Introduction to Management Consulting & Strategy
Sam Solakyan
Today’s Learning Objectives 1. To give an overview of the course 2. To know the definition, history and purpose of management consulting 3. To understand the consultancy market: the main players, industry segmentation, clients and trends 4. To gain an overview of the consulting life-cycle 5. To understand the basics of approaching cases, guestimating and analysing.
The Agenda 1. The Course 2. What is Management Consulting?
3. Who are Management Consultants? 4. Clients 5. Analysing Cases
Management Consulting
The Course • Practical, Practical, Practical…… • Case-based (Harvard) – Develops skills – Get jobs – Highest retention rates • To… – Understand Consultancy – Analyse businesses – Develop
The Course Pt. I • Introduction to Consulting – Overview of Consulting – Designing your own firm • Proposals and Planning – Planning, Costing and Proposing – Assignment: Speaker from StayMobile Ltd. • Strategy Consulting & Market Analysis – Analysing Trends
The Course Pt. II • Dark Sides of Consulting – Stress, manipulation and exploitation – Illegal trades: Enron, Parmalat, WorldCom • Speaker Day 1: Consulting Work – EDS & Deloitte – Managing Delivery • Speaker Day 2: Analysis with SSM – Jeremy Hilton: Private Consultant – Methodologies & Modelling
What is Management Consulting?
Historical & Future Trends
• • • • • •
Dates
Focus
Hires
Typical Firms
1890 – 1940
Technical Analysis
Academics
AD Little, Booz, Allen, Hamilton, AT Kearney.
1940 – 1970
Strategic Management
MBAs & Academics
McKinseys, Bain & Co., Boston Consulting Group
1970 – 1990
Technical & Financial Specialisms
Graduates, MBAs
Arthur Anderson, KPMG, IBM, Deloitte, E&Y
1990 2000
Niche: outsourcing, ebusiness, BPR
Experienced hires
Razorfish, Sapient, Viant, iXL
Big player recovery from 2000 - 2003 (DotCom bust) Accountability (Chinese Walls, Enron, Sarbanes-Oxley, Basel II) Diversification (M&A, Internationalisation, Sectors) Image (MBAs, Up selling, Over-charging, Facsimile Consulting) Projects (outsourcing, e-business, protection vs. emergent markets) Competition (numbers, approved lists, proven track record, sceptical clients)
Segmentation • Industry – Telcos – Digital Media – Finance & Banking Retail – Utilities • Function – Strategy – Operations business) – Private
- Health - Manufacturing - FMCG& - Transportation
- HRM - IT (incl. e-
A Consulting Typology Strategy Consultants McKinsey
Diamond
Sapient
Oliver Wyman
Scient
A.T. Kearney
Service providers Deloitte
Software Providers
/ Utilities
EDS
PwC Accenture
CSC
Technology Providers
IBM
Sector Analysis Pt. I • Strategy – Direction, Long-term plans & High-level goals – Lever to implementation – Bain & Co. - BCG – McKinseys - Monitor • Operations – Day-to day running of firm, Reaching, strategic goals – Re-engineering, outsourcing, supplychains – Accenture - Deloitte – Cap Gemini - CSC
Sector Analysis Pt. II • IT – Systems development, implementation – Business focused requirements – IBM - AMS (American Management Systems) – Accenture - CSC
• HRM – Strategic alignment of people function – ERP, training, culture change, competence management – Accenture - PWC – Mercer - AT Kearney
Consulting Products Dates
Product
Consultant
Organisation
1976
Portfolio Analysis
Henderson
BCG
1980
Five Forces
Porter
Monitor / Harvard
1985
Value Chain Analysis
Hamel & Prahalad
Strategos / Harvard
1998
TQM
Peters & Waterman
MIT
1990
Core Competencies
Reichheld
Bain & Co.
1993
BPR
Hammer & Champy CSC
1993
Economic Added Value
Stewart
Stern Stewart
Products have a name, a methodology, an application and great PR Consultants are charged with introducing ‘fashions’
Who are Management Consultants?
What is a Management Consultant? Not the brightest and the best Not all Harvard MBAs or even business students Not Magicians, Preachers or WitchDoctors
Skill Profile Broad set of general consulting competencies
Skills: • • •
Outstanding interpersonal skills Great Presenter Excellent at writing reports
Knowledge: • Generalist business knowledge • Methods & Frameworks • In-depth specific skill
Depth of expertise: skill or knowledge based
Basic Salaries (UK) • • • • • •
Graduate £20 – 26k Junior Project Lead £30 – 35k Team Leader £40 – 60k Senior Consultant £60 – 80k Principle Consultant £70 – 100k Partner £100k +
+ 10 – 20% bonus + car + health care, share options • Highest salaries earned at niche consultancies
Design your own Consultancy In pairs: you and 20 consultants wish to start your own medium-sized consultancy. You will consult on general strategic management issues such as mergers and acquisitions, outsourcing and new product development. Write 10 scenarios (5 each) that you think might be likely to occur whilst running this consultancy. What functions, departments and skills will you need in the consultancy. Sketch a brief organisational design and strategy outlining:
Skills Required Structure & Function Major Costs Key problems
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