2016 my first consulting project full lecture printout by MEI

My First Consulting Project Introduction October 2016

Welcome to your First Consulting Project course at the University of Luxembourg Objectives of today’s session

 Give you an overview of the different elements of the course and explain the different teaching formats  Share the grading mechanism of the course  Provide you the tools that you need in order to respond to your client’s needs and expectations

Being a consultant is not a job but rather a vocation and not least a mind set Curriculum Vitae Paul Schilling  Currently working at Deloitte Luxembourg as a Director in Human Resources, in charge of Sourcing, Recruiting, Learning and Development, driving change management and business process optimization initiatives  Worked as strategy consultant for McKinsey & Company, Inc. in Germany and Luxembourg, focusing on leadership development and change management in technology transformations

 Started own service company in 2006, working on process optimization and capability building projects for Volkswagen, General Electric and Union Investment  Graduated with Master in Business Engineering from University of Kaiserslautern, Germany and holding an Master in Business Administration from INSEAD Singapore/Fontainebleau  Born and raised in Luxembourg, lived in 5 different countries throughout the last 10 years, amateur of music and half-marathon runner

The topics touched throughout the course are versatile in order to equip you with a broad tool set Overview of the course elements •

Learn what it means to be a consultant, understand the upsides and the challenges

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Understand what a typical consulting project looks like and what needs to be done in each phase of the project

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Defining the scope of the project

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Running an analysis on the client’s problem and synthesizing findings

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Developing a recommendation for the client

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Learn about frameworks to use in the different phases of the project

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Learn to facilitate a workshop with the client and understand what great client communication looks like

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Learn to write a clean and concise client report

The course has the objective to take you through an endto-end consulting project experience Overview of the course sessions Dates

Content

Wednesday/Thursday 5th/6th October 2016 (10AM-5PM)

Introduction and basic consulting tools session

Week of 24th October 2016 (4 afternoons)

Client Kick-off Meetings

Beginning of November (2h session)

Meet the tutor

29th November 2016 (2-6PM)

Mid-project Steering Committee Meeting

16th January 2017 (2-6PM)

Presentation of final recommendations

This course will be different from most other courses that you’ve attended in the past Highlights of My First Consulting Project course •

The course is based on David Kolb’s adult learning methodology and thus offers short theory sessions, a lot of practicing and experiencing, reflection and planning

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The course is meant to be highly interactive

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The course aims to prepare you for the business world by not only teaching you theoretical concepts but by training you how to apply them in practice

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The practical experience you gather in your projects with the client companies is aimed to give you the opportunity to apply the learned frameworks

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There is no final examination but the outcome of your project and the satisfaction of your client is defining your team’s grade

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This course is a team effort – individual contribution is expected but the team performance is valued. Make sure you manage your project as a team with clear roles and responsibilities and ensure the involvement of everybody

Striving for team performance and ensuring client satisfaction is your key to a good grade in this course Grading mechanism of the course •

Mid-project Steering Committee Presentation (20%) o Depth of analyses and logic of synthesis o Presentation skills

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Final presentation of recommendations to the client (30%) o Response to the question asked by the client o Content o Presentation skills, creativity and structure of presentation

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4-page final report of your project to the client (30%)

o Logic, structure and cleanliness of document o Content o Recommendation to client (fit and feasibility) o Used frameworks •

Client satisfaction (20%)

My First Consulting Project Basic Consulting Tools October 2016

Respecting a number of rules and smartly using a set of tools and your brain is your recipe for success Proposed agenda for today and tomorrow •

What does it mean to be a consultant? – the written and unwritten rules of the game

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How is a consulting project carried out? – the “standard” phases of a project

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How do I agree with the client on what will be done… and what not?

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What should I do during the analysis phase?

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How do I define the future state or draft a recommendation for the client?

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What does a powerful report looks like?

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What matters in the final presentation?

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Let’s check the tires before you start the race – your questions on tools, frameworks and approach We will base all the above points on a case example to give you the opportunity to try things out and apply the theory before you meet your clients

What does it mean to be a consultant? The written and unwritten rules of the game

A number of traits will help you to be perceived as added value for your client Basic skills and characteristics of a consultant • Willingness and capability to drive the things to an end that you have started

• Competency in understanding numbers • Strength in working and “playing” with numbers

• Passion for the tasks that you work on

• Ability to draw consequences from numbers and analyses

• Willingness to overcome challenges that you will encounter

• Ability to build clean and understandable models (e.g., for financial purposes, sensitivity analyses)

• Capability to motivate yourself when no one else does it • Pragmatism when time is a constraint – 80/20

• Willingness to listen to others and trying to understand a point of view that might be different from yours

• Diplomacy in your communication and interactions • Intelligence in defending your interests, being convincing without being perceived as pushy

What does your client pay you for?

• Ability to work in a team, collaborate and contribute to a common effort • Ability to understand and resolve conflicts within the team and in the collaboration with the client • Willingness to take responsibilities, ownership and leadership in the team

The client is always right – even if he is wrong! The importance of diplomacy

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If you have a different opinion than your client, keep in mind that preserving the relationship might be more important than proving someone wrong

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This being said, being a service provider does not mean that you cannot challenge your client

Your role as advisor is to shed light on all potential pitfalls and threads while standing with your client even if you disagree with a direction the client takes

A well coordinated communication between consultant team and client is key to a good relationship Communicating with the client •

A consultant team always needs to be aligned on the message that is sent to the client – no contradicting messages!

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A mapping of stakeholders against team members ensures that each client knows who to contact (cf. Single Point of Contact)

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Mail communication with the client needs to be well structured  Top down message: first sentence should clearly state the objective of the e-mail  The body should provide the necessary (and not more) information  The end should state next steps, deadlines and expectations

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Phone communication should be kept short and to the point (cf. mail) and should thus be well prepared

20 Minutes

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Write an e-mail to your client (Virgin Case) to prepare for your first meeting

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Suggest an agenda for the meeting and make sure you include your client’s points

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Agree on date, duration and location

Regular communication ensures alignment and avoids unnecessary surprises on both ends Communicating with the client •

Regular touch-points or Steering Committees ensure alignment and allow for planning both on client and consultant team side

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“An apple a day…” – an e-mail per week with progress, challenges and next steps allows the client to intervene if he/she judges it necessary

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The client is not a pure data provider – cultivating a human relationship often opens many doors

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Keep in mind that you might not be your client’s top priority – clarify urgencies on your end without being too pushy

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Personal assistants are the most important people in the organization – treating them well is more than a door opener

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Sending documents upfront and following up with a phone call allows the client to be prepared and ensures that he/she hasn’t missed your message

At times you might disagree with your clients – make sure you consider this as an opportunity, not as a fight Handling conflicts •

Make sure you listen and understand your client’s point of view – if you feel your client being positional, make sure to understand what his/her true interests are (e.g., through using the 5 Whys method

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Don’t be positional, make sure you state your interests, not your position

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Handling conflict is like negotiating – if the relationship matters, winning is not always the best outcome

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In handling conflict, Kenneth W. Thomas and Ralph H. Killmann have defined 5 modes in their Thomas-Killmann Conflict Mode Indicator (TKI) that describe individual’s responses to handling conflict:  Competing (assertive and uncooperative)

 Avoiding (unassertive and uncooperative)  Accommodating (unassertive, cooperative)  Collaborating (assertive, cooperative)  Compromising (medium assertive and medium cooperative) © 2016 Paul Schilling – Université du Luxembourg

How is a consulting project carried out? The “standard” phases of a project

When clients state their problem, it often looks unsurmountable – structure in this case is your best friend The “standard” phases of a project 1st week Project set-up

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Organizing a kick-off meeting

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Aligning on the problem to solve

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Conducting a stake-holder analysis/ mapping

First half of project Analysis phase •

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Identify what information is relevant and what not Understanding the current situation (e.g., where does the client stand, where do competitors stand)

Second half of project

Last week

Future state design

Synthesis and final recommendation

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Based on findings, what would you recommend your client and why

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How would you recommend the implementation

Based on the analyses results, how could the future state look like (e.g., vision, target operating model, organization, processes)

The value of a consultant is often that he/she brings the methodology and manages the process, background knowledge often comes from the clients themselves © 2016 Paul Schilling – Université du Luxembourg

The kick-off meeting with your client is your moment to leave a first impression – don’t waste it! The kick-off meeting •

The kick-off meeting is often the first touch point with the client and a first opportunity to positively impress

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Make sure you come prepared  Read all relevant information on the project upfront  Know whom you’ll meet and what their roles are  Know how to present yourself and what experience to bring forward  Have an agenda for the meeting

 Clearly define what outcomes you need from the meeting •

Make sure you align on what problem to solve

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Manage your time during your kick-off meeting (and during all following meetings)

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Make sure to plan for logistics (e.g., meeting room, projector)

Before even staring to plan the project in detail, make sure you have understood the problem The problem statement worksheet – refresher from My start-up project course What is the basic question to be resolved? The basic question should bring focus to the analysis. The description should be succinct and also ensure that the findings can be acted upon. The more specific, the better – as long as important problem-solving levers are not excluded. What is the initial situation? Describe the "situation" and "complication" from which the task arises, e.g., industry trends, relative position in the industry What are the success criteria? Determine the criteria on which the company bases its decisions to act on the recommendations and by which the results will be measured, e.g., cost reduction by x%. What is the project scope? Indicate the focus and what the project will not include, e.g., division, market segment, country Who are the decision makers? Identify who makes decisions on whether to act upon the recommendations/results, e.g., executive board or head of business unit

Who are the other stakeholders? Identify who supports/could sabotage the project and define other influential people/groups, e.g., unions, professional association What are constraints to take into consideration? Define the limitations to the solutions to be considered. Note: Constraints may have to be relaxed as the study proceeds, e.g., extent of additional investment, staff changes Source: McKinsey Problem Definition Worksheet © 2016 Paul Schilling – Université du Luxembourg

Spending in depth time on clearly defining the scope of the project avoids painful scope creep afterwards Defining the scope – in detail!

ILLUSTRATIVE

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Scope creep is the uncontrolled expansion of the scope of a project that generally comes from additional expectations or requirements on the client’s side or from directional changes in the project

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Be precise in what activities will be done and what deliverables are due at what deadlines Activities

Deliverables

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Kick-off workshop (24.10.)

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Value stream map

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XYZ process assessment (November)

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Spaghetti diagram for XYZ

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Vision Workshop with dept XYZ (21.11.)

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Synthesized results from vision workshop

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Phase 2 (Deadline: End of January)

Future state design workshop with leadership representatives (Beginning of December)

Target operating Model (scope: dept. XYZ, …)

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Layout of modus operandi (scope: …)

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Validation of results with dept XYZ (Beginning of January)

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Final report with synthesis of project

…

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…

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…

Phase 1 (Deadline: End of November)

Prepare this detailed overview for your first meeting with your client. Validate and adapt based on client requirements. This is your safety net throughout your entire project. © 2016 Paul Schilling – Université du Luxembourg

Analysing your client’s situation does not mean you have to boil the ocean Refresher on a few concepts from My Start-up Project course •

Be 80/20 in your analyses – you very often have data that is not complete, which should not hold you back from advancing

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Structure your problem and identify what is relevant and what not

Prioritize your analyses – you might be able to come to the same conclusions with less effort

Understanding the client’s situation often starts with understanding the forces in the market Porter’s 5 Forces Framework •

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Porter’s 5 Forces Framework is used for decencies and yet still provides useful insights into a market if applied properly

Clearly defining the market is often the first pitfall •

Number and size of suppliers

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Uniqueness of their service or product

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Your ability to substitute service or product

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Cost of changing supplier

Supplier power

Threat of new entrants

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Cost of market entry

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Resources required to enter market

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Economies of scale

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Technology and engineering knowledge protection

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Barriers to entry (e.g., administrative, legal, …)

Competitive rivalry

Buyer power

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Number of individual customers

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Average size of order

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Switching cost on buyer side

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Customer loyalty

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Price sensitivity

Competitive rivalry •

Number and size of competitors

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Quality differences between competitors

Threat of substitution

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Availability and quality of substitutes

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Customer perception of substitutes

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Cost of changing to substitute

Mapping a company’s strengths and weaknesses seems so basic and yet you rarely see a SWOT properly applied SWOT analysis

The Porter’s 5 Forces assessment can be used as input when identifying opportunities and threats

External

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Internal

Positive

Negative

Strengths

Weaknesses

Opportunities

Threats

A well conducted SWOT analysis lays the foundation for the future state design and strategies for next steps

Weaknesses

Strengths

SWOT analysis Opportunities

Threats

Strengths-Opportunities Strategies

Strengths-Threats Strategies

Which of the company’s strengths can be used to maximize the opportunities you identified

How can you use the company’s strengths to minimize the threats you identified

Weaknesses-Opportunities Strategies

Weaknesses-Threats Strategies

What actions can you take to minimize the companies weaknesses using the opportunities you identified

What actions can you take to reduce the company’s weaknesses in order to avoid the identified threats

When taking a closer look at a company, processes are often the first element to focus on Process analysis •

Process maps, Process Flow Diagrams or Business Process Mapping (BPM) help you understand in which order a process is carried out, who are the owners of the process steps, what input is needed, what output is generated, etc.

When taking a closer look at a company, processes are often the first element to focus on Process analysis – Swim Lane Diagram

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Swim lane diagrams are a visualization of a process flow diagram, the overall diagram gives a complete view on the process, the individual swim lanes provide a view for each intervening actor

On shop floors and in offices, badly coordinated product flows often yield significant improvement potential The spaghetti diagram •

The spaghetti diagram has it’s roots in Lean Manufacturing, has later been one of the key analyses in Lean Administration

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The basis of a spaghetti diagram is the map of the floor you’re analyzing

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During an observation phase, lines are drawn for each movement of  …a specific file or product

 …an employee/employees

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The spaghetti diagram allows to analyze the flows in a given space or shop floor and identify improvement potential (e.g., inefficiencies due to long distances

Analyzing waiting time is another method that helps understanding how a process can be improved Value chain mapping •

Value Chain Mapping is another paper and pencil Lean tool, that analyzes the flow of material and information as a product or service makes its way through the value stream.

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A value chain map allows to track •

…all different process steps, step duration (value adding time) and waiting time (non value adding time)

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…process efficiency (VA time/Total process duration)

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…throughput of a process

Comparing your client’s company with competing companies is another way to assess performance Benchmarking •

Benchmarking means comparing company metrics with those of other players in the market. This is often done for  Number of employees in a certain department/company size  Salaries at different levels  Number of products produced/company size  Investments in running vs. building the company  Response time…and many more

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Benchmarking is often used to assess whether a company is a top performer (e.g., top quartile) or whether there is potential for improvement of a specific dimension

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Benchmarking is generally used to prove the necessity for action (cf. burning platform), understand who is best in class and what the gap is to fill to get there Benchmarking can be done intra-firm (e.g., comparing different departments with each other) or inter-firm (comparing different companies with each other

Listening to people and letting them express themselves often uncovers many symptoms that point at issues Interviewing •

Interviewing is a basic and yet – if properly applied – an extremely powerful method of analysing the client’s situation

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Key guidelines to respect 

Start with presenting yourself, the high-level project your working on and the objectives of the interview

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Be transparent about how long the interview will take and respect the time constraints

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Take detailed notes

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If you can do the interview with a colleague, use the opportunity that one person can write while the other one asks the questions – roles can be changed during the interview

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Have a detailed questionnaire prepared to ensure you cover all the topics

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Be prepared to release your questionnaire and follow-up on the information that your client is providing you

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When the client answers your question, make sure you listen and don’t focus on the next question to ask

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Techniques like the 5-Whys or asking “can you tell me more about that” helps to gain deeper insights

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Ask your client whether he/she has any questions that you could answer

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Thank your client for his/her time

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Be attentive to all non-verbal clues that the client gives you during the interview

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Share a synthesis of the interview with your client to make sure you captured all important points

Analyzing a client’s situation can also be done from a client’s perspective Voice of the Customer •

The Voice of the Customer analysis (VOC) is an in-depth process in market research that has as objective to assess customer’s expectations, preferences and aversions

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The outcome of the analysis is

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A list of customer’s needs and wants

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A hierarchy of these preferences (primary – strategic needs, secondary – tactical needs, and tertiary – operational needs)

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A prioritization of these needs

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The customer’s perception of your client’s performance on these expectations

The prime objectives behind the VoC analysis are •

Retaining your current customers by understanding and delivering against their expectations

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Improvement of your product and service design through understanding what your customers expect and value Often this analysis uncovers waste of “over-engineering”. Companies often offer service or product features that the customer does not value and is not willing to pay for

If the issue is rather people induced, vision workshops can help to surface what needs to be worked on The vision workshop technique •

In many settings, human interactions, emotions, frustrations and other feelings are at the root of collaboration inefficiencies

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Unless addressed, they spoil the professional and efficient functioning of a company

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Vision workshops help to tackle issues with mind-sets and behaviours

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Participants of a vision workshop are asked to use a pair of pictures to answer certain questions •

How do you perceive the work that you do today and how would you like it to be in the future

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How do you perceive the collaboration in the team today and how would you like it to be in the future?

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How do you perceive your leadership today and what would you like it to be in the future

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…and many others (typically done with 3 questions for a 1,5h workshop)

How do I get to a recommendation? Designing the future state

Generally there is not one correct answer to the problem at stake – try to layout different outcomes Scenario planning •

Scenario planning is a way to lay out different possible outcomes based on a set of assumptions and interpretations of the driving forces of change

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Inputs can be quantitative or qualitative:  Demographic and societal drivers  Market drivers (cf. Porter’s 5 forces)  Expected market shocks  Technological development  Political and environmental drivers  …and many others

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In order to manage complexity, generally 2 drivers are used as variables while the others are kept constant – based on this, 3-5 plausible scenarios are developed and illustrates in detail

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A sensitivity analysis can be carried out in order to understand how changes in one variable impact the overall outcome

The client generally does not want you to state the obvious, try to clearly distill the “so what” Synthesizing your findings •

Giving a recommendation goes beyond stating your findings (e.g., interview results, analysis results, observations) Analyses

• Conduct the analyses as requested by client

Findings

• Collect information during the analyses (e.g., interview notes, process data)

Summary of findings • Summarize and structure your findings

Synthesis of findings • Split the important from the unimportant information

Recommendation • Draw a conclusion from your findings • Explain what your interpretation is and what assumptions you base it on

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Always ask yourself the question: “why am I presenting these findings?”, “are they relevant for the client to take a better decision?” – focus on the relevant information

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Even though you might be proud about all the activities that you have done, keep in mind that the client is more likely to be interested in what you figured out

How do I write my final report? Leaving a great final impression

Whereas the kick-off is your opportunity to leave a first impression, with your report you leave a final impression Writing the final report •

Quality goes over quantity

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A good report starts with a clean structure  Start your report with an executive summary (not more than half a page, state the “so whats” and not the process  Describe your methodology – be clear about what was done and with whom

 Be transparent about your assumptions, ideally incl. sensitivity analysis  Be clear what conclusions you draw from the different findings and what rationale you based them on  Prepare an appendix with all relevant information and analyses results •

Clearly state sources of all external material or used methodologies that underlie copyright

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Turn on your auto correction and make sure your report is spelling mistake free

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Have a clean layout and high-end material if you provide hard copies

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A digital version is always submitted in PDF format

How do I impress in the final presentation? Refresher from presentation best practices

When we think about making presentations, we should not mix up content and presentation slides REFRESHER

Defining Approach

Task/Problem

Running analyses

Content

Presentation

Format

PowerPoint/Slide (also tables, documents, etc.)

PowerPoint/Chart (also flipcharts, videos, etc.)

Font size

Between 9pt and 14pt

Between 12pt and 18pt

Layout

One topic per slide, potentially several graphs

Content

As detailed and exhaustive as possible

≠

One message per slide, one or max. 2 related graphs Focused on key message/ synthesized; slide should not have more information than needed to underline the message

Before you start to produce your first slide, think about what message you try to convey to what audience REFRESHER

1. Specify your target group – who do you want to reach? 2. Specify your objective – what do you want to achieve? 3. Specify the topic and the key question to be answered 4. Formulate your answer to the key question at a high level 5. Think about what supporting data you need to prove that your answer is right 6. Build a storyline – how do you want to sell your solution to your audience 7. Only then draw your slides

What type of chart to use depends on the comparison between the data points you present The 11 golden rules of slide design

Content

Style

Formatting

REFRESHER

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Every slide has an action title which states the “so what” (font size 26pt). The action title has ONE clear message, which includes a verb and ideally contains a quantitative statement in line with what is showed on the slide

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Graphic elements (e.g., charts, pictures, frameworks) are to be used to convey the meaning of a message (“less is better”). If no suitable graphic image available, text is sufficient. Be careful in reusing frameworks

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Slides are read from left to right and/or from top to bottom. Important points are thus on the right and/or bottom part of slide

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Avoid “death by detail”. Use short and meaningful facts and figures

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Bullet point slides should be structured in categories (no more than 6 bullet points per category). Text, especially lists, should have a parallel structure (formulated using nouns or verbs)

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Slides should be free of spelling mistakes (use spell checker for support)

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Write numbers as digits to ease reading comprehension. Use same format for numbers on one slide (e.g., 480kEUR vs. 480’000 EUR, 1,256.87 vs. 1’256,87)

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Slide body should contain ONE font size only (ideally 12-16 pt). Stick to corporate colours for all text elements

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Text boxes have single line spacing and before paragraph spacing of 6 points

10 • Footnotes, sources, legends, unit measures, stickers and trackers complete a slide and should be graphically consistent and well placed throughout the entire document • All elements must be suitably aligned individually, with one another and with the slide master. 11 Symmetric spacing and/or intervals are a must © 2016 Paul Schilling – Université du Luxembourg