Basic Consulting Skills - University of Michigan

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Basic Consulting Skills
Community Consulting Club
University of Michigan Business
School
C O M M U N I T Y
Agenda
C O N S U LTI N G
Pegging the Scope Down
Analyzing the Issues
Developing a Work Plan
Working in a Consulting Team
Q&A
2
C O M M U N I T Y
Agenda
C O N S U LTI N G
Pegging the Scope Down
 Analyzing the Issues
 Developing a Work Plan
 Working in a Consulting Team
3
C O M M U N I T Y
Pegging the Scope Down
C O N S U LTI N G
Understand what the problem actually is
Meet early with client to sort this out
Develop a statement of the problem
A question or a clear hypothesis
As specific as possible
Focused on action
Draft the engagement letter
4
C O M M U N I T Y
Pegging the Scope Down
Fact
C O N S U LTI N G
• The Red Cross does not know what its educational
courses are costing
• What costing systems can the Red Cross put in place to
Too General find cost of courses?
• Build a simple and quick system that the Red Cross can
Specific,
put in place in order to better price its courses and
Focused on
manage its course mix
Action
5
C O M M U N I T Y
Pegging the Scope Down
C O N S U LTI N G
Define Problem Space
Context (Situation): Why is this an issue at this time? Are
there other issues bearing on the problem?
Constraints (Complication): What is not in the scope?
What solutions are not acceptable?
Who exactly is the Client? To whom will we make the
presentation? Who will take the decision?
Define Deliverables (Resolution)
6
C O M M U N I T Y
Pegging the Scope Down
C O N S U LTI N G
The engagement letter
• If you defined the problem, the problem space and the
deliverables, there’s little else to do
• Clearly define expectations from both sides
• Signed by team and client: a statement of commitment
from both sides
• There’s no ‘right’ way to do this
7
C O M M U N I T Y
Engagement Letter
C O N S U LTI N G
Heading
Description
Impact/benefit of the
project to the client
In 1 paragraph, define your assessment of the
current situation at your client, key issues the team
is going to address, and the benefit of resolving
the issues
Work plan/approach to
the project
Describe in 1 page what activities the team will
undertake over the duration of the project.
Identify the need for customer or supplier
interviews/surveys as early as possible
Prerequisites for
successful project
Define what resources you will need from the
client, and specify the time per week you will
require from them. If possible, describe the role
each individual will play on your team
8
C O M M U N I T Y
Agenda
C O N S U LTI N G
 Pegging the Scope Down
Analyzing the Issues
 Developing a Work Plan
 Creating a Good Presentation
 Wisdom of the Ancients
9
C O M M U N I T Y
Analyzing the Issues
C O N S U LTI N G
There is no ‘right’ way to do this. Different consulting firms have different
approaches. Use what works.
Brainstorm and build an “issue tree”
Ensure it is MECE
Mutually Exclusive and Collectively Exhaustive
10
C O M M U N I T Y
Analyzing the Issues
C O N S U LTI N G
Issue Tree Example
How can the Art
Center
increase revenues?
Change pricing?
Change nature of
collection?
Increase attendance
at given pricing
level?
Explore alternate
marketing channels
to broaden audience
Explore alternate
revenue streams?
Sub-idea 3
11
C O M M U N I T Y
Analyzing the Issues
C O N S U LTI N G
Prioritize and focus on issues based on impact, team
interests, ease of analysis
How can the Art
Center
increase revenues?
Change pricing?
Change nature of
collection?
Increase attendance
at given pricing
level?
Explore alternate
marketing channels
to broaden audience
Explore alternate
revenue streams?
Sub-idea 3
12
C O M M U N I T Y
Analyzing the Issues
C O N S U LTI N G
Why bother with the darn tree?
Helps divide project
Road map for analysis and data collection
Ensures completeness (prevents blindsiding)
(It will also help you with case interviews)
13
C O M M U N I T Y
Agenda
C O N S U LTI N G
 Pegging the Scope Down
 Analyzing the Issues
Developing a Work Plan
 Creating a Good Presentation
 Working in a Consulting Team
14
C O M M U N I T Y
Developing a Work Plan
C O N S U LTI N G
Identify key issues from analysis
What is our initial hypothesis for a solution?
What analysis do we need to perform to test the
hypothesis?
What data is available? What data is required? How can we
fill the data gaps?
What are the end products for each analysis?
Who will do each task? By when?
Check work plan weekly
15
C O M M U N I T Y
Developing a Work Plan
C O N S U LTI N G
General Advice
Be end product driven, think also about slide output
Ask “So What?”
Be data driven: all opinions are equal
Focus on what is achievable
Don’t try to boil the ocean
16
C O M M U N I T Y
Planning Critical Analyses
Principles
C O N S U LTI N G
Comments
End-product driven
Hypothesize the answer(s) and plan the quickest path to
robustly “prove” or disprove it
Continually question the
hypotheses
Re-evaluate hypotheses every day and adjust work plan –
regularly check ideas with client
Look for 80/20, “killer
analyses”
Avoid trying to boil the ocean– which analyses will nail the
answer/ provide the most insight?
Be realistic about end
product precision limits
Scrutinize precision of input data– beware of “polishing dirt”
17
C O M M U N I T Y
Story-board the Product
MAIN MESSAGES
PROJECTED FINANCIALS
EBITDA
C O N S U LTI N G
COST SAVINGS ANALYSIS
• Save $x million through China move
• Hold price while monitoring competitive
SGA
FOH
VOH
Labor
conduct
• Conduct lean transformation
-x%
Material
2005
PRICING STRATEGY: ROIC ISOQUANT
PerformConduct
ance
Structure
2004
Customers _____
_____
_____
OEMs
_____
_____
_____
Suppliers
_____
_____
_____
SUPPLIER SELECTION
Price
Today
Competitor
variable cost
Market share
PRODUCTION RAMP-UP SCHEDULE
Suppliers
Criteria
_____
_____
_____
_____
1
GAME THEORY VS. COMPETITOR X
EBITDA payouts
Year 1
Year 2
Drop Hold
Them
Us
Drop Hold
INDUSTRY TREND SCENARIOS
2003
Us
Drop Hold
2002
Drop Hold
Them
IMPLEMENTATION PLAN
May June July …
2
3
4
Product
1
2
3
4
Strong/weak ratings
Recommended
2003
2004
2005
18
C O M M U N I T Y
Agenda
C O N S U LTI N G
 Pegging the Scope Down
 Analyzing the Issues
 Developing a Work Plan
Working in a Consulting Team
 Q&A
19
C O M M U N I T Y
High-functioning Teams
C O N S U LTI N G
Trust
presume competence
Flexible roles
needs of project
Clear ownership
delegated responsibilities
Know when to escalate
delays, roadblocks
20
C O M M U N I T Y
C O N S U LTI N G
Agenda
Q&A
21
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