Adroit Market Research - Industry Insights

Management consulting is the exercise of assisting companies to help improve performances by external resources. Companies work with various skilled and equipped team to get advice and access to consultant expertise and knowledge. In the past 5 decades many consulting companies have been launched that are helping companies grow by better management practice. This document studies the various ways in which management consulting services is impacting the businesses and some basic information about the same. Along with studying the same, the document would also study a success story.

What is it all about?

A management consulting service consist of group of pe

Management consulting is the exercise of assisting companies to help improve performances by external resources. Companies work with various skilled and equipped team to get advice and access to consultant expertise and knowledge. In the past 5 decades many consulting companies have been launched that are helping companies grow by better management practice. This document studies the various ways in which management consulting services is impacting the businesses and some basic information about the same. Along with studying the same, the document would also study a success story.

What is it all about?

A management consulting service consist of group of people who are skilled and trained to help people overcome challenges in their organizations. These are organizational challenges that concentrates on leadership and managerial challenges. The consultants are skilled in analytics and communication, many of them work with data to put together a story and recommend clients. It works through a series of interviews and sessions taken along with executives to ensure that the key players understand it. Typically consulting service providers are experienced about the various best practices being followed by corporates and companies. However, what policies are best for one company may not be so for another company and hence the need of management consulting services. They observe, understand, analyze and suggest organizations for better growth.

The basic principle of creative consulting contains of three types, viz, Consultants (Quarterbacks), Academics/thought leaders, Executives (Gatekeepers). The executives are those ready to experiment with new ideas and create justifiable value. The consultants create a consulting organization that will deliver new ideas and practice through different methods. The academics create and communicate various ideas and plan innovations accordingly. Further they also help to pre-plan and visualize the outcomes of the same.

Boston Consulting Group

Bruce Henderson established the company that further grew to Boston Consulting Group (BCG) in the year of 1964. His aim was to improve performance of companies that have issues and are looking for improving performance of companies. During the World War II he studied various shipbuilding companies and observed how they handled costs during the period. He believed that these strategies would suit other industrial sectors.

Henderson worked with top graduates from renowned business schools that helped in application of his ideas across companies. The companies also were ready to work and test new ideas hoping for better productivity and results. The company started with Black & Decker organization. Here the CEO worked with the logic of rapidly building capacity and brand experience of one particular product at a time. This further helped in increasing the market share and hurdling any potential competition.

John Clarkeson, who started working as a consultant and later became CEO at BCG, worked with General Instruments to show how the experience curve would impact in total production cost and not only just the labor cost. The work done by BCG’s with Texas Instruments demonstrated that the experience curve applied at component levels permits pocket-friendly options to be shared across various multiple products. This logic, later became the Moore’s law which is application of the experience curve to semiconductors, reducing the cost by 50% in 1-1.5 year. By sharing his ideas he worked towards improving the way companies worked. He is known for writing almost 400 issues of perspectives.

As the client portfolio of BCG grew and diversified Henderson and senior BCG consultants developed another big idea, the Growth Share Matrix. The matrix provided a framework for various companies to classify their business units with reduced market share and reduce the chances for failure. The high market share companies were classified as starts and would receive adequate investment till growth slowed. Companies that have high market share and lower growth rate were termed as cash cows, with reduced investment funds that generate reduced market share and have high growth chances.

Similar to the experience curve, the growth of share matrix across companies that included Union Carbide and the Mead Corporation. They were suggested to take actions they can undertake across their diverse business units. Thought the growth matrix was simple it worked as the foundation concept for corporates and contrasted business unit strategies. As done earlier the idea was made public with the help of articles and conferences that were organized by companies. For the conference the Henderson Company invited senior executives of companies that have worked with them to explain their individual experience. This further helped the company to grow and create trust among the users.

The good circle of idea generation by Henderson and BCG senior thought leaders, along with proper implementation which resulted in revenue growth, sustained for almost 15 years. The setback came when in the year of 1973, Bill Bain, the most experienced consultant left and started his own firm Brain & Co.

Conclusion:

Management theories are restricted as they cannot be tested in laboratories; the results are known only post implementation and testing in real-life scenarios. For this to happen the traditional boundaries need to be broken and the ecosystem should be of creative people, with academic leaders and pioneer executives who are willing to adapt to innovative ideas. It is important that the leaders understand that adaption to the changing market demand is the only way to grow in the industry.