This chapter explains the consulting engagement process by looking at the stages and steps in all consulting engagements. The advantages of understanding the engagement process is that it gives a coherent structure to every piece of consulting work, and it provides a language in which consultants can discuss engagements clearly and unambiguously. The engagement process lies at the heart of all engagements and describes the everyday work of a consultant. But the engagement process is only one of the processes a client-centric consultant must be familiar with. As well as understanding this process, the consultant should also understand some of the client’s processes.
The emphasis in this book is on client-centric consulting. Therefore I am going to position engagements into the wider setting of an organisation. An engagement does not exist in isolation, but has a context within the client business. This context can be understood by considering how a consulting engagement fits with the operations of the client enterprise. I will explain the three core processes a consultant should understand. The three processes are:
Although each of these processes is important, it is the relationship between them all that is most important to a consultant. Each process provides context to the others. By thinking beyond the engagement process you are able to give truly client-centric consulting. In addition, by understanding this context, the widest range of opportunities for additional consulting sales can be identified.
Given the wide variety of possible consulting engagements, let alone the varieties of businesses, it is not possible to define an engagement process which is accurate for every situation unless it is so high level as to be meaningless or it has so many options and ‘if-then’ type loops as to be impractical. I take a middle course and outline a process that will work in the majority of situations. I am not worried about the lack of applicability to each and every occasion. The engagement process I describe will be appropriate to most engagements, but you may need to tweak it here and there in specific situations. This should not be difficult once the basic structure is understood, as it is straightforward to tailor this engagement process to a specific situation. What remains important, irrespective of how process steps need to be adapted, is the relationship between the consulting engagement and the other two core processes. Simply being aware that the relationship is important is a good start.
The most successful consulting provides assistance that is relevant to the client and in doing so must understand the interaction between these three processes. No matter how brilliant a consultant is, if the only context they have is the limits and boundaries of the engagement they are working on, they will never be able to achieve a full understanding and completely meet client needs. The value a client-centric consultant adds is by giving appropriate consulting advice relative to the client’s processes and context.
In this section I describe the engagement process, firstly at a high level by dividing the process into three main stages (see Figure 4.1) and then in more detail by breaking the stages into nine steps.
Figure 4.1 The high-level engagement process
Successful consultants’ objectives can be summarised as winning work, satisfying clients and cultivating long-term profitable relationships. A consulting engagement goes through three stages which achieve these objectives. The first stage is associated with all the sales activities and is called the propose stage. The aim of the propose stage is to win some work with a particular client. The propose stage is ideally brief, as no client is paying consulting fees whilst a proposal is created. In practice, selling consultancy can be a protracted business. The propose stage will either result in withdrawing from an opportunity or winning an engagement. When work is won, the consultant moves into the second stage, called the deliver stage.
The aim of the deliver stage is to satisfy your client by fulfilling their needs. The deliver stage is usually the longest stage of the engagement. The propose stage can be protracted, but the deliver phase is normally more resource-intensive in terms of person-hours worked. However, it is this work that results in the fees being earned by the consultant. A profitable consultancy needs consultants to work more chargeable than non-chargeable hours during the deliver phase – including also the time spent in the propose stage. It is in the deliver phase that the consultants add the most value to the client by applying the combination of skills, experiences and capabilities they possess. The deliver phase is then followed by the final stage, which I call the close stage.
Engagements end and you want them to end, or else you are not working as a consultant. It is the successful completion of an engagement that justifies your fees. Therefore a consultant has to work in such a way that the engagement can end and so the engagement must always be focused on reaching the end point. Do not confuse selling-on, which is concerned with selling a subsequent engagement to a client, with not finishing an individual engagement. The close stage can be very brief, but it is important. One reason for this stage is to ensure any loose ends are tied up, and often there are many on a consulting engagement. The most important part of closing an engagement is to provide an opportunity to cultivate a long-term relationship with the client. An engagement will end, but a relationship with a client should not.
Once the engagement process is broken into significantly more detail than the model shown in Figure 4.1, it needs to become less generic and more engagement specific. The process followed by a strategy consultant may be quite different from the process followed by an IT consultant. However, it is possible to show one more level of detail based on the steps in a standard engagement, which is broadly applicable to most engagements. This is shown in Figure 4.2 overleaf.
Let’s briefly look at each of these steps.
To write a proposal and hence win an engagement a consultant has to find an opportunity. There are many sources of opportunities, but in the end they all derive from some unfulfilled client needs. Sometimes clients actively seek consultants to help them, and sometimes consultants come across a client who wants consultancy. On other occasions, client needs have to be teased out through ongoing dialogue and analysis. To begin with, an opportunity tends to be vague and clients may have a tangled web of issues. Consultants cannot simultaneously resolve every problem a client has, so a period of exploration and dialogue with the client, when the consultant works to focus to define the scope of engagement and a precise set of deliverables, is required. Having collected enough information the consultant must then develop a client proposition. The consultant must frame a specific offering in the form of a proposal. (The steps in propose-to-win will be described in more detail in Chapter 5.)
Assuming the client accepts the proposal, and during the frame step there is normally a period of negotiation and tweaking of proposals, so that eventually the consultant can start to deliver the engagement. A consultant will commence the engagement by performing a range of set-up activities, detailed planning and gathering resourcing for the engagement. Next usually comes collecting information about the client. The sort of questions the consultant is seeking to be able to answer are: what is the client’s precise issue? What contextual factors need to be considered? What facts must be considered when determining the recommendations the consultant will make? And so on. Having collected sufficient information the consultant then analyses it and considers what recommendations to make, and the shape and content of any deliverables. The deliverables are then created. This includes activities such as writing reports or developing final presentations. Finally, the deliverables are handed over to the client. Clients are counselled on what to do next, and receive the consultation they have engaged the consultant to give. Occasionally clients are simply presented with final reports, but normally the counsel and consult step is a time of discussion, client education and a period in which the client has time to consider and then accept or reject the findings.
Figure 4.2 The detailed engagement process
Figure 4.3 The feedback loops in the engagement process
The steps shown in the deliver phase are very general. In reality they do not always happen in such a fixed linear structure. There are feedback loops and iterations between the steps. In the consider step, it is not unusual to find you do not have all the information you require and have to go back and collect some more. Even in the penultimate counsel and consult step, a client may disagree with a finding and it may be necessary to go back into the create step, or an even earlier step in the process and produce revised deliverables. It is sometimes necessary to return to the frame step and revise the proposal because of what is discovered in the deliver stage of an engagement. A consultant typically wants to avoid too many feedback loops as it extends the engagement and can reduce the consultant’s profitability. These feedback or rework steps are indicated in Figure 4.3.
The time spent in each of these steps varies tremendously, as does the nature of the particular work. For example, if your key deliverable produced in the create step is a strategic analysis of a business, the work in the collect and consider steps will be very different than if your main deliverable is a change implementation plan. Chapter 6 will look at the deliver-to-satisfy stage in more detail.
The close stage does not need to be broken down into any more detail at this point. Closing an engagement and ensuring you cultivate your long-term relationships with the client is explored in Chapters 8 and 9.
In this section I want to relate the engagement to a client’s change process. Let’s start by discussing the change process within a client and then position it relative to the individual engagement.
Most organisations, especially commercial enterprises, exist in a state of constant change. Even when organisations do not wish to change they are forced to by commercial pressures, improvements in technology and modifications in customer behaviour and views. Even the most seemingly conservative organisations undergo some change. This change may be radical strategic modifications endorsed or even demanded by shareholders and other influential stakeholders. It may be the regular cycle of business improvements that are planned by managers, usually as part of annual target and budget setting. It is frequently the minor tweaks and enhancements made at a micro-level by individual departments on an ongoing basis. Whether it is strategic change, implementing new IT systems, business process re-engineering, six sigma initiatives, reorganisations, cultural change, cost reductions, quality improvement initiatives, expansions or retrenchments, building moves and relocations, mergers and acquisitions, modifying an individual procedure or any other form of change activity – it is all part of the relentless drive to improve the organisation.
Few, if any, managers in a business have a perspective on all of this change. In substantial organisations it is probably not possible to have such a perspective. The most senior managers are aware only of the largest initiatives, and all smaller modifications and adjustments are only perceived by them in terms of increases and reductions in the operational performance of a business.
Such a swirling mass of change is difficult, if not impossible, to encapsulate totally in a single process, especially as every organisation approaches change in its own unique way. But we can approximate to it accurately enough with a simple model of how change occurs in an organisation. This is shown in Figure 4.4.
The process shown has six stages. An individual organisation is normally working at all stages in this process simultaneously in different parts of the business, with many parallel changes going on at once. Hence one part of the business may be planning changes, another implementing changes and a third thinking about its strategy. However, if we consider an individual change we can walk through this process in a logical order. A business thinks about the future, and taking account of what is going on in the competitive environment in which it operates, the business defines some form of strategy. This strategy may exist as a tangible documented statement of the way ahead for a business, or it may be something more informal. It could just be an ever-evolving set of ideas within the heads of the senior managers in a business. We can think of strategy as the high-level change agenda for the business, but we can also think of strategy in a more modest way, as the thinking and analysis that goes on all the time in a good manager’s brain and which results in ideas for improvements.
Figure 4.4 The change process in organisations
The business will have some existing operations. By ‘operations’ in this context I mean all the day-to-day work of the organisation – purchasing supplies, developing products and services, selling and serving customers, managing staff performance and so on. The operations are performed, measured or assessed and then, taking account of the desired strategy, improvements are identified. The improvements have to be planned, whether the plan is simply the allocation of a minor improvement to a specific member of staff, or the large-scale programme plans of radical change in an organisation. Once the plans are complete, the improvements can be implemented.
During strategy, planning and change implementation the business continues to operate. Following implementation the operations should undergo some improvement. The improvement might be that some higher level of performance is achieved, or operations are more efficient or more effective, or perhaps new products and services have been launched or existing products are better targeted at one set of customers or another. Over time, by measuring performance it is possible to determine if the changes have resulted in the level of improvement expected in a business.
The measured performance of the improved operations feeds back into strategic thinking, and the whole change process starts again. The change process is ongoing for several reasons. The implemented change may not lead to the level of performance desired. Even if it does, the strategy will evolve in response to new opportunities, new competitive threats, or other modifications in the environment in which the organisation operates. Organisations, their managers and customers always have new ideas and new desires constantly feeding the change process.
How does this relate to a consulting engagement? All consulting engagements should result in a change within a client. If nothing has changed at the end of an engagement then no value has been added to the client. This change may be subtle or it may be profound, it may be short or long term, it may affect a single individual or the whole organisation. Not only do all successful consulting engagements result in change, the engagements relate to one or more steps on the client change process shown in Figure 4.4. If you are being asked for strategic advice and the advice is accepted, it will result in a change somewhere in the strategic direction of the business. If you are performing a review of operational performance and your findings are accepted, it will result in a change somewhere in the operations of the business. Obviously, consulting related to planning and implementation are directly concerned with change.
The advantages of understanding the relationship between the engagement process and the client’s change process is that it enables you to tailor your work most appropriately to the client’s underlying change agenda, and hence increases the likelihood of success. If you know why a client originally asked for your engagement, and you have an idea of what will happen once your engagement is complete, you are much better positioned to provide consultancy that is targeted to the client’s specific needs.
A second reason for understanding the relationship between the engagement process and the client’s change process is that it increases your chance of selling on. The change resulting from a consulting engagement represents only one aspect of the change within a client. Whether the client tells you or not, or even whether the client is conscious of it or not, there is always a wider ongoing change agenda in every organisation. Whatever the engagement is, it will have been initiated due to some previous thinking in the organisation, and if successful will in turn result in changes in the business. If what you are doing is only one part of a client’s change agenda, but you have an understanding of the whole agenda – or at least know a bit more than the scope of your engagement – you have much better information with which to position your services for additional sales.
Having completed a consulting engagement, there is almost always a logical sell-on to the next stage in the change process. In Figure 4.5 I show an example of how the client’s change process could be broken up into a series of four consulting engagements based around consulting service lines. The advantage of thinking in this way is that it relates an engagement to both the consulting service lines and the process of change a client is going through. This set of four diagrams shows a logical sequence of engagements. The nature of each engagement is different, the skills required to do them vary significantly, and it is unlikely that a single manager in the client organisation would be the client for all of them. But, by understanding that there is always a next step to a successful engagement, you can get ready for any sell-on by identifying the right client for the work, and pulling the necessary resources and proposal together. What makes large consultancies successful is their ability to sell a variety of work to new clients and sell on to existing ones.
The example shown in Figure 4.5 is one possible sequence of engagements. A consultant starts by being invited to a client to develop a strategy for them. The strategy engagement corresponds to the monitor and think stages of the client’s change process. This leads on to an opportunity, which the consultant wins, to perform an operational review in the second engagement. The second engagement corresponds to the operate-existing stage of the client’s change process. This identifies situations in which the business does not meet the strategic requirements. Hence a change is required. Again the consultant sells on and this change is planned and implemented with the consultant’s help in the third engagement. Finally, there is a post-implementation review to learn lessons for the next change, corresponding to the operate-improved stage of the client’s change process. From an initially successful engagement a consultant has sold on three further engagements, each of which is valuable to the client. The selling on does not have to stop. For instance, during the fourth engagement the consultancy might also offer to outsource some of the client organisation’s operations.
Figure 4.5 A possible sequence of engagements based on the client’s change process
Because the change process is an ongoing cycle, a consultant can enter this process at any point. Consider the situation in which you may be invited to help a client with some change planning. The completion of a change plan obviously leads on to an opportunity for an implementation engagement. But suppose that when you come to undertake the planning you discover that there is insufficient information to develop the plan, or you think the basic change strategy will not work. If you can convince the client of this, there is an opportunity to step backwards through the process and look at operational performance or the strategic thinking that led to deciding on the change. It is not unusual for successful consultants to sell on by showing a client that what really needs to be done is not the engagement they have asked for, but to rework one of the preceding steps in the change process.
So far in this chapter I have presented the engagement process and its relationship to the client’s change process. This is helpful, but is not sufficient to understand fully a client and position an engagement in the best way. A client may be involved in significant amounts of change, and senior managers may spend a high proportion of their time involved in change, but it is always worth remembering that clients do not exist to change. They exist to run an organisation, which is achieved by the daily operations of a business. This includes activities like selecting and buying resources, finding customers, developing and making products and services, selling products and services, providing support to customers, managing staff and finance, and so on. The enterprise may be sustained or improved by change, but will not survive on change alone. It is easy for consultants to lose sight of this, given their regular involvement in change.
The operational process is unique to an organisation, and there can be no single, useful, universal or generic representation of all clients’ operational processes. This reinforces the need for client-centric rather than generic approaches. What is important, in every situation, is to gain some understanding of the client’s specific operational process.
A good place to start is to consider the perspective of the people responsible for operating the business. To an operational manager a piece of consulting is not an important activity in its own right. Implementing change by applying a consultant’s recommendations is not an important result by itself. The only result that matters to an operational manager is achieving necessary levels of operational performance and, ideally, improving on this. Consulting is only relevant to the extent to which it helps in achieving or improving operational performance – or, with a radical strategic change, in determining that the whole direction and nature of the operations must be modified.
Consulting typically identifies and implements change for clients. The change leads to performance improvements and hence the future operational results of the organisation are achieved. Operations are done today and are about today. Consulting is done today, but is about tomorrow. In most organisations, the majority of staff and resources are allocated towards the current operations of the business, not towards thinking about tomorrow or how improvements can be made.
Even though the consultant’s work is focused on tomorrow, the work of the consultant has an impact on today’s operational process. Consulting engagements have various impacts on the operations of a business in a number of ways, including:
When it comes to change implementation, this cannot be done without an appreciation of the operations of the business. Organisations which have existed for many years are usually robust, but the work of the consultant has an effect not only within the scope of the engagement, and not only upon the wider change agenda, but potentially on the broader day-to-day operations of a business. Organisations, especially those which are large or have existed for some time, are complex entities. They are not made up from a set of stand-alone components. They exist as organisations because the different components interact and are interwoven. One process affects another; one system interfaces with other systems. The way one person works affects the way other people work and feel. Wherever a change is recommended or implemented by a consultant in one part of a business, it will usually have an effect elsewhere in a business.
A consultant should always consider the operations of a business, simply because without them the value of the consulting is limited. It is context free. It is like asking an architect for a design to improve your house without them understanding the design of your current house or how you use it.
Considering the operational process of a business may seem to make the consultant’s life harder, but it is essential for client-centric consulting. However, there is another positive business reason to undertake this. Understanding the client’s operational process provides the opportunity for additional consulting sales.
A consulting engagement only touches on one part of a client’s business. This may mean it is possible to up-sell: that is, to increase fees by extending the scope of the existing engagement to parts of the business not currently within scope. For instance, if you are a consultant who specialises in launching new products and you are working in one division of a business there may be an opportunity to help another division with launching new products as well. There may also be many opportunities to cross-sell. Cross-selling is selling other services lines to the same client. For example, you may be helping an organisation improve the way it manages staff performance management, and as part of this you identify a general weakness in budget planning and budget management. There is, therefore, a potential opportunity to sell some additional financial services. The point is that both in cross-selling and up-selling, the additional sales do not directly result from your current engagement. Your current engagement gives you information about the way the business operates and relationships that enable you to identify the opportunity and increase the likelihood of a successful sale.
Figure 4.6 shows graphically the on-sell, up-sell and cross-sell concepts.
You may think at this stage that this differentiation between on-sell, cross-sell and up-sell is not that important as it is all just pedantic variations on the theme of making additional sales. They are all additional sales, but there is a good reason for stressing the difference between the three types. By seeing the difference it encourages you to think in the broadest way about possible opportunities with your client. If the on-sell is obvious, is there any possible cross-sell or up-sell? Alternatively, the cross-sell may be straightforward, but is there any potential on-sell or up-sell? Finally the up-sell may be there to take, but is there any opportunity for on-sell or cross-sell? Successful consulting businesses increase their potential revenue streams by thinking across these sales approaches. It is not simply revenue maximisation: if you are an independent consultant who can only actually complete a limited amount of work, the more opportunities you identify, the more you can choose the work you want to do and that which you can add most value to.
An easy way to think about on-sell, cross-sell and up-sell is to ask yourself on every engagement the following three questions:
Large consulting businesses may have a more significant involvement in the operational process in a client business through the related services of interim management and in outsourcing. These are valuable and specialist services which are critical to the operations of many businesses and there can be a symbiotic relationship between them and consulting, but they are outside the scope of this book.
Figure 4.6 Additional sales from live engagement
Considering all the points in these sections, does this mean that the consultant has to be an expert in every aspect of the operational process? No. That is not required and would not be practical. However, a consultant should seek to understand enough about an organisation’s operational process to be able to position an engagement relative to this process. This is both in the client’s interest as the consulting will be more relevant, and in the consultant’s interest as it can lead to more sales. This is one main reason why experience of an organisation can make the contribution of a consultant more valuable. There are various pros and cons of internal versus external consultants, but one significant advantage of internal consultants should be their understanding of the operational process, and their ability to shape an engagement appropriately so it has the maximum positive and minimal negative impact on the business.
The impact of the consultant upon the organisation and the sustainability of any resulting change are discussed in more detail in Chapter 8. Up-sell, cross-sell as well as on-sell are revisited in Chapter 5.
If you have read this book in chapter order, you have now completed the first part made up of the initial four chapters. You should have a clear understanding of the world of the consultant and be comfortable with the central topics and jargon of consultancy. The central message is both to appreciate and be willing to expand your skills in consultancy, but also to strive continuously to put this into the context of the client’s organisation. This is at the heart of client-centric consulting. You have no business without clients and their unfulfilled needs. If you can position your services relative to real client needs and fulfil those needs, you have the makings of a sound consulting business.
