In the world of management consulting (also known as strategy consulting), buying the services of a consulting firm has historically been seen as an exclusive decision: which one do I choose? Those who make the hiring decision generally think that one firm is above the rest.
Management or strategy consulting is an independent professional advisory service that helps managers and organizations achieve their objectives by providing and/or implementing solutions to management and business problems, discovering and evaluating new opportunities, improving learning, managing change, developing management skills and developing strategies. Source: Wikipedia
Personally, I believe the “art” of hiring management consulting in an optimized way lies in knowing how to combine different providers according to the need, specialization, depth and flexibility of the service required.
The “Big 4”
For those unfamiliar with the term “Big 4”, it refers to the four large global audit firms that also offer many other services (consulting, legal, tax, transactional outsourcing, headhunting, compensation and benefits, systems implementation and strategy, among many others); they are “the department store” of professional services. They are followed by another group, the “MBB”: the three largest consulting firms by revenue. In Central America and the Caribbean, only the Big 4 have offices, so we will focus on them.
These four firms have a global structure and a breadth of services that make them the preferred option for large multinationals that need to deploy multiple initiatives across different geographies. They are primarily audit-based firms, so they are regulated by laws such as Sarbanes-Oxley, which protects investors in companies listed on US stock exchanges. Laws like this seek, among other things, to avoid conflicts of interest for the auditor, preventing it from auditing matters where another service unit of the same firm was involved, such as consulting or systems implementation.
Limitations of the Usual Approach
Regulation has also encouraged the Big 4 to define where they provide consulting and other services, and to develop protocols that govern how deeply they advise a given client and which areas they prefer not to enter at all. The clear and clean separation between the “outside advisor” role and the “internal execution” role is often a constant concern for this type of firm, and it shapes how they operate, even in their marketing and service offering.
The limitation of this approach is that, often, the business problems companies face are not that clean, so a report stating what should be done may not be enough to “get the ball rolling” inside the hiring organization.
Much depends on each situation and company, on the muscle it has to implement and even on the context in which the recommendations must be acted upon. Sometimes the initiative is one of many, and other business problems and issues may compete for the same resources within the organization, people’s time and focus being the most sensitive. It also often happens that the team or people who will implement have trouble organizing themselves and launching the project. In these cases, great value comes from a third party who starts leading the launch, rolls up their sleeves and co-executes with the company’s team to start the dynamics of change, and steps back as the company’s staff gains traction in the project.
For this reason, when hiring management consulting you should determine what type of support will be required throughout the project cycle, how much variability it could have and how deep the support might need to be.
The Art of Combining Providers
As in many other areas of sourcing, the “art” lies in knowing how to combine a portfolio of different providers that co-exist on the organization’s radar and whose combination brings the greatest value, security, flexibility and support to the company in the last mile of implementation. Boutique or specialized firms, or even individual management consultants, can bring a level of depth, flexibility and value that is very difficult to provide with a generalist consulting practice. “One-stop shops” tend to be good at addressing all business needs, but not as good at getting to the bottom of any one in particular.
However, if it is not a Big 4 firm, how do you buy and how do you compare? A first way is to rely on references from colleagues in other companies and industries, but this is still a somewhat artisanal way of sourcing consultants.
The Importance of Certified Management Consultants
In this context, and to support decision makers, new standards and certifications are now available in our Latin American region. For individual management consultants there is the CMC (Certified Management Consultant) certification, awarded by CMC-Global, the global organization for the management consulting profession and the provision of its services. Until last year, CMC-Global had no representation in Spanish-speaking Latin America or in Africa.
Starting in 2016, this global organization is making an effort to encourage management consultants in the region to join CMC-Global and achieve the CMC certification, which guarantees quality, caliber in the consultant’s area of expertise, ethical conduct and adherence to the global consulting standards of developed markets such as North America, Asia and Europe.
It is worth mentioning that there is only one CMC standard, and a CMC-certified consultant has the same weight and recognition anywhere in the world: the 48 national management consulting institutes around the world that belong to CMC-Global reciprocally recognize consultants certified in other markets. In addition, the certification must be renewed every three years, which ensures that the management consultant stays current with market trends and encourages continuous professional development.
Besides the CMC, there is currently the European standard for the provision of consulting services (EN 16114:2011), and from 2017 the ISO 20700 standard for the provision of management consultancy services will come into force. It was developed with significant participation from CMC-Global, whose objective is to raise the standards of the profession globally.
CMC-Global also has several certification schemes for firms (such as ACP and CMC Firm) that will be promoted in our region, complementing the CMC certification for individual consultants.
The Portfolio Approach
So, as I mentioned earlier, the right way to source consulting services is to manage them as a portfolio, using the services that best suit the organization, coexisting and collaborating with each other where it makes sense, and taking advantage of the fact that there are now tools beyond references and first impressions to provide more information when making the decision.
Because of the strategic nature of management consulting, buying it will always be a decision strongly influenced by the trust placed in the firm, company or individual consultant, but that does not mean this is the only factor available today to do the job well… Let’s apply ourselves!
From our archive. Originally published in Spanish in Nearshore Americas on 17 January 2017; translated into English. Read the original (in Spanish).