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Rethinking Value in Consulting: What distinguishes top performing consulting firms from the rest?

—17 August 2017
—Analysis of the winning consulting firms from the MCA Awards 2017

This is a summary of an original ‘Point of View’ article by MCA Associate Member PSfPS. You can read the full article, including examples taken from the winning consulting firms, here.


Why are some consulting firms seemingly able to maintain a healthy supply of new clients, run many successful engagements and attract the best people, when, at least on paper, their consultants appear to have similar levels of experience, knowledge and expertise as other firms?

Here’s our hypothesis: A firm’s consulting methodologies and tools are important but they are not enough in themselves.

Instead, what matters most is the perceived value created by the consultant in the client’s mind in every interaction before, during and after the engagement.

Rather than superior consulting tools or ‘solutions’, the success of a consulting firm is a direct function of its people. Not high levels of technical, functional or sector knowledge – that is par for the course – but superior human, emotional and cognitive capabilities: an ability to illustrate significant value in every single contact with the client. How consulting firms reward, encourage, share and embed these behaviours across the organisation is what determines the overall performance of the firm.

Quite rightly we could be accused of being overly inclined towards this view because these are the skills and behaviours we have developed for our consulting firm clients for over 25 years.

So, to suitably test our hypothesis, we needed to find a list of the best performing consulting firms, where financial performance wasn’t the sole indicator of success, where firms explain what they believe are the secrets to their success and where performance has been independently verified by an objective group of assessors.

Thankfully, such a point of reference did exist: the winners of the Management Consultancies Association (The MCA) Awards 2017.

Having analysed the winners from this year’s MCA awards – trying very hard to refrain from our own confirmation bias – this is what we found: It's time for consulting firms to rethink how they create value for their clients...

The ‘Bananarama Theory’ holds true in consulting:

“It ain’t what you do, it’s the way that you do it, and that’s what gets results” Value is not something created by a consulting tool, it is a judgement made in the client’s mind based on the experience of working with that consulting firm.

See the full Point of View for examples from MCA award winning firms Integration Consulting, Egremont Group and PwC.

Values in Action:

From our analysis of the MCA award winners it becomes clear that their values are not simply pithy statements but lead to direct actions and behaviours shared throughout the firm.

Many consulting firms have well-known, often altruistic stated values but it is how these values are realised in every interaction with clients and colleagues that distinguishes the top consulting firms.

As Simon Sinek has recently argued: For values to be actionable, to be able to hold people accountable to them, to measure their use, they must be verbs: “Values are things you do. Values are things you live by. You cannot ‘do’ nouns. You can only ‘do’ verbs." 

See the full Point of View for examples from MCA award winners PPL and Arup.

An example of ‘Values in Action’? Knowledge and skills transfer:

Knowledge and skills transfer is a prime example of how the top firms put their values into action. The reason is simple; by transferring their knowledge and skills throughout an engagement, consultants ensure the perceived value of their work is significantly enhanced in the client’s mind long after the project has ended.

Countering our ’confirmation bias’:

We did find some firms for whom outstanding performance predominantly came from the use of market leading or consulting tools - such as MCA award winning firm Pearson Ham Consulting. However, we would argue that firms whose key advantage comes from their proprietary consulting tools need to focus even more on their human, emotional and cognitive capabilities.

Why? Because should a client perceive a firm’s consulting tool as the sole mechanism that creates value, they can start to perceive the consulting firm towards the commodity end of the consulting spectrum. This isn’t a race to the bottom that firms would really want to win. 


Recommendations:

Based on our research into the MCA award winners 2017 and rethinking how firms create value for their clients, we would propose the following steps for consulting firms:

1. Develop the core behavioural, emotional and cognitive skills required in consulting: Consulting skills go well beyond simply analytics and modelling. Core consulting skills should include: how to challenge clients, how to form and offer a point of view, how to communicate effectively, how to listen effectively, how to present results, how to think critically and creatively and how to manage client relationships.

2. Turn your firm’s values into actions: Your values need to be actionable, measurable and reward the behaviours that really create value in the mind of the client. Rather than stating that ‘speed, flexibility, collaboration and engagement’ are our guiding principles, determine what behaviours will illustrate these values and how you will hold people accountable to these standards. What would you like your clients’ overriding memory to be after working with your firm and what stories would you like them to tell about you

3. Ensure your firm’s metrics measure and reward the behaviours you want to see: Linked to the point above, if your firm’s performance metrics are based on activity (utilisation / billable hours) or financial metrics are they compatible with your firm’s stated values? Most likely they are not. If your Partners are fixated on and reward short-term activity-driven, financial metrics, what signals does this send to employees and ultimately clients about the behaviours the firm values?

4. Ensure there are systems in place that enable and reward knowledge transfer: Beyond simply ensuring agreed deliverables for their clients, the top firms recognise that the perceived value for their clients can be significantly amplified by passing on skills to clients that can be used long after an engagement is finished.

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