Concepts on Consulting short version v 5

Concepts on Consulting

Support Material for the ALP Course

Jones Graduate School of Business, Rice University

Welcome to Consulting

2

We are going to do our utmost tomake this experience profitable foryou and the Clients, enjoyable and true to the experience gained in major consulting companies

Consulting is not easy, but it isrewarding and you can gainenormous experience and insightinto top level business thinking in a very short period of time

It requires commitment and dedication plus a willingness tosacrifice oneself for the Client and the Team

This course is an attempt tointroduce you to the basics of consulting and give you some basictools and a roadmap

Thanks and enjoy the course

We welcome you!Jones Graduate

School of

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Agenda for this presentation

3

Part I

Introduction

The presenter

Architecture and

Accounting

Conceptual Framework

Why do companies hire

consultants?

Consulting styles and

models

Hypothesis based

Consulting

Key Frameworks

Part II

The Consulting Process

Part III

Presenting your

Recommendations

Conclusions and closing

thoughts

Jones Graduate

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Part I



Introduction

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The Presenter, Consultant and Architect Lin Giralt has a 30 year career helping companies improve their performance.- both as a

Consultant (20 yrs) and as an Agribusiness Entrepreneur, Sales and Operations Manager and Construction Manager for over half a dozen buildings

He joined Booz Allen & Hamilton in 1992, rising to Senior Associate and Project Manager in the Andean Region. He founded Lambda Consultores in Caracas in 1997 and Lambda International Consultants in Houston in 2010

Mr. Giralt's specialty is linking strategy with operational improvements to ensure that strategic thinking is integrated with organization, business processes and the client IT platform.

Valuation of SME’s and integration of Consulting recommendations to Value Based Impact is a special area of interest

Among the many companies that he has consulted to are: a leading softdrink manufacturer, a leading valuables transportation company, dealers for two prominent German automobile companies, a leading Car Rental franchisor and various telcos, banks and financial companies. His practice has been divided between Fortune 5oo firms and family owned companies

He has an MBA from The Wharton School of the University of Pennsylvania, a Master's in Architecture from Rice University and a B.A. in Architecture and Urban Planning from Duke University

He has been active in community activities, having been President of the PTA at his children's school, President of his Homeowners Association, was Board Member of the Wharton Club of Caracas, and President of the Duke Club of Venezuela. …there were only a couple of Rice grads in Caracas, but he currently serves on the Rice University Graduate Alumni Committee

He is married with two college age children. He is an avid golfer, squash player and reader of military history, strategy and political biographies.

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Architecture and Accounting have a common uncle

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Fra Luca Bartolomeode Pacioli

Accounting and Merchant Arithmetic

Tractatus mathematicusad discipulos perusinos

(merchant arithmetic and algebra)

Summa de arithmetica, geometria, proportioni et

proportionalita

(double entry ledger system)

Mathematics and Magic

De viribus quantitatis

Architecture and Proportions

De divina proportione

www. wikipedia.com

Some other links between Architecture* and

Consulting (1)

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Discoverproblems

and needs

Researchinformation

and getdata

Developpreliminarysolutions; Test and evaluate

Modify and evolve

Providesolutions

1. Similar Iterative Processes

R

e

v

i

e

w

R

e

v

i

e

w

R

e

v

i

e

w

R

e

v

i

e

w

Stay close to your client to keep your client

* and other creative professions

Some other links between Architecture and

Consulting (2)

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1I . No right or perfect answer – just approximations

ArchitectureMultiple design ‘schools of

thought’, methods and styles

ConsultingMultiple frameworks for

analysis and different firms


Consulting (3)

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1II . Don’t fall in love with your answer

– there is always a better one coming

Architecture

Evolution that incorporates building

technology and new lifestyles

Change in consumer tastes and

need to incorporate current visions

Consulting

Evolution that is impacted by

technological change and change

in consumer lifestyle

Development of new frameworks

and evolving organizational

paradigms


Consulting (4)

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IV . Long hours of analysis and in reviewing and

designing solutions

Architecture

Reviews of designs and changes

that require redesigning many inter-

related parts

“God is in the Details”

Consulting

Data review and rejection of

previously assumed hypotheses

require a reevaluation of the entire

direction of the project

“The Devil is in the Details”


Consulting (5)

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V . Build around certain solid principles

Architecture

Form follows function

– Louis Sullivan

Less is More

- Mies Van der Rohe

Architecture depends on Order,

Arrangement, Eurythmy, Symmetry,

Propriety and Economy

- Vitruvius

Consulting

Macro and micro economic principles

Theories of strategy, financial analysis,

marketing and organizational behavior

plus the impact of technology on

business

It is our intention to help you understand these


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Consulting styles and models

Hypothesis based Consulting

Key Frameworks

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Consulting Styles and Models

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Why do companies hire consultants?

Strategic Provide an objective third-party viewpoint on strategic planning,

marketing, operations, capital structure and other long term issues

Act as an impartial third party in evaluating organizational functions, operations, and results Be the outside resource that acts as an 'agent for change‘ as BPR Project

Manager

Perform valuations and strategic analyses prior to M&A’s Evaluate and develop Business Plans

Evaluate changes in performance subject to changes in strategy or organization

Technical and Operational· Oversee or conduct special projects that require a knowledgeable outside

resource Create internet, marketing and promotional materials

Support and resolve MIS and IT issues

Write technical product bulletins and manuals

Develop and conduct training courses / workshops specific to a company's needs

Provide technical advice in product development or manufacturing areas

Troubleshoot immediate issues involving as operational performance http://www.acs.edu.au/info/distance-and-online-education/professional-

courses/consultant-course.aspx16Jones Graduate

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There are internal and external consultants

Internal Consultants External Consultants

17

Long term, salaried advisors to top

management

Generally in charge of internal projects

for operational improvement

Vertical long term organizational

knowledge is required

Work hand in hand with existing

personnel and within the organization

Generally – with exceptions - do not

challenge status quo

Are not called upon to review internal

issues where an unbiased , external

viewpoint is needed

Short term contract based advisors to

top management

In charge of specific change

management projects

Horizontal knowledge of external

factors is required

Work with, but outside of, personnel

and internal organization

More likely to challenge status quo

Called upon when it is important to

have an unbiased external viewpoint on

internal issues

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Internal vs. external consultants

There are Technical and “Strategic”

consultants

Technical and Operational

Consultants Strategic Consultants

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Focused on one area of expertise

Human resources

Financial management

Operations

Information Technology

Sales and Marketing

Tends to be one individual practitioner

Generally report to one of the operational

units

Generally come from the industry

Supply expertise in one field and very

related to the industry

Short term focused rather than long term

vision

More likely to offer incremental improvements

More “Horizontal’ in their expertise

Span different disciplines and integrate

various fields of knowledge within the team

More team focused than individually

oriented

Generally report to C Level

management

Consultants are not from a specific

industry, but supply expertise across

various industries

In major firms, there is specialization in

projects in one industry, or even one client

Tend to be Strategic and Long term

focused

Prone to give “game changing”

viewpointsJones Graduate

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Technical vs Strategic consultants

For this presentation we are going to focus on

“Strategic” and External consulting

Your presenter does not know much about Technicalor Opertional consulting and only some aboutInternal consulting (One year experience withVerizon)

These positions evolve from within industries… varyfrom industry to industry Have a strong vertical focus and are mostly learned within

an ‘on the job’ setting

Frameworks are not as important as in depth technicalknowledge

Many technical consultants do more than “consult” theyare the unquestioned experts in their field

Internal consultants are valuable in their horizontal knowledge of a company

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Hypothesis Based Consulting

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Hypothesis Based Consulting

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Hypothesis

Issues

Data AnalysisConclusions

Recommendations

Prior to

Project

Build Tree from the Issues/Questions

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Issues /

Questions

MECE Logic

Further

Breakdown

Questions to Ask/

Data to Collect

Breakdown the issue into logical categories and begin asking questions

MECE= Mutually Exclusive, Completely Exhaustive (… and

exhausting)

www.ruf.rice.edu/~jgsmcc/Rice_Case_Workshop.ppt

Hypothesis Analysis

Example

Issue tree: Profit = Revenue minus Costs

Jones Graduate

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Drug Co.’s operating margins are lower that

Walgreen’s as a result of poor operations and

lower revenue

Drug Co. generates less

revenue per location, per

square foot

What’s happening in the

market?

•Regulatory changes?

• Industry trends?

–Consolidation? (1)

–Diversification of product

base? (2)

•Competitors? (3)

–Walgreen’s

–Eckerd?

•Substitutes? (3)

Drug Co.’s operations are

not as efficient (cost wise)

as Walgreen’s

•Store specs?

–Size of store (1)

–Hours of operation

•Product mix?

–Prescription versus general

merchandise (2)

–Brand prescriptions versus

generic (2)

–Compounding as a % of

prescription

•Locations?

–Do Drug Co.’s locations

hurt the business?

–Traffic at a Walgreen’s

versus Drug Co. &

Competitors (3)

•COGS?

–Does Walgreen’s have an

advantage due to buying

power?

–How does product mix

affect COGS?

–Pricing?

•Fixed costs

–Rent – Is Drug Co. cheaper

as a result of location?

–Wages and salaries?

–Size of locations?

–Number of employees?

•Variable costs?

MECE Hypothesis

Should be part of

Cost or Revenue

or is not MECE


Issue tree: Profit = Revenue minus Costs

Jones Graduate

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Drug Co.’s operating margins are lower that

Walgreen’s as a result of poor operations and

lower revenue

Drug Co. generates less

revenue per location, per

square foot

Drug Co.’s operations are

not as efficient (cost wise)

as Walgreen’s

•Walgreen has higher margin

products in mix

•Walgreen sells more per SF

and per Store

• Walgreen has larger stores

•Locations?

–NO Information here

• Indications that Walgreen has

lower costs, because of EOS

through larger stores and

higher margins, but have no

ABSOLUTE cost data

• No information as to

attractiveness and relative

traffic of store locations (???)

• Cannot really conclude based

on information given

MECE Validation?


Typical Profit Analysis Tree

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Profits

Revenues

No. Units

Product A

Product N

Price per Unit

Product A

Product N

Costs

No. Units

Product A

Product N

Cost per unit

Product A

Product N

Do in Absolute and Percentage of Sales terms; Current Year and 3-5 yrtrend line

• Distribution Channel

• Geographic location

• Seasonality

• Per Client Segment

• Per Key Client

• What drives changes

in Units or Price/Unit?

• Fixed vs Variable

• Base product costs

• Raw Material

• Labor

• Overhead

• Depreciation

• Marketing / Sales

• Administrative

• Financial

• Extraordinary items

Type of firms (1)

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Universe

Capital Intensive

FixedCapital

DirectAssets

IndirectAssets

IntellectualCapital

DirectAssets

IndirectAssets

Labor Intensive

DirectLabor

Product A

Product N

IndirectLabor

Product A

Product N

Cost trees and breakdown vary between these two types of companies

• Costs are more

related to capital

expenses and

investments

• May show up more in

Depreciation and

Amortization

• Will probably be tied

into product at the

COGS/Depreciation

level

• Costs are related

to labor costs

• Can be Direct or

Indirect

• Will be tied into

product at the Direct

Cost level

Type of firms (2)

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Universe

Manufacturing

B2B

Direct Assets

Indirect Assets

B2C

Direct Assets

Indirect Assets

Service

B2B

Product A

Product N

B2C

Product A

Product N

Do in Absolute and Percentage of Sales terms

• Cost Structure fill

follow traditional

• Material

• Labor

• Manufacturing or

Transformation

Costs

• Depreciation will be

imbedded in costs

• Costs are

principally Labor

and Overhead

Costs (w/o

Materials or

Depreciation)

Key Frameworks

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“Half the battle is understanding the

problem” – Victor Cheng

29

Business Situation

Profit Problem (Price, Cost, Volume)

Business Situation & Strategy:

Entry Strategies, New Businesses,

Competitor Actions

Merger and Acquisitions

Supply and Demand

Business doesn’t Work Well

Frameworks to Consider

Profit = Revenues – CostsSeparate Fixed vs Variable, Direct vs

Indirect

Competitive Positioning and

Capabilities

Market Attractiveness

Demand and Supply Curves

Dynamic Game Theory

Corporate fit and synergies

What does the finished co. look like?

Corporate Fit issues vs. Financial

issues

Industry curves, capacity and costs

Cost curves: new vs. previous

Internal value chain functions

Analysis of functionalityJones Graduate

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www.victorcheng.com; with adaptation by Lambda International Consultants

http://www.victorcheng.com/

Mergers and Acquisitions Framework

Example of

Framework

Host

Company

Target

Company

Merged

Company

Suppliers Alpha , Beta Alpha More leverage

on Alpha

Buyers/Customers A, B, C B, C, D Complementarit

y

Products Delta ,

Epsilon

Iota, Omega Complementarit

y

Distribution

Channels

Gamma Gamma Greater

leverage

Key Capabilities Strong Medium Strong

Financial

Resources

Strong Medium Strong

www.victorcheng.com; with adaptation by Lambda International Consultants 30Jones Graduate

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http://www.victorcheng.com/

Suppliers CustomersIndustry Rivalry and your

Competitive Position

Substitute

products

New

entrants

into Market

Competitive

Dynamics

Prof. Michael Porter’s Five Forces indicate how

Competitive Dynamics works to develop a Strategy

31Jones Graduate

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Current

competitors

Michael Porter, Competitive Strategy

Cost

Service

Functional and

Image Product

Attributes / Quality

Innovation

/ Fashion

Competitive Dynamics:

How do businesses compete?

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Oscar Bernardes, Booz Allen & Hamilton

PEST Analysis (PEST+LE)

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POLITICAL

•ecological/environmental issues

•current legislation home market

•future legislation

•international legislation

•regulatory bodies and processes

•government policies

•government term and change

•trading policies

•funding, grants and initiatives

•home market lobbying/pressure groups

•international pressure groups

•wars and conflicts

ECONOMIC

•home economy situation

•home economy trends

•overseas economies and trends

•general taxation issues

•taxation specific to product/services

•seasonality/weather issues

•market and trade cycles

•specific industry factors

•market routes and distribution trends

•customer/end-user drivers

•interest and exchange rates

•international trade/monetary issues

SOCIAL

•lifestyle trends

•demographics

•consumer attitudes and opinions

•media views

•law changes affecting social factors

•brand, company, technology image

•consumer buying patterns

•fashion and role models

•major events and influences

•buying access and trends

•ethnic/religious factors

•advertising and publicity

•ethical issues

TECHNOLOGICAL

•competing technology development

•research funding

•associated/dependent technologies

•replacement technology/solutions

•maturity of technology

•manufacturing maturity and capacity

•information and communications

•consumer buying mechanisms/technology

•technology legislation

•innovation potential

•technology access, licencing, patents

•intellectual property issues

•global communications

www.CIPD.co.UK; www.businessballs.com/pestanalysisfreetemplate.htm

http://www.cipd.co.uk/

SWOT Analysis

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• Present& Future/ External

• Present& Future/ External

• Present / Internal

• Present / Internal

StrengthsWeakness

es

ThreatsOpportunities

SWOT (and PEST) are not meant to be a static, stand alone analyses

Original framework by Dr Otis Benepe (SRI)

1. Values2. Appraise3. Motivation4. Search5. Select6. Program7. Act8. Monitor and repeat steps 1 2 and 3

Robert Stewart, Marion Dosher, Dr Otis Benepe, Birger Lie, and Albert Humphrey. SRI

Urick and Orr, 1964, etc; see http://www.wiziq.com/tutorial/51376-SWOT-analyses

Match Strengths to Oppty and

Weaknesses to Threats

to develop Change Programs

McKinsey 7s

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McKinsey & Co. Inc.

BCG Matrix

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Boston Consulting Group

McKinsey/ GE Industry evaluation matrix

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My

experience,

strengths

and abilities

How

attractive is

this market?GE & McKinsey & Co. Inc.

Product Life Cycle Curve

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Stage Characteristics

1. Market introduction stage

1.costs are very high

2.slow sales volumes to start

3.little or no competition

4.demand has to be created

5.customers have to be prompted

to try the product

6.makes no money at this stage

2. Growth stage

1.costs reduced due to economies

of scale

2.sales volume increases

significantly

3.profitability begins to rise

4.public awareness increases

5.competition begins to increase

with a few new players in

establishing market

6.increased competition leads to

price decreases

3. Maturity stage

1.costs are lowered as a result of

production volumes increasing and

experience curve effects

2.sales volume peaks and market

saturation is reached

3.increase in competitors entering

the market

4.prices tend to drop due to the

proliferation of competing products

5.brand differentiation and feature

diversification is emphasized to

maintain or increase market share

6.Industrial profits go down

4. Saturation and decline stage

1.costs become counter-optimal

2.sales volume decline or stabilize

3.prices, profitability diminish

4.profit becomes more a challenge

of production/distribution efficiency

than increased sales

Theodore Levitt “Exploit the Product Life Cycle” Harvard Business

Review, November 1965.

http://en.wikipedia.org/wiki/Theodore_Levitt

ADL Matrix

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Arthur D. Little, Inc

Small companies need to be smart and find

niches using their capabilities

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Size of company Capabilities Time Horizon Resources

Large Enormous Long term Considerable

Medium Constrained Medium term Moderate

Small Focused Short term Limited

Company

size

Capabilities

Large

Small

Low High

Focus on creating

capabilities and

capturing niche

markets in accord with

capabilities

Focus on using capabilities

and capturing large

markets

Lambda International Consultants

Core capabilities can also be examined as

they impact across business units

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Prahalad, C.K. and Hamel, G. (1990) The core competence of the corporation,

Harvard Business Review (v. 68, no. 3) pp. 79–91. Analysis by Lambda

International Consultants

Strength of Capability / Impact on Business

++ Very Strong

+ Strong

= Average

-Weak

0 None

Lambda Framework

42Jones Graduate

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Corporate

Structure and

Governance

Sound

Business

Strategy

Key

Processes

Lean

Organization

Adequate

Resources

Culture,

Communications

and Control

Market

Consumers

Competitors

Suppliers

Marketing and Sales

Strategy

Key processes to

make the business

work

The people and

structure needed to

make the processes

work

Human resources

Financial resources

Technical resources

Knowledge

resources

Company culture

and communications

Control of the

business

Legal and

shareholder

structure and control

Start here!


Small Company Improvement Framework

Capability Based Strategies

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SALES / MARKETING /

BRANDING

DISTRIBUTION/ CUSTOMER

SERVICE

FINANCE

MANAGEMENT AND

HUMAN RESOUR

CESR&D

INFORMATION TECHNOLOGY

CORPORATE CULTURE AND

COMMUNICATIONS

SUPPLIERS

MANUFACTURING

CAPABILITIES

• Macro environment

• Economics

• Market situation

• Micro environment

• Vision of the

business

•

Competitiveness

• Revenues,

costs, profitability

• New Business

Opportunities

• Management

Depth

Capability Evaluation

Implementation Plan and Closing of Gaps

2Current Situation

1Development of

Strategic Options

4

3

• Identify Opportunities

• Market

Attractiveness

• Gap analysis

• Grow vs Strengthen

• Key Markets

• Key Internal Areas

• Filter vs. External Factors

• Select Key Strategy

• Develop Resource

Priorities

• Strategy Implementation

• Closing Gaps in Processes, Organization, Resources

• Implementation Plan and Responsibilities



Part II




45

Part I

Introduction

The presenter

Architecture and

Accounting


Why do companies hire

consultants?


models

Hypothesis based

Consulting

Key Frameworks

Part II


Part III

Presenting your

Recommendations


thoughts

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Phases in Consulting Projects (1)

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1• Initial Contact

2• Discussion and Development of Hypotheses

3• Proposal Preparation and Contract Negotiation

4• Project Execution*

5• Post conclusion Evaluation

* Will be explored in a detailed section

The Initial Contact sets the tone for the rest

of the relationship

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• Initial contact may

come through

• a social or

business

acquaintance

• a cold call

• a referral

• a marketing

initiative

• It is important to

present the firm in a

professional manner

• Sell, but don’t oversell

your services

• Trust is the basis of

the relationship and it

must be created from

the beginning by

understanding client

needs and budget

Generally a preliminary discussion with the client

includes their hypotheses as to the problem

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•Clients know their

businesses and orient

the Consultant as to

problem areas and

where they need advice

and support

• It is safer to interview

various people in a

client organization to

obtain divergent

viewpoints on the

problem and not

straitjacket the

proposal; ie that it is a

sales problem and not

a cost problem or

viceversa

• The Team should

discuss this internally

after initial client

meetings

With an initial although incomplete understanding of

potential problems a Proposal may be prepared

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• Preparing a proposal is

50% of the project

• a poor proposal

encumbers and

hinders the team

delaying

understanding the

problem and

developing solutions

• Proposals have three

key elements

• The workplan:

steps to be done,

analyses to be

performed and

deliverables for each

step

• Duration: time and

person-hours that

each step takes

• Staffing: level and

skills of the team

Preparing a Proposal is a multi part process

prior to writing the Proposal itself

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1. Understanding the problem(s)

2. Developing the methodology foreach

3. Estimating the duration of worksteps

4. Designing the work team: skills, levels and dedication

5. Preparing the budget

Preparing a Proposal is a multi part process

prior to writing the Proposal itself (2)

1• Based on experience, the Consultant must decide what kind of problem is

faced: Strategy, Profits, Marketing, Organization or Processes

2• For each problem, a method of analysis must be chosen to include all the

possible factors and data and what steps and substeps are needed

3• Based on the steps and data required, the Consultant estimates and the

duration of each step in the process; there is always a Critical Path

4• With all the steps determined, the Consultant decides the capability level

of the staff needed for each and their dedication

5• The Consultant multiplies each staff member’s dedication in hours by the

Hourly or Daily Billing Rate for each to arrive at a budget

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Budget development: team member

dedication and projected task durations

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Number Task Duration Start Finish Predecessor LG JLA LEA Mkt Specialist Sr Consult

INITIAL TASKS 0 days 21-01-09 8:00 21-01-09 8:00

1 Preparatory meetings 3 days 21-01-09 8:00 23-01-09 17:00 10% 10% 5% 0% 0%

2 Develop initial proposal 3 days 26-01-09 8:00 28-01-09 17:00 2 10% 10% 5% 0% 0%

3 Discuss final proposal 0 days 28-01-09 17:00 28-01-09 17:00 3 10% 10% 5% 0% 0%

4 Develop final proposal 3 days 29-01-09 8:00 02-02-09 17:00 4 10% 10% 5% 0% 0%

5 Negotiate with Client 7 days 03-02-09 8:00 11-02-09 17:00 5 10% 10% 5% 0% 0%

6 Sign final contract 0 days 11-02-09 17:00 11-02-09 17:00 6

DEVELOP VALUE PROPOSITION 0 days 11-02-09 8:00 11-02-09 8:00

7 Prepare Market Research Protocol 7 days 12-02-09 8:00 20-02-09 17:00 6 25% 10% 5% 25% 0%

8 Define Focus Groups 3 days 12-02-09 8:00 16-02-09 17:00 6 20% 20% 5% 25% 0%

9 Focus group development 3 days 17-02-09 8:00 19-02-09 17:00 7,10 20% 20% 5% 25% 0%

10 Hold initial Focus Groups 15 days 20-02-09 8:00 12-03-09 17:00 11 5% 5% 5% 25% 0%

11 Integrate initial Focus Group Visions 3 days 13-03-09 8:00 17-03-09 17:00 12 10% 10% 5% 25% 0%

12 Hold Final Focus Groups 7 days 18-03-09 8:00 26-03-09 17:00 13 10% 10% 5% 25% 0%

13 Integrate Focus Group Visions 3 days 27-03-09 8:00 31-03-09 17:00 14 25% 25% 5% 25% 0%

14 Develop initial store proposal 3 days 01-04-09 8:00 03-04-09 17:00 15 25% 25% 5% 25% 0%

15 Approve initial store proposal 0 days 03-04-09 17:00 03-04-09 17:00 16

16 Define Value Proposition 4 days 06-04-09 8:00 09-04-09 17:00 17 25% 25% 5% 25% 50%

17 Approve Final Value Proposition 2 days 10-04-09 8:00 13-04-09 17:00 18 25% 25% 5% 25% 50%

Project for Market Research and Concept Development of a new Retail Food Store

Note: this project was atypical in that Client accepted that we bill for Initial Tasks including

Preparation of Proposal since it required significant amount of time with Client Staff and

internal negotiations with various units of a Multinational Company

Budget development: team member

billing rates and estimated project cost

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Rate per hour 200.00$ 200.00$ 150.00$ 125.00$ 100.00$

Step LG JLA LEA Mkt Specialist Sr Consult TOTAL

INITIAL TASKS 2,560 2,560 960 - - 6,080

1 Preparatory meetings 480 480 180 - - 1,140

2 Develop initial proposal 480 480 180 - - 1,140

3 Discuss final proposal - - - - - -

4 Develop final proposal 480 480 180 - - 1,140

5 Negotiate with Client 1,120 1,120 420 - - 2,660

6 Sign final contract - - - - - -

DEVELOP VALUE PROPOSITION 12,320 10,640 3,000 12,500 2,400 40,860

7 Prepare Market Research Protocol 2,800 1,120 420 1,750 - 6,090

8 Define Focus Groups 960 960 180 750 - 2,850

9 Focus group development 960 960 180 750 - 2,850

10 Hold initial Focus Groups 1,200 1,200 900 3,750 - 7,050

11 Integrate initial Focus Group Visions 480 480 180 750 - 1,890

12 Hold Final Focus Groups 1,120 1,120 420 1,750 - 4,410

13 Integrate Focus Group Visions 1,200 1,200 180 750 - 3,330

14 Develop initial store proposal 1,200 1,200 180 750 - 3,330

15 Approve initial store proposal - - - - - -

16 Define Value Proposition 1,600 1,600 240 1,000 1,600 6,040

17 Approve Final Value Proposition 800 800 120 500 800 3,020

Total 14,880 13,200 3,960 12,500 2,400 46,940

Project for Market Research and Concept Development of a new Retail Food Store

Project Execution is the reason for being for

Consultants, so we shall devote a section to this

55Jones Graduate

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Business

• The Project starts

officially at the Kick Off

• May proceed through

one or two preliminary

presentations until a Final

Presentation is held

• Implementation plans

may or may not be

presented at the Final

Presentation since there

may be recommendations

that have to be approved

before implementation

plans can be finalized

Phases in Project Execution

1 • Kick Off

2 • Initial Interviews / Data reception

3 • Analysis of data and interviews

4 • Preliminary Presentation/Worksession

5 • Final analyses

6 • Development of Recommendations

7 • Final Presentation/Worksession

56Jones Graduate

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The Kick Off meeting is key to align all

participants

57Jones Graduate

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• Kick off meeting is

where the project

workplan is presented,

objectives validated

and team members

introduced

• Client team members

generally are

incorporated into the

project at this point

• Initial interviews can

be set up and data

requests delivered here

Being part of a consulting team

A consulting team is exactly that – a team

There has to be a Director and/or Job/Project Manager whose responsibility is to lead the teamand who is ultimately responsible for projectdeliverables

Under this person may be one, two or more consultants whose role is to execute different partsof the project Interviewing

Data collection

Data analysis

Preparing charts and graphs for presentation

Preparing the presentation

Project support58Jones Graduate

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Delegation and Supervision

Within the Team There is a tradeoff between what a Job Manager can

do him/herself and what must be delegated Generally the Director and Job Manager will hold final

responsibility for writing and editing the final deck and assign analyses to Consultants and Client Team Members

Consultants cannot grow unless they are given increasingly responsible challenges within the team

Supervision and training day to day is one of the key responsibilities for the Job Manager

With the Client Ideally, Client Team Members would be 100% co-

participants; nevertheless, frequently they are holding a full time job within the client organization and cannot devote the same amount of time as a consultant

59Jones Graduate

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The Team Structure

Director or Officer in Charge(client relations; directs

proposal, reviews intellectualcontent)

Job Manager (day to dayresponsibility for team; writes

document under OIC supervision)

Consultants / Analists

(do the routine analyses; supportinterviews and data collection)

60Jones Graduate

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The Officer in Charge (OIC) sees the Document one hourbefore Final Presentation and

says “Oh, I see…”

Initial Interviews and Data Reception mark

the hands on part of the project

61Jones Graduate

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• Initial interviews serve

to deepen team

understanding of the

situation and collect

initial data;

• Can be inside the

Client or with outside

sources

• Data reception is key

to launching the project

• Be sure to specify

form, time span and

disaggregation of data

to the greatest degree

possible to avoid pitfalls

later

• For Interviews,

prepare interview guide

and avoid leading

questions

Effective Interviewing (1)

1. Prepare1. Know your interviewee

2. Obtain background Info and define info Gaps

3. Define your objectives and key ‘takeaways’

1. General: Market tendency and evolution

2. Specific: Market size, shares, competitive strategy of X

4. Arrange order of interviews

5. Design Interview Guide

1. If possible review with other team members

6. Confirm time, meeting place and assistees

1. Who else would be there

2. Dress code?

3. Consulting team should never overwhelm interviewees

from Jan Niemens and M&W Consulting, with additions by Lambda International

Consultants62Jones Graduate

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Effective Interviewing (2) Conduct the Interview

Introduction Yourself/team

Time allotment

Purpose and objectives

Confidentiality; validate if OK to take notes or record the interview

Divulge potential conflicts of interest

It is safer to ask for water than coffee, less fallout if spilled….

Open Dialogue General issues first …then specific issues

Jot down follow up questions, don’t break flow

Frequently test for your understanding and summarize what was said

Balance open and closed questions… never leading questions

Balance building rapport with obtaining information; share your insights (ifyou have any, keep your mouth shut if you don’t)

Good idea is to share your graphs and synopsis charts w/ interviewee

If your team size allows it, it is an excellent idea to name one personexclusively to transcribe the interview and/or check on the recording device

from Jan Niemens and M&W Consulting, with additions by Lambda International Consultants 63Jones Graduate

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Effective Interviewing (3)

The Closing Cover new elements introduced into interview

Review main topics covered and conclusions

Leave opportunity for open comments : “anything youthink I should have asked you, but didn’t”

Last Five Minute Jewels: frequently interviewees will giveyou an invaluable insight in the last minutes, even whenwalking to the door… don’t miss these, ie: “Don’t forgetyour client’s sales started to go down when they changedthe comp. plan….”

Leave door open for further conversation or telephone call

Thank and offer “anything we can do to help YOU, we are at your service”

Make sure you take all materials with you

from Jan Niemens and M&W Consulting, with additions by Lambda International Consultants 64Jones Graduate

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Precise questions for effective data collection

“Garbage In/Garbage Out” is valid for data requests and subsequent collection

If the client or data provider is not clear what is wanted, ifthere are ‘grey areas’ and room for doubt or interpretationas to EXACTLY what data is required, and for whatpurpose, data collection becomes a ‘hit or miss’ affair

It is CRITICAL to eliminate any doubt and uncertainty as to what data is required and its conditions

It is an excellent idea to prepare a template to be filled in with the data specifying all conditions to eliminate errors

Submit data requests in writing and include due dates ondelivery, if possible get a signed copy back

Be sure to have excellent communications with your data providers and supervise the process before receiving thefinal data

65Jones Graduate

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Data analysis and follow up interviews start

shedding light on the issues

66Jones Graduate

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• When data starts to

arrive, it is important to

review it for quality

control prior to using it

• Validity

• Exactitude

• Timeliness

• Integrity

• Follow up interviews

serve to interpret the

data received, shed

light on additional

questions and explore

in depth areas that

appear critical

• Frequently, new

issues not considered

in the proposal appear

in the interviews and

these may/may not be

incorporated into

project

Diagnosis – key elements

67Jones Graduate

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Consultants are called in when internal staff cannotgenerate bindingconclusions themselves Due to lack of time or

experience

Due to internal conflicts of interest, ie. deciding whichone of two product lines toprioritize

Due to a need to haveexternal validation of decisions for third parties, ie. Boards of Directors, external entities such as Banks and FinancialInstitutions. This isfrequently true for Capital Projects where externalvalidation is requested prior to launching large capital expenses

Diagnosing problems istherefore one of a consultantskey tasks Consultants must be objective

and not be unduly influenced byclient’s internal opinions and judgments as to cause-effect

Consultants must be willing tobreak from ‘groupthink’ and diagnose the problemindependently of a client’s pre-set opinions Tact must be used in order not to

offend client sensibilities

The function of frameworks is toprovide the consultant with a structure with which to workand analyze problemsindependently of currentopinions

Diagnosis – key elements

68Jones Graduate

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Consultants are

selling their

Credibility and their

Ethics – learn to

manage client

situations accordingly

At the beginning of a projectit is perfectly fine to say “I swear I don’t know” Do not rush into conclusions

prematurely that you have toretract later

This destroys your Credibility

Credibility, like Virtue, are noteasily regained

You must be honest at alltime, but do not have to sayeverything you are thinking ifyou have not come toclosure on ideas and hypotheses

At the end of a project if yousay you don’t know, it isunlikely you will be rehired

The first Presentation or Worksession serves to validate initial

understanding or develop first ideas as to recommendations

69Jones Graduate

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• Between 2 to 6 weeks

after Kick Off it is

proper to hold either a

Preliminary

Presentation where the

team presents initial

findings or hold a Work

session with the client

to review implications of

data analysis and

interviews and reach

joint conclusions

• This step should

validate the team’s

focus and set the stage

for work leading to the

Final Presentation

• See “Diagnosis” in

“Elements to Consider”

The Final Analyses should serve to clarify areas of doubt or ‘drill

down’ in more detail into previous findings – if the team is still

discovering issues, the project is in trouble!

70Jones Graduate

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• After the Preliminary

Presentation, initial

hypotheses should be

either validated or

disproved and replaced

• The Final Analyses

serve to delve deeper

into issues and start to

provide the material for

the Final

Recommendations

• Generally, these

analyses are done with

the first draft of the

final document to

ensure that all analyses

are necessary

• If in Worksession

mode, then the outline

of the Worksession is

the guide

Concurrent with Final Analyses, the Team should be able to

develop Recommendations or different Alternatives based on the

emerging and validated conclusions of the work

71Jones Graduate

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• Once some of the

Final Analyses are

completed, a good

consulting team can

start to create

recommendations or

alternatives for the

Client

• If the project is run in

Presentation Mode,

then the team must

detail its

recommendations and

consider implications

for implementation

• If being run in

Workshop mode, then

generally different

alternatives are drawn

up to be considered in

the Worksession

The “Stepping Stone Method” to Consensus

Good Consultants believe “Discretion is the greater partof Valor”

Therefore, every effort must be made to reachconsensus prior to the final presentation

Surprises are not welcome at final presentations

Pre-final presentation meetings with key executives are vital tobrief them on the evolving recommendations and ensurefeedback and acceptance of recommendations

Typically, alignment is achieved by executive level – once executives on one level are aligned, one by one or in small groups, then the recommendations or analyses are presented to the level further up

Presentations become forums for discussion and deeperinsights and avoid becoming divisive and destructive

72Jones Graduate

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Recommendations that are worth the cost

of the project …

73Jones Graduate

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Clients do nothire consultantsto tell them whatthey alreadyknow….

… they hire themto tell them whatthey don’t know

Recommendations must be:

‘Actionable’ – implementable

within a reasonable amount of

time and cost and with

accesible resources

‘Insightful’- add value to the

client above what he/she

already knows

‘Game changing’ – offer the

client the opportunity to

improve his/her way of doing

business in a way that will

more than justify the

engagement

A consultant’s

job is not

complete until

the

recommendation

s are ready

At the Final Presentation or Worksession, the Team presents its

Conclusions or Alternatives and there should be closure-

acceptance or modification of its proposals

74Jones Graduate

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• It is not unusual for

recommendations to

be modified by the

Client in the Final

Presentation. In this

case an amended

Final Report is sent to

the Client post

presentation

• If it is a Worksession

and decisions are to be

made jointly therein,

then a Post

Worksession

document is delivered

to the Client

• It may be that a

skeleton staff stays

behind to develop the

Implementation Plan

If the job has been done, good conclusions

and recommendations sound inevitable

Recommendation Recommendation

Conclusion

Issue

Data Data

Issue

Data Data

Recommendation

75Jones Graduate

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Hypothesis Hypothesis

Synthesis

Analysis

Your knowledge of the client and industry will evolve through

the project … so will your insights, patience and ability to add

value

76Jones Graduate

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• Blissful ignorance

• Initial insights

• Some ideas jell,

others are discarded

… resist impatience

and pressure to jump

to conclusions

• At some moment you

reach the Eureka

point, where you

finally understand what

is happening

• From this you can

start to develop

alternative

recommendations

based on insight,

creativity and your

analyses

• Grunt work to put the

final document

together

• Congratulations on a

happy client!

Start

Finish

Managing Live TV

– the Workshop/Worksession

Doing “unscripted” workshops and worksessions offersthe opportunity to make enormous advances in understanding the issues facing a company and toquickly build consensus around actions to be taken… butit can be risky Lack of consensus marked by strong diatribe and divisions

amongst client participants

Denial or disparagement of facts being presented

Passivity among subordinates unwilling to question superior’sopinions in public

The consultant must weigh the cultural ambience and current environment in a company prior to deciding thatWorkshops are the correct methodology – sometimesmuch preliminary preparation has to be done to allowWorkshops to reach agreement Although the Consultant has more control in Presentation

based projects, Workshops are a formidable tool

77Jones Graduate

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Knowing your Client Style may avoid pitfalls

Lead Client Style Impact on Consulting Team

Gambler – risk seeker, avoids routines, goes for

big wins and breaks rules, intuitive

Need to show big wins and

improvements, but create structure

Warrior- alert to threats; tolerates conflict, seeks

position of power, gives orders

Show how recommendations

improve Warrior’s status; but

needs to build a team

Athlete – skill seeker, team player, wants

participative decisions, sacrifices self, hates waste

Provide capability creation model,

but integrate risk and leadership

Farmer – seeks incremental growth, conservative,

builds on common sense consensus

Show long term growth plan, may

be too slow for fast moving industry

Craftsman – seeks well made solutions, bothered

by poor fit, likes shared consensus

Be prepared to do detailed

recommendations and risk

management evaluations

Engineer- intolerant of waste, seeks systemic

optimization, rational numbers and spec. driven

Quant driven recommendations,

but need to incorporate intuition

Copyright, Communications Patterns Iinc, Stamford Conn.; Analysis

Lambda 78Jones Graduate

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Dealing with “Clients who say ‘NO’ ”

Sometimes, after all the effort and perseverance and

fine analysis and brilliant recommendations,

The Client says ‘NO’

79Jones Graduate

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Plan B: earnestly discuss and understand why “No”

Attempt to incorporate reasons for resistance

Try to develop a compromise solution

Consider whether there are other facts to incorporateor other third party experts to consult whose opinionscould sway the client

Plan C: “Fall back” – ‘we could be wrong ‘ - buy time to

regroup, re-evaluate and to consult other advisors and experts

and return with a new position or alternative … have a ‘cooling

off’ period.

In order to improve Client Service it is customary to

email the Client a Project Evaluation Form afterwards

80Jones Graduate

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• Client evaluation forms

measure both Project

Content and Deliverables

and Team adherence to

Professional Standards

• Was the Client satisfied

with results?

• Did the team fulfill

expectations and

Proposed deliverables?

• Did the team maintain a

professional manner

throughout the project?

• Was the team supportive

of Client activities during

the Project?

• Would the Client hire the

team again?


Part III




82

Part I

Introduction

The presenter

Architecture and

Accounting

Why do companies

hire consultants?



models

Hypothesis based

Consulting

Key Frameworks

Part II


Part III

Presenting your

Recommendations


thoughts

Jones Graduate

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Presenting your Recommendations

83Jones Graduate

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Ballroom vs. Conference Room Style

Presentations

BALLROOM CONFERENCE ROOM

84

Graphic, attentiongrabbing, colorful Can incorporate Sound and

Video

Emotion generating, sales documents

Generally only titles, no headers or storyline

Needs interpretation by a Presenter

Great for large groups and not meant to be printed

Tend to bemonochromatic, whitebackground Text and chart driven

Analytical, rational and data focused; explaindecision processes

Headers and storyline isclear; horizontal and vertical logic is strictlyrespected

Needs no interpretation

Generally apt to beprinted and is for smallergroups

Jones Graduate

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Business

http://extremepresentation.typepad.com/blog/2008/01/ballroom-vs-con.html

Ballroom vs. Conference Room Style

Presentations

BALLROOM CONFERENCE ROOM

85Jones Graduate

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http://extremepresentation.typepad.com/blog/2008/01/ballroom-vs-con.html

Horizontal and Vertical Logic

A well prepared document should stand alone, without

needing explanation from a presenter or other person

Each page consists of a HEADER or HEADLINE at the

top of the page and the CONTENT or BODY, below

The Horizontal Logic demands that all the headlines can

be read together as a book or story and has a story line

that flows without interruption

If you copy all the Headers into Word, it should flow as a

document

The Vertical Logic demands that each Content support

the Headline above it on the page

Similarly, each ‘dash’ must support each bullet above it

If you don’t have three bullet points per page, consider

eliminating it See Barbara Minto, The Pyramid Principle 86Jones Graduate

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87Jones Graduate

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TO THE NEXT PAGE

VERTICAL LOGIC:

CONTENT

SUPPORTS

HEADLINE

Loret Ipsum veritas

xxx ….yyyy….zzzz

• Make sure most

important bullet points

go first

• Graphs and charts

should be clearly

labeled and LEGIBLE


Some consulting firms require the use of “Pyramid

Principle” (by Barbara Minto) for deductive or

inductive thinking

Others are less rigid and simply demand that the

“story makes sense”

A common element is that the presentation and

bullet points are always arranged – whenever

possible – according to priority and impact

Most important points first

Less key points later

88Jones Graduate

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Examples of “Horizontal Logic” taken from Headers in

a Presentation defining a Company Vision

89Jones Graduate

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Telcos, Cablers and ISP’s dominate the ConnectivityLandscape while the Support Competitive Landscape is mostly

Mom and Pop’s – No one integrates Connectivity + Support

Among the Lords of Connectivity, AT&T, Verizon and Warner have aggressive packages …

The convenience of plug-and-play connectivity, reliable support for a

convenient fee –as well as access to a myriad of value-added IP

services - define the Vision of XXXYY Net

Vertical Logic requires that Header and

Content be mutually supportive

90Jones Graduate

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International health insurance policies are a small,

but profitable and rapidly growing, niche market

International health insurance is estimated to be a USD 6-8 Bn market witha growth rate of 10 -15% per annum Latin America may represent around 10% - 15% of the international market

growing at nearly 20%

The industry is focused on expatriates and high executives that devote a significant amount of their time in international travel There is a second market targeted at high income individuals that live in third

world countries, but want the ability to have first class insurance coverage

Commission structures can reach 50% of first year premiums and haveattractive incentive plans

Principal companies in this market are Bupa: acquired IHI Danmark and Amedex forming IHI Amedex

BMI

Generali

Axa

Prudential

Others

(Source: AIVA International) 91


From: “Rice Case Workshop”

92

Story Boards / The Master Deck

As soon as possible, but definitely after the mid project

presentation, the team should start working on the Final

Story Board or Master Deck

This is the first cut of the finished document and each slide

should have the horizontal and vertical logic as clear as

possible and as detailed a description as possible of the

supporting charts, graphs or bullet points

From this point on, the team works with this final document as

a reference, completing , editing or deleting pages as the

project evolves

ONE copy – paper or electronic – should be labelled the

MASTER and one person responsible for it, or each part of it …

this may be different people for different chapters there should

never be TWO MASTERS (for the same material) as this can

cause much confusion93Jones Graduate

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Story Boards / The Master Deck

Decks will change as the project evolves

In the analytical phase, decks will revolve around the

different issues: costs, competition, organization, market,

processes…

In the synthetic/recommendation phase, they will turn

around 90 degrees and revolve around recommendations

linking material from different issues and parts of the

analytical document to create a document that supports

the recommendations and implementation

94Jones Graduate

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Typical Agenda Pages comparing two

presentations

Analytical Phase Synthetic Phase

95

Our understanding of the situation

Critical Issues Market and Industry

Evolution

Competitor Profiles and Positioning

Our Capabilities

Corporate Governance

Initial Conclusions

Introduction

Definition of Company

Priorities

Becoming More

Competitive

A New Career Plan

Conclusions and Next

Steps

Jones Graduate

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Example of Evolution of a Document

XXXYY Net

96Jones Graduate

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Initial Presentation Agenda Final Presentation Agenda

New to Final Presentation

• Development of Products & Visions

• Client Segmentation and Market Attractiveness

• Key Process and Organization Plans

• Developed Business Plan

• Long term Vision and Exit Strategy

New

Products

that drive

the rest of

the

Presentatio

n

One chart is worth a thousand bullet points

97Jones Graduate

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Manufacturers have

different alternatives

in reaching their

clients. Some can

sell directly to

Clients, for example,

Dell. Others sell to

and through a Retail

outlet. Many others

go through a network

of Distributors and

Wholesalers before

reaching the Retailer

and ultimately, the

Client. The structure

depends on the

product and the

“Cost to serve”

This "figurative map" by Charles Joseph Minard shows

information about the advance of Napoleon's army into Russia

and its retreat; it is considered a masterpiece of presentation

98Jones Graduate

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https://qed.princeton.edu/index.php/User:Student/Minard_carte_figurative

Some tips on using Excel Graphs

Chart type Functionality

Column or Bar Compare magnitude of different elements, sales, units, etc.

Time series to track evolution of data

Line Time series

Scatter gram Relationship between two variables, ie. correlation,

regression analysis

Pie Charts Snapshot of composition and market shares

Area Mix of line and pie chart; can show composition over time

or in two axes

Can be in 100% terms or unit terms

Bubble charts Similar to scatter grams, but with a third value in size

Surface Similar to area, but with third value in height

Hi Lo Close Evolution of prices (or other values ) over time

Polar

Coordinates

Comparing different subjects across multiple rating criteria

or one subject across multiple criteria over time

99Jones Graduate

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Some resources for improving your

graphical capabilities

Say It With Charts, Gene Zelazny

Information Graphics, Robert Harris

The Visual Display of Quantitative Information,

Edward R. Tufte

some websites

http://extremepresentation.typepad.com/blog/2006/09/sim

plicity_of_d.html

http://paulecoyote.com/2009/09/02/book-the-visual-

display-of-quantitative-information-edward-r-tufte/

100Jones Graduate

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Conclusions and closing thoughts

101Jones Graduate

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Consultant watch: ¿Where do you want to

be on the wave?

102Jones Graduate

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Documents

Concepts on Consulting short version v 5