Chapter 5: Operational Performance

Overview

At any point in the economic cycle - bull years and bear years - the vast majority of businesses are performing neither very well nor very badly. Their markets are not growing; their cost bases are relatively stable; there are no major threats or opportunities on the horizon. The reasons for stalling may be many and varied; some may be familiar, others less obvious. They are united only by the fact that they are hard to solve.

Improving business performance is the traditional backbone of consulting, stretching back before World War II. Today, when people calling themselves ‘consultants' abound in almost every walk of life, it remains the standard by which the consulting industry differentiates itself from other forms of temporary labour - body-shopping, contracting, even interim management. When the MCA revisited its definition of ‘management consulting' in 2002, it concluded that it is: ‘The creation of value for organizations, through the application of knowledge, techniques, and assets to improve performance. This is achieved through the rendering of objective advice and/or the implementation of business solutions.'

This differed from the MCA's previous definition in two important respects. First, it allowed for the fact that much consulting today takes the form of implementing business solutions and is not confined to providing objective advice. Second, it stressed that the work of genuine consultants is directed at improving performance, not simply maintaining the status quo.

This emphasis has been particularly relevant since the millennium, as the consulting industry has faced a client base that is simultaneously desperate to make improvements during a period of economic stagnation and cynical about consultants' ability to make a genuine difference. Mike Bird, a partner at Kepner-Tregoe (one of the consulting firms featured in this chapter) says:

Many consultants have been selling quasi-academic solutions, but clients are turning round and saying ‘What does all this add up to?' The real game is the how: how to equip clients to run their businesses better; how to configure those businesses more effectively. The consultants who'll make money will be those doing this hard-nosed work. For all the talk of recession, this is a good market for consulting firms that can demonstrate tangible, practical, non-IT business solutions which clients can see and use to get results.