Human capital Network Capital Social capital

Client Structural Capital capital Organizational Capital

Management consulting
Lecture 6 and 7 Managing knowledge and knowledge workers

Human Capital Intellectual Capital

Human Capital
Staffing Development

Intellectual Capital
Human capital Network Capital Social capital

Employee Knowledge Skills Experience

IC
Client Communication Capital Structural capital Organizational Capital

Products and services which have market value

Performance Management
Remuneration and Reward

Structure of Lecture 6 and 7

Lecture 6
Level of analysis
Organisational perspective
Human capital
Network Capital Social capital

Framework for analysis

Management of knowledge (reactor model)

Client Structural Capital capital Organizational Capital

Lecture 7
Level of analysis
Work process

Framework for analysis

Identity model

HRM issues across both lectures

Recruitment and selection of consultants Promotion policies up-or-out principle The boundaries of HRM practices

Objectives
To understand the characteristics of the management consulting industry
History Types of organisations Types of consultancy activities

Typology of human capital

According to the client interface process Career structures within management consultancy The role of consultants as knowledge brokers

Typology of client capital

The consulting firm client relationships

Human capital Network Capital Social capital

The HRM practice focus:

Recruiting human capital Managing across boundaries

Client Structural Capital capital Organizational Capital

History
Management as a unique field of study Arthur D.Little (1890s) McKinsey & Company
First management and strategy consultancy Founded by James McKinsey in 1926 (Chicago) Hiring of bright young MBAs

Rise of management consultancy after World War II

Development of tools for strategic management Boston Consulting Group (1963), McKinsey&Co, Harvard Business School Bain&Co - focus on shareholder wealth

Consulting within accountancy and technology firms

PwC and IBM

Niche consultancy firms

Corporate social responsibiity

Types of firms in the industry

Accountancy firms offering consultancy Large non-accounting consultancies Small specialist boutiques Gurus Independents

Types of Consultancy services

Strategy HR

Process and Operations

Marketing Management consulting Change Infotech

Org design

Major consultancies
Bain & Company Boston Consulting Group Deloitte & Touche Ernst & Young A.T. Kearny KPMG Arthur D.Little McKinsey & Co Mercer PriceWaterhouse Coopers

Different types of consulting services: a knowledge-based view

Productise Reuse economics People-to-documents IT focus Buy experience Reward for contribution to document database Ernst & Young HRM Competitive strategy Economic model KM strategy Technology Bespoke Expert economics Person-to-person IT enables personal Build experience Reward for knowledge creation and sharing

Example

McKinsey & Company

Typology of Human Capital

The consultancy process Career structures Consultants as brokers of human capital
Boundary spanning

The consultancy process: Your experience

Paired assignment Identify a consultancy experience that you have been part of. Characterise the individual stages of the consultancy process Interview your partner and identify:
Which skills were developed at each stage of the consultancy process Which other knowledge resources did you rely upon during this process

Summarise your findings and be prepared to feed back to the group

The career structure

Analysts Consultants Senior Consultants Business development managers Directors/Partners

The McKinsey Facilitator case

Specific type of human capital Across boundaries How would you design the recruitment process to capture this human capital?

Components of a high performing culture

IQ

General business knowledge Understanding of client context Logical problem solving Creates environment of trust Manages group dynamics High awareness of emotions High self knowledge Experience of own transformational journey Sense of vocation

EQ

SQ

Using external facilitators poses a challenge to many forms of intellectual capital flows

Clients

Facilitators

Facilitator network: HC viewpoint

HC boundary
External pool of facilitators External Externalskill skillexperts experts

Clients

Facilitators within clients

Clients

Focal Regions Practice Group Other

Practice Groups Clients

External skill experts Clients

Mindsets are often misunderstood and ignored

What we see and usually try to change What we cannot see, make assumptions about and often do not address

Behaviour Thoughts and feelings

A desire to change ends up like most New Years resolutions if root Needs met and unmet causes are not identified and addressed

Values and beliefs

The first step in mindset change is a new level of personal understanding

Requires practice

Requires a choice

Requires insight

The first step in mindset change is a new level of personal understanding

You cannot solve a problem from the same level of consciousness that created the problem in the first place Albert Einstein

Requires practice

Requires a choice

Requires insight

The McKinsey Facilitator case

How would you design the recruitment process to capture this human capital?

Facilitator network: OC viewpoint

External pool of facilitators

Clients

Facilitators within clients

External skill experts

Focal Regions Practice Group Other

Practice Groups Clients External skill experts Clients Clients

Recruitment & development processes

Client delivery processes

Positioning in the lecture

Nature of the industry Typology of human capital
Consulting process Career structure Knowledge brokers

Now we turn to the human-client capital interface

We take a closer look at how clients perceive consultants?

IDEA SUBMISSION PROCESS

Workshop room 1. Group discussion on topic/idea 5. Stick hexagon on hexagon wall with similar ideas and rejoin group 4. Receive hexagon at idea table and write on idea no. and title

Individual or group write up idea cover sheet and attach backup materials (others at table may start on another idea at this time if appropriate Patio

3.

Submit written materials at idea table

In tray Filing

Door to patio Wall

Cassette record sheet

2.

Individual(s) go outside to record 23 minute video to explain idea

Video station helper with stickers of idea number

Video station helper puts idea no. stick on to idea coversheet and onto video cassette record sheet. Records idea title onto cassette record sheet Individual(s) write idea no. and idea title on directors boardhold up at start of recording Record 23 mins video

The perception of Human Capital

The ability to learn in practice Why smart people dont learn The impact on organisational learning The impact on social capital The impact upon the client relationship
social construction of learning

The client-consultant relationship

Human capital and its link to client capital Dimensions for analysis
Strength of ties
frequency

Relational
trust

Cognitive
Shared mental models

Giving answers or shaping futures

The nature of relationships

Social capital (between facilitators) Morphology Structural density X Deep X X Resilient Generalized Structural holes Trust: Nature Positional

Social capital (between sponsors)

Morphology Trust: Nature Positional

Structural density Deep Dyadic X Deep X Dyadic X Mechanistic Resilient Generalized Generalized X

X Resilient X

Client-and-network capital (between internal and external facilitators) Organisational capital: HRM process Client relationship process

Morphology Trust: Nature Positional Flexibility

Structural holes

Adaptive X Adaptive X

Flexibility

Mechanistic

Facilitator network: SC & CNC viewpoint

External pool of facilitators External Externalskill skillexperts experts

Clients

Facilitators within clients

Clients

Focal Regions Practice Group Other Practice Groups

Clients

External skill experts Clients Dense: Resilient and dyadic trust

Dense: Deep and dyadic trust

Structural holes: resilient and generalised trust

Structural holes: Deep and dyadic trust

Books about management consulting

Flawless Consulting, Peter Block, ISBN 0-7879-4803-9 Guerrilla Marketing for Consulting, Jay Conrad Levinson and Michael W. McLaughlin, ISBN 0-471-61873-X Managing at the Speed of Change, Daryl Conner, ISBN 0-47197494-3 Managing the Professional Services Firm, David Maister, ISBN 07432-3156-2 The Professional Services Firm Bible, John Baschab, ISBN 0-47166048-5 Managing Transitions, William Bridges, ISBN 1-85788-341-1 Management Consulting: A Guide to the Profession, Milan Kubr (ed.), ISBN 92-2-109519-3 The World's Newest Profession: Management Consulting in the Twentieth Century, Christopher D. McKenna, ISBN 0-521-81039-6