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[Article updated Jan 2024]
For individuals that want to excel within the world of consulting, mastering a range of methodologies, tools, and skills is essential. By ensuring your toolkit is comprehensive, you can act subjectively when interpreting and eventually solving business problems, propelling you into consulting stardom or close to.
At Freshminds, we have been working with the best strategy and management consultants in Europe since 2000. In essence, understanding their job has become our job. While we don’t want to be too generalist, this consulting toolkit aims to encompass a spectrum of frameworks, processes and soft skills, all key components to successful management consulting practice.
We’ll explore a combination of analytical ability, diverse commercial acumen and the ability to create a positive personal impact that can be applied cross-industry. Discover which management consulting tools and techniques are highly desired by businesses today.
Why use consulting frameworks and methodologies?
We often term the consulting skill set as anyone that can demonstrate a high level of these 5 core skills (IQ to EQ: Problem solving, numeracy, personal impact, communication, collaboration) from whichever background the individual comes from.
But in terms of consultants, historically, these skills, developed through years of hard work in consultancies, have allowed freelance consultants to leverage a diverse and busy portfolio of projects.
However, with a rise in boutique ‘specialist’ consultancies with specific sector focus and an increase in client demand for ‘experts’, we find that the most successful freelancers have given themselves an edge by adding several ‘bolt-on’ skills as well as harnessing specific tools.
For businesses going through periods of growth as well as internal transformation, the concepts, tools, and soft skills below are invaluable within the management and strategy consulting sphere.
1) Benchmarking.
Renowned management consultant Peter Drucker once said,
“If you can’t measure it, you can’t manage it.”
These days, almost anything can be measured; we are living in a time of data abundance. Unfortunately, data relevance based on your business needs can be haphazard.
To help you avoid juggling meaningless figures, benchmarking is good practice. Effective benchmark is comparative. So you may need to ask questions like, How are industry leaders performing within your sector? What methods are they using to innovate and grow? Consider company size, location, and organisational structure (if possible), and learn from others, either through what they are or are not doing.
That’s the trick - finding something worthy of measuring and consolidating them as your KPIs.
In a practical sense, this means research, such as data collection and analysis. Only when you define a reference can you tackle KPIs in an effective and meaningful way.
2) The balanced scorecard.
For a greater internal perspective on company performance, using the balance scorecard framework is another useful tool.
It can give businesses an umbrella view of overall performance through a multitude of lenses, including vision, strategy, and raw data. The Harvard Business Review describes the practice:
“The balanced scorecard minimizes information overload by limiting the number of measures used.”
The four perspectives are:
Learning and growth
Business processes
Customer perspectives
Financial data
3) Scenario analysis.
Scenario analysis, sometimes touted as scenario planning, thinking, or prediction is a way to look at strategy hypotheticals within a business. By considering the outcome of multiple scenarios, a business can view comparative outcomes and act accordingly.
Examples:
Imagine a B2B bakery that produces x number of rye bread loaves per month. What would happen in a turbulent manufacturing environment where the cost of raw materials is increasing. How will this affect the business?
You will need to consider:
Base-case scenario: The cost of raw materials increases; however, the consumer market is healthy, so you can increase the wholesale price.
Worst-case scenario: The cost of rye flour increases by 10% with clients unwilling to shift on wholesale prices.
Best-case scenario: The rising cost of raw goods means less rivalry for sourcing and, therefore, more competition between manufacturing prices. Meanwhile consumer market continues to thrive.
Scenario analysis is a powerful way of limiting risk and the unpredictable nature of the future by providing your organisation with pre-solutions.
4) Industry and sector expertise.
It is becoming increasingly common for clients to demand independent consultants to bring industry-specific expertise to the table. This does not always mean the experience of working with a direct competitor, but a strong exposure to the industry or similar organisations experiencing similar problems and market dynamics is very valuable to clients.
According to Evettfield Partners, a leading specialist strategy boutique in Australia, independent consultants believe that the process of strategy research, development and implementation are directly transferable across industries.
At Freshminds, many of our clients believe that industry expertise is important from a ‘speed to market’ perspective.
And the ability to save time on the consultant being brought ‘up to speed’ with the commercial nuances of the market, as time is often of the essence for independent consultant engagements.
5) The GE-McKinsey Matrix.
Some business methodologies are so impactful that they stand the test of time. Developed in the 1970s, the GE Mckinsey toolkit is evidence of this.
The 9-box matrix was built in response to organisations expanding their governance over multiple companies. In essence, multi-business enterprises. Unsurprisingly managing these structures often resulted in convoluted management that could result in profit loss.
To tackle this, the consulting firm developed a measure for both business strength and industry competency, hoping it could help businesses prioritise their investments and grow sustainably. The framework can be categorised into 3 actions; Grow, Hold, and Harvest.
There are various other frameworks within consulting to follow similar straits, not least the BCG Growth-Share Matrix.
6) Porter Five Forces.
Created by Harvard Business School professor Michael Porter’s strategic model has become a mainstay framework for industry analysis. It asks consultants to consider 5 viewpoints;
Competitor rivalry
Bargaining power of buyers
Bargaining power of sellers
Threat of new entrants
Threat of absolute offerings
By breaking competitor behaviour down into these fragments, consultants can lean on a structured process that makes analysis easier. And hopefully, make c-suite stakeholder engagement easier too.
7) Continued analytical excellence.
Typically, consultants – as they progress up the ladder within consultancy or industry – will prefer to concentrate on the bigger strategic and transformational problems within the organisation. However, we have seen that with a number of our clients, there is a demand for interim Strategy Managers or Programme Directors to have and maintain keen Excel skills and have recent experience in guiding teams through complex analytical problems.
For example, for one client we have been working with, the first step of assessment for independent consultants and permanent intake (up to C-Suite executives, including a CFO!) is an Excel data manipulation assessment. The organisation believes that if senior members within the company are not attuned to these skills, then they cannot advise their subordinates effectively.
The demand for this skill is also enhanced by the fact that we live in a world dominated by (big) data and companies are hugely wary of its implications on future consumer strategy. Senior consultants with the ability to break this data down and translate it into strategic plans are not only desired but ultimately a necessity.
8) Digital and customer competencies.
At Freshminds, one of the most in-demand skills for consultants across all sectors is Customer and Digital. A review by Consulting UK of 400 buy-side decision-makers found that 99% stated that digital has led to some form of marketplace disruption. As a result, clients are increasingly focused on customer-centric operating models, digital strategy and transformation, and almost all retail clients are focused on e-commerce. Indeed, looking at the recent acquisitions of traditional consultancies, e.g. PwC with BGT, EY with Seren and Accenture with Karmarama, proves the sheer importance of having this capability.
Ashley Friedlin, an Econsultancy founder, says that this skillset shows’ separate parts of the customer funnel, (historically) managed by agencies, tech vendors and consultancies, are coming together. In fact, McKinsey & Co recently claimed that
20% of each McKinsey consultant’s generalist skillset would be focused on digital and customer strategy.
So independent consultants who are able to spice up their existing know-how of strategy and transformation with digital and customer expertise will find themselves in a narrow pool in very high demand from both traditional consultancies and cross-sector clients.
These are a few key trends we have seen through our interactions with both consultants and clients – what do you think? We’d love to hear your thoughts.
