What counts at the end of the day
At the end of the day, the "solution" counts
In a complex world like this, it can't be that easy to choose. Our professional environment in particular contains a large number of far-reaching decisions that will shape our future. Sometimes we decide about others, sometimes others decide about ourselves. One occupation that specializes in helping others make decisions is business consulting. Who is behind this much discussed industry? Does it really do what it advertises? Why is there so much money flowing there and what happens if wrong decisions are made after a consultation? Three people tell from practice.
Management consulting as a service
“Management consultancies have established themselves widely in the market in recent years,” says Wilhelm Menninghaus. He is a partner and therefore in the highest position at the Münster-based management consultancy "zeb". The company is one of over 15,500 consulting organizations with more than 110,000 consultants in Germany. According to the Federal Association of German Management Consultants (BDU), this is an increase of over three percent compared to 2015. The consulting industry is booming. Thomas Leif criticizes in his book “Advising and Selling” ‘that consulting firms are springing up like mushrooms. But where does the great demand from the economy come from?
Michael Hasler is one of those young entrepreneurs who consulted a management consultant. “It is important to take advice from other people, especially professional people.” The “smartricity” co-founder points out that it is difficult as an entrepreneur to keep track of everything. "Especially small things, such as tax effects, are difficult to assess yourself," he says. Menninghaus also emphasizes that consulting companies serve different purposes. He sees managing companies and reflecting their opinions as his main task. The advisor sees himself in the role of an independent, critical opinion leader. Above all, companies from the manufacturing, finance and public sectors bring a sparring partner to their side when making important decisions. A partner with whom you can discuss specific decisions, for example in the area of strategic corporate management. Jan Schumann, the holder of the Passau Chair for Innovation and Marketing, adds that the client often knows in which direction the job should go. The decision to be implemented is often already made on the part of the entrepreneur. Hasler also confirms that in most cases he received what he expected.
What then does he need an external partner for when he has recognized the necessary changes himself and could implement them independently? Hasler describes that he learned a lot of new things that were not so clear to him before. With every consulting appointment, the entrepreneur gives a piece of his responsibility to his partner and in return receives security. The BDU declares that management consultants would support their clients in recognizing and using new opportunities. In particular, the strategic thinking and analytical skills that a consultant brings are welcome in the area of organizational and process growth as well as strategy and IT consulting.
One thing is certain: there is no such thing as the perfect management consultant. But what skills does a person need to have to help others with decisions? Basically, a consultant should have analytical skills, a certain intelligence and expert knowledge, says Schumann. "If you start there, someone in his decision-makingfinding to support, a consultant should take on the role of a coach. ”He must then be able to empathize with someone in order to understand his decision-making and to make possible mistakes in thinking more transparent. According to Menninghaus, there are differences in the type of advice. In the IT environment, IT people, mathematicians and business informatics are preferred. In the strategic environment, on the other hand, the entire range of areas of knowledge is relevant, from economists to natural scientists to lawyers. “Whenever it comes to technical issues, a certain technical competence is required,” explains Menninghaus. Leif criticizes the fact that a consultant has to harass his customers with frightening scenarios in order to secure follow-up orders. Menninghaus contradicts this. It is important to him that the consultant gives the customer food for thought and shows him the problems.
Acquiring follow-up orders is, according to Schumann, the point of the sales activity of consulting. He explains that there is a tendency to often sell projects that the company doesn't really need. But Schumann asserts that there are certainly enough problems in companies where this is not the case and therefore cannot be generalized. In no other profession are employees so pressured as in the consulting industry, says Leif. Many companies work according to the “up-or-out principle”, which means that the employee has to perform within a certain period of time. If he does not meet the requirements, he has to leave the company. If he does his job well, he can move up into different classes depending on the company. From consultants and junior consultants to managers and senior consultants and partners. How does a management consultancy recruit people who work under this strain? “Recruiting is at the core of the personnel strategy of management consultancies,” explains Leif. In his opinion, a university degree, above-average academic performance and international experience are top priorities when it comes to recruiting employees. Nevertheless, consulting companies are attractive employers because of their good income and career opportunities and the possibility that ambitious employees have many opportunities for advancement.
Cost versus performance - why companies spend huge sums of money on consulting
"If consulting firm XY has suggested that, then it has to be good," criticizes Leif. The customer wants to justify his decisions and, in case of doubt, place the responsibility on the consultant. He complains that for precisely the reasons mentioned, customers invest so much money in management consulting. According to Menninghaus, the high daily rates relate to the respective advisory model in which the customer finds himself. Consultations aimed at processes or strategies are usually more expensive, since the experienced partner is more likely to work. A coaching day that you prepare for separately is more expensive than a day on which you only have to present a final presentation. Most of the time, these would be created by a consultant. "The partner is the main point of contact for the customer and is responsible for the overall success of the project," explains Menninghaus. Schumann agrees and adds that the costs depend on the type of advice and the size of the company. Top consultants have the “halo” and have well-trained people who have years of experience. "If companies did not pay that, the consultations would not be able to demand the rates," concludes Schumann.
Leif, in turn, criticizes the fact that the companies mostly get standardized procedures and solutions from the consultants and pay for something that another company has already received. “In certain content-related topics, the wheel is not always reinvented”, Menninghaus justifies himself. He believes that companies can definitely benefit when a solution has been tried and tested and has reached a certain "level of maturity", explains Menninghaus. For Hasler it is obvious that large companies work according to a standard procedure. “In our case, we were supported by an independent consultant. The concept was really tailored to us, ”explains Hasler. In the end, it remains up to the entrepreneur to weigh up whether to opt for the expensive variant of management consulting or for the cheaper "self-therapy" and not take advice.
Independence in forming opinions
Management consultancies pursue the goal of making people and their companies successful. But counseling is not always just an individual's self-profit. “It always makes sense to call in certain people in advisory situations.” Menninghaus prefers empathetic advisors to those who “bullishly” fall into the house. He explains that when advising, external specialists are often called in who are better able to implement specific customer concerns. As a result, consultations are always dependent on others. If customers from one industry get support from the same consultant, who guarantees independence from each other and competition? Menninghaus defends that clients from the same field of work pursue their own philosophies and take advantage of advice on different topics and times. Schumann contradicts: "If you have several competitors and McKinsey is everywhere in the company, you can of course ask yourself whether the knowledge is not carried from one company to the next". This means that a similar consulting strategy is used in different companies. As a result, the customers advised act according to comparable solution models. Leif adds: "A squad of former politicians in the consulting firm also ensures close contact with the public sector." For example, Angela Merkel is said to have a good relationship with the head of McKinsey. Management consultants are not a closed system, but are closely linked to experts from various industries.
Playing with responsibility and the ideal solution
Leif describes an interview with an anonymous consultant who says that entrepreneurs buy “legitimation, acceptance and loyalty” from their consultant. They give up their decision-making power and purposefully place their own responsibility in the hands of others. Schumann, on the other hand, believes that giving up responsibility is totally human, understandable and sensible. “As a decision-maker with far-reaching decisions, it always makes sense to protect myself.” Clients place great trust in their consultants in finding the right strategies for their company. Schumann warns: “Ultimately, the decision has to be made by the one who has to make it.” Hasler has brought in a consultant as a partner and has so far been very satisfied. The entrepreneur looks ahead confidently: “The solutions are absolutely usable, you just have to test them on the market later. That could work. ”In the future, too, they would like to work with other management consultancies, including larger ones:“ Our goal is to act internationally. ”The start-up entrepreneurs are not alone in this endeavor. More and more companies are entering into consulting partnerships. The BDU figures show that all fields of consulting in the consulting industry have seen sales growth of at least 4.5 percent and more. The increasing digitization of companies in particular requires new expertise.
So far so good. But who is responsible if a provoked change becomes unpleasant or a wrong decision has been made? Menninghaus, who has been a partner at "zeb" for 21 years, says that management consultancies do not serve as an extended workbench, but rather sit in the same boat with their customers. "In the event of wrong decisions, both parties are responsible, because the project runs together and the goal must always run with the project." He sees reasons for failure particularly in the set-up phase, in which the clients' expectations are exchanged in contracts. Menninghaus thinks that if you approach it sensibly, you can avoid mistakes very well. Hasler also shares this opinion. He is well aware that both can be held accountable, but that he alone does not have to bear the burden. “The consultant gets the money, he has the expertise, he knows his way around, he should be able to keep track of it. Nevertheless, you also have to check for yourself whether it all makes sense. ”And Schumann also takes away the fear of being assigned guilt. “The decision-maker does not have to be beheaded immediately in the event of wrong decisions.” Despite all this, the consulting business works. Strategists and analysts like to be society's paid decision-making aids. Menninghaus appeals to his industry to always maintain honesty and show more courage for more complex topics. Companies benefit from this. Hasler especially recommends young entrepreneurs to take advantage of professional advice in order to be able to discover completely new potential in the market.
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