Basic Consulting Skills

Community Consulting Club

University of Michigan Business
School
 C O M M U N I T Y
C O N S U LTI N G
Agenda

Pegging the Scope Down

Analyzing the Issues
Developing a Work Plan
Working in a Consulting Team
Q&A

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 C O M M U N I T Y
C O N S U LTI N G
Agenda

Pegging the Scope Down

 Analyzing the Issues
 Developing a Work Plan
 Working in a Consulting Team

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 C O M M U N I T Y
C O N S U LTI N G
Pegging the Scope Down

Understand what the problem actually is

Meet early with client to sort this out
Develop a statement of the problem
A question or a clear hypothesis
As specific as possible
Focused on action
Draft the engagement letter

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 C O M M U N I T Y
C O N S U LTI N G
Pegging the Scope Down

Fact • The Red Cross does not know what its educational
courses are costing

• What costing systems can the Red Cross put in place to

Too General find cost of courses?

• Build a simple and quick system that the Red Cross can
Specific, put in place in order to better price its courses and
Focused on manage its course mix
Action

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 C O M M U N I T Y
C O N S U LTI N G
Pegging the Scope Down

Define Problem Space

Context (Situation): Why is this an issue at this time? Are
there other issues bearing on the problem?
Constraints (Complication): What is not in the scope?
What solutions are not acceptable?
Who exactly is the Client? To whom will we make the
presentation? Who will take the decision?
Define Deliverables (Resolution)

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 C O M M U N I T Y
C O N S U LTI N G
Pegging the Scope Down

The engagement letter

• If you defined the problem, the problem space and the
deliverables, there’s little else to do
• Clearly define expectations from both sides
• Signed by team and client: a statement of commitment
from both sides
• There’s no ‘right’ way to do this

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 C O M M U N I T Y

Engagement Letter
C O N S U LTI N G

Heading Description

Impact/benefit of the In 1 paragraph, define your assessment of the

project to the client current situation at your client, key issues the team
is going to address, and the benefit of resolving
the issues

Work plan/approach to Describe in 1 page what activities the team will

the project undertake over the duration of the project.
Identify the need for customer or supplier
interviews/surveys as early as possible

Prerequisites for Define what resources you will need from the
successful project client, and specify the time per week you will
require from them. If possible, describe the role
each individual will play on your team

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 C O M M U N I T Y
C O N S U LTI N G
Agenda

 Pegging the Scope Down

Analyzing the Issues
 Developing a Work Plan
 Creating a Good Presentation
 Wisdom of the Ancients

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 C O M M U N I T Y
C O N S U LTI N G
Analyzing the Issues

There is no ‘right’ way to do this. Different consulting firms have different

approaches. Use what works.

Brainstorm and build an “issue tree”

Ensure it is MECE
Mutually Exclusive and Collectively Exhaustive

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 C O M M U N I T Y
C O N S U LTI N G
Analyzing the Issues

Issue Tree Example

Change nature of
Change pricing?
collection?

How can the Art Increase attendance Explore alternate

Center at given pricing marketing channels
increase revenues? level? to broaden audience

Explore alternate
Sub-idea 3
revenue streams?

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 C O M M U N I T Y
C O N S U LTI N G
Analyzing the Issues

Prioritize and focus on issues based on impact, team

interests, ease of analysis

Change nature of
Change pricing?
collection?

How can the Art Increase attendance Explore alternate

Center at given pricing marketing channels
increase revenues? level? to broaden audience

Explore alternate
Sub-idea 3
revenue streams?

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 C O M M U N I T Y
C O N S U LTI N G
Analyzing the Issues

Why bother with the darn tree?

Helps divide project
Road map for analysis and data collection
Ensures completeness (prevents blindsiding)

(It will also help you with case interviews)

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 C O M M U N I T Y
C O N S U LTI N G
Agenda

 Pegging the Scope Down

 Analyzing the Issues
Developing a Work Plan
 Creating a Good Presentation
 Working in a Consulting Team

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 C O M M U N I T Y
C O N S U LTI N G
Developing a Work Plan

Identify key issues from analysis

What is our initial hypothesis for a solution?
What analysis do we need to perform to test the
hypothesis?
What data is available? What data is required? How can we
fill the data gaps?
What are the end products for each analysis?
Who will do each task? By when?
Check work plan weekly

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 C O M M U N I T Y
C O N S U LTI N G
Developing a Work Plan

General Advice
Be end product driven, think also about slide output
Ask “So What?”
Be data driven: all opinions are equal
Focus on what is achievable
Don’t try to boil the ocean

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 C O M M U N I T Y

Planning Critical Analyses C O N S U LTI N G

Principles Comments

End-product driven Hypothesize the answer(s) and plan the quickest path to
robustly “prove” or disprove it

Continually question the Re-evaluate hypotheses every day and adjust work plan –
hypotheses regularly check ideas with client

Look for 80/20, “killer Avoid trying to boil the ocean– which analyses will nail the
analyses” answer/ provide the most insight?

Be realistic about end Scrutinize precision of input data– beware of “polishing dirt”
product precision limits

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 C O M M U N I T Y

Story-board the Product

C O N S U LTI N G

MAIN MESSAGES PROJECTED FINANCIALS COST SAVINGS ANALYSIS

EBITDA
• Save $x million through China move SGA
-x%
• Hold price while monitoring competitive FOH
conduct VOH
• Conduct lean transformation Labor
Material
2002 2003 2004 2005

INDUSTRY TREND SCENARIOS PRICING STRATEGY: ROIC ISOQUANT GAME THEORY VS. COMPETITOR X
EBITDA payouts
Price
Perform- Today Year 1 Year 2
Structure Conduct

Drop Hold

Drop Hold
ance Competitor
variable cost

Us

Us
Customers _____ _____ _____
OEMs _____ _____ _____ Drop Hold Drop Hold
Suppliers _____ _____ _____ Market share Them Them

SUPPLIER SELECTION PRODUCTION RAMP-UP SCHEDULE IMPLEMENTATION PLAN

Suppliers May June July …
Criteria 1 2 3 4 Product
_____
1
_____
2
_____ Strong/weak ratings 3
_____ 4
Recommended 2003 2004 2005

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 C O M M U N I T Y
C O N S U LTI N G
Agenda

 Pegging the Scope Down

 Analyzing the Issues
 Developing a Work Plan
Working in a Consulting Team
 Q&A

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 C O M M U N I T Y
C O N S U LTI N G
High-functioning Teams

Trust
presume competence
Flexible roles
needs of project
Clear ownership
delegated responsibilities
Know when to escalate
delays, roadblocks

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 C O M M U N I T Y
C O N S U LTI N G
Agenda

Q&A

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