Human
capital
Network
Capital
Social
capital
Client
Structural
Capital
capital
Organizational
Capital
Management consulting
Lecture 6 and 7
Managing knowledge and
knowledge workers
Human Capital – Intellectual Capital
Human Capital
Intellectual Capital
Staffing
Employee
Knowledge
Skills
Experience
Development
Human
capital
Network
Capital
Social
capital
IC
Client
Communication Capital
Structural
capital
Organizational
Capital
Performance
Management
Remuneration
and Reward
Products and
services which
have market
value
Structure of Lecture 6 and 7
• Lecture 6
– Level of analysis
• Organisational perspective
– Framework for analysis
Human
capital
Network
Capital
Social
capital
Client
Structural
Capital
capital
Organizational
Capital
• Management of knowledge (reactor model)
• Lecture 7
– Level of analysis
• Work process
– Framework for analysis
• Identity model
• HRM issues across both lectures
– Recruitment and selection of consultants
– Promotion policies – ‘up-or-out’ principle
– The boundaries of HRM practices
Objectives
• To understand the characteristics of the management
consulting industry
– History
– Types of organisations
– Types of consultancy activities
• Typology of human capital
– According to the client interface process
– Career structures within management consultancy
– The role of consultants as knowledge brokers
• Typology of client capital
– The consulting firm – client relationships
• The HRM practice focus:
– Recruiting human capital
– Managing across boundaries
Human
capital
Network
Capital
Social
capital
Client
Structural
Capital
capital
Organizational
Capital
History
• Management as a unique field of study
• Arthur D.Little (1890s)
• McKinsey & Company
– First management and strategy consultancy
– Founded by James McKinsey in 1926 (Chicago)
– Hiring of bright young MBAs
• Rise of management consultancy after World War II
– Development of tools for strategic management
– Boston Consulting Group (1963), McKinsey&Co, Harvard Business
School
– Bain&Co - focus on shareholder wealth
• Consulting within accountancy and technology firms
– PwC and IBM
• Niche consultancy firms
– Corporate social responsibiity
Types of firms in the industry
•
•
•
•
•
Accountancy firms offering consultancy
Large non-accounting consultancies
Small specialist boutiques
Gurus
Independents
Types of Consultancy services
Strategy
Process
and
Operations
HR
Marketing
Management
consulting
Org design
Change
Infotech
Major consultancies
•
•
•
•
•
•
•
•
•
•
Bain & Company
Boston Consulting Group
Deloitte & Touche
Ernst & Young
A.T. Kearny
KPMG
Arthur D.Little
McKinsey & Co
Mercer
PriceWaterhouse Coopers
Different types of consulting services: a
knowledge-based view
Productise
Competitive strategy
Bespoke
Economic model
Expert economics
People-to-documents
KM strategy
Person-to-person
IT focus
Technology
IT enables personal
Reuse economics
Build experience
Buy experience
Reward for
contribution to document
database
Ernst & Young
HRM
Example
Reward for
knowledge creation and
sharing
McKinsey & Company
Typology of Human Capital
• The consultancy process
• Career structures
• Consultants as brokers of human capital
– Boundary spanning
The consultancy process:
Your experience
• Paired assignment
• Identify a consultancy experience that you have
been part of.
• Characterise the individual stages of the
consultancy process
• Interview your partner and identify:
– Which skills were developed at each stage of the
consultancy process
– Which other knowledge resources did you rely upon
during this process
• Summarise your findings and be prepared to
feed back to the group
The career structure
•
•
•
•
•
Analysts
Consultants
Senior Consultants
Business development managers
Directors/Partners
The McKinsey Facilitator case
• Specific type of human capital
• Across boundaries
• How would you design the recruitment
process to capture this human capital?
Components of a high performing culture
•IQ
•EQ
•SQ
• General business knowledge
• Understanding of client context
• Logical problem solving
• Creates environment of
trust
• Manages group dynamics
• High awareness of
• emotions
High self knowledge
• Experience of own
transformational journey
• Sense of vocation
Using external facilitators poses a challenge to many
forms of intellectual capital flows
Clients
Facilitators
Facilitator network: HC viewpoint
HC
boundary
Clients
Facilitators
within
clients
External pool of
facilitators
External
Externalskill
skillexperts
experts
Clients
Focal Regions
Practice
Group
Other
Practice
Groups
Clients
External skill experts
Clients
Mindsets are often misunderstood and ignored
•What we
see and
usually try to
change
•What we
cannot see,
make
assumptions
about and
often do not
address
Behaviour
Thoughts
and feelings
A desire to change
ends up like most
New Year’s
resolutions if root
Needs –
met and unmet causes are not
identified and
addressed
Values
and beliefs
The first step in mindset change is a new level of personal
understanding
•Requires practice
•Requires a choice
•Requires insight
The first step in mindset change is a new level of personal
understanding
•Requires practice
“You cannot solve
a problem from the
same level of
consciousness that
created the problem
in the first place”
•Requires a choice
Albert Einstein
•Requires insight
The McKinsey Facilitator case
• How would you design the recruitment
process to capture this human capital?
Facilitator network: OC viewpoint
External pool of
facilitators
Clients
External skill
experts
Facilitators
within
clients
Focal Regions
Practice
Group
Other
Practice
Groups
Clients
Clients
External skill experts
Clients
Recruitment & development
processes
Client delivery processes
Positioning in the lecture
• Nature of the industry
• Typology of human capital
– Consulting process
– Career structure
– Knowledge brokers
• Now we turn to the human-client capital
interface
– We take a closer look at how clients perceive
consultants?
IDEA SUBMISSION PROCESS
5.
•Workshop
room
•1. Group discussion
on topic/idea
•
Individual or group write up
idea cover sheet and attach
backup materials (others at
table may start on another
idea at this time if
appropriate
•Cassette record
sheet
•Video station
helper with stickers
of idea number
4.
3.
Submit written
materials at idea
table
•Door to
patio
•Patio
2.
Stick hexagon on
hexagon wall with
similar ideas and
rejoin group
Individual(s) go outside
to record 2–3 minute
video to explain idea
Receive
hexagon at
idea table
and write on
idea no. and
title
In
tray
Filing
•Wall
– Video station helper puts idea no.
stick on to idea coversheet and onto
video cassette record sheet. Records
idea title onto cassette record sheet
– Individual(s) write idea no. and idea
title on directors board—hold up at
start of recording
– Record 2–3 mins video
The perception of Human Capital
•
•
•
•
•
The ability to learn in practice
Why smart people don’t learn
The impact on organisational learning
The impact on social capital
The impact upon the client relationship
– social construction of learning
The client-consultant relationship
• Human capital and its link to client capital
• Dimensions for analysis
– Strength of ties
• frequency
– Relational
• trust
– Cognitive
• Shared mental models
• Giving answers or shaping futures
The nature of relationships
Social capital
(between facilitators)
Morphology
Structural density
X
Trust:
Nature
Deep
X
Positional
Social capital
(between sponsors)
X
Morphology
Structural density
Trust:
Nature
Deep
Positional
Dyadic
Client-and-network
capital
(between internal
and external
facilitators)
Morphology
Structural holes
Resilient
Generalized
X
Resilient
X
Generalized
X
X
Structural holes
Trust:
Nature
Deep
X
Resilient
Positional
Dyadic
X
Generalized
Organisational
capital:
HRM process
Flexibility
Mechanistic
Client relationship
process
Flexibility
Mechanistic
Adaptive
X
Adaptive
X
Facilitator network: SC & CNC viewpoint
External pool of
facilitators
External
Externalskill
skillexperts
experts
Clients
Facilitators
within
clients
Clients
Focal Regions
Practice
Group
Other
Practice
Groups
Clients
External skill experts
Clients
Dense: Deep and
Structural holes: resilient and
Structural holes:
dyadic trust
generalised trust
Deep and dyadic trust
Dense:
Resilient and dyadic trust
Books about management
consulting
• Flawless Consulting, Peter Block, ISBN 0-7879-4803-9
• Guerrilla Marketing for Consulting, Jay Conrad Levinson and
Michael W. McLaughlin, ISBN 0-471-61873-X
• Managing at the Speed of Change, Daryl Conner, ISBN 0-47197494-3
• Managing the Professional Services Firm, David Maister, ISBN 07432-3156-2
• The Professional Services Firm Bible, John Baschab, ISBN 0-47166048-5
• Managing Transitions, William Bridges, ISBN 1-85788-341-1
• Management Consulting: A Guide to the Profession, Milan Kubr
(ed.), ISBN 92-2-109519-3
• The World's Newest Profession: Management Consulting in the
Twentieth Century, Christopher D. McKenna, ISBN 0-521-81039-6