An Introduction to Management Consulting

What it is, what is the demand, what are the requirements


Welcome to this section on a management consulting overview. In this section we look at services a management consultant can provide plus what is the demand and what are the requirements. Management consultants can provide a valuable contribution to organizations so let's get started at looking at how.


What is management consulting? A good working definition involves the practice of helping organizations improve. Improvements can come in performance and meeting of objectives. A consultant can analyze problems in an organization and help develop plans for improvement.

What is the demand? The demand for a management consultant can come from the need for an objective opinion from a third party. The demand can also come due to a lack of knowledge in an organization. An example can be if an organization wants to become ISO certified. A consultant can have the knowledge to help the organization get certified.

What are the requirements? Consultants typically are aware of industry best practices and requirements. Consultants can help an organization achieve best practices and improvements. Getting back to our example of getting ISO certified a consultant can explain how to get this certification using techniques competitors and exemplars use. Another example of how a consultant can help is with raising employee morale or helping a company get a CSA compliance mark on their products. The list goes on and on. We will look at how a consultant can help with these issues. Here is a list showing a consultant can help with:

1.      Change management

2.      Coaching

3.      Process analysis

4.      Implementation of new and emerging technologies

5.      Strategy development

6.      Operational and performance improvement

We will look at important assessment areas where consultants can help. These include project management, quality, change management, interventions, process improvements, standards compliance, and organizational development. These topics are just some of where a consultant can help. We could easily expand the list. Let's also remember that there are many actionable areas for the consultant. Some of these include:

?     Industrial engineering

?     Industrial psychology

?     Management by objective

?     Operations management

?     Organizational psychology

?     Process management

?     Project management

?     Strategic management

We will just begin to look at these concepts and provide an overview.


Where did the need for management consulting come from? We can find in the late 1800's and early 1900's management consultants doing specialized research for organizations and helping organizations with their productivity and technical challenges.

In the United States the consultancy industry grew with passage of the Glass-Steagall Banking Act in the 1930s. Organizations were looking for advice on productivity, finances, and strategies. As consultancy firms showed results, they became more and more popular.

The Glass-Steagall Act prohibits commercial banks from involvement in investment banking. It was put into place as a response to the failure of banks during the Great Depression. Management consulting grew as the practice of effective management grew and interest in effective management also grew.

After World War II and throughout the 1950s management consultancy operations grew globally. Consultancies began a disciplined and analytical approach to advising on management and strategy. The demand was for advice on a range of issues including accounting, auditing, performance, and information technology, to name just a few.

Management consultants can be freelancer consulting professionals or part of large firms such as Booz Allen Hamilton, Bain, Deloitte, McKinsey, PricewaterhouseCoopers, and Ernst & Young.

Here is a list of some of the functions a management consultant can provide.

1.      Information on best practices in an industry

2.      An impartial and objective perspective

3.      An economic approach compared to using internal resources and hiring

4.      Knowledge of a specialized skill

5.      Knowledge on how to complete change management

Some of the approaches used by management consultants include:

1.      Provide an expert opinion

2.      Define how something should be done

3.      Facilitate a client to look at their organization and how to improve it and its processes and practices

Specialization of management consultants can include:

1.      Technology

2.      Operation

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3.      Strategy

4.      Executive coaching and leadership

5.      Process improvement

6.      Certification and standards compliance

7.      Sales

8.      Marketing

9.      Talent management

Some groups specialize in industries such as:

1.      Automotive

2.      Healthcare

3.      Oil and gas

4.      Retail

5.      Information technology

Additional specialization can be in human resource consulting, quality consulting, emerging technologies consulting, and education.


As a service to business management consultants can find that work is linked to overall economic conditions. The work grows and shrinks depending on economic upticks and downturns with work for freelancers growing if they are no longer with a larger consulting firm.

Big consulting firms have acquired other businesses with a trend towards mergers and acquisitions. The role of management consultants continues to evolve to reflect emerging technology trends and access to information via newer technologies.

Government consultants can also help their clients become more efficient and effective, plus better serve the public. As an example, a management consultant can recommend changes such as how best to handle rail service in a country. This can result in job losses and withdrawal of services. As another example, government agencies can hire a consultant to assist with strategy development concerning change management, procurement, and project management concerning infrastructure and other services.

Some consultants get criticized for:

1.      relying on fads and providing advice an organization cannot and does not follow

2.      providing high fees and empty promises

3.      stating the obvious

4.      bringing too few innovations

5.      offering generic strategies and plan

6.      placing their own interests before that of the client

7.      firing employees to cut costs

8.      not providing customized information


Let's take a closer look at the types of services a management consultant can provide, at least, in general terms. The services can cover a wide variety of projects. Here are some of them.

Help an organization such as the IRS with better customer service

The Internal Revenue Service hired a management consulting firm to help repair a reputation for poor customer service. The management firm helped with both the reputation and modernization. One of the recommendations from the management consulting firm was to reorganize employees into categories to better serve customer. The categories include business, charities, and individuals.

Recommend improvements for a state run railway service

An Australian government agency hired a management consulting firm to advise on improvements in running the state railway service. The report recommended removal of jobs and withdrawal of staff and services. The report also recommended removal of sleeper trains and some of the freight service.

Assist with homeland security

The U.S. Department of Homeland Security contracted with a management consulting firm to run intelligence operations.

Work with the U.S. National Institutes of Health

The U.S. National Institutes contracted a management consulting firm to share cancer data between NIH funded study centers.

Assist the countries such as the United Arab Emirates (UAE) with security issues

The government of the UAE contacted a management consulting firm to create an agency similar to the National Security Agency for that country. The consulting firm is teaching teaches data mining, Web surveillance, and digital intelligence collection.


Management consulting companies adjust their services to the demands of the marketplace. Here is an idea of what kind of demand mix a management consulting company could have today.

?     Assurance can include financial audits, financial accounting advice, fraud investigation, dispute services, and sustainability services, all accounting for 40% of demand for services

?     Tax services can include business tax compliance, human capital, global trade, indirect tax, tax accounting and risk advisory, all accounting for 25% of demand for services

?     Advisory consists of IT assurance, risk, performance improvement, and actuarial services, all accounting for 25% of demand for services

?     Transaction advisory service involves preserving, optimizing, investing, and raising capital, all account for 10% of overall demand for services


When an organization is looking to hire a management consultant, what requirements would apply? One option is to look for a management consultant who is a Certified Management Consultant (CMC). The requirements for getting such a certification should give a client confidence in the abilities of the consultant and what they can offer. The areas of evaluation for a CMC includes:

1.      Competence

2.      Ethics

3.      Results

When an individual receives CMC certification it means the person has received positive input on client satisfaction surveys, passed rigorous exams covering consulting competencies and ethics, and getting through a panel interview of experienced CMCs. Here are some of the qualities a CMC should possess:

1.      Evidence of results – this comes from client testimonials, references, and repeat business

2.      Evidence of excellent performance - this is required to maintain CMC certification

3.      Adherence to ethical standards – this a candidate demonstrates by completing a written and oral exam covering fiscal responsibility, commitments to clients, and commitments to the public

4.      Evidence of experience in the field – a minimum of three years of successful results and continuous consulting are required to achieve the CMC certification

5.      Access to a network – this an be helpful when referencing client issues

A client who works with a CMC professional should know that that CMC certification means the consultant has a record of delivering results to clients and a commitment to standards of competence, ethics, and customer satisfaction.

This consulting certification is ISO-accrediting and recognized by the insurance industry as reducing risk.


Coaching provided by a management consultant can involve a form of learning and development where a person called a coach supports a client or learner. The skills of the coach from a management consultant perspective can include:

1.      Communication skills

2.      Listening skills

3.      Questioning skills

Business coaching involves a type of human resource development. It improves the personal effectiveness of an individual in a business setting. This can also be called executive coaching, corporate coaching, or leadership coaching. Coaches help a client achieve professional goals. This can include:

1.      Managing career change

2.      Performance management

3.      Professional communication

4.      Dealing with conflict

5.      Building effective teams

6.      Improved strategic thinking

An industrial organizational psychologist can be an example of executive coach. While the consultant can act in this role of executive or business coach, a senior leader in an organization can perform the same function. Executive coaching can be worthwhile as it can have a positive impact on workplace performance.

Coaching ethics and standards is another possible job a management consultant can do.

Let's also point out some differences in consulting and coaching.

1.      A consultant is regarded as an expert and problem solver. A coach helps a client solve their problems and make positive change.

2.      A consultant brings technical expertise and experience to a project. A coach has a focus more on relationships in solving problems in a larger scope.

3.      A consultant typically works with teams. A coach typically has a focus of work on a one on one basis and can coach more than one person individually.

4.      A consultant has a focus on a project with a particular objective. A coach supports clients to help them meet objectives.

5.      A consultant tends to work on a problem and tries to overcome weaknesses. A coach concentrates on strengths and how to build on them.

6.      A consultant gathers data and provides detailed information on action items. A coach has a focus on facilitation growth.

7.      A consultant works typically on a contract and short time basis on a project. A coach works over a longer period of time with contracts that a renewed and the focus is long term.

8.      A consultant can focus on recommendations but does not do the work. A coach has more involvement in making change


In this section we looked at the topic management consulting and answered questions such as what are management consulting service, what is the demand for the service, and what are the requirements. Let's review that management consulting can apply to many industries including apparel, financial services,  energy, utilities, oil and gas, banks, food and beverage, manufacturing, media and entertainment, retail, science and technology, government, services, and transportation.