Kristina Safarova: Succeeding as a Management Consultant

INTRODUCING THE ENGAGEMENT

A work stream or work team refers to a group of consultants within the engagement team focusing on a distinct cluster of analyses.

ETHICS AS A COMPETITIVE ADVANTAGE

Management consultants have access to data that moves markets. We advise companies and industry leaders who make multibillion-dollar decisions on investments, new plants, hiring, firing and more. What we do matters. Yet, who watches us? We are not a regulated industry.

Being ethical gives you a sustainable competitive advantage.

Values is a material competitive advantage that is difficult to replicate and has a tangible financial impact.

In Michael Porters’ thinking, ethics is the ultimate competitive advantage since it requires one to adjust every aspect of their life, thinking, philosophy and activities to achieve this advantage. Doing that is very difficult which means many would not do it.

Your worth and standing in life is determined by accolades. As your career progresses, you begin to be judged more by your actions and less by these accolades.

By 1960 Warren no longer asked people to invest, they had to bring it up. This is the same strategy as Marvin Bower used for McKinsey. If the other party asks you for your service, they don’t have a “prove you are worthy” attitude. You are doing them a favor and not the other way around.

Like Michael Porter said, a competitive advantage is not one single thing you do, but how you organize your life to produce this advantage.

First, it is important to understand that ethics usually applies to three types of actions. Actions not covered by law, actions for which the law is not enforced or actions for which the law is clearly wrong.

Anyone who tells you that they know with absolute certainty that they are absolutely right is absolutely wrong. You can only be reasonably certain of being right.

Being ethical does not mean you have to be nice to people. Personality and your value system are completely different concepts.

The social construct to which you belong determines what you consider to be a clear conscience. You are your friends.

Ethics is required when the law is not written, not enforced or wrong.

BUSINESS JUDGEMENT

Judgement is the way one interprets information. And to interpret information we typically rely on our past experience, readings and teachings, what we see in the media, and travel experiences.

If you want to build out your judgement, you need to think about the source of your knowledge:

• Past experiences (packing trucks, waitressing, being mugged, etc.)
• Readings (high school, university, media, books, comics, etc.)
• Education (high school, university, ongoing development, etc.)
• Social network (your significant other, friends, family, and their conversations)
• Media exposure (cable, internet, streaming, etc.)
• Travel (the trips you take daily and on vacations)

Judgement is essential, and it comes from everywhere. Your job is not to assume you must ignore what you already know. You must learn to use it.

First principles analyses help you figure out what drove the issue, but you still need to apply judgement to determine what likely happened.

If you have no unique judgement, we could essentially hire anyone who knew how to solve a problem from first principles or simply automate the task.

The responsible person does what they are told, correctly. The accountable person thinks about why they are completing task x, determines if another task should be done to achieve the intended goal and makes those changes. They own the problem and not the solution.

PROLOGUE

The book is talking about virtual engagement project of consultant company at Goldy, which is a made up case, but close to the real one.

The Brazilian Minister of Resources eventually played the patriot card: “Carlos, Goldy is a national institution in Brazil. It is your duty to turn it around. The very future, the very competitive fabric of Brazil is interwoven with Goldy’s success. If Goldy unravels, Brazilian morale and competitiveness will unravel.” Selgado eventually accepted the position.

A month into his position, Selgado knew he would need help. His first management meeting was a disaster.

No one had a business plan, and certainly no direction had come from executive management. The first meeting with the Strategic Planning Group (SPG) was another disappointment.

Goldy was like a huge supertanker merely carried by the momentum of its past success. Yet, even the largest supertankers can be stopped.

It did not get any better outside the company. Two weeks into his tenure, Fleet Rock Investors wanted to meet him.

Realizing the need to have an honest appraisal of the situation, Carlos contacted a consulting partner called Marcus Capple whom he met while preparing for his interviews with the board.

He would need to be careful in rolling out his turnaround strategy and employing consultants. The stakeholders at Goldy were powerful, entrenched, and resistant to new ideas.

WEEK 0: WEEK BEFORE THE ENGAGEMENT

Week 0 is also known as the pre-engagement week. It is rare to have them. The team will work in the office and away from the client. The objective of this week is to ensure the team fully understands as much about the client and the problem as they possibly can and before they arrive on-site. At the end of the week, the team must actually develop their solution and thereafter use the engagement to test their hypotheses.

Planning commences with the engagement team reviewing all relevant newspaper articles, research reports, equity research reports, annual reports, and regulatory filings about the client. As the team conducts its research, each member will write down any issues they think affect the client.

Posting issues on a whiteboard helps everyone see a common set of items, potential patterns, and themes developing. In the second or third meeting, the team starts discussing the common themes from the list of issues. The group uses this discussion on themes and key issues to spur debate and gain a better understanding of the engagement.

Many consultants get too focused on answering the question posed by the client, but perfectly answering the wrong question will not help the client. Therefore, the team takes time to ensure they are asking the correct questions in the engagement. They ask themselves, “If we solved this question posed by the client, would the problems at the client be resolved?” If the answer is yes, the key engagement question is confirmed and captured.

To make it easier and manageable, the team takes this question and splits it into smaller questions in a logical format.

As the team develops each layer of questions, they test each layer (e.g., layer 2, layer 3, layer 4) by asking themselves two further questions. First, are these the complete list of questions in this layer that can impact the previous question? Second, have the questions been sufficiently separated so that changing the variables that impact one question will have NO impact on another question?

The principles of being mutually exclusive and collectively exhaustive (MECE) are fundamental concepts in management consulting. They are the foundations on which consulting analyses are built.

Isolating a question, issue, or analysis allows the engagement team to conduct a test whereby they can be sure that x, y, or z is responsible for the changes.

When questions are laid out from left to right, with the primary question on the left (How can Goldy increase its production value?) and the subsequent levels fanning out to the right, it tends to look like a tree with branches. This is the origination of the term value tree or decision tree. Developing the decision tree is one of the most important steps of an engagement.

Using the decision tree, the team can break down a hypothesis into manageable components for analyses. Using these detailed decision trees and hypotheses, the engagement team can determine the likely answer to the questions before they arrive at the client site. Using the decision tree, the team also develops the storyboard for the engagement. The storyboard is the message delivered to the client based on the expected results.

The engagement is therefore the process of proving or disproving hypotheses. The decision tree and hypotheses are written as questions.

The process can be summarized as follows:

• Determine the key engagement question Develop the decision tree to the 4th or 5th level horizontally
• Check for MECE Prioritize the branches Develop hypotheses for the prioritized branches
• Develop analyses to test each hypothesis
• Develop the storyboard
• Collect data for the analyses
• Complete the analyses
• Refine the storyboard

The business case team needs to ensure the opportunities recommended will actually deliver the benefits stated.

They ask such questions as the following: Are the opportunities mutually exclusive? In other words, are we double counting benefits? Does this opportunity make sense? Will it actually work as described? What is the impact of doing this? Is this opportunity worth pursuing? What are the returns and cash flow patterns?

These five pieces of work take about a week to complete:

• Stream Charter: a charter is a clear explanation of what the business case team will deliver.
• Model Architecture: the architecture is a simple modular representation.
• Model Description: a half-page description of the model.
• Decision Tree Tests and Data Requirements: the decision trees are a set of questions.
• Storyboard: the storyboard consists of the headlines of the presentation that summarize the expected results from the business case stream.

WEEK 1 – DAY 1&2: FIRST WEEK AT THE CLIENT

Building the overall work plan so early in the engagement requires the business case team to understand the overall problem, outline how they will design the solution, list their data requirements, and understand all the questions that need to be answered.

The business case team must conduct the initial top-down financial assessment of the operations. The result of this analysis, coupled with the focus interview feedback and benchmarks from Goldy peers, provides enormous insight to the engagement team.

It is a consulting rule never to go into a situation where the client has not been carefully prepared, and the outcome cannot be managed.

WEEK 1 – DAY 2: TOP-DOWN ANALYSES

As computing power had advanced and the firm better integrated its knowledge management systems and sharing of analytic tools, analysis had become too easy to conduct. In fact, it had become commoditized. Like any commodity, it had been abused.

If the hypotheses focused on the wrong issues, having to change the direction of an engagement at a later date is difficult to do.

In any study, especially longer and more complex engagements, the team needed concrete validation that their early hypotheses and focus were correct.

There are essentially four steps that are common to all well-planned engagements. Like any individual analysis, an engagement has a top-down step, consisting of four parts:

• Focus Interviews – Focus interviews are a key tool that should be deployed on every engagement. Very early in the study, an update must be presented to the most senior management, usually the CEO and his team, on the initial findings. The process of developing the interview questions forces the teams to think about whether or not they have the correct hypotheses, and how they could collect the data to test them. Younger and inexperienced consultants struggle on all studies. This is normal. Focus interviews rarely identify the wrong themes to be analyzed. Employees are at the frontline and the frontline is rarely blindsided by market events.
• Financial Analyses – Financial analyses are scary to an average consultant. Finance is like math. It is generally poorly taught at school and typically by teachers who believe their discipline is superior. Done correctly, the average top-down financial analyses across all clients, in all sectors, and irrespective of the client size, can be done in between 24 and 72 hours. The majority can be done in less than 48 hours. Like the focus interviews, the financial analyses are like a compass. They highlight anomalies, data spikes/dips, patterns, and trends that must be examined further. They set the direction for more work. Four guidelines for top – down financial analyses: It is not offering a solution. It is not offering a reason for the problem. It is not forecasting nor modelling anything. Financial analyses are not financial modelling. Three types of analyses need to be done at this early stage. Ratio analyses: basic calculations of simple profitability, cash flow, and simple balance sheet ratios. Cost structure: requires a fairly simple analysis of margins, fixed costs, variable costs, contribution margins, and/or break-even points. DuPont/ROCE analyses: essentially any return ratio would work here. In other words, is the client earning a healthy return for their capital deployed?
• Benchmarks – The idea of looking for patterns can be taken further in a simple way requiring little effort, provided the minimal investment is made ahead of time on each study to build a proper data capturing system. The calculations must be uniform and consistent. That is, a consultant working in Munich must be calculating ROCE the same way as a consultant in Mumbai. Offices must trust other offices and have a central location to collect client data, archive the original data, and only share the sanitized version.
• Case Studies – Max found the case study discussion most intriguing. His view had always been that a case study was a case study. It meant the same thing in all parts of the firm and the contents/quality/methodology was uniform across the firm. Case studies help the consultants understand how a problem evolved at another company. Case studies are rife with abuse. Any case study can be designed to show anything the consultant wants to show. Consultants cherry-pick both the case study to present but also the facts within that case study. A case study should have a very narrow scope, or it is meaningless. Broad case studies tend to be inaccurate unless they are period case studies. Consultants avoid period case studies since they are harder to do. Unless the consultant was involved in the company being case-studied, and at a fairly senior level of the discussions with that client, anything they say may lack credibility. Case studies generate the least controversy when they lack controversy.

WEEK 1 – DAY 2: ENGAGEMENT CHARTER

The charter is essentially the business case team’s contract with the engagement manager. It exists for several reasons: It helps to set expectations from both sides. The engagement manager uses the charter to understand the work the team will do, and the team can tell the manager what they intend to do.

The manager uses the charter to manage client expectations and the rest of the engagement team. The charter becomes an important tool to manage the performance and performance review of consultants both during and after the engagement. From a legal perspective, if the client agrees to the charter, it is much more difficult to claim the work was not done or they misunderstood what they would receive. While everything else may change, the charter should never change unless the scope of the engagement officially changes. The charter should be only one page.

The charter has five components:

OBJECTIVES – The objectives are the reasons why the business case team exists in the engagement.

SCOPE – Determining the scope is important. It creates the boundaries for the business case team. The scope could be described along such dimensions as geography, level of detail, value chain, or parts of the company analyzed. The scope should also outline the depth of analysis required.

KEY ACTIVITIES – Many activities will be required to complete the work. This section lists the main clusters of activities that are critical to reaching the objectives above.

DELIVERABLES – If the objectives of a work stream are defined as what the team wants to accomplish at the end of the engagement, the deliverables are the work and insights to be provided to the client at the end of the eight-week engagement. Consulting firms never present solutions/answers. They always present the implications of various options, and it is up to the board to decide the way forward.

CRITICAL SUCCESS FACTORS – The critical success factors (CSFs) are important. Most consultants forget to write down what they need to make this engagement successful.

WEEK 1 – DAY 3: OPERATIONS STRATEGY & PRODUCTIVITY

Productivity is a well-used term but poorly defined.

Productivity is measured as the output value/input. There is no other definition of productivity. It is erroneous to assume productivity is how fast one completes a task, or the number of tasks completed in a year. Completing a task quickly that is of little value or completing many tasks that add little value will actually lower productivity. Completing just one task over an entire year that is very valuable means one is actually very productive. Understanding productivity is important. It will change your life if you manage your schedule by this definition.

An unproductive enterprise, relative to its peers, cannot make the necessary investments to grow, fight in the market, introduce new products, block competitors, attract talented employees, etc.

Productivity is always a relative measure. There is no such thing as a productive or unproductive business/person. A business can only be less or more productive relative to some comparison business.

Even if you start at the lowest possible career path, as long as you keep earning some excess value and continue wisely reinvesting this excess in your development, you will benefit significantly in the long term. It adds up like compounding interest. This is compounding productivity. It’s a term invented for this book.

The point of being competitive is to drive up productivity. Without greater productivity, you cannot hope to win. And one cannot be competitive unless one is productive.

Competitive advantage is knowing whether the company will mostly differentiate itself on the numerator or denominator and how it will differentiate itself to be productive.

It is possible to raise productivity significantly by hurting the company. That is a counterintuitive yet common strategy and operations mistake made in business. And this is why it is not sufficient to just raise productivity. One has to raise productivity by pursuing the right competitive strategy.

A resources company can be analyzed in the same way. Its productivity is a ratio of total output value to total input costs. As a commodity business, almost all resources are commodities, a resources company automatically struggles to compete at the output value level. It can do a few things to increase output value but not much.

When demand is rising, and prices for commodities subsequently surge, companies ignore lowering costs since high prices can mask poor cost containment.

Some common mistakes consultants make is to assume that productivity should first be increased on the new production and then the focus should shift to the existing production.

WEEK 1 – DAY 3: DEVELOPING THE VALUE TREE

Every economic model has a core calculation engine that produces the data around which all the calculations will be performed.

The core engine, sometimes called an activity model, itself must be driven by a set of primary data. The model determines how key metrics (such as ROCE) change as the primary data is altered.

Built around the core engine, the model will have several options that must be tested. An option is a different route for management to fix the business. The model should be able to test all the options that have a significant impact on production value. No more than two to four options should be modelled. The model must be explicit about what will be assumed, what will be measured and included, and what is simply taken from industry benchmarks. Benchmarks are critical.

Not everything in the model is variable/flexible. The output of the model is just as important as the input.

Financial models should never be generic. The top-down financial analyses will indicate what must be analyzed further with the financial model. The economic model must be simple and specifically answer the questions to be answered.

It is usual for clients to be more attentive and willing to learn new ideas at the start of the engagement.

It is critical that the agreements, decisions, and next steps from the meeting are captured in an email and circulated among attendees. The person who writes the next steps has lots of power. They get to interpret all the agreements and propose the way forward.

Everything has been reduced to an equation. It is a critical requirement of effective value trees. Essentially, an effective value tree involves layers of equations. However, not all decision trees can be broken down into these neat equations. In many engagements, particularly organizational design and organizational issues, there are no equations as such.

Bs/Cs are an acronym for benefits and concerns. This is a process that usually ends all meetings and workshops. The attendees discuss the benefits of the sessions and concerns. All concerns must be acted on through next steps. Concerns must never be left as unaddressed items without a clear next step, a person accountable for the next step, and a deadline.

WEEK 1 – DAY 3: DEVELOPING THE MODEL ARCHITECTURE

The architecture is not an overly detailed layout of the economic model. It does not consist of many pages of drawings and notes. It is actually a one-page diagram. The architecture explains the conceptual logic behind how the model will work. It visually indicates how the different blocks of analyses will link together to produce the final results.

The model architecture is somewhat similar to the early design mock-ups produced by architectural firms to demonstrate early concepts to a client.

Max writes down the purpose of the model:

• Calculate ROCE. Analyze the existing operations to generate the base case. This is the operation’s current performance.
• Produce the business case for each option:
  • Improving productivity
    • Improving production
  • Reducing bottlenecks
    • Removing gaps in production
  • Reducing costs
    • Procurement costs
    • Supply chain costs
• Key outputs from the model include ROCE, costs, cash flows, and financial and operating trade-offs between all options and the recommended option.
• The scope is clear: five-year timeline, one mining site, and analyzing only the operations.
• External (macroeconomic) shocks tested will be limited to currency, inflation rate, and gold price fluctuations.

The primary data (variables to alter production volume) to drive the core engine is listed as well as how it will be calculated. All three types of options are listed. Outputs are listed.

WEEK 1 – DAY 4: DRAFTS OF WEEK 1 PLANNING DOCUMENTS

Everyone in the team has seven minutes to deliver their update in the following format:

• Key insights and findings
• Things useful to the other teams
• Help needed

A stretch role is one that forces consultants to move outside their comfort zone by learning new skills, operating in a new environment, or doing work they have never done before. Stretch roles help develop consultants.

WEEK 1 – DAY 4&5: WRAPPING UP WEEK 1

The basis of a client-consultant relationship is usually set over the first one or two meetings.

• Stream charter: This is an overview of the business case scope of work. If it is not in the charter, it will not be done.
• Value tree and data requirements: This document explains the key metric to be measured. It breaks down the metric into drivers. The value tree will form the basis for how the relationships between outputs, such as costs and revenue, will be modelled.
• Model architecture: This is a conceptual overview of the overall economic model. If it is not in the architecture, there must be a compelling reason to include it. The architecture must be decided before the details can be developed.
• Model description: The description summarizes the model architecture in words using no more than half a page.
• Work plan: The work plan is a high-level guide to key targets and activities. It is meant to guide everyone’s expectations regarding data requirements and deliverables.

The details can only be developed once the high-level approach is approved. They need to know what they are building before it is built.

Teams and roles:

• Engagement Manager — The engagement manager must guide the team and bring together the findings from the operations improvement, services, and business case teams.
• Operations Improvement — The objective of this team is to find ways to raise production value for the core mining operations.
• Service Functions — The services team will analyse all the service functions. They will need to determine what impact this is having on the performance of the business and recommend a set of actions to manage services.

WEEK 2 – DAY 1: MINE SITE VISIT

The best management consultants understand that it is impossible to properly advise a client without understanding the environment, culture, history, and challenges within the location where the solution will be implemented.

WEEK 2 – DAY 4: ALL THE PLANNING IS DONE

Despite all the assistance partners and team members offer on an engagement, unless the associate or business analyst responsible for the work takes full ownership and understands the problem in its entirety, it will never be a successful engagement for that consultant. Ownership of the problem and solution is a prerequisite for success. Attitude is just as important as skill. Ownership implies taking charge of the process and pulling in help as needed.

EVA (economic value added). EVA is difficult to benchmark across companies since they use different adjustments.

WEEK 2 – DAY 4&5: DESIGNING & CONDUCTING FOCUS INTERVIEWS

How frequently new business analysts misunderstand the importance of the focus interviews and the purpose of a business case.

Too many young business analysts think the business case team’s work is done once the model is built and ready; little do they know that this is just the beginning. The real work starts once the model is ready, and it must be used to analyses the various options and guide the development of the final recommendations. The latter part requires building client relationships, understanding all the issues, and being able to communicate clearly. Business case development is not about model building. It is about understanding the business.

For the business case team: The focus interview is a critical tool to collect valuable data and test hypotheses. The client will almost certainly know more than the consultants. The client can outline what has been tried, what has failed, and what has worked. The ability to design, conduct, and analyze a focus interview is one such soft skill.

The overall engagement team has the following objectives for the focus interviews: Build relationships with key employees and executives. Understand where the likely problems lie. Understand previous/current efforts to address these problems.

The following best practice principles:

• Use the interview responses to test their initial hypotheses/ideas.
• Have an objective for holding the focus interviews.
• Use the interviews as an opportunity to build allies for the engagement team.
• Build the questionnaire around extracting the data/information needed to answer the primary question for the work stream and build the model. The primary data focus is on the mining operations, and they have built the largest part of the questionnaire around this subject. Include ranking questions so that comparisons can be made between interviewees.
• Focus on collecting data for comparisons. Order the questionnaire so that the critical questions are asked before the time limit is reached.

WEEK 2 – DAY 5: FEEDBACK FROM THE FOCUS INTERVIEWS

For each interviewee, they capture the five most important findings or observations to shoot off as an email.

WEEK 3 – DAY 1: PREPARING THE DRAFT STORYBOARD

Storyboarding is one of the most powerful tools used by management consultants, and the ability to produce and use a storyboard is one of the most critical skills needed.

The preparation and presentation of the storyboard must follow several principles: The storyboard must go up on their working space walls. Initially, the storyboards will just be pencil sketches on A4 sheets of paper, but over time, each page will gradually be replaced with a draft slide prepared with PowerPoint.

The business case team must write out their proposed story so that everyone on the team can understand their progress and thinking.

• There should be a story! The story should flow horizontally across headlines and vertically down an individual slide from the headline to the content and finally the kicker.
• Color-coded post-it notes must be placed on the lower left corner of each A4 sheet. Anyone can leave comments using post-it notes.
• The storyboard should never ever be a diary of the work done or analyses completed.
• The story must stand by itself. By reading the story, the rest of the team must be able to understand the details.
• The storyboard must be created before the data is ready.
• Only the headlines of the panels comprise the storyboard. No data and graphs should be added at this point.
• Kickers (“so what” statements) at the end of the slide may also be added.

The business case team will use a deficit model to design the business case. The alternative is to use an aspirational model where the business case team shows the client how good things could be. Deciding between the deficit and aspirational models is a critical step.

WEEK 3 – DAY 2: BUILDING THE MODEL

The baseline is important. Sometimes it is called a financial analysis or financial decomposition. Any improvements from the opportunities generated by the engagement team will be measured against this baseline. The baseline analyses also indicate areas in the business worth examining further. Used effectively, it is like a compass for the team.

The team decides to explain commonly used and confused terms, such as financial analyses, business modelling, top-down business cases, and bottom-up business cases. It is important the client understands what will be done in each part and how it all links together.

Financial analyses and top-down business cases are linked. They are done to determine the current and historical performance of the business. They generate the baseline against which all improvement opportunities will be measured.

Benchmarks (top-down analyses) against peers are done using the financial analyses results to determine the magnitude of possible improvement opportunities. It is a gap analysis.

Case studies are typically also used in the top-down phase to provide examples of other companies who have done the same things.

Business modelling and bottom-up business cases are linked. They are used to drill down into the gaps and results of the financial analyses. An economic model is developed to simulate the business and assess the effect of different initiatives, scenarios, or opportunities on the business.

A well-designed engagement should always begin with focus interviews, financial analyses, case studies, and some basic benchmarking to identify problems. This should be followed by the business modelling to estimate the impact of changes to fix the problems.

Bringing the bottom-up and top-down analyses together is difficult.

There can be no surprises. The client must know well in advance that some parts of the engagement will be more difficult than others, that this is normal, and it must be expected. This is known as pre-presenting.

Surprising a client is never ever an option. It is a rule of the firm.

WEEK 3 – DAY 5: OUTPUT FROM THE FINANCIAL ANALYSES

The update chart is designed to present a compact view of progress and force decisions. Details are only provided at the level where decisions can be made between team leaders.

Following the correct management consulting approach. Each slide consists of:

• A headline – One piece of data analysis to support the headline.
• References, sources, and calculation approach fully described at the bottom of the slide.
• As little inappropriate text as possible since data is more important.
• Simple, clean slides with a headline, data graphic, and sources.
• A well-constructed storyboard so that the engagement team may follow the findings
• A summary of the findings is presented first. This way, the team knows what to expect and can see how each slide fits into the overall message.

WEEK 4 – DAY 1: PRESENTING FEEDBACK FROM FOCUS INTERVIEWS

Contrary to popular belief, findings and feedback from focus interviews are a significant part of the business case. Anecdotal evidence presented with hard data can build a compelling argument. Quotes are priceless.

The first steering committee meeting is typically driven by the findings from the focus interviews, though you can include the financial analysis findings as we have done in this study, but not the bottom-up financial modeling output.

The steering committee update will typically comprise information from the following areas:

• Key Findings
• Financial Baseline
• Analyses
• Quick Wins (usually presented in the third update, but can be included earlier)
• Brief Operational Improvement & Services Update
• Next Steps

A well-presented focus interview feedback pack helps set the stage for presentation of the financial analyses, which can be blended into employees’ feedback with performance data.

“Panel bashing” is the term used when the slides (panels) are criticized and torn apart under the unyielding and rigorous assessment of the engagement team. It is the duty of the team to undertake the harshest possible assessment of the slides. This is the least the client expects. Panel bashing ensures that any presentation receives its greatest scrutiny in the safe environment within the engagement team.

WEEK 4 – DAY 1: PRE-PRESENTING

Pre-presenting is the process of taking the audience through the complete presentation before the day of the actual presentation.

Steering committee meetings are held to make decisions. If the audience’s first viewing of the results is on the day of the steering committee meeting presentation, they would not have had time to think about the significance of the findings.

Pre-presenting before the session allows the session itself to focus on the correct agenda item:

• Making decisions.
• Clients do not like to be surprised.
• Explain the analyses and answer questions.
• Build relationships and make allies.

Consultants can rarely tell the client what to do. They certainly cannot do so in a meeting with a large client group. They can merely recommend and advise. The engagement team needs to identify sources of resistance. The engagement team needs feedback and guidance. An agenda is crafted around facts and personalities.

WEEK 4 – DAY 5: STEERING COMMITTEE MEETING

The engagement team decided to do the following preparation for the steering committee meeting: Ensure that every data point presented could be traced back to verified evidence. Assumptions and estimates were clearly marked. Earlier versions of the storyboard contained hypotheses about the root causes of the problems. These were removed, and only validated examples or observations were provided.

Hendrik also felt that the storyboard was too “busy” and “cluttered”. He insisted that the engagement team only have the following on each slide:

• Headline with a clear and direct message.
• One piece of analysis to support the headline, which could be a graph, set of quotes, or another graphical representation.
• “Kicker” stating the “so what” of the slide.

Draft versions of the presentation consisted of 35 slides. Hendrik requested this be reduced to 15 slides at most.

All documents must be error free, and they need to be prepared to discuss their findings and observations in great detail should that be required.

Typically, steering committees comprise executives who are closely linked to the operation analyzed and who can steer the engagement to benefit the operation.

WEEK 5 – DAY 1: MID-ENGAGEMENT REVIEWS

The firm understands the importance and value of honest and constructive feedback. Without clear and descriptive feedback, consultants cannot grow as professionals, and clients do not benefit. In the long term, the culture of honesty can atrophy, and this strikes at the heart of the management consulting ethos: doing what is in the best interests of clients.

The firm follows a simple process when providing feedback on an engagement. The final rating is provided at the midpoint of the engagement.

As a business analyst, Alana will be reviewed along the following dimensions:

• Demonstration of firm values
• Placing the client’s interests first
• Teamwork
• Intellectual rigor and honesty
• Financial analyses and general analytical skills
• Ability to structure analyses under guidance
• Ability to design hypotheses under guidance
• Ability to test hypotheses under guidance
• Ability to prepare storyboards under guidance
• Client interaction Understanding of engagement issues
• Assessment of deliverables against the dimensions above

WEEK 5 – DAY 4: SERVICES WORKSHOP

There are a number of reasons for a successful workshop:

• There was a clear and simple objective for the workshop. When a workshop process is not known to the attendees, it is important to make it as simple as possible.
• The process was visible to all participants, and feedback was constantly captured and updated with flip charts and post-it notes.
• The engagement team was prepared.
• There was an “aha” moment at the end when the 3X3 matrix was collapsed into the 2X2 matrix.
• The engagement team facilitated the process, but the attendees arrived at their own conclusions.

WEEK 6 – DAY 1: WHAT IS BIG-PICTURE THINKING?

All consultants must be constantly aware of how their work fits into the bigger picture and how the engagement fits into the broader client context.

The objective should always be to provide a complete review at a high level, but with sufficient information for the listener to understand. Tell the audience what you intend to tell them. If required, the listener can then ask for more information.

WEEK 6 – DAY 3: MANAGING A CRISIS

Management consulting is a stressful career. Consulting firms hire only the very best business school and university graduates. Joining a consulting firm is, however, not a prize, nor the prize. It’s the entry point to a process of constant evaluation, constant training, and constant culling of those who do not meet the standards to be a partner of the firm. Making partner or leaving on one’s own terms is a prize. The prize is taking up a leadership position post consulting.

WEEK 6 – DAY 5: OPERATIONS IMPROVEMENT & SERVICES FEEDBACK

Service functions typically do destroy value since their primary function is to support the profit-producing parts of the business. They are measured more by the value they bring to the operations’ units; they are measured by customer service ratings and the cost of delivery.

Nadia faced problems common in many management consulting engagements: A significant number of businesses required analyses.

No reliable data was available to use. A lot of data was available but not much in a form that could be used by the team.

A consultant must over-deliver in terms of insight and quality, not the volume of slides, and be flexible to change their approach as understanding of the client’s situation evolves.

WEEK 7 – DAY 3: BUSINESS CASE SIGN-OFF

A successful management consulting engagement ultimately comes down to the ability of the team to develop a set of recommendations that add value to the client. Business cases are not only about financial analyses. A successful business case consultant must also be able to understand the business, break it down into the components that generate value, and map this into an Excel spreadsheet to test a set of carefully constructed hypotheses. When all analyses are completed and recommendations finalized, a short written report is often required as a final deliverable in addition to a clear PowerPoint presentation.

There must be joint ownership for the ideas so that the client feels vested in the benefits case.

The sign-off is critical. By having the sign-off, the team has the explicit support of the executive who has approved the work. This is a critical requirement going into the final update sessions.

WEEK 7 – DAY 4: FINAL STORYBOARD

Let’s talk about some circumstances how incorrect presentations are generated and why they fail on poorly managed engagements.

• Teams work in isolation: Each team in the broader engagement works in complete isolation.
• Solutions ignore the broader picture: An engagement team must present a recommendation that solves the problem they are studying and does not create an entirely new problem in another part of the organization.
• Forgetting the value tree: As shown earlier in this book, the primary question answered by the engagement team sits at the top of the value tree.
• Writing for the consultant versus client: A client is not concerned about the type of analysis done, the amount of data collected, or the pages and pages of analysis required to arrive at a conclusion. They are paying high fees for the answer and, sometimes, an explanation of how the answer was derived.
• Too much data, too few insights: Poorly constructed headlines and presentations lack a “so what” statement, which should be the question a consultant asks of every slide and presentation they prepare.
• Clutter does not equal quality: Busy slides with lots of bullets, text in small fonts, and many graphics are usually a sign that the consultants do not understand the point they are trying to make.
• Poor formatting: Poor formatting will damage the brand and ultimately the pricing power of a firm.

Let us now look at how to build a proper presentation for the overall engagement.

There are no boundaries: Just because the business case team was separated as a work stream does not imply it should be a separate section in the final presentation.

The storyboard needs to pull together data and information from all the teams and in the sequence required to build a compelling story.

Everyone’s work need not appear in the final pack.

Not every piece of analysis must be included in the storyboard.

Remember the delivery model selected.

Forgetting or changing the model midway through an engagement is dangerous. It could derail the entire effort to mobilize the client.

Offer recommendations. The team must reach a point of providing recommendations to problems. Clients pay for recommendations.

Validation. There is no excuse for not validating information.

Employees’ support.

WEEK 8 – DAY 4: CONSULTING VALUES

As you develop your career, always remember the following:

• As a professional of this firm, you will be expected to hold yourself to the highest possible standards.
• Honor and respect your clients. We never sell work. We never chase profits.
• Don’t confuse doing what’s in the client’s best interests with making a client happy.
• You have the right to dissent at all times. You do not need to agree to everything, but you must state your position.
• Generously invest in others.
• There is no hierarchy at the firm.
• All the fancy analyses taught today in business schools are wonderful and important to the firm. Invest in it. Yet, never forget the importance of engaging and understanding the viewpoint of frontline employees.
• Don’t stop learning.

WEEK 8 – DAY 5: DID THE ENGAGEMENT TEAM SUCCEED?

You need to be excellent at analyzing problems and understanding their impact on the business. Without this core skill, you will struggle as a consultant since you will not be able to understand the impact of your recommendations.

Experience is a competitive advantage when it helps you understand the context.

Analytical brilliance is the most basic building block of a management consultant, but it is not enough. The stress levels during a consulting engagement are very high.

If analytical brilliance is one building block, emotional intelligence is another.

Another building block is political awareness.

A management consultant must be aware of the impact their presence is having.