What Is Management Consultancy And How Can It Help You?

Article by Tim Hatari

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What are Management Consultants?

Management consultants work in many industries and are also active in the public sector, serving government agencies, educational institutions, and not-for-profit organisations.

The specific function of management consultants vary based on industry and on their clients’ requirements. However, they share certain qualities. Let’s explore the purpose of management consultancy and why so many businesses work with consultants.

What Do Consultants Do?

Consultants are essentially problem solvers. They aim to improve efficiency, reduce waste, increase profits, help businesses find better marketing strategies, and seek other ways to improve performance. They may help with individual projects or focus on a company’s overall strategies and practises.

Harvard Business Review provides a helpful overview of the role played by management consultants. According to their model, consultants have a hierarchy of purposes that includes:

  • Provide information, interpret data, and help clarify issues.
  • Solve problems. They may be hired to address a specific problem or called upon to identify the cause of certain problems.
  • Make recommendations based on the diagnosis.
  • Help implement solutions. They may work with management or employees to help bring about improvements.

Types of Management Consultancy

Management consultants fall into several categories. There are general consultants who work with a wide variety of businesses and industries. There are also more specialised consultants, such as:

  • Industry specialists – Consultants may specialise in areas such as technology, healthcare, hospitality, not-for-profit organisations, and others.
  • Issues – Some consultants specialise in particular challenges faced by businesses such as improving productivity, cost reduction, managing a merger, or other areas.
  • Focused on specific departments – Consultants may have expertise working with certain departments or roles such as  CEOs, human resources, IT, or customer service.
  • Location-based – Consultants may specialise in working with organisations in a certain area, city, or country. Increasingly, however, consultants are national and even global due to ease of online communications.

Who Uses Consultants?


According to the Management Consultancies Association (MCA), 
84% of businesses polled used consultants at some point. The survey also found that 81% of the respondents who used consultants found that they met or exceeded expectations.

Consultants work with businesses and other organisations of all sizes, including SMEs as well as multinational companies. In fact, many consulting firms today specialise in serving the needs of smaller businesses. According to one survey, UK SME’s spent £60 billion for the services of expert consultants.

4 Reasons Why Businesses Hire a Management Consultant

Businesses may hire consultants to address a variety of issues and below are some common reasons:

1) Identifying the source of challenges

A business may have issues such as:

  • Declining sales
  • High customer turn
  • Frequent refund requests
  • Poor employee morale or high employee turnover
  • Inefficient production or delivery process.

These and other problems in a business are usually easy to spot. The root cause, however, isn’t always so obvious.

Owners and employees who are caught up in the daily running of the business aren’t always in the best position to understand why certain things are happening. They may also be reluctant to speak up if it implies criticising management. A consultant will have a more objective point of view.

2) Conducting research

Management consultants rely on their experience and expertise to identify and solve problems. However, they must also become very familiar with the background and particular challenges of their clients.

This often requires substantial research, which may include:

  • Collecting and analyse data, such as demographics and market forecasts
  • Consulting trade journals, raw data sources, management reports, and personal industry connections
  • Running focus groups
  • Interviewing employees, clients, or members of the target audience.

3) Helping with a transition

If your business is going through a major transition, it can be challenging for everyone involved. If you’re introducing new automation tools, your employees may have a difficult time adjusting. If there are changes in the way customers interact with your business, you also have to communicate these changes in a way that avoids confusion. You may be introducing a new service or branch of your business. A consultant can suggest ways to make the transition proceed more smoothly.

4) Learning and development

A management consultant may teach both soft and hard skills to employees, and this may include areas such as:

  • Software and other technological skills
  • Customer service improvements
  • Sales and negotiating techniques
  • Strategies for managers to improve efficiency and workplace communication.

Getting the most from Management Consultancy

The decision to work with a consultant shouldn’t be taken lightly and there are several criteria to consider, but the list below should help to get you started.

  • Research your options: There are many consultants who are eager to work with you. Do your research before hiring one. Find out how long they’ve been in business and what types of organisations they’ve worked with. Check their references and any reviews you can find. It’s always good if you can get a word of mouth recommendation from someone you trust.
  • Identify your goals: As noted, there are consultants who specialise in various issues or industries, as well as those who are more generalised. Be sure to find someone who is able to address your needs.
  • Make sure you’re prepared to implement changes: Even the best recommendations only help if you actually enact them. Make sure you’re prepared to make changes and that your staff and other relevant parties are fully on board with the plan.
  • Consider the cost: You have to consider your budget. At the same time, you have to weigh the cost against the experience and track record of the consultants. You also need to be clear about how they charge for services. Do they charge by the hour, or for a project?
  • Spend time talking to consultants before signing up: Talking to a consultant will give you a sense of how comfortable you are with them and if they are a good match. Compile a list of questions on their methods and the approach they would take. It’s a helpful sign if they ask you many questions as well. You want someone who will work with you in a personalised way and not simply implement their pre-conceived ideas.