Whether it’s the excitement of growth opportunities, anxiety sparked by a new competitor in the market, or concerns over financial difficulties, companies constantly deal with change.
In circumstances where in-house skill and expertise can’t provide adequate guidance to deal with required adjustments, consultants are called in. Based on the needs of an organisation, specialists can range from technological to marketing to legal. The types of consultants most commonly enlisted are in the areas of strategy and management consulting.
There can be some overlap in the scope and responsibilities of each type of consultant, but there are some fundamental differences. Organisations should to be clear on their needs so the right person can be brought in to address them.
Key distinctions
Abdullah Verachia is a senior faculty member at GIBS, and chief executive of The Strategist, a strategy and innovation consulting firm. “Strategy consulting is a subset of management consulting,” he explains. “Management consultants are more broad. They look at the operations and efficiencies of a business, whereas strategy consulting is more boutique and specific. It’s a niche skill that looks at where an organisation is going, how it's going to create or capture value, and what systems will be able to deliver.”
Verachia highlights that strategy consultants should not get involved in the day-to-day administration of a company because this can take away the strength and capabilities of the people who work in them. “I get very weary when strategy consultants go and take over the running of an organisation. We must delineate between the running of the organisation and rather guiding, steering, managing conversations, and assisting organisations in terms of building a coherent plan for how they create and capture
value.”
Trained as a mining engineer, Terry Twala is a GIBS MBA graduate and chief executive of Philanabo Consulting. His company provides services such as project management, social labour plans and stakeholder engagement to mining companies. He says the key differentiators between strategy and management consultants are the levels at which they operate, the time horizons they cover and their deliverables.
“Strategy requires a medium- to long-term view while management consultants are concerned with short-term goals. Working at the executive level of an organisation, strategy consultants impact organisational orientation and capability while management consultants work at the tactical and operational levels and are expected to deliver tangible short-term results,” says Twala.
A project outline for a strategy consultant might, for example, task them to identify trends in the market and find a niche for the company in that market. They’d do an assessment of the competition and of the client's company. This might entail facilitating analysis of both the internal and external environments of the organisation, so that opportunities and threats to competitiveness and internal strengths and weaknesses could be understood and dealt with adequately.
The strategist would then facilitate the definition of the desired state and the current state with the aim of quantifying the gap between the two. High-level action plans would be formulated and targets set at a strategic level. They would work with the company to formulate a strategy comprised of decisions and actions.
Their scope tends to end at this juncture, whereas this is where the management consultant might begin. Execution of strategy, monitoring of implementation, processes and systems for delivery fall within the ambit of management consultants.
Conventionally, companies will choose which expert they most need. But sometimes, they do require both types. In these cases, each consultant must have their own phase.
The strategy consultant should be employed first to help with the grand plans. The organisation may want to implement their strategy on their own at first and call in management consultants to help with areas of weakness. “The management consultant should follow the strategy consultant so that they implement the latest and most appropriate strategy,” advises Twala.
Whichever type of consultant an organisation may choose to enlist, a benefit they bring is their outsider perspective. Unlike founders, leaders or current staff, they aren’t likely to be emotionally invested. This makes it easier for them to properly identify challenges and provide solutions in the best interests of a business.
Aid is at Hand
Boost your knowledge and enhance your practice with these easily accessible resources.
ON STRATEGY:
Book: On Grand Strategy by John Lewis Gaddis
Having lectured on the topic for decades, the Pulitzer Prize-winning author has distilled his teaching into a comprehensive book. He covers strategic theory and practice from the ancient world (Herodotus and Sun Tzu) to more recent times (Queen Elizabeth I and Franklin D Roosevelt).
Podcast: Masters of Scale, hosted by Reid Hoffman, the co-founder of LinkedIn
Episodes include "How to Find and Keep Your True North" with Susan Wojcicki, chief executive of YouTube, and "How to Take on Goliaths and Win" with Drew Houston, co-founder and chief executive of DropBox.
TED Talk: Your Strategy Needs a Strategy, delivered by Martin Reeves, chair of the BCG Henderson Institute
Running at just 11 minutes, this video is a succinct but impactful solution to one of the most common problems: when a long-term plan becomes out of date shortly after conception. Drawing from five patterns of success, Reeves offers a new strategy for devising and executing effective strategies.
ON MANAGEMENT:
Book: Radical Candor: Be a Kick-Ass Boss Without Losing Your Humanity by Kim Scott
Drawing from her experiences as a top manager for companies such as AdSense and YouTube, Scott shares guidelines on how to be an effective leader. The book espouses her belief that good managers truly care about their employees while also being able to challenge them appropriately.
Podcast: Moonshots, interview with Ken Blanchard
Blanchard talks about his bestselling book, The One Minute Manager. He recounts the three techniques of an effective manager and talks about the value of checking in and scheduling reviews rather than assuming everything is okay. Blanchard posits that good management is about mindset and behaviour.
TED Talk: Management Lessons from Chinese Business and Philosophy
Management consultant Fang Ruan recounts fascinating case studies of businesses that are thriving in China right now. These include the founder of an insurance company with a management style she calls "steering wheel", and the founder of an internet company who values a collaborative work environment. She also talks about the founder of a dumpling business who, despite Ruan’s pointed question of "Are you sure?" when she first heard the idea, developed and implemented what he describes as a "two-hat approach" for his regional managers.
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