LEADERSHIP IN A CONSULTANCY PRACTICE

I seem to remember from the days when I was taught corporate strategy that the first question to ask when fashioning a strategy is: 'What business are we in?' Perhaps strategic thinking has moved on since then but it is a good question to ask of a consultancy business. Large consultancy practices have taken to adding a strapline to all their publicity material as an answer to this question. This is usually something to the effect of 'Helping our clients to become more successful' or similar. But how is this to be done?

Consultancies add value to their clients through the medium of their consultants. Figure 2.2 shows a model of a consulting practice, expressed as exchanges of value between consultancy firm, consultant and client.

Figure 2.2: An added value model of consultancy

For the purposes of business management, we need to consider the exchanges of value involving the consultancy firm at both operational and strategic levels. The key question for any consultancy firm is: 'What do we as a firm add to the transaction between consultant and client?'

At its simplest, consultancy is simply brokerage: the consultancy practice introduces its clients to specialists who have the technical skills needed to carry out the work required. The consultant has the benefit of carrying his or her employer's franchise - they are being employed as consultants at least partly because they bear the imprimatur of their employer. The client has the reassurance of the reputation of the practice underwriting the work of the individual consultants. The practice makes a profit on the difference between what they charge the client and what they pay the consultant.

The thought will occur eventually to both client and consultant that it might be to the advantage of both to cut out the intermediary - the consultancy firm. A sole practitioner is the result of this thinking taken to its logical conclusion. None the less, there is a role for a broker between clients and consultants but this is more often the function of networks or associations than that of a consultancy practice. So, a consultancy firm has to offer something more in the long term.