Business and Project Consulting

Dr. Fred Mugambi MwirigiJKUAT

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Overview

The operating environments of different businesses are increasingly becoming complex and dynamic.

It is now much more difficult for managers and business owners to keep pace with this complexity and change as far as their decision-making and implementation is concerned.

More and more business concerns are now seeking consultancy services from business specialists.

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Contd.

Consultants are on the other hand developing consulting services tailored to meet the ever-changing needs of various firms and projects in a bid to remain relevant to the business community.

Consultancy is, therefore, also becoming increasingly complex, specialized, scientific and professionalized.

This trend is likely to rise to significantly higher levels in the coming years.

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Overview contd.

Every business/project manager is primarily concerned with promoting the firm’s or project’s basic reasons for existence (e.g. profit and growth) but many of them lack the capacity to implement this concern.

It is this need that consultants are equipped to meet. It is, however, not only illogical but also uneconomical for projects to maintain permanent consultants in their employment.

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Overview contd.

Consultancy services may be required:1. If the project/business faces definite difficulties

e.g. a drastic reduction in sales2. If it detects uncertainties and is unsure how to

position itself to meet them3. If it wishes to make a radical departure from its

current position (either in terms of increasing investment, changing its mode of operation or even changing its mode of operation)

4. For periodic check-ups to detect hidden pitfalls and evaluate performance

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Overview contd.

Consultancy is not cheap but neither is success. The cost of using consultancy services should hence be analyzed against the long-term benefit that could emanate from such an endeavor.

A month’s consultancy process may be all that a collapsing project may need to grow into a multi-million concern.

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Consultancy Defined

What is Consultancy?

Fritz Steele-Consulting is any kind of providing help on

the content, process, or structure of a task or series of tasks where the consultant is actually not involved in implementation the task.

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Consultancy defined contd.

Peter Block-Consulting is the process of trying to

improve or change a situation without necessarily having direct control over the implementation.

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Consultancy defined contd.

Larry Greiner and Robert Metzger-Consulting is an advisory service contracted for

and provided to an organization by specially trained and qualified persons who assist, in an objective and independent manner, the client organization to identify management or business problems, analyze such problems, recommend solutions and help, when requested in the implementation of solutions.

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The latitude of consulting

Consulting covers all the majors areas of a project.

Some of the main components of consulting include:

1. Policy development

2. Analysis of project processes

3. Planning

4. Training

5. Counseling 10

The Main Concerns of Consulting

Consulting is in itself a very broad Every area requires some kind of professional

intervention in the way of consulting services. In projects, consulting mainly concerns itself with the

following areas:1. Functions and processes of management- business will

mostly seek consultancy services in the following areas: Methods of production/production management e.g.

JIT, TQM, Business Process Reengineering (BPR) Project administration Financial management Human Resource Management General business concerns Others

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Concerns of Consulting contd.

2. Problems and challenges faced by management: these could either be peculiar to that type of business or general in nature. Their range is extremely wide. They may include high costs of operation and production, poor productivity, inefficient technologies or even marketing problems.

3. Systems development and improvement: many businesses suffer the problem of uneconomical or simply unworkable systems. This particular concern may cover areas such as MIS and general informational structures. Other business/organizational aspects that may warrant the intervention of a consultant are the links/bridges of various components of the said systems such as technology and equipment that make the systems work.

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Concerns of Consulting contd.

4. Organizational performance and change: change is the only constant. Organizations face continuous change that impacts either negatively or positively on the overall performance, depending on how that change is managed.

5. Sectoral consulting: some business/project consultants exist to handle specialized business concerns such as financial investment or E-commerce or even M&E

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Phases of Consulting

1. Entry

2. Problem and Purpose diagnoses

3. Action Planning

4. Implementation

5. Termination

6. Follow-up

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Phase One: Entry

Initial Contact (official- at client’s premises)First Meetings (rapport building, process planning) Preliminary problem diagnosis (broad and general)Defining the Client’s Involvement (stage based,

intensive, extensive, etc)Preliminary Information gathering (broad and

general) Review of terms of Reference and Proposal Assignment Strategy and PlanThe Consulting Contract (Verbal contract, Letter of

agreement, Written contract, Psychological contract)

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Phase Two: Problem and Purpose diagnoses

It is the process of examining the problem faced and the factors and forces that are causing and influencing the problem and the eventual preparation of all information needed in order to decide how to find solutions to the problems.

The process of diagnosis should start with a clear conceptual framework.

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Problem and Purpose diagnoses Contd.

During the diagnostic process the consultant should limit himself to selected data, remain focused on the purpose of the project and incorporate other factors that may not be possibly captured in the information and data collected.

During the first phase (entry) the problem and purpose definitions arrived at are general in nature, hence vague. These, however, form the basis upon which the consulting contract is signed.

It, therefore, becomes important to restate the problem and purpose of the consulting assignment more specifically with the client at the start of the diagnostic phase.

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Problem and Purpose diagnoses Contd.

Purposes: Defining the purpose for which you are working on a

problem helps the consultant to employ his efforts in areas where he can make the greatest impact.

A number of purposes should be listed – from very broad to very specific, immediate and not very immediate, etc. It is then important that out of the consultant identifies the focus purpose. This is the most encompassing/important among the array of purposes listed down.

Some purposes may include increasing profitability, reducing customer complaints, increasing quality of products/services and improving customer satisfaction. In this case the most encompassing is improving customer satisfaction.

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Problem and Purpose diagnoses Contd.

Problems: There is a problem if there exists a disparity between

the real and the desired. The client’s problem can be identified using five principal dimensions:

1. Substance of identity – the content of the problem must be fully defined and the various symptoms described (eg, is the problem low performance or lack of investment ideas?)

2. Organizational and physical location of the problem

3. Problem ownership 4. Absolute and relative magnitude of the problem5. Time perspective

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Problem and Purpose diagnoses Contd.

Common mistakes in problem identification:Mistaking symptoms for problemsPreconceived ideas about the causes of

problemLooking at problems from one technical

viewpoint onlyIgnoring the perception of the problem in various

parts of the organizationUnfinished problem diagnosisFailure to clarify the focus purpose

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Problem and Purpose diagnoses Contd.

Data Collection:The consulting assignment cannot be

successful unless a considerable amount of relevant facts is collected and used to identify the problem. This array of facts gives the consultant a clear picture of the business and its current situation.

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Problem and Purpose diagnoses Contd.

Factors to consider when collecting dataContent of dataDegree of detailPeriod of timeCoverage

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Problem and Purpose diagnoses Contd.

Ways of Obtaining Data1. Retrieval of Recorded Data2. Observing3. Special Reports4. Employing Questionnaires5. Interviewing6. Data-gathering Meetings7. Employee Attitude Survey8. Estimates

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Fact Analysis:Fact analysis involves correctly describing the

reality, establishing what can be done to improve present reality, establishing whether the client has potential to do it and identifying possible benefits of the change.

Fact analysis evolves to synthesis. Synthesis is the process of building a whole from parts, drawing conclusions from fact analysis and developing action proposals.

They both should run concurrently i.e. theoretical knowledge and practical experience should help in synthesis while still analyzing the facts.

Hence deduction or induction methods are used.

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Editing Data:

Before it is used in analysis data should be screened and put in usable form. This may include checking their completeness verifying clarity, eliminating or correcting errors and making sure that uniform criteria were applied in data gathering.

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Classification: The main criteria used to do this are: time, place (unit),

responsibility, structure, influencing factors etc. Classification under time indicates trends, rates of

change and periodic (or random) fluctuations while classification under place indicates problems of various

parts of the organization. Classification under responsibility shows the part of the

organization responsible for different facts and events. Classification under structure could be carried under the

subheadings employees, materials, products, plants and equipment, customers, etc

Classification under influencing factors looks at factors that cause a variable of machine stoppages is caused or influenced by lack of raw materials, break in energy supply, lack of spare parts, absence of workers, etc.

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Analyzing Organized Data:

Data prepared and organized by classification are analyzed to identify relationships, proportions, and trends.

Various techniques such as statistics techniques (eg averages, dispersion, correlation, regression), mathematical modeling, graphical techniques, etc are used.

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Other ways/tools of analyzing data/situations

Force field analysisComparison of different

variables/phenomenaRatios Causal analysisFuturistic analysis

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PHASE THREEACTION PLANNING

Action planning is the third phase in the consulting process. It incorporates the following: Developing solutions Evaluating alternatives Proposals to the client Planning for implementation

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Continuity between diagnosis and action planning is critical in the consulting process.

However the approach and methodology between the two is different.

Whereas in diagnosis one’s focus is on analytical work and finding more date in action planning focus shifts to creativity and innovation in a bid to come up with something new.

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Importance of client involvement It familiarizes the client with the approach taken and

wins his agreement with the alternative solutions arrived at.

The consultant needs the contribution of the client organizations talents in the process of action planning. Without this the process would be rendered ineffective.

The client’s personnel can do a great deal of design and planning work with the consultant thus reducing the costs of the project.

Participation of the client organization generates commitment which is so critical especially at the implementation stage.

The action planning phase provides a new range of learning opportunities for the client.

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Searching for Alternative Solutions

It is the client expectation that the consultant will help find the best solution to the problem under study or propose ways of taking up new opportunities.

The reality however is that a problem is likely to have many possible solutions, some of which may not be known to the consultant.

Consultants operate in a rapidly changing environment and new problems may defy old approaches.

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Contd.

The objective of this phase is to search for information on possible solutions to the problem, identify feasible alternatives and subject them to preliminary evaluation before starting detailed design and planning work on the best proposal.

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Understanding the problem

Before searching for solutions to a problem the client needs to understand the nature of the problem. The following basis can be used to analyze the nature of the problem.

Its technical characteristics – functions areas, techniques to be used or methods to be changed.

Its complexity – technical, financial, human and other aspects of management involved, its importance to the client organization, its need to respect sectoral technical standards, etc.

Its degree of newness – are the client and consultant familiar with the problem?

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What solution?In deciding how to focus the search for feasible solutions the client may

pose questions such as: What should the new solution achieve? - in terms of basic purpose,

other purposes, level of performance, quality of output, etc. How will the need solution differ from the present? – difference

viewed in terms of products, services or activities, methods, systems, equipment, location, ways of managing, etc.

Are the effects likely to last? Where could solutions or ideas be found? - in the same unit, the

same enterprise, business partners, friends, literature, consulting firms, research institutions, etc.

What difficulties may arise? - technical problems, managers or staff resistance, work hazards, over production, quality standards, shortage of finance or raw materials, customer reaction, etc.

Who will be affected? - specific employees, management, etc. When is the best time to change? – during holidays, end of season,

as soon as possible in several stages, etc.

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Critical Competences in Action Planning

The consultant can draw from one or all of the following competence during action planning to enhance his performance:

ExperienceCreative thinkingFuturistic orientation

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Experience He should consider methods used elsewhere in previous

assignments, and knowledge derived from such sources as: previous clients, consulting organizations files and documents, colleague consultants, literature, producer of equipment who may have improved them as a result of similar conditions, staff in other departments of the client organization other organizations, etc.

The consultant should avoid reinventing the wheel and make sure all available experience is identified and considered so that the client gets the best possible advice/solution.

He should avoid leaving too heavily on himself and go out in search of opinion from those who might even be better than him in specific areas.

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Critical/creative Thinking

This is the process where the consultant and the client come up with completely new approaches having realized that experience is inadequate in solving the problem.

Creative thinking is also defined as the relating of things or ideas which were previously unrelated. Here, rigorous analytical process, initiation and imagination come into play.

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Critical/creative Thinking contdThese are five stages in the creative thinking process:

1. Preparation – gathering all know facts, applying analytical thinking as far as possible and defining the problems in different ways.

2. Effort – divergent thinking to generate multiple ideas, concepts and approaches. It leads to possible solutions or frustration, both of which are important in creative thinking and the production of good ideas.

3. Incubation – leaving the problem in the subconscious mind for some time. This helps pick new ideas to support problem solving.

4. Insight – illumination of the mind that brings forth possible solutions.

5. Evaluation – analyzing ideas advanced to find possible solutions.

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Techniques of creative thinking1. Brainstorming – a group of 8 – 12 people sit together and

wildly produce ideas. Quantity and not quality is the concern here.

2. Synthesis – a group of 9 people sit together, the problem owner explain the problem to the group, then the group suggests a possible solution, it is analyzed by the “problem owner” who says what he likes or dislikes about it after which new suggestions are put forward and analyzed until a solution is found.

3. Attribute listing – the main attributes of a tangible object are recorded, each is analyzed and possible changes advanced e.g. a steel handle of a screwdriver could be changed to plastic.

4. Forced relationship – objects or ideas are considered together and the question advanced: “In how many ways can these be combined to give a new object or idea? Eg. An engineer could put together two house designs to come up with a third.

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5. Morphological analysis – different variables are set in matrix form and one tries to combine them in new ways. The result is a great many combinations some of which are impossible - these are discarded.

6. Lateral Thinking – analytical thinking is about going into the depth and detail of a problem. This is vertical thinking. Lateral thinking involves creative thinking which is the examination of all options, including those that appear to be outside the given problem area.

7. Checklists – these are meant to assist in the inquiry into a problem. Checking the problem against listed questions could help to arrive at different ideas.

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Contd.

In the use of all/any technique, however, these four things must be maintained:

Suspend judgment – don’t criticizeAllow free-wheelingEncourage quantity of ideasCross-fertilize – combine and improve on

others ideas.

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Barriers to Creative Thinking:

Self-imposed barriersBelief that there is only one right answerConformity or giving the expected answerLack of effort and courage to challenge the

obvious Evaluating too quicklyFear of appearing foolishRespect for authoritySuccess – impairs further innovativeness and

creativity

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Phase Four: Termination

At this stage the consultant and the client must settle all mutual requirements. These include:

1.Payment of all moneys owed to the consultant

2.Return of all organizational documents by the consultant

3.Handover of the final copy of the consulting report

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Contd.

Termination can be:

1.Mature- a consulting assignment that proceeds to its logical end

2.Premature- a consulting assignment that is terminated before its logical end due to disagreements and inadequate financing, among other reasons

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Phase Five: Follow-Up

This is the last stage in the consulting process

The client and the consultant should develop an elaborate structure of how the implementation will be monitored

Follow up is supposed to support the client during implementation by providing implementation capacity especially of a technical nature

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Thank you

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