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The Art of Consulting: A Taxonomy of Experts
By
Michael Richarme
One of the most vague and widely misunderstood professions is that of
consultant. We undertake years of formal training to become professionals in
our fields, yet there is no defined training for consultants. The purpose of
this paper is to add definition to the field of consultancy, identifying some
of the major types of consultants. The conclusion contains a brief checklist to
help you decide which type of consultant would work best for your company.
Some people believe that consultants are people with extensive industry
expertise, hired to provide a better understanding of a
specific business sector. Typically, this type of consultant has been actively
engaged in the specific business sector for decades and very clearly
understands the rules of the game for that particular sector. The consultant
has extensive contacts throughout the sector, having either worked with or
competed against most of the key figures in the sector. Often, these people
have completed successful careers in that sector, and have retired to a role of
consultancy to stay active and involved in the business that played a major
role in their lives. This type of consultant can be particularly helpful for a
firm that is considering entry into a new business sector. This type of
consultant will tend to focus on strategic positioning, competitive advantage,
degree and intensity of competitive forces in the sector, and similar top-down
considerations. One must take care, however, to insure that the industry
expertise of the consultant is not dated.
Another type of consultant is someone with a focus on process expertise.
Most common during the major business restructuring activities of the 1980s,
the focus of these people was to identify more efficient and more effective
means for businesses to conduct business. Unlike the external focus of the
industry expertise consultant, this type of consultant has a highly inward
focus. However, this type of consultant will similarly tend to focus on
top-down considerations such as outsourcing, organization structure and
alignment, and work flows. This type of consultant is particularly helpful for
a firm that needs to reduce its cycle time or become more efficient in
delivering product to market. One must take care that the consultant recommends
process modifications that are tailored to your specific business and not
derived from a stable of generic solutions.
A third type of consultant is one who possesses a high degree of functional
expertise. Specializing in a functional field, such as
marketing or accounting, this expert is useful in setting up a new department
within an organization and identifying the tasks, responsibilities, and
outcomes of that department. One must take care that the consultant develops a
functional unit that is well connected to the other elements of the
organization.
A fourth type of consultant is very similar to functional experts, but is more
engaged in a narrow subject or technology. Called a subject matter expert,
this consultant has comprehensive knowledge about the specific subject matter
at hand. Often associated with technology, this consultant is found where
specialized knowledge is critical. Examples from the marketing research field
might include multivariate statistics experts or research methods consultants.
Because the knowledge they possess is so specialized, only other subject matter
experts in their field are able to tell if they are correct or not. Also, one
must take care, particularly with volatile fields, that the subject matter
expertise is current.
A fifth type of consultant is one who provides reflection and insight. Called
sounding board or critical thinking consultants,
these are the rarest of consultants. These consultants may or may not know
anything about your industry sector, the characteristics of your business, how
your products function, or how your organization is structured. But they are
able to listen carefully to these descriptions and determine whether the
arguments are logical and consistent. They can ask questions and test
assumptions that persons within the organization take for granted. They can
provide an alternative perspective on situations that may not be immediately
apparent to insiders. And, possibly most important to senior executives, they
may offer a willing ear for highly confidential concerns that the executives
don’t wish shared within their own organizations. One reason that these
are the rarest of consultants is that these consultants offer only themselves
to an organization–they do not bring a finished product like a new
organization chart or acquisition strategy. Unlike engagement-oriented
consultants, this type of consultant is most effective over a longer period of
time, gaining the trust and confidence of the executive team. In return,
critical insights are given time to develop as well. One must take care,
however, that the consultant is providing enough value to justify the
significant expense involved.
Of the tens of thousands of consultants roaming the landscape, most tend to fall
into one of the above categories. Often, their business cards or prior
consulting projects speak clearly to their specialty. Occasionally, however,
one can find a consultant with capability in two, or even three, of the above
categories. These are not common, and one should take care to understand the
tradeoffs being made by gaining breadth of consulting knowledge over depth of
expertise. Generally, a combination expertise will involve an industry or
subject matter expertise with a functional expertise, producing someone who had
been employed in a specific industry for several decades who also understands a
specific technology or subject.
Sometimes, the combination involves an industry or subject matter expert who
also has sounding board or critical thinking expertise. These consultants are
rare and valuable, because people with this combination of characteristics tend
to be running organizations rather than consulting for them.
So where does one go to find good consultants? Typically, businesses are
besieged by consultants every day, and one needs only to go to a conference or
trade show to attract swarms of eager experts. But there are some other
alternatives available as well.
The United States government’s Small Business Administration (SBA) has a
group of retired executives who provide consulting to small businesses. Often
these executives have skills in this area that are very helpful. Another source
of this type of consulting can come from your suppliers and vendors, who may
have people within their organizations who have either latent or active
capabilities in this area. Building long-term relationships with one's
suppliers and vendors can provide an environment in which this capability can
flourish. If more businesses adopted the latter approach, perhaps there would
be less need to bring in expensive and ephemeral experts to help run the
business. Unlike the SBA approach, this approach takes time to grow and
nurture, and requires a shift of perspective from utilizing suppliers to
working with business partners. In this partnership environment, collaborative
problem-solving will flourish, and business partners will flourish.
How do you decide which type of consultant to utilize for your business
situation?
The following checklist might provide some guidance.
Consultant Checklist
- Are you entering a new business sector or facing stiff competition in your
current sector? If yes, an industry expert would work well for you.
- Are you trying to take costs out of the business or reduce delivery cycle
time to your customers? If yes, a process consultant would work well for you.
- Is one of your company’s departments struggling to meet objectives,
not communicating with the rest of the organization, or floundering in the
delivery of its services? If yes, a functional consultant would work well
for you.
- Are your employees great with general information, but not up to speed on
the latest technologies or techniques available in the market? If yes, a subject
matter expert might help bring them up to speed.
- Are you thinking about making some radical changes to your management team
or making strategic moves in the market that you don’t want to share
with the rest of your management team just yet? If yes, a sounding board consultant
might be a good solution.
- Are you stymied with new concept or product development? A subject matter
expert probably knows too much of the nuts and bolts, so a sounding board
consultant would likely work better here.
- Do you want to make sure that the company is sending out a unified message
through its brands, its advertising, its website, and other communications
avenues? Again, a sounding board consultant would work well here. The information
isn’t necessarily confidential, but this approach helps provide an unbiased
look across some of the communication venues mentioned above, which typically
would fall in different functional areas in the organization.
- Are customers and noncustomers providing feedback that your pricing is too
complex, too onerous, too rigid, or otherwise not matching up with their needs?
A critical thinking consultant can help sort through the complex issues and
reduce them to simpler, yet effective, packages.
- Are your distribution channels from production through end-user customer
clear and free-flowing, or is there overlap and confusion about how the end-user
gets the product and what is the best channel structure for managing this
process? A critical thinking consultant can talk with the channel members,
including your distribution partners, and sort through the problems and provide
some recommendations to clean up the channel.
- Are you losing proposals to key competitors or not even getting your share
of the requests for proposals? A critical thinking consultant can get to the
bottom of your acquisition process, finding out the real story behind your
positioning relative to competitors and the reasons why your company may be
losing critical share points.
Copyright © 2004 by Decision Analyst, Inc.
This article may not be copied, published, or used in any way without written
permission of Decision Analyst.
About the Author
Michael Richarme (mrichar@decisionanalyst.com)
is a Senior Vice President at Dallas-Fort Worth based Decision Analyst. He may
be reached at 1-800-262-5974 or 1-817-640-6166.
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