In this in-depth guide, you’ll get to discover what strategy consulting is and isn’t, and what management consulting is and isn’t. Read on to explore how consulting can help your business succeed whether it’s becoming more profitable, fixing problems, or standing out in the competition.
What Is Consulting?
Consulting is when a business gives expert opinions to a specific field or person. It’s giving advice to different businesses based on organizational structures, strategy, management, and operations.
A consultant will bring their experience to help businesses succeed. While the base term of consulting doesn’t require certifications, firms, or degrees, management consulting and strategic consulting often do.
It’s about helping a person solve their problem and move from the current situation to the desired state. For example, say someone who is an accountant makes about $60,000 a year.
Maybe they’d make more working for a company, but they have entrepreneurial goals. A management consultant or strategic consultant can work with them to help go after their desired goals to make more money and stand out.
Some consultants will reach out to other experts to ensure that they’ll deliver the results the client is looking for. For example, an accountant looking to grow might require learning digital marketing to stand out online.
Why Hire Consultants?
Many hire consultants for 3 main reasons. The first reason is that they don’t want to waste their efforts or time. They want a proven system to follow.
The next option is that although they might have an idea, they’re not quite sure how to implement it. The last reason is that they know the problem, but aren’t sure how to solve it.
Obtaining Goals Quicker
While some might be patient and take time exploring the best methods for problems, many want the reward as quickly as possible. They realize that if they try to learn it from the beginning, there might be mistakes along the way, and it’ll take longer.
Management and strategic consultants will have the education and expertise necessary to give businesses a proven system. It’s up to the business to implement the system after the consultant leaves.
What Is Management Consulting?
Another term for consulting at a base level is giving advice. When you take a look at different types of consulting, for example, IT, they help their client with IT problems.
Management is about combining the different departments and functions of a company. Management consultants work on business problems at a top-level. That includes the Board of Directors, Boards of Management, CEOs, etc.
Another term for a management consultant is what’s known as a management analyst. Their goal is to help businesses come to an outcome whether that’s to be competitive, profitable, or solve a problem.
Management consultants can break down into different functions such as IT or inventory control. They can also have specialties within an industry such as education, manufacturing, and healthcare.
A management consultant works with a leadership team to identify the different problems in order to come up with a solution. They can be found in teams or self-employed working with different businesses. Most work for a consulting firm and will help different businesses.
- Review company data such as payroll information
- Inspire faster utilization
- Meetings with clients
- Communicate the work product or results
- Go over the scope of the work
- Plan out schedules
- Research a client’s business challenges
What Is Strategy Consulting?
Strategy consulting is where the consultant has experience in what they’re providing expert advice on. This can include future directions or strategic issues so the value and growth of the company improve.
This can include marketing and corporate strategies. The marketing strategy can include relating products with products of the competition for customer experience, channels, and pricing. Under the corporate strategy, it’s about market positioning, growth, etc.
Since management consulting is a broad term it can refer to different niche areas of business management and handles different problems and issues of an organization. It’s about taking a look at data gathering, recommendations to management, defining problems, and being part of the implementation process.
Under strategy consulting, it’s about taking a look at the overall strategy of the management team. While it falls under management consulting, it takes a look at specific issues that those in management experience.
All strategy consulting firms fall under management consulting. Not all management consulting firms are strategy consulting firms.
A Breakdown of Management Consulting
Certified consultants will gather research and data for their company. They spend a large amount of their time doing the necessary amount of research.
They’ll take a look at different focus groups with 3rd parties, research industry reports, interview company employees, and take a look at internal financial figures.
This can include large files with raw data. Management consultants are organized and will have this data on an Excel sheet to better understand it.
The consultant will meet with them to further discuss the project and plans. Every meeting doesn’t have to be with a C-level executive, but instead, the consulting team that you as the client approves.
This can include directors, VPS, etc. You’ll receive updates every few days or weeks from the point of contact.
Your management consultant will spend a large amount of time with their management team in order to have a clear objective in mind before beginning.
Discussions can include interviews with employees or taking a look at financial information. Many consultants will start with a hypothesis for a solution and what data they’ll use to test this idea.
Both strategy consulting and management have different methods when it comes to business situations. Strategy consulting comes up with plans for a certain period of time to ensure that there are cost reduction and promotion of a new product.
It’s about solving a problem for the client to have satisfaction. Strategic consultants are a good idea when there are issues that need to be solved. Whether that’s unexpected events, developing a new business, etc.
Management consulting is about developing a method for faster solutions. They’re good when there’s a known opportunity or issue. Or, when there’s a tested solution available.
Why Work With a Strategic Planning Consultant?
They’ll come up with a competitive business strategy for different businesses with a detailed action plan. Different methods and tools will be provided to meet the goals of the company.
It can include:
- Everyone involved
- Notes on all discussions
- No short cuts
Since a strategic planning consultant is from the outside they can give you a new perspective without being influenced by the company’s culture. This can lead to new ideas and suggestions that’ll help the business gain clarity.
They’ll collect market intelligence and analysis on markets, competitors, industry trends, etc. This research will help businesses in evaluating and identifying opportunities that lead to growth.
Developing a Plan
They work with management to come up with a business strategy that works for a business. This includes taking a look at the budget, tasks, strategies, goals, and other needs of the strategy implementation process. It lets a company know what will be done, and what will be the goal.
What To Look for in a Management Consultant?
A high-quality management consultant will make a company’s issues and business a top priority. A management consultant will ask business questions during the sales process to dig deeper.
There are industry specialists and generalists. While a generalist might not have that special quality, they can solve and see different problems and opportunities from a fresh perspective. A specialist in that industry can bring in an understanding as well.
They See the Gray Areas
As a business, it’s important to see the gray areas to develop and use them in businesses. A strong management consultant will see the gray areas in order to see the difference between OK and good opportunities.
Before hiring a management consultant, find out who you’ll be working with before you begin. See if they take into consideration the gray areas as well.
The right management consultant will create reports in a timely manner. It’s harder to find one who will give you measurable results as well, but it’s possible.
They’ll help with building out new ideas into the real world. A firm that can take a look at tactical and conceptual ideas is important as well.
A management consultant should have the outcome as the most important part of the process. A company’s interests should always be at the forefront of what a management consultant does.
Understanding the Project
Before hiring a management consultant, it’s a good idea to find one who understands the scope of the project. After they pitch to a business, a company should decide whether the consultant understands the problem and their needs.
Responds to Questions
Ask the management consultant how often before a response will be received, or questions a business may have. A consultant with a strong response time is important to ensure that there are no steps or questions missed.
Avoid a consultant who will walk around the question and make a response to salesy. Pick someone who will listen to the needs of the business to ensure that they understand the facts. Make sure that the business will receive the specific answer to that question before proceeding with that consultant.
Look for a consultant who has the experience necessary to help. While each business will have different requirements, it’s a good idea to find a management consultant with plenty of experience.
Understanding the Differences
To understand the differences between strategy consulting vs management consulting it’s important to take a look at examples. Imagine a restaurant that’s having trouble with getting new customers.
Maybe they had a commercial to advertise their products but it fell flat. Also, say this company underpays its staff who is also overworked. They also don’t have healthy options so lack variety.
This restaurant keeps going to the same methods and hoping something will change. Strategy consultants and management consultants will handle this situation in a different way.
The Strategic Consultant Way
A strategic consultant will provide advice on specific management topics instead of identifying the problems as a whole as a management consultant will do. To help the business, they might reach out to different consumers and conduct surveys and interviews.
They’ll also take a look at different data to analyze and test different hypotheses they come up with. The conclusion is what path they’ll take to help this failing business. As a strategy consultant, they’ll take a look at one management issue and come up with a plan to fix it.
The Management Consultant Way
A management consultant will take a look at the restaurant’s entire business operation. They’ll take a look at the different components that are behind the company’s problems. This can include different parts of the organization such as IT, marketing, finance, etc.
It includes taking a look at the different concerns from the different parts of the organization. They’ll provide either advice or actionable solutions that the organization can take.
This can include a new plan from new market research, or even creating a healthier menu. It might also include improving the training for the restaurant managers.
They might also recommend higher pays for the employees and how this can be done. Objective opinions, guidance, and advice can also occur as well. A management consultant will use their understanding from different businesses, problem-solving, and other professional experience to solve the problem.
How To Pick the Right Consultant?
When looking for an external consultant, find one who has strong experience. Whether you’re looking for a strategic consultant or management consultant is up to the needs of the company.
Choosing a Consultant
For example, for more of a consultation to do with the business, choose a strategic consultant. For a broader sense of multiple issues, they’ll want to pick a management consultant.
A strong management consultant will have good communication skills in writing and speaking. Also, one who will listen to the needs of the company they’re working with.
The management consultant will listen to the business and current needs in order to help. If a management consultant doesn’t listen, then it’ll be harder to come to a strong conclusion.
The right management consultant will be organized with the information when they come up with a solution. Not just organization on their desk and in papers, but in their mind as well. They’ll be able to formulate a solution that best fits the business based on their past experience.
Every business and client is different. Whether it’s the same business or completely different, a management consultant will need to be able to adapt to the needs of each business.
Since each situation and client is different, a strong management consultant will be able to think creatively in order to achieve results. There will be no cookie-cutter approaches, and instead, they can take a look at the weak points of a business. They’ll take a look at what needs to improve, the different facts and figures, and solutions to the problems.
The ideal management consultant will have writing skills to fill out different manuals, reports, and other types of documentation. They’ll be able to communicate their different reports to you as well.
A high-quality management consultant will be great with time management. This is due to either being paid with a fixed-fee agreement or per the hour.
Management Consultant Job Description
In order to become a management consultant, a person must have at least a Bachelor’s degree from a strong institution. They must have strong attention to detail, knowledge on researching, presentation, and analysis knowledge.
They must be independent contributors who can work alone or with others. They’re self-directed and don’t need guidance.
Preferably, they should have a few years of experience under their belt, and an MBA from a top institution. They need to be strong in PowerPoint, Microsoft Suite, and Excel as well.
A management consultant needs to be confident in what they say and be able to work in a team environment. They also need to be able to work with heavy workloads. Some management consultants will have different certifications such as a Financial Modeling & Valuation Analyst.
The Different Types of Management Consultants
Under the umbrella term of a management consultant, you have different consultants such as information technology and strategy. An operations consultant is someone who provides the business with guidance for business practices.
A financial advisory consultant gives advice to clients regarding acquisitions and mergers. Human capital consultants give businesses solutions as far as organizational changes.
The main role of a management consultant focuses on research and white papers. They contribute to the pieces. As time goes on they normally pick a specialty to focus on.
A management consultant’s role is about giving solutions to different businesses. It can include strategy development, process optimization, new technology introduction, etc.
Management Consulting Facts
When hiring a management consultant, they help businesses grow. Whether it’s guidance or help in solving one problem or multiple, a management consultant can help. Management consultants can help identify problems that businesses aren’t even sure that they have.
Some think that management consultants are only hired when advice is necessary. The truth is, they can be hired as well for improving profits and efficiency as well. They can help with standing out in a competitive market.
Different methods are used in order to come up with a plan of action. For example, that can include interviewing management and employees. They do so in a manner that won’t interrupt a business.
Can Be Self-Employed
While some business management professionals can work for a business, some are self-employed. Whether a business wants to work with a large, small, or self-employed firm is up to them.
But, with a self-employed firm, there’s that personal touch. You can find consulting firms within public institutions, big corporations, private equity funds, and non-profit organizations.
Typical Consulting Projects
The length of time a management consultant will work with a company varies from 3 months to 1 year. It can start out with signing a short-term contract of about 2-3 months, and then change from there.
The fees involved depend on which consultation team you choose. Consultants charge more because they work with other consultants across the world for different ideas.
Many management consultants work overtime to meet the needs of the different companies they work with. The role tends to require travel whether that’s by car or plane. They spend very little time in the office and are often out and about from place to place.
When To Hire a Management Consultant?
A management consultant should be hired when a business is looking for temporary help with a problem or skill. When a problem comes up in a business and they’re not sure how to solve it, a management consultant can help.
Consulting vs Supporting
In the supportive role, they’re similar to consulting but slightly different. For example, function specialists are within the function support center. In the research and intelligence role, they’re in offices providing support for projects in multiple locations.
A more popular supporting role is what’s called an implementation consultant. It’s similar to a consultant since they work with clients. The focus of their work is mostly on the implementation of recommendations from past projects.
Do Consultants Help Clients?
The advice given by a consultant comes with conditions that must be met by the business. While some are done properly, others are not.
Consulting is known to be a prestigious field and many go into it. Many who start out in consulting may eventually go into other roles as well.
Consulting Track Levels
There are different tracks for consulting such as entry and ranks. Entry is for those with a background in any education. Business knowledge isn’t required.
Some consultants might have a background in Math, engineering, etc. Next is what’s known as different ranks.
At different firms, there will be different ranks, but normally 3 groups. There are project owners, managers, and staff.
After consulting, you might find some switching to other roles such as corporate strategies, entrepreneurship, operational roles, etc. They can also head into finance and work with Corporate Finance or Private Equity firms.
Who Should Hire Strategy Consulting?
Strategy consulting is great for an entrepreneur who doesn’t have a plan of action. Many who own their own business often make the mistake of taking a look at the competitors and what they feel comfortable with only.
Why Strategy Consulting?
While some might wonder why employers can’t pull employees from different departments to fix an issue, it has to do with focus and time. Strategic consultants have the experience necessary to guide a business with the right strategies.
Strategic consultants are normally hired for a set period of time. During this time they’ll place their effort, time, and energy into different problems.
Executives at businesses are busy running their business. That’s where a strategic consultant comes in. They’ll be able to focus on the different implications of changes within the business.
Also, they’ll bring new ideas instead of just the company’s ideas. They won’t have judgments or sensitivities that an employee might.
Whether they’re managers, board members, or executives at businesses, they’ll have stakes in the business they won’t want to risk. Having a consultant come in will bring a fresh perspective that can help.
Strategic Consultant Skills
Being a strategic consultant involves analytical thinking. Along with this, there must be problem-solving skills as well. Under strategic consulting, they’ll have a specialty as well.
Along with these, a strategic consultant must have time management. This is due to being able to research, meet with clients, and meet deadlines.
Since they work with people they must have strong communication skills. They’ll also need to be able to get down to the problems a business is facing.
Flexibility is important as well since no one knows everything. This means that there will still be parts of a business they’ll need to learn to come up with a solution.
This includes coming up with new information and trends. Strategic consultants often work with CEOs of different companies.
Questions a Strategic Consultant Will Ask
A strategic consultant will take a look at whether or not you want to launch a new product. At that point, they’ll decide how the business can stand out from the competition, and if it’s possible.
They’ll also find out whether the company wants to collaborate with other companies or not. Also, how they’ll market for the future.
Requirements of a Strategic Consultant
Plenty of experience will be a requirement for a strong strategic consultant. They’ll need to understand how to be professional with executives, and have an effective approach.
They’ll need to be confident in the results and advice they give. It’ll take a few years before a strategic consultant will meet the requirements to be a successful consultant.
A strategic consultant will have at least a bachelor’s degree, often in the business field. Having a bachelor’s degree doesn’t guarantee a position, and it often requires an MBA.
This is due to firms wanting candidates who have knowledge of business management and problem-solving skills. They’ll also develop analytical skills from the MBA as well.
How To Choose a Strategic Consultant?
First, look for a strategic consultant who has experience within the business industry. Choosing one who specializes in the field is another option.
Next, decide what services they’ll be offering you, and if they fit the business needs. Some consultants might only provide you with a report on how to proceed, but others will give more in-depth knowledge.
Next, decide on the budget of the business. While it’s important to find one who has experience within the industry, they need to be within budget as well. Some strategic consultants charge a flat-rate project fee, while others charge by the hour.
Next, check online to identify the right consultants for the business. Do they have reviews online? If not, businesses can ask for testimonials from previous clients.
While asking friends and colleagues for referrals is an option, every business will have different needs and requirements. After the research process, you’ll need to interview the consultants.
It’s important to ensure that not only will the consultant fit within the budget, but they must bring what they claim. It’s a good idea to interview different strategic consultants to find the right one for each business.
Next, decide whether a self-employed consultant or one who works for a firm is the better option. Look into the different expertise that the consultant has as well.
You’ll want to find a strategic consultant who has facilitation skills. Facilitation is what can help you succeed in your business.
Facilitation is an important part of the complex components of the business. When a facilitator comes in they’ll be able to take a look at the different personality types within a business to see what’s working. They might make adjustments to the discussions for the most effective results.
Experience With Multiple Industries
Another advantage is having a strategic consultant who has experience in various industries. While it’s important for them to have experience within a certain industry, they can bring more to the table with multiple backgrounds.
A consultant who has experience in multiple industries can provide curiosity and versatility. This can lead to success within the business when they’re given a fresh perspective.
A strong strategic consultant will have experience, confidence, and competence. They’ll have a strong portfolio to back up what they say and communicate it properly.
A strong strategic consultant will be able to speak with different employees and help them gain confidence in what they’re doing. Without building that rapport the employees may fail to deliver the requirements.
Before hiring a strategic consultant, it’s a good idea to encourage honesty and transparency before beginning. A consultant who is transparent about the good and bad about a company is vital for a business.
Even going with a strategic consultant, it’s a good idea to find one who has open communication and will let a business followup with questions. A business should understand too that while a strategic consultant will provide a plan, it’s still up to the business to run it, in the end, to be successful.
Open to Recommendations
Businesses should be aware that as they choose a strategic consultant, they’ll need to be open to extending deadlines and other recommendations. While it’s important to be open to recommendations, it’s also vital to understand why a consultant can’t meet the deadline if they promised a certain date.
When a business interviews each strategic consultant, they should see if the solutions they brainstorm make sense for the company. Ask the consultant how the solution will address the needs of the business and how it’s better than other choices.
Picking out a consultant who can communicate in a clear way is important. While a consultant who speaks in hard-to-understand jargon might be appealing, it’s important to understand what they’ll do and why.
Some consultants charge for the whole project, others by specific tasks, and some by the hour. Some might offer the option to break the project into different sections. Within each section is a fee. It’s about ensuring that these fees are affordable for the business as well.
How Many Projects?
How many projects is the strategic consultant currently working on? Do they have the time necessary to take on another project?
Or, do they focus on one project at a time? Find out the time frame they’ll be able to finish up the different work requirements.
Once the contract ends, will they answer questions? Even after the report ends, it’s a good idea to find out if they’ll be open to helping with any questions a business may have. While not every business needs ongoing support, it’s a good idea to find out whether a consultant does provide it just in case.
Management Consultation Cons
Being a management consultant can have cons. For example, they might experience a large amount of stress.
Businesses can demand a large amount from a management consultant. While they’re providing exemplary results, it’s about balancing the needs of the client, meeting the requirements for solving a problem, etc.
While there’s much critical thinking involved in the role of management consulting, creativity is limited. At a junior role, they’re more involved in analyzing data and gathering research. For creatives, it’s not the best role.
No Tangible Results
Being a management consultant there aren’t tangible results. At the end of the day even with strong research and support, it’s up to the client to follow the guidance given. Seeing these results is rare since when the project is done they’ll head to the next project.
Independent consulting is when a person chooses to run their own business around what they know. This is when they choose to be self-employed instead of working for a company.
Many can be found online building their business. Also, independent consulting can be on a broad range of expertise.
This is often when someone has years of experience under their belt in a particular industry. This can include technology, software, and IT. It can be B2B consulting, in-housing consulting, etc.
The different types of consulting can include online programs, individual coaching, group coaching, done with you consulting, and done for you consulting. Done with you consulting is where the consultant and the client split the work.
It’s not providing the entire service, but instead, just a section. It can include receiving a part of the service but still receiving advice on the other methods.
Done For You
This is where the services are delivered by the consultant. For example, maybe you’re helping a business increase their sales you’ll offer lead generation. This is the most time-consuming delivery option for consultants.
This is where a group of clients will receive help at the same time. It can include 20 people or 3. Whether on a phone call or through the internet, there are different options available.
This is where a consultant creates a course or program that can be viewed by as many people as they’d like. This allows clients to learn different information in their own time.
Some consultants choose this method since it’s a more passive option. There isn’t a time commitment required with this method. They receive the course and then implement the methods taught.
Before Choosing a Consultant
Before choosing a consultant, businesses should request proposals that state project goals, the budget, and time constraints. This helps both the consultant and business decide if they’re the right fit.