Management Consultancy - (8. Impact)

8 Impact
Impact is a major issue for management consultancy firms, yet there have been very
few empirical studies of impact and academic literature has paid little attention to
the issue. Many books on management consultancy mention impact only in passing;
some do not mention it at all. And yet, few issues in management consultancy are
more important.
Good consultants spend much of their time thinking about impact and trying to
make a difference to clients. They do so for three reasons. First, firms need to
demonstrate that they really do make a difference to clients and thus the fees charged
by consultants are justified; second, to respond to those critics of the consultancy pro-
fession who argue that their fees are not justified; and third, and in my view most
important, for their own satisfaction. Consultants are highly intelligent, highly moti-
vated people, and the good ones take up consultancy not because they want to make a
lot of money but because they feel that, through their consultancy work, they can
make a difference. They need to know that there is impact, because this is what makes
their work worthwhile.
Perhaps one reason why the subject has received comparatively little attention is its
difficulty. Defining impact is not easy, and measuring it is extremely difficult. More than
fifty years ago, Johnston (1963) had already come to the conclusion that it is very difficult
to accurately measure quantitatively the productivity and impact of management con-
sultancy firms. A later study by Wright and Kitay (2002) found that most management
consultants and most clients use entirely subjective measures, apart from a few of the
larger consultancy firms which have tried, not particularly successfully, to link impact to
improvements in the bottom-line performance of client organisations.
Copyright © 2015. Taylor & Francis Group. All rights reserved.
Actual analysis of impact is rare. Sahlin-Andersson and Engwall (2002) concluded that
the management consultancy profession as a whole had played a role in increasing levels
of knowledge about good practice among managers. A study by Nachum (1999) examined
the productivity of management consultancy firms in Sweden and concluded that there
had been some positive impacts, while Bloom et al. (2013) conclude that the improved
productivity of textile firms in the Mumbai area over a three-year period could be linked
to management consultancy interventions.
McClellan (2010) is a rare example of an academic study focusing specifically on the
notion of impact. In particular, McClellan argues that impact is not just the outcome of
the consultancy process, but is created at every step of the engagement from beginning
to end. I will come back McClellan’s criteria for evaluating impact shortly, but first
we need to come to some understanding of what impact is and arrive at a working
definition.
Witzel, Morgen. Management Consultancy, Taylor & Francis Group, 2015. ProQuest Ebook Central, http://ebookcentral.proquest.com/lib/uql/detail.action?docID=4218630.
Created from uql on 2023-08-18 23:01:27.
Impact 103
What is impact?
Wright and Kitay (2002) noted that some management consultancy firms, mostly larger
ones, attempted to quantify impact by linking it to improvements in financial perfor-
mance, productivity and other bottom-line measures following the conclusion of the
consultancy engagement. This is the wrong approach, for two reasons.
First, as we saw in Chapter 2, it is impossible to prove a link between the work of the
consultants and improvements in the performance. Those improvements might have
many causes, of which the work of the consultants is only one. Business improvement
programmes can take a very long time to mature; the performance increase might be the
result of other projects undertaken months or even years before (they might even be the
result of a previous consultancy engagement with different consultants) that are only just
now beginning to bear fruit. They might be the result of changes in market conditions,
in entirely unrelated performance improvement or cost reduction programmes, and so
on. In other words, there is no way of proving cause and effect beyond a reasonable
doubt. We can assume that improvements might be the result of our consultancy work,
but to some extent we will always have to take this on trust.
Second, we can use the method of analogy to compare impact with product/service
quality, concepts which closely overlap. It is axiomatic in quality thinking that quality is
determined by the consumer (see for example Crosby 1979). The highest quality product
is not the one made from the best materials, or the one with the most product features,
or the one made to the highest specification; it is the one that most closely meets customer
needs and delivers most value to the customer. A meal at a Michelin-star restaurant and a
frozen pizza can both be of equal quality, if they meet the demands of particular consumers
at a given moment.
Let us apply this rule that quality is defined by the consumer to management consulting.
The ‘consumer’ in this case is the client; the ‘product’ is the advice, knowledge, problem
solving and capacity building delivered by the consultant to the client. What determines if
this is of high quality? Can the consultant say that the service was of high quality because it
meets their own high standards for service delivery? Can the consultant say that the service
was of high quality because it led to a 50 per cent increase in profits, or a 30 per cent
increase in productivity, or a 40 per cent increase in market share on the part of the client?
I have seen instances where all these things were delivered, and yet the client was still
unhappy and did not work with the consultant again. Does this mean there was impact?
And even if there was, how long does impact last? How long before the beneficial
effect, if any, of the consultancy engagement wears off and the client needs assistance
again? We referred in Chapter 3 to the controversy over Peters and Waterman’s In Search
of Excellence (1982) and how, ten years later, some of the ‘excellent’ companies were
having financial problems or had disappeared altogether. Some of this criticism was
unfair; it is impossible for a consultant’s impact to last for all eternity, and calling in a
consultant does not then make a company invulnerable to further harm. But how long
does impact last? And how long should it last? These are imponderables, and yet they are
vital to impact. If a company spends several million dollars on a consultancy engagement
and, six months later, can no longer see any benefit, then that company is unlikely to be
satisfied with the impact. But if after six years the company can still see the benefit, then
satisfaction is much more likely to ensue.
A final complicating factor is the switch in emphasis from problem solving to capacity
building. When the consultancy engagement focuses purely on problem solving, it is
104 What consultants do
easier to evaluate impact. There is a beginning, middle and end to the project, the pro-
blem is identified, analysed and solutions are found and implemented, and at the end an
outcome can be measured: was the problem solved successfully?
With capacity building it is quite a different story. Capacity building is, or should be,
delivered in advance of need; companies build capacity so that they can grow in the
future, even if it is the near future. But no one can predict for certain when that addi-
tional capacity will begin to yield value, or how much. Capacity building too is a leap of
faith; companies do it because they know they must, and because they are aware of the
consequences if they do not, but they cannot predict the future and they do not know
entirely what will happen. Certainly it is much less easier to define an outcome.
Bearing all of this in mind, then, let us attempt to define impact. From the previous
discussion, we can state the following propositions:
Impact, like quality, is defined by the client.
In fact, handing over the definition of impact to the client makes sense. No matter
how well the consultant knows the client organisation, he or she can never be entirely
sure what matters to the client and what does not. Some aspects or features of the service
that the consultant values highly may be of little interest to the client. For example, it
may be very important to the consultant that their research methods are empirically
proven to work; the client might not care, so long as satisfactory results are achieved.
Also, some of the benefits the client feels might be all but invisible to the consultant, and
some might take months or even years to emerge.
Impact can have both qualitative and quantitative value.
While it is quite true that the quantitative value of a consultancy engagement in terms of
bottom-line improvement cannot be empirically proven, there is no harm in making the
calculation anyway, provided that caveats are applied. Any number arrived at must be
treated as indicative, and the number must also be one that the client agrees seems realistic.
And as McClellan (2010) says, a wide range of qualitative measures must also be employed.
Impact should be lasting.
While there is no general agreement as to how long the impact of a consulting

engagement should last, it would seem sensible for the consultant and client to agree to
this at the outset. As a part of the process of setting client expectations, the consultant
should give a realistic assessment of how long the outputs of the engagement will con-
tinue to yield value. This should be done on the basis of those outputs that the client
values most. Here are a few examples:
strategy: Realistically, how long will this strategy serve the client and when will
another strategic review be needed?
competitive advantage: How long can the client expect to enjoy any advantage stemming
from the engagement, before new entrants come into the market, new technologies
threaten its core products, existing competitors raise their own game, and so on?
financial systems implementation: How long will any new financial systems last,
with upgrades, before they need to be completely overhauled and replaced?
Impact 105
restructuring: How long will the re-designed structure suit the company’s needs, and
when will it need to begin considering restructuring again?
process improvement: How long until new technology or changing products make
the processes obsolete?
capacity building: How long will the new capacity serve the company before new
capacity-building initiatives need to be considered?
This leads us to a simplified definition as follows:
The impact of a consultancy engagement is the combination of qualitative and qualitative value
enjoyed by the client over a defined period of time.
This definition is necessarily vague, and it has its weaknesses. One is that the client
may not entirely understand or recognise the value that the consultant has delivered. The
consultant can reduce the risk of this by setting expectations clearly at the outset, and by
conducting regular impact measurements and sharing these with the client. A second
weakness is that there may be no agreement as to the defined period of time; this again
may be a problem of unrealistic client expectations. The third is that a client’s senior
management and leadership may change, and the incoming leaders may not agree with
their predecessors as to what constitutes value, thus undermining the original agreement.
As part of that process of setting expectations, both sides need to be clear about the
limits of what consultants can and cannot do. Consultants are not miracle workers, and
they do not make companies invulnerable to competition or economic forces. Consultancy
engagements are temporary, and subsequent changes in strategy, focus, leadership, etc. may
well take the company in directions the consultants never intended.
More than one consultant has visited a client company a few years later to find that
new managers have thrown out or ignored the recommendations he or she had made. If
the client company then gets into trouble, that is not the consultant’s fault. On the other
hand, will the world see it that way? Many consultants have been blamed for the sub-
sequent failure of companies they worked with, despite the fact that the failure was in no
way their fault. All such blame impacts on the consultant’s reputation.
This brings us back to a point made early on in this book: right at the start of the
negotiation process, the consultant should determine whether it is possible to have
impact with this prospective client. Will the client listen? Will they be active partners in
the engagement? Is their top management of sufficient quality and sophistication to come
up with the ideas the consultant needs? Will the management team be able to implement
any solutions we propose, with any confidence of success? If the answer to any of these
questions is ‘no’, then the consultant should consider whether to take the engagement.
This may sound harsh, as if the consultant is putting their own reputation first. On the
other hand, consultants who lose their reputation by failing to make impact do not
remain consultants for very long.
How can impact be measured?

McClellan (2010) rejects purely financial and performance metrics as adequate measures
of impact. From his own research, he proposes instead that impact can be measured on a
large number of client-centred dimensions. Table 8.1 shows the full range of these
dimensions, which he groups into six categories: formulation of the problem,
Table 8.1 Criteria for evaluating consultancy services
Evaluation category Dimensions of evaluation
Formulation of problem Brought awareness of issue needing resolution
Clarified sponsor’s (i.e. the executive or team responsible for
bringing the consultants in) intention regarding outcomes
Identified competencies required to resolve issues
Confirmed resources needed to resolve issues
Defined/shaped problem/statement/question
Articulated necessary/desired outcomes
Confirmed nature of opportunity merits strategic investigation
Conveyed sense of urgency regarding potential opportunity
cost
Constitution of project Considered because of past activities (reputation, experience)
Presented qualified personnel (team leader, team members)
Showed understanding of specific requirements of the situation
Brought applicable industry/company/functional
knowledge
Demonstrated mastery of applicable methods/technologies
Presented credible approach/plan to solving the problem
Proposed appropriate timeline with a sense of urgency
Conformed to budget expectations and expected value
proposition
Communicated competence to solve problem
Provided evidence of fit with organisation
Engendered sense of comfort to project sponsor
Experience of the Managed all phases of the project in an orderly manner
engagement Assigned sufficient and appropriate personnel to the
project
Met contractual milestones (timing, expense) and
interim deliverables
Practiced collaboration/inclusion inside the
organisation
Focused appropriate internal and external resources on the
problem
Minimised disruption to the organisation (time, staff,
mind-share)
Conducted comprehensive, competent data-driven
investigation
Surfaced, explored and/or brought forward relevant options
Applied creativity to developing strategy
Found ‘ah-ha’ insights (different, reframed, breakthroughs)

Maintained integrity (objectivity, non-political)
Delivered credible answer(s) to problem/question posed
Proposed practical paths forward
Accounted for competency of the management team
Crafted a compelling storyline and presentation
Assimilation of results Gained trust of key decision makers
Refocused issues or reframed mindset of the
organisation
Fostered cohesion among decision stakeholders
Obtained commitment to action from key decision
makers
Met goals of project sponsors, whether ‘pure’ or
‘political’
Impact 107
Evaluation category Dimensions of evaluation
Determination of Changed inputs (resource allocation, staffing, goals, priorities)
outcomes Changed processes (the way we do things, organisation,
structure)
Changed context/culture (the way we see things, the way we
behave)
Changed outputs (financial measures, closely watched
numbers)
Achieved transaction (buy, sell, trade, LOBs or companies)
Prevented disaster (what we would have otherwise done)
Improved strategic position, viz. The Future that Unfolded
Seen as having generally benefitted organisation
Extended relationship with consultant (implementation,
follow on)
Incidental benefits Generated energy inside the organisation
Forwarded the sponsor agenda
Identified ‘accidental’ opportunities
Provided learning (individual, group or institutional)
Improved organisation’s capabilities or competencies
Contributed to personal advancement (sponsor, team,
consultant)
Reframed mindset of organisation in general (we now see
things differently, do things differently, have greater
aspirations)
Source: McClellan (2010)
constitution of the project (setting up the project team, etc.), experience of the engage-
ment (that is, the process of analysing and problem solving), assimilation of results (the
process of presenting and agreeing final recommendations), determination of outcomes
(including where relevant, implementation) and incidental benefits derived. Each
dimension is expressed as a statement about the consultant’s contribution, with which the
client can agree or disagree; responses could also be scored on a scale of 1–10 with 1
meaning strongly disagree and 10 strongly agree.
Highlighted in bold in Table 8.1 are fifteen issues that McClellan’s research found to
be most frequently mentioned by clients, and therefore most likely to determine client
satisfaction and therefore impact. It is worth considering the implications of these, and
also of those issues that were not highlighted by clients – but, in terms of impact, are still
important.
First, it is interesting that none of the issues identified under formulation of the problem
were among the most frequently mentioned by clients. Yet, from a consultant’s point of
view, these issues are vitally important: they help establish the scope of the problem,
client expectations and the nature of the relationship. One implication would seem to be
that these formative steps happen under the radar for many clients, or at least are not
considered a priority. It would therefore follow that the consultant needs to take the lead
here in order to ensure that these things do get done.
Under constitution of the project, the issues that most concern clients are the members of
the project team and the knowledge they bring with them. The implication here is that
clients want what they are paying for. They want, and expect to get, experienced,
knowledgeable professionals. Failing to provide a top-quality consultancy team will cause
the client to lose confidence from the outset, and this is bound to affect impact.
The composition of the consultancy team comes up again under experience of the
engagement, but here the emphasis changes. Here we can see that the client’s impression
of impact is heavily influenced by the process, not just the result. Metrics that rely purely
on value creation or financial metrics will miss a rich range of issues that contribute to
client satisfaction. The McClellan research suggests that clients value the process of the
engagement nearly as much, or even as much, as the results.
Certainly clients are looking for professional competency on the part of the consultants,
and they will scrutinise the process and expect data-driven investigations; these give them
more confidence in the outcome. But they are also looking for direct contact with the
consultant through the process. ‘Accounting for the competency of the management
team’, means that the consultants are able to work at the same level as the management
team, identifying strengths and weaknesses, understanding where the management team
has gaps and helping to fill those.
Further, ‘minimising disruption to the organisation’, certainly does not mean the
consultants should be invisible. On the contrary, they must be very much present, for
this is how learning by osmosis occurs. What they must not do is unnecessarily distract
staff or take them away from their own important tasks. This leads us to the conclusion
that a consultancy engagement should as far as possible blend into the ordinary working
life of the client organisation. Consultants must fit in.
The view that the engagement process, whether problem solving or capacity building
or both, is as important as the outcome is reinforced when it comes to assimilation of
results. All five issues in this category are noted as being highly important. I will single out
just two here, reframing mindsets and fostering cohesion among key decision makers.
Impact here means (a) changing people’s perceptions of the world around them and
(b) creating consensus as to how to respond to those new perceptions. This is change at a
deep level, a long way below pure problem solving; this goes right to the heart of
capacity building, not just giving people knowledge and tools but changing the way they
think. With new perceptions, greater confidence and greater cohesion, companies are
better equipped to go forward.
With determination of the outcomes, on the other hand, the results are fairly predictable.
The implication of this research suggests that clients are not so much interested in the
metrics of change, the value that change might create; rather, they want to know that
change has occurred, and that this change has the potential to make the company more
effective and more efficient. A further implication is that clients themselves are less
focused on the notion of measuring value than are consultants themselves, a conclusion
partly supported by the work of Wright and Kitay (2002). In other words, clients know
that the future is uncertain and nothing can be predicted, and won’t necessarily blame the
consultant if things go wrong in future. (This will not stop outside observers in academia
and the media from doing so, of course.)
Under incidental benefits, the one issue singled out was the provision of learning. Clients
clearly value the new knowledge that consultants bring, but as we saw in the last chapter
there are several kinds of learning, and once again consultants need to be careful not to
be seen as gurus, wise sages who have all the answers to all the problems at their fingertips.
Learning by osmosis and co-created learning are more likely to produce impact than
lecturing or teaching clients.
Finally, we should note that several issues not highlighted are nonetheless vitally
important. Clients may not see them as things that are essential to be done; but assuredly,
if they are not done, there will be negative impacts on the engagement. Examples
Impact 109
include engendering comfort to the project sponsor, exploring and bringing forward
relevant options, maintaining integrity, crafting a compelling storyline and presentation,
and preventing disaster. The highlighted items are those on which the client is most
.
likely to directly assess the consultant; that does not make the other issues any less
important, or mean they do not have to be done.
Impact over time

One thing missing from McClellan’s model, and from most discussions of impact, is the
concept of time. Research still needs to establish whether the relative importance of
some of these dimensions increases and decreases over time. Anecdotal evidence from
clients suggests it does: in the immediate aftermath (up to six months or a year after the
conclusion of the engagement), the client places most value on outcomes, changes in
inputs, process, outcomes and so on. In the medium term, two to three years, the focus
shifts to learning and clarity of thinking and cohesion. Longer than that, there is very
little evidence, and it is possible that three or four years marks the point at which the influ-
ence of a consultancy engagement starts to wane; changes in the market, in technology, in
competition and so on mean that the company now faces a new set of problems. This
has, however, to be proven.
How can impact be stated?

Another problem with impact is that it can be very difficult to make a clear impact
statement. Thus when someone asks the question, ‘what impact did this engagement
have?’, it can be very difficult for either client or consultant to answer coherently. Both
sides know that there was impact; both sides know that the client organisation is now in a
better place than it was before the engagement started, but that knowledge is tacit
knowledge and they struggle to make it explicit.
One way of getting around this problem is to agree on some key measures of impact
during the negotiation process, using McClellan’s framework above or other suitable
methodologies. If both sides agree at the beginning what impacts they are looking for
and state them clearly, both can then agree at the end whether they think those impacts
have been achieved. Metrics can be used, but simple yes-no questions will often suffice.
Client and consultant can then both say clearly that this agreed impact was achieved.
Shareholders may well want to know the monetary value of each impact, and as we have
seen that can be very difficult to estimate; but at least a reasonable, agreed case can be
presented.
The impact measuring process: what consultants should do

When attempting to assess or measure impact, whether using the framework above or
any other framework or methodology, consultants should follow five rules.
First, agree with the client what things will constitute impact. What does the client
value most, and what do they need to get from the engagement? It is important that
impact measures relate only to outcomes directly related to the goals of the engagement,
not to the client’s wider goals and mission.
Second, a time frame should be agreed. How long is impact likely to last? This will
depend on the nature of the work being carried out, but as we said above, it is
uncommon for a consultancy engagement to still be yielding assessable value after three
or four years, though the feel-good factor may well last longer than that.
Third, agree with the client how impact will be assessed, quantitatively or qualita-
tively? What limitations are there on measurement and what caveats must be applied to
the results?
Fourth, measure and assess impact during the client engagement, and check to see
whether the client is satisfied with and deriving value from the process.
Lastly, continue if at all possible to measure impact at intervals after the project is over.
There may be problems in doing so; for example, if the CEO or others who brought the
consultants in depart and are replaced by other people no longer interested in continuing
the relationship, then doors may be closed to the consultant. Care must be taken also not
to intrude too heavily on the client or waste their time. Often, key impact measures can
be discussed in a single phone call with the client every six to nine months, and a
qualitative assessment derived from the client’s opinions. This is not exactly precise, but it
should satisfice.
Chapter summary
This chapter dealt with the difficult issue of assessing impact and understanding what
it means. We looked at some of the problems and difficulties with assessing impact, and
at defining impact as a measure of quality, determined by the client. The definition at
which we eventually arrived was the combination of qualitative and qualitative value enjoyed by
the client over a defined period of time.
We then moved on to discuss the measurement of impact, arguing that purely quan-
titative measures will not suffice and suggesting the McClellan framework as an example
of how to include more qualitative measures and move the focus to the client. We dis-
cussed the importance of measuring impact over time, as some impact measures will
change with time, and we looked at how impact can be stated and described in a more
explicit manner. Finally, we offered some suggestions as to what consultants should do in
order to obtain better and more explicit understanding of their impact in any given
engagement.
Of course, there are times when there is no impact, or negative impact. No matter
how much care is taken, things do go wrong in consultancy engagements, and it is to
this issue that we turn our attention in the next chapter.
Student exercise
Go back to Table 8.1 and look at the impact measures, referred to there as ‘dimen-
sions of evaluation’. If time permits, look at each measure; if not, use the highlighted
fifteen as a sample. For each measure, answer this question: as a client, how would
you expect to see those impacts demonstrated during a real consultancy engagement?
What evidence would you want to see?
Write down as many things as you can think of next to each item. Then, as a con-
sultant, refer to the lists you have created and think how you would do in the course of
your daily work to demonstrate impact to the client. Again, write down as many
behaviours and actions as you can think of that would help you to demonstrate
impact.
Impact 111
Case study: Handyman Building Supplies

Handyman is an American building supplies chain headquartered in Lincoln, Nebraska
and with a chain of 146 outlets across the western half of the USA. Fifty-two of these
outlets are directly owned; the rest are franchises, with fourteen franchise holders
dividing up the outlets between them. Each franchisee holds the franchise rights for
one American state; Handyman has kept direct ownership of outlets in Nebraska,
California and Washington state.
Handyman was founded just over forty years ago, originally as supplier of tools and
materials to the house construction industry. Over time it has evolved into a consumer
retail business, and today more than 90 per cent of sales are to the home improvement
or ‘do-it-yourself’ market, householders who want to make repairs or improvements to
their homes as a hobby or leisure time activity.
Each Handyman outlet stocks the same range of goods, and around 8,000 varieties
of tools, fixings and raw materials are carried in each store. In order to keep stock
costs down, Handyman has a warehouse in each state, and each store has a com-
puterised just-in-time ordering system; the aim is to ensure that all stock orders are
fulfilled within twenty-four hours, sooner if possible. This system has so far worked
well, but it is predicted that if customer demand increases any further, the system will
come under strain. Failure to fulfil orders could lead to empty shelves, and dissatisfied
customers.
Although the home improvement market in western USA has flattened out, Handyman
has continued to grow, winning market share from some its larger rivals. Handyman is
famous for its smiling, friendly staff, and products are always available when needed.
Handyman has also invested significantly in advertising in key markets, supporting both
the company-owned stores and the franchises.
However, Handyman now reckons it has reached the end of its growth potential in
the western states. Its board have been considering several options. One is to expand
existing stores to create a larger range of products; an expansion into gardening sup-
plies, or into fitted kitchens and bathrooms, have both been discussed. A second option
is to invest in a new chain, again perhaps concentrating on gardens or fitted kitchens,
but to spin this off from the core business and run it as a subsidiary. A third option is
to expand the Handyman brand east of the Mississippi, especially into the more
populous north-eastern states, although it is known that competition is more severe
there and Handyman will have to work hard to establish a brand presence.
Handyman has engaged your consultancy firm to carry out a strategic review to
look at these and other options.
What impact measures do you think will be most important to Handyman? How will
you go about demonstrating impact?
Case study: Fatermékek Temesvárról

Fatermékek Temesvárról was founded in southern Hungary in 1994 by Ferenc Nágy, a
former official in the state forestry service. Nágy is still the primary shareholder, but he
has handed over control of the company to his daughter Erszébet, who serves as
managing director. The company is privately owned. It had a turnover last year of €143
million, and profits of $4.6 million.
Fatermékek Temesvárról produces wooden domestic and office furniture, and also
products such as wood panelling for walls and hardwood floors. It has several markets:
panelling and walls go mostly to the building trade, while office furniture is sold to B2B
office furniture specialists and domestic furniture – mostly chairs and tables – goes to
consumer retailers. The company has no direct retail presence itself.
The office furniture market was formerly very profitable, but that industry experi-
enced a slowdown as Europe’s economy faltered after 2008 and the sovereign debt
crises; the German market, formerly very lucrative, has seen a sharp decline in sales.
The market for panelling and floors also declined as the European house construction
industry went into a slump.
Domestic furniture, on the other hand, is doing well, and Erszébet Nágy thinks there
is real potential in this market, especially if she can get her products into furniture
showrooms in Western Europe and the UK. A combination of good quality and low
cost base means Fatermékek Temesvárról’s products should be very competitive. One
UK department store chain has already expressed an interest.
Two things are holding Fatermékek Temesvárról back. One is lack of capital. To
really push for export growth, Fatermékek Temesvárról will also have to expand its
production facilities in advance of growth, and this would require more capital than the
company has. Bank lending in Europe remains tight thanks to low interest rates, and
Hungarian banks have declined to back what they see as a risky export venture. Nágy
is wondering about pursuing a listing on the stock exchange in either Budapest
or Vienna.
The second is lack of management competence. Nágy herself has an MBA from
INSEAD and has worked in France and Germany, but most of her fellow directors lack
experience outside of Central Europe. Nágy doubts too whether they have the finan-
cial and managerial skills to run a considerably expanded company operating across
international boundaries.
Nágy has engaged your firm to conduct a review of the firm and advise on three
issues: (1) general strategy going forward, (2) whether to pursue a stock market listing
and launch an IPO, and (3) how to build capacity and strengthen the management
team. She has warned your firm that some of the other directors disagree with this
move: they resent outsiders coming into the firm and think the spend on consultants is
a waste of money. You get the impression that this is not the first time Nágy and her
fellow directors have disagreed on important points.

What impact measures do you think will be most important to Nágy and the rest of
her company? How will you go about demonstrating impact?

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8 Impact

Impact, like quality, is deﬁned by the client.

Impact can have both qualitative and quantitative value.

Impact should be lasting.

While there is no general agreement as to how long the impact of a consulting

This leads us to a simpliﬁed deﬁnition as follows:

How can impact be measured?

Found ‘ah-ha’ insights (diﬀerent, reframed, breakthroughs)

Impact over time

How can impact be stated?

The impact measuring process: what consultants should do

Case study: Handyman Building Supplies

Case study: Fatermékek Temesvárról

fellow directors have disagreed on important points.

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Management Consultancy - (8. Impact)

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Management Consultancy - (8. Impact)

Uploaded by

Copyright:

Available Formats

8 Impact

Impact, like quality, is deﬁned by the client.

Impact can have both qualitative and quantitative value.

Impact should be lasting.

While there is no general agreement as to how long the impact of a consulting

This leads us to a simpliﬁed deﬁnition as follows:

How can impact be measured?

 Found ‘ah-ha’ insights (diﬀerent, reframed, breakthroughs)

Impact over time

How can impact be stated?

The impact measuring process: what consultants should do

Case study: Handyman Building Supplies

Case study: Fatermékek Temesvárról

fellow directors have disagreed on important points.

You might also like

Found ‘ah-ha’ insights (diﬀerent, reframed, breakthroughs)