Consultants come into play in order to identify, analyse and provide solutions for client issues.
Typical clients of consulting firms include small and large corporations, investment firms (e.g. private equity firms and hedge funds) and governments.
These clients may have no idea as to the root of their problems or if they do understand why certain issues have arisen, they may need assistance to solve them.
Clients may have clear aims and objectives in mind, but lack the knowledge or tools to achieve them. Clients may be unsure of the best way to allocate budgets or resources.
Sometimes they face problems of completely different nature be it fall in profitability, increased competition from new market entrants or low staff morale, which they cannot resolve over the course of time. This is where consultants come into play in order to identify, analyse and provide solutions for client issues.
Descriptions of the role of consultants usually refer to the provision of ‘innovative end-to-end solutions’, collaboration with clients to ‘turn strategy into reality’, enabling clients to ‘create or sustain a competitive edge’ and overall, to ‘add value’. However, what is it that broad statements such as these actually encapsulate in practice? Hopefully, we can shed some light.
Consultants with different specialisms may work together to serve the same client in order to help that client to achieve its overall goal. For instance, if a client wants to increase profitability, this may involve technological and operational change to reduce costs, in addition to detailed industry and competitor analysis to enhance revenue performance.
Below are some examples of the types of projects that consultants undertake. In each case, consultants may work on the project from the development and implementation stages, right through to facilitating the client’s adaptation to any internal change that has occurred (for instance through training personnel and working to mitigate issues as and when they arise following implementation).
Consultants are expected to be able to view the big picture of an organisation and understand how all its different parts fit together.
Consultants must develop both an in-depth knowledge of the field in which a company operates and demonstrate sensitivity to that company’s particular needs. This can involve processing a huge amount of data and when doing so asking direct, carefully considered and relevant questions from the outset to ensure advice is based upon a strong insight into the company.
Consultants must then be able to communicate this information in a clear, concise and easily digestible manner when drafting proposals and presenting results/solutions.
Consultants spend a lot of their time conducting market research and due diligence on behalf of clients, analysing the findings (typically through the use of Excel models), putting together presentations (PowerPoint is the best friend of many consultants!), then delivering presentations to clients, which usually involves answering questions relating to their findings or conducting subsequent research in order to answer these questions.
Due Diligence refers to the process by which the client’s advisors carry out in-depth investigations into many aspects of the client’s business in order to gain a solid understanding of the client’s business and market.
Consultants typically undertake impartial, in-depth assessments of a client’s business (or the relevant area of a client’s business) in order to deliver informed, contextualised proposals that relate to the client’s needs or aims. Impartiality is key here, as many clients bring in consultants to gain an unbiased assessment of their issues/proposed solutions.
Many interdependent elements can determine the success of companies and as such, consultants may have to take into account a multitude of factors when conducting such research. These factors include: a client’s financial performance and tangible resources; its competitors, market share, market position and the industries in which it operates; its operational structure and effectiveness; its human resources (including employee turnover) and culture; its customers and suppliers; its shortcomings; its competitive advantage; and its achievements. Assessment of such elements can in turn determine the company’s prospects of achieving its desired aims and objectives. Accumulating feedback from the client’s stakeholders may provide an invaluable insight into many of the above factors.
Some firms and industries require consultants to travel extensively (depending on their experience) both domestically (i.e. to the offices of domestic clients) and internationally (i.e. to visit international offices and/or work closely with colleagues in international offices). Many consultants may also be required to work in house for a particular client for extended periods of time.