, full-time, part-time),[42] whereas a temporary worker will only be offered a temporary (and scope limited) contract or a work-results type contract (e. g. in Germany a specific type of contract called Werksvertrag[43]) to fulfill or create a specific work. Additionally, a temporary worker might be directed and managed by a client, whereas a consultant is employed by a company (or self) and provides services for a client. This service comes without human-resource related interactions by the client, e. g. the client company will not assist in career progression of the consultant, will not provide work-related instruments or tools, but only the necessary infrastructure and accesses the consultants needs to fulfil the statement of work, e. g. access to internal IT networks or client-side laboratory, if this is even needed for performing the work. Moreover, a consultant might engage in multi-project services (matrix organization) for the client or for internal projects/activities at the employer firm.[44][45][46][47]

The consultant's career path is usually not at the client's side,[48] however the consultant will very likely be introduced into the client's organizational program or project structure.

Novel collaborations of expert-contractors or independent consultants especially in ICT sector exist, e.g. ThoughtWorks.

Consulting scope[edit]

A consultant's activity can last anywhere from an hourly consultation, to a one-day service, three months, 12 months or more. For complex projects, a longer period is needed for the consultant to analyze, resolve the root cause, get to know the stakeholders and organizational-situation, etc. Usually the engagement has set legal boundaries under given law to avoid (specifically for freelance-contractors) the problem of false self-employment (see also Umbrella company). The person at client location is sometimes called a Resident. By spending time at the client's organization, the consultant is able to observe work processes, interview workers, managers, executives, board members, or other individuals, and study how the organization operates to provide hers or his services.

In some settings, a consultant is signing a specific contract and is hired as an interim manager or executive with advanced authority or shared responsibility or decision making of client-side activities, filling a vacant position which could and cannot be filled with an internal candidate. This is often the case by the client-organization due to other constraints, such as corporate compliance and HR-processes, which lead to prolonged hiring paths beyond six months, which is often inacceptable for leadership roles.[49][50]

Work location[edit]

Though most of the research and analysis occurs at the consultants' offices (sometimes called back-office) or home-offices (in case of COVID-19 see also Telecommuting), in the case of smaller consulting firms, consultants typically work at the site of the client for at least some of the time. The governing factor on where a consultant works tends to be the amount of interaction required with other employees of the client. If a management consultant is providing advice to a software firm that is struggling with employee morale, absenteeism and issues with managers and senior engineers leaving the firm, the consultant will probably spend a good deal of time at the client's office, interviewing staff, engineers, managers and executives, and observing work processes. On the other hand, a legal consultant asked to provide advice on a specific property law issue might only have a few meetings at the client's office, and conduct the majority of his work at the consultant's office and in legal libraries.

Similarly, the growth of online, highly skilled consultant marketplaces has begun to grow.[51]

Additionally, the on-going COVID-19 pandemic is fueling the need for staff to work from home (remotely) and to develop or evolve excellent online-work skills to continue business or operations.[52][53]

In-house consulting[edit]

Also known as ICUs - Internal Consulting Units, which are departments or specialists groups created by or maintained by usually larger companies for their own consulting service needs along the business chain. ICUs might be internal or own-run businesses.[54][55]

Success factors of consulting[edit]

The following qualities are found to be helpful for a successful consulting career.

Accenture success factors[edit]

From Accenture blog, one of the main IT consultancies in the world, the following factors play an important role:[56]

  • A service-oriented mindset
  • Sharing of great work
  • Seizing of opportunities
  • Setting of goals, seeking of advice and taking time to reflect

77 Keywords Consulting success factors[edit]

According to 77 Keywords Consulting, a foundational references on consulting, the following factors are important:[57]

  • Choice of consultant: Factors that matter: subject matter competency, appearance and social skills, and knowledge transfer capabilities
  • Cooperation and delegation of tasks: The consultant works along-side other employees and needs clear scope and guidance of activities (mutual skill; needs client organizational setting too)
  • Continuity of consultancy: Avoidance of frequent changes of consultation activity to increase costs transparency, trust, etc.

Bronnenmayer's success factors[edit]

Bronnenmayer et al. investigated, by applying a structural equation model, and due to little empirical research, the management consulting's success factors from a client perspective. It is found that Consultant Expertise, Intensity of Collaboration and Common Vision have strongest performance impact on success.[58]

  1. Common Vision
  2. Intensity of Collaboration
  3. Trust
  4. Project Management
  5. Consultant Expertise
  6. Provided Resources
  7. Top Management Support

Sindermann and Sawyer success factors[edit]

Sindermann and Sawyer conclude in their book The Scientist as Consultant, that a [scientific] consultant is successful, if she or he has "achieved a viable mix of technical proficiency and business skills" with "technical proficiency" meaning excellence in competence, credibility, effective networking with colleagues, and ability to negotiate.[59]

Hartel's 10 Golden Rules[edit]

According to management consultant Dirk Hartel, the following ten objectives or rules are key to a successful consulting career:[60]

  1. Customer first - Especially the meaning of being available (time) for customer needs
  2. Appearance - Understanding of self-image and dress for the job
  3. Determined friendliness - Having concrete mindset and goals, but being diplomatic too
  4. Punctuality - Leading time management, starting and finishing on time, being prepared
  5. Engagement and productivity - Supporting, being pro-active, etc.
  6. Critical questioning - Nobody is born a consultant; asking the right questions is a key skill
  7. Feedback - Request regular feedback, asking for critic rather than waiting for it
  8. Acceptance of hierarchies - Professional navigation in client organization, knowing authority-levels, being respectful and being confidential with customer information
  9. Stakeholder behavior - Study and understanding of client behavior and culture; inspiring stakeholders with presentations, etc.
  10. Being couragous - Consulting-life is challenging, never lose trust in yourself, but also reflect and lead a positive and good life

Consulting challenges[edit]

Distinctness[edit]

Consultants are often outsiders to the client organization. On one hand, this means their work methods, expertise, behaviors, etc. differ from the client-employees and organizational, and is exactly what the client needs, however it can also be a considerable disadvantage for a successful engagement and may lead to a less intimate cooperation with the client's business.[61][62]

Domain[edit]

Next to general challenges, domain-specific challenges for consultants exist.[63] In palliative medicine consulting, emotions, beliefs, sensitive topics, difficulty communicating and prognosis interpretation, or patients expectations despite critical illness are some of the challenges faced by the consultant.[64]

Ethical conflict (Manipulation)[edit]

According to Kelman,[65] "One danger is that [the counselor] does not recognize the control that he is exercising over the client's behavior. The other is that he is so convinced that he is doing good for the client that he does not realize the client that he does not see the double-edged nature of the control he is exercising."[66] A consultant therefore needs to be aware and in control of her or his manipulative influences in particular couseling settings.

Expectations (customer)[edit]

Hartel mentions several challenges that are based on the types of consultants, including a consultant in a short-term role, as integrator, as driver, as project manager or methodology guru, know-how expert, or as scapegoat.[60]

In case of consultant as integrator, the consultant has the challenging task to resolve, negotiate, facilitate, mediate political situations in companies to move forward, such as different opinions, critical characters (persons), difficult relationships or interfaces, goal conflicts, power games, etc.

In case of consultant as scapegoat, the consultant, who is external to the company, is the one to announce difficult company decisions such as layoffs or reorganizations, but it is important that the consultant acts professional and competent, not just as "Rambo in suit".[60]

Organizational[edit]

Consultants may face several organizational challenges, e. g. internal consultants are faced with the paradoxes to maintain a good balance between knowing the internal company structure and at the same time staying neutral and objective, keeping a marginal position between the client and the provided service.[21] Further, depending on the hiring company's understanding how to work with a consultant, the consultant might be seen as disruption to the inhouse employees status.[67]

Other general challenges[edit]

General issues faced by a consultant can be stress,[68] productivity issues with meetings,[69] general "technostresses",[70] high-paced and changing business environments and situations,[71] etc.

Stakeholder management[edit]

In case of corporate and industrial consultants, the role is further challenged to act and become the "translator of information" from various different client-company cultures and procedures (processes) and between her or his employer-side team, managers and leadership team. What is an important goal to the current client is usually not similar for any other client due to multiple variations in company size, history, product, program, organizational structure, leadership, etc. Hence the consultant must be excellent in sensing and communicating between different layers in the organization and further across it, while maintaining authenticity, integrity and trustworthiness with all parties involved.[72][73]

Taxation / Legal status[edit]

Independent consultants (contractors or freelancer) usually need to fulfil taxation requirements given by laws, specifically challenging employment status to avoid 'disguised' employment.[74]

Compared to contracting, consulting can be seen as being "in business in your own right", not controlled by your client, etc. placing a consultant "well outside" of e. g. IR35.[19]

Alan Weiss provides 20 "factors" for consultants in the US (IRS), which are similar in other countries, to avoid or understand in terms of their business activity. Amongst those, the consultant is not supposed to be instructed by the client, should not receive similar training as employees, has the right to sub-contract, should not be integrated into the organizational structure, etc. to avoid legal-status and taxation issues.[75]

Qualifications[edit]

There is no single qualification to becoming a consultant, other than those laid down in relation to medical, psychological and engineering personnel who have attained this level-degree in it or professional licenses, such as Chartered Engineer.[76]

Consultants may hold undergraduate degrees, graduate degrees, professional degrees or professional designations pertaining to their field(s) of expertise.[76] In some fields, a consultant may be required to hold certain professional licenses (e.g., a civil engineer providing consulting on a bridge project may have to be a professional engineer).[76] In other types of consulting, there may be no specific qualification requirements. A legal consultant may have to be a member of the bar or hold a law degree. An accounting consultant may have to have an accounting designation, such as Chartered Accountant status. Some individuals become consultants after a lengthy and distinguished career as an executive or political leader or employee, so their lengthy and exposed experience may be their main asset.[29][77]

Accreditation[edit]

Various accreditation bodies for consultants exist today:

Code of Ethics[edit]

Accredited associates in all field (incl. medical) can be bound by a Code of Ethics or Code of Conduct.[79][80][81]

Ethics in the field of business consulting and organizations is still a subject under research.[82][83]

A thoroughly discussion of ethics in the field of consultation is giving in Lippitt & Lippitt[66] (see also 2nd edition in English[84]). Here the authors mention several guidelines and definitions including Shay,[85] the Association of Consulting Management Engineers (1966), American Society for Training and Development (1977), Academy of Management (1976) and conclude their own codex with the following attributes (see below). Additionally, the authors mention the difficulty in applying the codex and scenarios of how to track adherence and how to judge violations in accordance with other bodies, such as APA (American Psychological Association) and CSPEC (or CSCE) (Committee on Scientific and Professional Ethics)[86] and conclude that "The most important aspect in the formulation of a code of conduct however, is the recognition of a fundamental moral standard. Only then is compliance with the rules guaranteed."[66]

Professional consultant codex of Lippitt & Lippitt[edit]

  • Responsibility
  • Competency
  • Moral and legal standards
  • Misleading information
  • Confidentiality
  • Client well-being
  • Announcement of services
  • Cross-professional relationships
  • Compensation
  • Responsibility towards the organization of origin (employer)
  • Promotional activities

McKinsey code of professional conduct[edit]

McKinsey & Company published their code of conduct online with last update in January 2021. It is a document with nine pages and the following five areas, and "is supported by the full set of firm policies."[87][88]

  1. Serving our clients with the highest professional standards
  2. Creating a working environment that inspires and motivates our people
  3. Fulfilling our responsibility to society
  4. Managing risk to the firm
  5. Seeking advice and raising concerns

Guidelines[edit]

For management consultancy services, ISO 20700 standard has been available since 2017.[89]

Consulting domains[edit]

There exist various forms, types and areas or industries of consultants. The following list provides some examples:

Business (general)[edit]

  • Business transformation consultants - Specialists in assisting business stakeholders to align the strategy and objectives to their business operations.
  • Human resources (HR) consultants - Specialists who provide expertise around employment practice and people management.
  • Interim managers - Often independent consultants who act as interim executives (any CxO) with decision-making power under corporate policies or statutes. They may sit on specially constituted boards or committees.
  • Process consultants - Specialists in the design or improvement of e.g. operational processes in specific sectors, e.g. medical industry
  • Marketing consultants - Advisors around areas of product development and related marketing matters including marketing strategy.
  • Public-relations (PR) consultants - Experts with public relations matters external to a client organization and are often engaged on a semi-permanent basis by larger organizations to provide input and guidance.
  • Performance consultants - Consultants who focus on the execution of an initiative or overall performance of their client.[90]
  • Sales consultants - Professionals who focus on all levels of sales and marketing for the improvement of sales ROI, moving share from competition, etc.
  • Strategy consultants (more generally known as Management consultants) - Professionals working on the development of and improvement to organizational strategy alongside senior management in many industries.[91]
  • Financial consultant - Providing financial advice and services to clients (individuals, small companies, large corporations, financial institutions, etc.)
  • Project Management Professionals (PMP) and related (e.g. Program Management Professional, Risk Management Professionals) - Certified experts in project planning, execution and management.

Technology[edit]

  • Engineering consultants - Engineering-Specialists (certified or years of experience) providing services such as design, supervision, execution, repair, operation, maintenance, technology, creation of drawings and specifications, etc. in various fields such as chemical, aerospace, automotive, etc.
  • Information-technology (IT) consultants - Experts in Computer-technology disciplines such as computer hardware, software engineering, or networks.[92]

Construction[edit]

Other areas[edit]

  • Educational consultants - Assist students or parents in making educational decisions and giving advice in various issues, such as tuition, fees, visas, and enrolling in higher education.
  • Immigration consultants - Help with the legal procedures of immigration from one country to another.
  • Consultant (medical) - the most senior grade of hospital doctor in the United Kingdom.

Legal & Politics[edit]

Types of consultants[edit]

Further reading[edit]

  • Nissen, Volker, ed. Advances in Consulting Research: Recent Findings and Practical Cases. Cham, Switzerland: Springer International Publishing, 2019. Print.[93]
  • CMI - Management Consulting Journal[94]
  • CMC - Management Consulting Journal[95]
  • Treichler, Christoph. “Consulting Industry and Market Trends: A Two-Sided View.” Contributions to Management Science. Cham: Springer International Publishing, 2019. 253–272. Print.[96]
  • Journal of Business and Management
  • Journal of Management Studies
  • Global business services: obsolete or more relevant than ever? by Stephan Hartmann of Roland Berger Switzerland, 2021
  • Management Review Quarterly
  • Marsh, Sheila. The Feminine in Management Consulting. London: Palgrave Macmillan UK, 2009. Print.[97]
  • McKinsey Quarterly Magazine
  • Seebacher, Uwe G. Template-Based Management: A Guide for an Efficient and Impactful Professional Practice. Cham: Springer International Publishing, 2021. Print.[98]
  • Strategy+business by PwC
  • Roland Berger's Think:Act Magazine[99]
  • Susskind, Richard, and Daniel Susskind. The Future of the Professions: How Technology Will Transform the Work of Human Experts. Oxford University Press, 2015. Print.[100]
  • Kipping, Matthias, and Timothy Clark, eds. The Oxford Handbook of Management Consulting. London, England: Oxford University Press, 2013. Print.
  • TCS' Management Journal Perspectives
  • Weiss, A. (2016). Million dollar consulting: The professional's guide to growing a practice, fifth edition (5th ed.). McGraw-Hill Education.[101]

List of notable (management) consultants[edit]

Further prominent thinkers are also listed in the Strategy portal.

See also[edit]

References[edit]

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