A consulting firm is a company comprised of industry experts who offer professional advice, guidance and practical solutions to companies that have problems that they cannot resolve internally. All businesses are bound to have issues, and consulting firms are hired to solve them. Consulting firms can provide a variety of services, from strategy to problem solving and planning. The scope of work can often extend beyond providing actionable results and include project management solutions. Consulting firms often charge high fees for their services and can be extremely profitable businesses.
A consultant is an expert in her field who provides advice and guidance to companies and individuals. Unlike an employee, a consultant is hired as an outside contractor and typically works with a company or individual on a short or part-time basis to address specific issues. Let's look at a statement from one of the major management consulting firms, McKinsey, about what they do. Customers are usually leading companies (e.g. in the energy sector) and non-profit organizations (e.g.
charities). The major consulting firms have gained fundamental experience in key areas (e.g. mergers and acquisitions). Therefore, when companies are faced with mission critical challenges or problems that require that experience, an efficient way to solve the problem may be to hire a consulting firm. For example, consider the scenario of a large consumer electronics manufacturer that has decided to merge with a competitor of similar size.
While both firms have made small acquisitions in the past, neither of them has ever attempted a merger of this magnitude. Therefore, neither of them will have the muscle memory or the internal experience to perform well with confidence. Companies may be able to do it on their own, but given how much is at stake, they want to execute with confidence, and therefore taking advantage of the experience of a consulting firm makes sense. In many cases, consulting firms are used to provide an objective opinion from third parties on an important decision being made by a company (e.g. whether or not to pursue a merger).
Why is this happening? Shouldn't the company's key stakeholders who know their own business best be perfectly qualified to make that decision? Yes and no. Yes, they will understand the business well and are likely to have more context than any third party. However, other challenges almost always arise. Business owners may have blind spots or certain biases. Therefore, having an outside voice will help them to face them and to deal with them objectively.
Another example is a deadlock scenario; for example, the board of directors or factions of the executive team may not agree on the right path and therefore an objective opinion that breaks the tie is needed. Another common possibility is that the consultancy firm can provide an objective view of the best practices in the industry, basically taking advantage of its broader scope of how other companies have addressed similar problems. The last common case is that the company has a pressing problem. Since all of its current teams and people are linked to ongoing projects, the company needs an injection of intelligent people and brains to address the problem at hand. Some companies are even designed to operate this way; for example, private equity firms often rely on management consulting firms to help them with specific aspects of due diligence when seeking to make an acquisition. Of course, private equity firms could create and staff their own in-house consulting firms, but many will choose to hire teams on demand rather than changing the structure and talent base of their own organization. Now that we know a little more about the type of clients that hire consulting firms, what they work on and what type of results they are responsible for vary depending on the specific firms and projects.
Management consultants often work with company executives and provide them with generalist and industry-specific specialists known as subject matter experts who are often trained in management or business schools. Political consultants work on individual political campaigns and offer assistance in a wide range of areas. You'll need to develop this knowledge through relevant experience if your goal is to become a consultant. After doing your research, consider if small consulting firms in your industry are successful; the key to looking for work as an aspiring consultant is ensuring that your resume is perfectly suited to the position you're applying for. Company leaders typically ask an industry-specific consultant for expertise on a problem they're facing, and the consulting firm sends an expert to work with the company. A consultant will provide you with answers by evaluating data while a consulting advisor will help you develop skills you already have. For example, a human resources consultant can hire and interview job seekers, advise executives and managers who have difficulties with an employee, manage both onboarding and removal of new and departing workers.
The delivery of a management consultant usually consists of recommendations for achieving a business objective leading to a business project. Political consultants will develop plans to promote a politician or candidate in the media including creating advertisements. In addition, they will also advise on fundraising strategies as well as campaign messaging tactics. In conclusion, consulting firms offer valuable services for companies facing mission critical challenges or problems that require specialized experience or knowledge. They provide objective opinions from third parties on important decisions being made by companies as well as best practices from other industries when dealing with similar problems. Consultants also provide expertise on individual political campaigns as well as advice on fundraising strategies and campaign messaging tactics. Aspiring consultants should research small consulting firms in their industry before applying for positions; resumes should be tailored specifically for each job application.