The Three Types of Independent Management Consultants
In a previous blog post I wrote about the 4 types of consulting. This post is about the three types of independent management consultants.
I have been working in government for 3 years and in business for 31 years. Since 2003 I have been operating as a management consultant. Through all those years I have come across a multitude of consultants, advisory board members, board directors and interim managers. I have come to the conclusion that there are basically three types of independent management consultants.
Which type are you?
Identifying where you fit may help you to go “all in” or “all out” of the management consulting business.
Before I reveal the different types, let’s get some definitions right.
What is a management consultant?
According to Wikipedia management consulting indicates both the industry and practice of helping organizations improve their performance primarily through the analysis of existing organizational problems and development of plans for improvement.
In my universe a management consultant has experience working in and working with a broad range of businesses. A management consultant is experienced with the 360 degrees of running a company and most importantly with marketing and sales. A management consultant has experience with companies in all stages of growth: Start-up, bootstrapping, early success, takeoff and maturity. The management consultant should also also have experience with business turnaround issues. In other words, a management consultant has broad and narrow stroke experience and typically, 20 years or more of solid business acumen.
In addition he must have acquired a methodical framework for exercising consulting type assignments. Exercising management consulting is very different from running the business. A structured consulting process is crucial for balancing the facilitation and the frank challenging of client prejudices. It is the accumulated business experience and the methodical framework, which makes a management consultant.
What does a management consultant do?
His first “assignment” is to define his field of specialty, formulate his customer value proposition, identify his ideal customer profiles, find them and win their projects. In short he must start exercising his skills as a marketeer and a top star salesman. Having signed consulting assignments on the book he can now start delivering.
A management consultant starts any and all assignments with understanding the client’s business. He spends the first time interviewing stakeholders, studying material that the client has provided and researches the Internet for sources the client didn’t provide. He applies a systematic approach accumulating insight and a systematic approach documenting his findings.
After having learned the details of the client’s business, the management consultant identifies problems and opportunities. Obviously there will be certain problems and opportunities, which led the client to engage the management consultant in the first place, but a management consultant will through his systematic approach find problems and opportunities, which the client didn’t know and never thought of. A management consultant brings fresh eyes, fresh experience and an open mind to any business enterprise, providing a completely different perspective than that of someone who has been running the company for some time or someone looking to start a new venture.
Having nailed the problems and opportunities of the business the management consultant will then analyze the gathered information and facilitate the process of identifying solutions and plans for the future. The facilitation is structured and qualified in the sense, that the management consultant uses his experience and insight challenging the conclusions made by the stakeholders.
By the end of the process there is well-defined “who-do-what-when” plans for changing the situation, which the management consultant was brought in to help facilitate. The organization should now be capable of implementing the changes agreed to.
The three types of consultants
All companies have issues they need outside help to solve. The kind of consultants they engage can be divided into three groups:
- The Unemployed
- The Celebrity
- The Career Consultant
The Unemployed is a person without a job (!). As he cannot find a job or while he is looking for a new job he gets a business card saying “management consultant”.
The Unemployed will have experience from previous jobs. He will also have a network of business contacts, which may be interested in his services on a project basis. But he typically has no content. He has not invested in learning what consulting is and he has no structured methodology taking his clients through the various phases of a consulting assignment. He is “in-between” jobs and spends time looking for work.
The Unemployed will mostly get operational interim type assignments with clients who are attracted by the experience and the low price The Unemployed is willing to accept.
The biggest challenge of The Unemployed is finding work. With long periods without work he keeps lowering his price. Thus the jobs he finds will not pay well, keeping him busy with little time to develop his skills and find another job.
The Unemployed will normally not have “management consultant” on his business card for long. He will find a job with a regular salary and be much more comfortable than having to hunt for the next assignment.
The Celebrity is also “unemployed”, but seldom with a need to find a new job. The Celebrity is a recognized business executive, who for certain reasons does not want to be involved with corporate politics or deliver the many hours a top executive assignment requires. He chooses to work as a consultant on a project basis or as an advisory board member.
The Celebrity will have experience from previous jobs or business ventures. He will also have a solid network of business contacts, which demands his services. But also he typically has no content. He does not invest in learning what consulting is and he has no structured methodology taking his clients through the various phases of a consulting assignment. He operates based on his previous experience, his network and his good name.
The Celebrity doesn’t have to look for work. His reputation and track records from his previous business activities makes him an attractive person. Having him on board will often be perceived as an endorsement of the client and thus carry value in itself.
The Celebrity will typically be more interested in equity or in working as a business angel rather than getting a consulting fee.
The biggest challenge of The Celebrity is staying clear of low prestige projects, high-risk assignments and scandals. One or two failures can devaluate his brand, leave him with a broken reputation and eliminate the demand for his presence.
The Career Consultant
The Career Consultant is a senior executive who has deliberately chosen a career as a consultant. He has invested the time and energy in studying consulting principles and is combining his personal experience with a set of structured approaches to help his clients.
The Career Consultant is using his personal network to get his first assignments, but he is also investing in building a brand and a pipeline ensuring new projects with clients outside his immediate personal network.
The challenges of the Career Consultant is building a brand and getting those assignments, which actually support his brand building efforts. Leverage is an additional challenge. As he builds his brand he will get bigger and bigger projects where he needs to delegate work to others. Finding other qualified Career Consultants to whom he can delegate work is a major challenge.
See also my posts on Management Consulting Essentials