Impact consulting

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In the 1930s, a new breed of service company

began to adopt a similar business model to that of
successful law firms recruiting from top business
schools such as Harvard, offering tempting starting
salaries, and applying the up or out principle to
career progression.

The Top 8
1. Know not only the terminology of the consulting world
but the scope of what consulting is and is not
2. Rigorously examine 6 key factors when benchmarking
training partners
3. Ensure technology and tools prove their relevance on
human level
4. Pioneer the blend of analytical rigour and business skills
with deep-rooted behavioural change
5. Accept that a trial of good ideas applied well and fast is
infinitely better than any attempt to impose the perfect
plan
6. Delight in and demand a challenge to your
assumptions
7. Ensure that your credibility and legitimacy to initiate
change is in place or can be coached
8. Demand that your consultants frequently measure the
impact of their progress and adjust as necessary

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Impact consulting

he model worked. And whilst consultancy entered turbulent waters in recent

years, it now has the wind at its back. In 2006, consulting posted a double
digit growth rate just over 10% - according to the European Federation of
Management Consultants (FEACO). [1]

Have you ever wondered how much money this high-flying sector was worth? In Europe,
its turnover is now estimated at 74 billion[1] (booked by 85,000 participating firms and
serviced by 450,000 individuals).
A starting point the terminology
So what do consultants actually do to book those billable hours? FEACO organises the
business into four main segments. This provides executives with a useful map of the
terminology, and a starting point to identify which or, crucially, which combination - can
best meet your specific needs within the broader context of your business. This can create
a common language within your organisation.
Consulting

Development and Systems Integration

Business consulting
Strategy consulting
Organisation/operations management
Project management
Change management
Human resources consulting

Development of applications (excluding

software)
Creation of new functionalities
Design of services which integrate
other IT applications

Information technology consulting (ITC)

(IT strategies aligning technology with
business processes see, also, right --->)

Deployment and integration of

applications implementation
Installation of hardware/software
Integration of other IT applications

Outsourcing

Other services

IT management services
Applied management services
Business process

Training
Market surveys
Outplacement
Recruitment, executive selection

Source: FEACO

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Defining the scope

What is management consultancy, and what is it not? What distinguishes the
consulting territory in the quadrant overleaf, (featured by Krauthammer - in blue),
from its surroundings? In our view, the primary task of management consultancy is to
help executives to do their jobs a facilitative role which does not extend to taking over
specific segments of the organisation. Later we shall see, too, how and why the human
element of organisations, rather than being a separate segment of the consultancy role,
is actually part of its core.

Finding a partner
Institutes and federations
Technically speaking, consultancy is not yet a fully-fledged profession. This is due to
the absence so far - of the formal regulatory standards to which, for example, law,
accounting and medicine are subject. And still, it benefits from formally organised
federations and institutes, useful portals for information seekers. Here are two:
- European Federation of Management Consultants (FEACO) is the European umbrella
organisation for 22 national management consultancies associations. It is the sole
European federation representing and promoting the management consulting sector.
- The International Council of Management Consulting Institutes (ICMCI) is the global
association of national management consulting institutes. These administer the
international CMC certification (Certified Management Consultant).
Perspectives and needs
In our experience, clients first of all look for a consultant that is associated with a
certain speciality for example, strategy, finance, operations, marketing, or HR/Change.
A second question is: what kind of firm am I seeking? What geographical scope is
necessary? International or local? What kind of profile is demanded? High profile, or
rather less conspicuous? And in terms of the scope, should this be broad or focussed?
What kind of style or approach? High brow, or down to earth? Objective, or involved?
This leads to 6 distinct groups:
1- The Final 4 accountancy firms with M&A, (merger and acquisition) tax and business
consulting divisions
2- IT services firms with implementation, outsourcing and business consulting activities
3- International Strategy Consultants
4- International functional or industry-focussed players
5- National players, ranging from highbrow/high fee to pragmatic/low fee
6- Self employed contractors ranging from highbrow/high fee to pragmatic/low fee

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International strategy consultants

Bain & Company, Boston Consulting Group and McKinsey, are all top-end players. Based
on extensive experience in the market, Krauthammer recommend that interventions
should be structurally combined with the exercise and installation of deep change at
the behavioural level of your organisation as we shall explore later. For those looking
beyond the names mentioned above, the Vault European Consulting Survey 2007
features firms who have prominence in the consulting industry and are of interest to
consulting job seekers.
Benchmarking excellence
In a richly populated market where barriers to entry are low, small players and one man
shows abound. A specialist qualification can reassure. The CMC (Certified Management
Consultant) demands extensive experience, peer reviews, client satisfaction, as well as
oral and written examinations and technical competence. 6 questions can help executives
to check and benchmark consultants:
1- Philosophy what are their driving principles? How diligently will they challenge you,
uncovering real needs? How pragmatic are their solutions? How insistent are they
upon the transfer of learning into action? What is the fit with your culture? With the
ages and learning styles of participants?
2- Impact measurement how will they set and meet measurement criteria, impact level
agreements, return on investment?
3- Delivery how will they engineer a complex and multi-dimensional intervention
throughout your business, nonetheless ensuring consistency? How will they ensure the
right consultants are active, in terms of seniority and specialism? How can they help
you secure the commitment of key stakeholders? What quality control mechanisms are
in place? What about the training and coaching of key players and target audiences?
4- Customisation what is the fit with your specific challenge/sector? A one size fits all
approach or an eclectic application of what works for you?
5- Symbiosis how will they integrate solutions with your existing ones? How well do
they collaborate with other specialists? Do they bring out the best of your key-players
or do they try to steal the show?
6- Risk what is their track record, their financial security? What is their back-up system
in case of emergency?

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The language
From Six Sigma to Total Quality Management, the world of consultancy is rich with
tools. What are these? In Management Tools and Trends 2007, Darrell Rigby, of Bain
& Company, researches those deemed relevant to senior management, topical, as
evidenced by coverage in the business press, and measurable. These are defined in
Management Tools 2007, An Executives Guide. (With results of over 8,500 surveys
in their database, Bain claims this is the worlds definitive fact base on management
tools and trends). Apparently, the tools are widely used, the average number deployed
worldwide in 2006 being around 15 (against an overall average of around 13 since 1993).
Larger companies (annual revenues over $2bn) use more tools. Yet medium companies
are not far behind, and small ones (annual revenues of less than $600 m) use on average
14 of the 25 defined. Yet the tools get a mixed reception (see below). The authors insist
that they are much more successful when they are a part of a major organizational
effort.
Management tools
European usage and satisfaction rates
Tool

Usage

Satisfaction (where 5 is high)

Strategic planning

90%

4.05

Supply chain management

60%

3.96

Customer segmentation

88%

4.19

Total quality management

60%

3.87

Benchmarking

88%

4.03

Mergers and acquisitions

60%

4.06

Customer relationship
management

85%

4.07

Lean operations

52%

3.85

Core competencies

80%

4.02

Loyalty management tools

52%

3.74

Outsourcing

80%

3.78

Shared service centers

51%

3.72

Mission and vision

statements

76%

3.93

Collaborative innovation

47%

3.91

Scenario and contingency

planning

74%

3.90

Offshoring

42%

3.88

Strategic alliances

66%

4.00

Consumer ethnography

33%

3.76

Business process
reengineering

65%

3.89

Six Sigma

28%

3.75

Knowledge management

65%

3.64

Corporate blogs

20%

3.37

Growth strategy tools

65%

3.90

RFID

19%

3.69

63%

3.82

Balanced scorecard
Source Bain & Company

[2]

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Relevance - a non-negotiable precondition. The rather muted response to tools such

as corporate blogs or Six Sigma, rather than creators of meaning such as strategic
planning confirms the need to embed tools in major organizational effort as
suggested by the authors. Krauthammer go further, insisting that if tools sidestep the
issue of people, they can actually cause more harm (or indeed ironic laughter) than
good. The erratic flight of the internet bubble has also brought home the message
that new technology, for example, may be nice, but must always prove its relevance.
Organisations are in our view beginning to dispense with rhetoric and demanding
upfront relevance before applying a new tool or recipe.
Still cutting
Many companies using consultancy, are reactive distress buyers (c. 50%) looking for a
short-term fix to a problem say consultants Logica, researching practice in the UK [3].
The findings are significant not only to UK executives, but for those across the channel,
since the UK market can be considered an important bellwether of European consultancy
practice. According to FEACO, it posted the second highest turnover in consulting after
leader - Germany[1]
Three shifts in attitude
On the basis of continuous interaction with clients worldwide, Krauthammer note that
three trends are beginning to take root in the mindset of senior executives. And they
deserve our full attention, since all influence the impact of change interventions.
1 Diversity is key The first trend is widely recognised. Organisations increasingly want to
mirror the composition of society. And, frankly, they must if they want to respect the law
of requisite variety (Ross Ashby). In other words: organisations have to be as diverse as
- or more diverse than - their environment if they want to survive profitably. This leads
to questions regarding marketing (diversity of products and services), HR (age, ethical
and gender issues) and organisational structure (aligning networks with the need for
centralised governance). US-based multinationals are also realising that universalism has
its own limits and that Europe as much as Asia requires a different style of leadership.
2 Paradoxes are part of life With our personal and professional lives becoming increasingly
interwoven and complex, the tension between both realms makes it more difficult to make
the right choice. This means paradoxes will become an integral part of life and of leadership.
Leadership paradoxes seem contradictory but can be combined in innovative ways. Viewing a
tension as a paradox challenges the leader to seek the best of both worlds a synthesis of the
two sides. Here are just two wicked examples: the need to synthesise dramatic performance
improvement AND breakthrough innovations. The imperative to compete or die synthesised
with the imperative to collaborate or be isolated.

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3 Recognition that organisational change is behavioural change I see an increasing

interest in soft skills: attitude, ethics, energy, motivation and interpersonal skills
reports a senior HR manager in a leading European insurance company, speaking of
the combination of rational and emotional components, which motivate employees
to invest. A Project Manager of Business Operations and Process Industries of a global
ICT consultancy adds: We produce more complex knowledge faster, areas of onceseparated knowledge will converge - industries success will increasingly be based on this
convergence. A leading oil multinational, in line with this thinking, launched a campaign
to stamp out nine killer behaviours. These raise the bar for managers and consultants.
When is change successfully implemented? How can hard issues, like systems and
processes, be tackled simultaneously with soft issues such as values and styles?

Holistic consulting the sweet blend for the future?

A new breed of consultancy is called for a blend of practical solutions and clientspecific training and coaching - rooted in the clients vision and strategy. A bias towards
execution is essential since conditions are never constant enough for a 100% solution.
A trial of good ideas applied well and fast is infinitely better than any attempt to impose
the perfect plan.
Steven van Rooij, Managing Partner, Krauthammer Consulting
The wicked problem facing companies partnering with consultants is to achieve distinct
- and lasting - performance improvement. Traditional approaches attempt this by applying
analytical rigour, improving strategies, operations and structures. However, they often fail
to help organisations to adapt fundamentally enough for lasting change. Not because
clients or consultants are incapable of anchoring a given intervention in an organisations
strategic objectives, or of using clear performance measurement mechanisms.
A new approach change underpinned by behavioural and skill growth
The lack of lasting performance improvement, we believe, lies in the fact that business has
conspicuously failed to blend analytical rigour and business skills with deep-rooted behavioural
change. Achieve this integration (or virtuous collision), and a true paradigm shift in business
consulting is possible. To deliver it, outstanding business consultants must be paired with
excellent behavioural coaches - both with a strong bias towards execution. Here is an example.

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Providing the infrastructure to ensure profitable growth a case study

Our client is a leading player in the fast-evolving financial services market. Part of a large
European group, the company has over 1 million active customers to whom it supplies a
variety of financial services direct. With an organic growth rate of over 25 per cent per
annum, the strategy is now to sustain this. However, growth had been achieved at a cost.
The companys infrastructure no longer matched its strategic requirements. The market
demanded higher levels of customer transparency and service; the cost of operating
existing services was increasing. A comprehensive change programme must now
synchronise the complexities of new systems, processes and organisation. A technology
provider was in place and specialist support was required to help guide the team through
the next critical steps. Krauthammer Consulting had worked with the group in developing
the leadership behaviour of the team and Senior Management now turned to their
international experience and track record in blending people and business change.
Building the case for change. The first step was to build a common platform of what the
organisation was trying to achieve and to establish to what extent operational issues were
hindering growth. Krauthammer Consulting undertook an initial phase of 8 weeks to
establish:
- What processes touch our customers and how do they perform?
- How can we control cost and performance? What is the optimal cost of operating our
value chain?
- Organisationally how do we ensure the development of commercial awareness in our
people and what do they need to achieve this?
- Finally, how do we build a case for change which all can embrace?
In workshops the true efficiency of customer service was analysed. For customer
experience to be trouble-free as possible, the following critical business parameters
needed to be handled correctly:
- Streamlining the cycle of customer acquisition to maintenance and revenue collection
- Optimising each interaction with the customer, developing insight into added-value
products and services
- Building a process-based organisation to drive and support these features.
The initial analysis confirmed Managements suspicions. Trade-offs between different
parts of the organisation were undermining the processes of dealing effectively with
customers. The result was felt not just in excess cost but a failure to address customer
opportunities and debt issues; only one in two interactions were well handled. The case
for change was already felt at the top of the organisation. Still, this first phase helped
crystallise the critical issues - and the way forward. A more cross-functional way of
working was needed, emphasising real customer focus in call centres. The financial case
was also crystallised - this new emphasis would drive sales and, in the short term, reduce
operational call centre costs by over 4 million euros.

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Execution in the workplace. With Krauthammer Consulting, Management structured a

12-month programme to prepare the organisation to tackle the change - establishing
the conditions to secure the success of the forthcoming technology transformation. This
transition approach had 4 major themes - all led by members of the senior team:
1- Processes: reducing lead times and consistency of delivery
2- Management processes: enhancing the transparency of performance and the systemic
usage of management information
3- Organisation: increasing the efficiency of functional cross-overs and optimising product
development
4- Change Management: providing the drive and communication to secure all the above.
Sustainable Impact
An improved effectiveness of front-end processes has enabled the organisation to
sharpen its market focus and deliver more value to its customer base. A 17% staff
reduction and a 2,5 million Euro cost reduction in other areas has been identified,
of which 1 million Euro has been directly implemented. The new cultural behaviour
principles and competency management framework will provide a solid base for a
dynamic future.

The 3 phases of consultancy - in a nutshell

If, like most executives, you are dealing with complex challenges in ambiguous
environments, you will almost certainly welcome a disciplined - yet flexible - approach to
change. Here is a template for doing this in partnership with your consultant.

Phase one

Map the benefits and

problems related to your
current and desired states.
This will demand analytical
rigour - challenging
the way you think and
behave. Ensure you are
truly heard, so your project
can be properly framed.
A powerful paradox is
installed at this stage creating a sense of urgency
to change paired with a
respect for tradition. Your
credibility and legitimacy
to initiate change are now
paramount - and can be
coached.

Phase two

Co-create your desired

outcome. Demand
probing, guidance,
encouragement and
suggestions.

To co-determine
criteria, plot a roadmap
and commit to an
impact level agreement
that spells out what
quality and quantity of
change is sought. Also
seek to define what
should not change.

Phase three

Execute change on
three levels: re-focus
the strategy, re-design
systems and processes
and fundamentally reinvent your culture by
engaging the hearts and
minds of all involved.
Your consultants should
frequently measure the
impact of their progress
and adjust their delivery
as needed.

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Understand where
you need help

Framing

Process

Activities

Meeting the team

Understanding
the challenges
Identifying
the pressure points

Find the facts,

identify the gaps,
recommend
solutions

Analysis & synthesis

Hypothesis testing
Qualification and
quantification
of challenges
Identification
of key levers
Design of the change
programme

Help you deliver

the solutions

Implementation

Communication
and alignment
around the vision
Building teams,
developing leaders
Training and coaching
of key employees
Application and roll-out
of relevant tools and
methodologies
Ensuring sustainability
through local
ownership

Analysing pain
Confusing symptoms with causes, accepting diagnoses or interpretations at face
value, all are easy mistakes to make when analysing pain especially in situations of
complexity and/or crisis. Here we make explicit the reflex of going deeper - and positive
confrontation - two qualities of an effective analyst. All change processes evolve
constantly, so we strongly recommend rigorous questioning at regular points during a
process. As follows:
- What is your description of the situation?
- Why is this important? (An issue, problem, challenge)
- Summarise simply, triggering the other to express worries more deeply, So if I
understand you correctly
- Take an issue, asking repeatedly How do you know? Says who? What (symptoms) did
you observe?
- Ask repeatedly How come, how come? to dig for/identify main causes/bottlenecks.
- Depending on the atmosphere, now ask: So what? What will happen if you do
nothing? to unearth the real risks. (This usually demands repetition as well).
- Determine the stakeholders. Who is directly concerned/accountable/responsible/
involved? Who needs to be consulted? Who can change this?
- Establish the urgency. When would still be in time/too late?

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The Human Capital Development model anchoring vision in action

Organisations are organisms whose sustainable performance depends upon people and
their behaviour. Of course! Yet, how do we align people with the three pillars of strategy,
culture and structure, so determining the health of our organisation or our change
process? Krauthammer developed the HCD model to help organisations translate vision
into action, mapping their current and desired future situation with regard to a set of
clear parameters, using leading questions which apply a common language. A language
we define here.
Company

Individual
Vision

Mission

Values

Responsibilities

Goals

Principles

Competencies

Meaning

Willingness

Vision: exists in
someones imagination.
It is a raison dtre. To
inspire, a vision must
be permanent and
comprehensive rather
than time-specific and
focussed.

Ability

Action

Mission: A mission or
challenging task is
time-specific. We must
concretely know when it
has been accomplished.
Missions typically

comprise the major strategic imperative of an organisation.

Goals: these are intermediate steps in realising our mission and vision. Important for
generating explicit, day-by-day direction, goals direct human energy and resources,
creating a sense of security and an ability to measure effectiveness.
Values: or higher objectives strengthen our feeling of purpose and belonging. They
provide a compass for decision-making and express our corporate identity.
Principles: A rule for behaviour, a principle shows how we express our intentions in
our actions, and forms our ethical code - the translation of our values into exemplary
behaviour.

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Responsibilities: Having the right people on board with clear result areas, performance
indicators and authorities (including access to means and resources). In this combination,
responsibility actually implies accountability.
Competencies: Every employee should use his or her true strengths - recognised both
by employee and others. Competency or professionalism implies a level of mastery of
talent that will ensure success in nine out of ten cases. (An amateur standard is rich in
lucky chances).
Meaning: Does it make sense to me? helps us determine whether people buy into the
vision because they see the purpose.
Willingness: Am I motivated to contribute? Leaders promote engagement (not just
compliance) and focus on aligning corporate and individual motives.
Ability: the capacity in terms of both means and skills - to do something professionally
and well. Establishing ability means enabling others or ones-self to complete
something successfully, either alone or as part of a team.

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 Sources
[1] FEACO - Survey of the European Management Consultancy Market 2006/2007.
[2] Management Tools and Trends 2007, Darrell Rigby, Bain & Company
[3] LogicaCMG Management consultancy: is aiming high letting you down? - white
paper published 2006.

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15

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Belgique/Belgi

France

Polska

Brussels
Tel +32 (0)2 359 96 90
Fax +32 (0)2 358 30 37

Aix-en-Provence
Tel +33 (0)4 42 52 80 40
Fax +33 (0)4 42 52 80 41

Warszawa
Tel +48 22 631 60 55
Fax +48 22 631 60 55

esk republika

Lille
Tel +33 (0)3 20 13 04 00
Fax +33 (0)3 20 13 01 11

Slovensko

China
Beijing
Tel +86 10 65 08 19 35
Fax +86 10 65 08 19 37
Hong Kong
Tel +852 2521 2839
Fax +852 2536 4743

Lyon
Tel +33 (0)4 72 91 21 30
Fax +33 (0)4 72 36 06 70
Nantes
Tel +33 (0)2 40 48 98 98
Fax +33 (0)2 40 48 98 99
Paris
Tel +33 (0)1 44 69 60 00
Fax +33 (0)1 44 69 60 01

Deutschland

Strasbourg
Tel +33 (0)3 88 61 60 61
Fax +33 (0)3 88 61 50 61

Hamburg
Tel +49 (0)40 6894920
Fax +49 (0)40 68949229

Italia

Espaa

Milano
Tel +39 02 49 81 499
Fax +39 02 49 82 470

Barcelona
Tel +34 93 301 15 53
Fax +34 93 318 36 39

Magyarorszg

Madrid
Tel +34 91 372 99 75
Fax +34 91 372 83 23

Budapest
Tel +36 1 349 2717
Fax +36 1 239 1057

Nederland
Noordwijk
Tel +31 (0)71 364 33 44
Fax +31 (0)71 362 05 09

Bratislava
Tel +421 2209 02415
Fax +421 2209 02416

Suisse/Schweiz
Genve
Tel +41 (0)22 999 08 50
Fax +41 (0)22 999 08 55
Zrich
Tel +41 (0)43 255 30 60
Fax +41 (0)43 255 30 70

Sverige
Stockholm
Tel +46 (0)8 545 03 840
Fax +46 (0)8 545 03 850

United Kingdom
London
Tel +44 (0)208 770 7200
Fax +44 (0)208 770 7748

United States
Atlanta
Tel +1 404 812 0052
Fax +1 404 812 0079
VA/999-99-23/090101/EN by Krauthammer

Praha
Tel +420 296 508 470-1
Fax +420 296 508 472

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