The selection of management consultants

Guest contribution by | 12.12.2019 | Project management | 0 comments

“At around 33.8 billion euros, turnover in the management consulting sector in Germany in 2018 was higher than ever before.”1 This is accompanied by a steadily rising number of consulting firms and management consultants. In 2018, around 124,000 management consultants worked in the 20,000 or so consulting firms in Germany. Since “the consulting market has been overheated” (…) it is “all the more important, when selecting a consultant, to make sure that he or she really knows what is important for the success of the project.”2

Despite these impressive figures, small and medium-sized enterprises (SME) often find it difficult to hire external consultants. They are reluctant to engage management consultants because they have difficulty assessing services in advance and lack the criteria to define the quality requirements for consulting services. In the following I would like to present you a method to define requirements for the quality of consulting services.

Characteristics of external consultancy activities

The term “management consultant” is known in Germany to be neither protected by the state nor by professional law. Irrespective of education and qualification, “everyone” can therefore call himself a consultant and offer his services on a market. For companies looking for IT support, for example, it is often unclear where consultants see their focus and what knowledge they actually have. Does the IT consultant offer functional consulting along the value chain, is it strategy consulting, or does he want to develop the organisation by setting up a new change management?

“Fortunately” there are some essential characteristics that are inherent to defining external consulting services:

  • Consultants provide their services for a defined period of time.
  • In most cases, this is a leadership-supporting task.
  • Partnership-based cooperation with the client is a central element of cooperation.
  • Communication between the parties is intensive.
  • Cooperation focuses on one goal.
  • And: there is a limited assumption of responsibility by the service provider.

These characteristics can help organisations to select consultants. But how exactly does this work?

How are decisions made?

Decisions in companies to commission a consulting service can either be made as individual decisions at a fixed hierarchical level or the decision is made as a group decision (e.g. within a committee). In the case of a group decision, the decision can alternatively be made on the basis of a majority decision or a consensus decision.

For SME in particular, it makes sense to make the decision to commission a management consultancy on the basis of a broad consensus in order to ensure the highest possible level of acceptance of the subsequent consultancy service among the top management.

To this end, the so-called “flag” decision method can be used, in which the conditions necessary for a decision are worked out, which must be present so that the group reaches a joint “YES” (positive decision) or “NO” (non-compliance with conditions).

Various basic rules must be observed here:3

  • All arguments put forward are formulated as conditions to be fulfilled (necessary conditions) for a decision.
  • The wording of the conditions must be clear and accepted by all decision-makers. “Killer conditions” that cannot be fulfilled must be avoided.
  • All conditions are subjected to a consistency check in order to recognise and resolve contradictions.
  • If all necessary conditions are fulfilled, a positive decision is made.

 

Conditions necessary to engage a consulting firm

How can necessary conditions be formulated in order to commission a management consultancy? Let’s take a look at some examples:

A management consultancy is only commissioned if …

  • all internal deliberations are no longer recognised as effective,
  • there is clarity about the “topic to be worked on”,
  • the objectives of the consultation are clearly defined,
  • it is clear what is to change in concrete terms,
  • the consulting company has a defined quality of the services offered,
  • a contract is concluded with the consulting company defining the services,
  • the necessary budget can be made available.

Not all necessary conditions can be fulfilled or fulfillable at the time of the decision. Often a statement can only be made at a time after the assignment. Example: A management consultancy is only commissioned if it enables a long-term improvement of the company result. These conditions must be reviewed continuously.

Recommendation: Against the background of a fragmented and overheated consulting market, SME should pay special attention to the quality aspect of a consulting service.

Quality in consulting from the provider’s point of view

In order to offer its customers reliable orientation, the Federal Association of German Management Consultants (Bundesverband der Deutscher Unternehmensberater – BDU) has defined a framework for quality in management consulting. This quality framework comprises three quality dimensions:

  • quality of the consultant,
  • the quality of the client relationship and
  • quality of service.

These quality dimensions are described by nine elements.4

However, the BDU expressly declares that the quality framework is merely a recommendation and that the member companies of the BDU are free to use methods and solutions for quality assurance that deviate from the mission statement.

The Federal Association of Independent Consultants (Bundesverband der freien Berater e.V.), which says of itself “We speak as a medium-sized company”5, has also defined quality standards and consulting principles for working with customers.

Apart from an appropriate technical qualification the “KMU-Berater” (SME consultants) require among other things sufficient professional experience and a regular participation in advanced training, in order to maintain the quality of the consultation from their members.6

The “Offensive Mittelstand” (OM), an independent network of consultants under the umbrella of the national New Quality of Work Initiative (Initiative Neue Qualität der Arbeit – INQA), takes a different approach. The advisory process is divided into four phases:

  • Preparation of the assignment
  • Contract and work planning
  • Execution of the order
  • Completion of the order

Along this phase model, OM has developed a total of 28 requirements for a good and desirable consulting practice. The OM criteria “quality of counselling” are represented in the form of a self-check, which is designed as an instrument for reviewing, reflecting and further developing the quality of counselling provided by OM members.7

The concept of quality in DIN standard 55350

DIN Standard 55350 defines quality as the “nature of a unit in terms of its ability to meet quality requirements”.8 This means that quality is made up of a performance-related and a customer-related quality concept.

The performance-related quality term (suitability) results from agreed quality standards for the performance area under consideration, such as quality seals or certifications. The customer-related quality concept (quality requirement) can be derived from the quality of a service from the customer’s point of view, i.e. his expectations and demands.

Proof of the suitability of a management consultancy

Proof of suitability can be provided, for example, by certifying the quality management system of a consulting firm on the basis of DIN:EN ISO 9001-2015. From the customer’s point of view such a certification might not be a unique selling point of a management consultancy.

DIN EN 16114:2011-12 contains detailed recommended guidelines for the effective provision of management consulting services; however, certification according to this standard is not possible. This standard was also extended in 2018 to become an internationally valid ISO standard of EN ISO 20700:2018.

“ISO 20700 gives practical guidelines based on outcomes and emphasizes the importance of understanding clients’ needs. It is useful to all management consultancies, (…). It is also useful for clients in that it helps them better understand what they can expect from a management consultant in a consultancy project.”9

The certification programme Certified Management Consultant (CMC), which is offered in Germany by the Institute of Management Consultants (Institut der Unternehmensberater GmbH – IdU), also offers personal proof of quality for management consultants. For a certification the consultant must prove thereby not only his professional experience as well as project successes and specialised knowledge. “For a certification the management consultant must convince his customers as well as qualified colleagues of his abilities.”10 A re-certification is necessary every three years, otherwise the title is withdrawn again.

Quality of advice from the customer’s point of view

According to an Austrian consultant study, customer requirements for the quality of a consulting service are defined, in particular, by fulfilling the following criteria: 11

  • professional know-how
  • industry expertise
  • implementation competence
  • expected increase in performance
  • tailor-made solutions (customer proximity)

In this context, it makes sense to clearly define the corresponding requirements from the company’s point of view already in the context of the decision to commission a consulting service. The creation of a checklist containing the requirements for a management consultancy on the basis of a catalogue of criteria can serve as an aid. In addition to the criteria mentioned above, these can also be, for example:

  • qualification certificates
  • proven consulting focal points
  • proof of consulting experience
  • special expertise
  • membership in a professional association

Support for the preparation of such a checklist is provided by Offensive Mittelstand (OM), which has prepared a recommendation for the selection of freelance consultants.12

Conclusion

If you are about to make the decision to make use of a management consulting service, I would recommend a consensus-oriented approach. Make a joint decision without permanently focusing on different points of view and/or (repeatedly) postponing a decision due to conflicts.

If you have made a decision that you want to make use of a consulting service, the selection of a consulting company naturally requires special care. It can make sense to consider quality criteria from the provider’s point of view during the selection process. In my opinion, however, the most important thing is to define the expectations regarding the quality of the consulting services on the basis of comprehensible criteria from the customer’s point of view.

And a small tip to the conclusion: Since management consultants are to provide a “leading support” it is indispensable to include also the personality of the advisor into the selection decision and to consider particularly the integration ability and motivation of the advisor. Good luck with your selection.

 

German notes and references:

[1] Hubert, Julia (2019), Statista Veröffentlichung. Umsatz der Unternehmensberatungsbranche in Deutschland bis 2018
[2] Dietmar Student (2016), Interview mit Bianka Knoblach (2016) in Manager Magazin 09/2016
[3] Steffens, Bernd (2017),  Fahnen, Entscheiden unter besten Bedingungen. in: managerSeminare Heft 234 S. 74-76
[4] Bundesverband Deutscher Unternehmensberater e.V., https://www.bdu.de/der-bdu/unser-anspruch/unser-qualitaetsverstaendnis/
[5] KMU-Berater, https://www.kmu-berater.de/verband/
[6] KMU-Berater ebenda
[7] Offensive Mittelstand (2019) Selbstcheck Qualität der Beratung
[8] DIN 55350 Teil 11, S. 3 Nr. 5
[9] Naden, C. (2017), Guidelines for optimizing use of management consultancies just published, https://www.iso.org/news/ref2160.html
[10] Das IdU Institut für Unternehmensberater, http://www.idu.eu/iduhome/
[11] Ennsfelder, I./Bodenstein, R, (o.J.), Qualitätssicherung für Management Consulting.
[12] Offensive Mittelstand (2018), Gut beraten. Auswahl, Beauftragung und Bewertung von Beraterinnen und Beratern – Empfehlungen für mittelständische Unternehmen

Stephan Pust
Stephan Pust

Stephan Pust was an IT executive for a long time. Today, as a freelance trainer and consultant, he supports managers in organisational change and as a driving force for change in the new world of work. He also benefits from his extensive experience as a process manager. In addition, he works as a lecturer for various universities in Niedersachen, Germany in order to pass on his professional and personal experience to future specialists and managers.