The history of Corporate-Consulting:
We can often hear people using the term consulting, but let’s ask ourselves the question what Corporate Consulting really means and where it comes from?
The first management consulting firm was created in 1886 by Arthur Dehon Little, and initially specialized in technical research. However, Arthur D. Little refused to follow the general trends when the field he had created started to grow — according to his opinion — on much too homogeneous standards.
The first management consultancy to serve both industry and government clients was Booz Allen Hamilton, founded in 1914, while the first modern, pure management and strategy consulting company was McKinsey & Company. Marvin Bower, the Mckinsey’s CEO from 1950–1967, later developed the ‘professional’ status of consultants, focused on top MBA & Law graduates.
Later on, with the DuPont Company, the departmental structure was born. They reshaped their organization according to the different products: explosives, stains, and paints — opposed to the former structure based on functions: sales, production, R&D.
While from the 1940s to the 1960s, consulting firms contributed to the rise of multi departmental structures, from the mid-1960s, they started to sell strategy, rather than structure. By the end of the 1980s, consultants played a whole new role in firms: they would legitimize their strategy. The growth of strategic consulting led to the unification of practices or, how Paul DiMaggio and William Powell, called it, to an institutional isomorphism.
It is interesting to notice that until the mid-1960s, a firm would never recognize that it hired consultants, that would mean it was going through hard times. European firms were the first to publicly announce that they had hired American consulting companies, with an aim to give clear warranties of their legitimacy.
It is important to remember that consultants covered two principal functions:
- Bringing information
- Supporting legitimacy
Their role was to draw conclusions from observations and information they had and transpose these from one organization to another. This is where their advice to the companies which hired them came from.
What Corporate Consultants Bring to the table?
Expertise:
The main values of consultants include their knowledge, expert skills, and influence. Because consultants work with a variety of businesses, they may have a much broader and deeper knowledge of business trends, industry challenges, and new technologies and processes than internal employees.
In fact, according to Harvard Business School, consultants are fundamental in disseminating innovation and new knowledge within their industries.
Cost Savings:
When you hire a consultant, you pay only for the services that you need, when you need them. This can provide substantial savings over hiring a salaried employee with the same level of expertise to complete similar tasks.
Further, consultants in multiple areas—lean manufacturing, proactive funding, financial planning, etc.—can identify areas where you are currently spending more than you need to and help you cut costs.
Time Savings:
The experience of consultants means that they know best practices already. For example, a lean consultant can look at a client’s manufacturing process and very quickly identify inefficiencies. With a consultant, there is no need for business owners to reinvent the wheel or lose valuable time to something that can be completed by an expert contractor.
Objectivity:
Consultants provide a useful distance from business challenges; they are not emotionally invested in operations in the same way that business owners are and they can more easily identify and address challenges, whether the issue is implementing a new technology or completing a merger or acquisition.
The consultant’s objectivity can be especially important in family-run businesses, where dynamics could be emotional and core problems more difficult to discuss.
Customization:
Consultants do not offer a one-size-fits-all solution. Their value comes in learning about each client’s business and goals and tailoring advice and strategy consulting to the specific challenges that the business faces.
This customization means that a consultant’s solutions are much more effective than generic advisory services. For example, a legal consultant can select compliance requirement for which your business is clearly eligible and has to comply with.
Unsure about Hiring a Business / Corporate Consultant?
Despite the benefits of business consulting services, some business owners may be wary of engaging them. Researcher Lance Lindon has complained that consultants “would borrow our watch to tell us what time it is.” That is, some business owners may feel that consultants cannot tell them anything that they don’t already know. Other business owners and managers may reject consultants out of a discomfort with sharing the business’s problems with an outsider.
However, both concerns can be alleviated by choosing the right consultant for your business, one whose expertise will make a real difference to your firm’s growth.
Choosing the Right Consultant:
Select a consultant with a proven record of results. You might speak to other business owners and managers in your circle and see if you can get a recommendation.
You can also dig into the backgrounds of potential consultants through their websites and social media sites. Who have consultants worked for and what is their educational background? How long have they been in business? Such information will help ensure that your chosen consultant is a qualified expert who will provide concrete results.
As well, in choosing your consultant, remember that the best consultants meet both the technical and psychological needs of their clients.
The Journal of International Management Studies identifies the following additional key soft skills for consultants:
- Capacity to cognitively collect, synthesize, and analyze information about a business.<
- Empathy for the client’s situation.
- Discretion about the client’s operations.
- Adaptation to the client’s readiness for change and available resources.
- Ability to “read” the client’s environment and fit in.
Consultants should understand your motives for engaging them and should approach the consulting work as a partnership. Development of this partnership can be the key to a business owner saving time and money and reducing stress while positioning the company for longevity and success.