Consultants Why ‘Credible’ is Crucial To Management Consultants

The successful or otherwise world of the management consultant hangs on word: ‘credibility’.
Buyers of the services offered by management consultants believe they (consultants) should have professional qualification in management consulting, according to our jointly conducted research. But currently most do not. What users want is ‘warrant of credibility’, WOC if you like.
To define the market we asked: what is management consultant? Of the consultant respondents 65 percent said they provided consulting services on strategic and business planning, business pro-cess improvements and management of change; 43 percent included project management and smaller percentage offered range of human resource services.
On what academic or other qualifications consultant should have, 65 percent of all respondents thought graduate degree and professional qualification were basic necessities.
A weighted average of respondents’ answers suggests there are around 2000 management consultants offering their services in New Zealand. But the range of responses to the survey suggests wide disparity in views of both the numbers of management consultants, and what distinguishes them from other management service providers. This disparity is exemplified by the answers to question on fee levels. Nearly 90 percent of responses were spread fairly evenly through the range $750 to $3000 day for short-term assignments, with significant reductions for longer-term assignments.
The concern, at least for IMCNZ is that 20 percent of management consultants consider their profession suffers from ‘credibility’ problems. On the other hand, 90 percent of them thought Enron and other recent miscreants had no or little effect on perceived credibility in New Zealand.
Perhaps the most telling responses were captured in ‘key issue’ comments such as:
* “Identification of professionals versus casuals and cowboys.”
* “Just what is ‘management consulting’, vis-a-vis other contracted management services.”
* “Telling clients what they want to hear rather than what they should hear.”
* “Lack of professional standards.”
* “Lack of credibility.”

Real professions?
Internationally, management as profession suffers from lack of recognised standards, qualifications, regulations, complaints procedures and other formal aspects normal for the legal, engineering and accounting professions for example.
Legislation in Austria requires all management consultants to be members of the Austrian Institute of Management Consultants. With 2500 members from total population of eight million, Austria offers stark contrast to New Zealand.
A profession, according to the Collins English Dictionary, is “an occupation requiring special training in the liberal arts or sciences, esp. one of the three learned professions, law, theology or medicine”. Herein perhaps, sits useful clue to understanding the management consultant’s problem.
The key word is ‘requiring’. Apart from exceptions such as Austria, there is no requirement by providers or users of management consulting, let alone legislation, that management consultants should have specific qualifications.
There were only two significant management consulting firms in New Zealand in 1983 – WDScott and PA Management. WDScott was absorbed into what was then Deloitte Haskins and Sells as all the major chartered accounting firms developed management consulting practices. The ‘Big 8’ gradually reduced to the current ‘Big 4’ – Deloitte, PriceWaterhouseCoopers, KPMG and Ernst & Young – and competed with international specialised practices such as McKinsey and Boston Consulting.
Each one of these major firms developed its own standards, training and approaches, and several large corporations have also developed internal management consulting groups with their own standards. Not surprisingly the standards were all different, although some major corporates including IBM and Shell are in the process of ensuring their standards are compatible with the International Council of Management Consulting Institutes’ (ICMCI) CMC qualification (see below).
More recently management consulting services are being offered by wide range of smaller consultancies that have their roots in information technology, engineering, project management and human services. Some are like smaller versions of the global firms, with others operating looser associate pools of consultants.

Going global
In 1987, management consultants from 10 countries met in Paris to explore the common ground between professional institutes that certified individual management consultants. The congress was led by the management consultant institutes of the United States, Canada and the United Kingdom. This led to the formation of the ICMCI.
The 1989 ICMCI Congress in Copenhagen ratified the structure and membership criteria, agreed to establish ICMCI and approved the ICMCI Code of Professional Conduct.
The Third Congress held in Toronto, Ontario in 1991 was attended by 40 delegates from 17 countries. The delegates approved the framework of ICMCI’s Common Body of Knowledge and an updated international standard for certification of management consultants and CMC as the universal designation for Certified Management Consultant.
There are now 35 national members of the ICMCI and several more pending, covering the great majority of the developed world.

The CMC qualification
The IMCNZ was formed in 1971, modelled on the UK IMC. IMCNZ is affiliated to the ICMCI, oversees the CMC qualification that was adopted by IMCNZ in 1988 and is the only professional body representing management consultants in New Zealand.
Given that credibility and professional qualification are important and key issues, why is the CMC qualification not demanded by purchasers of management consulting services?
The answer is twofold. In the formative years of management consulting in New Zealand, CMC did not exist and the larger management consulting groups were accepted as providing de facto standards as well as credibility. This credibility was presumed to manifest itself through the individual consultants and processes they applied, and indeed this is still the case to significant extent. But secondly, most clients are unaware of the CMC qualification.
The situation has changed markedly over the past 10 years. Now the great majority of management consultants are either freelance or work with small groups, often as part-owners, and many are ex-employees of major consulting groups.

Choosing the ‘best’
The overriding requirement for client is similar to other supply relationships; to ensure solution of the desired quality is delivered on time and at the expected cost. In reality, it is not always that simple. By comparison, when you go to medical professional, you often don’t know what is wrong, let alone the solution. You rely on the doctor’s knowledge, experience and professionalism to deliver the ‘right’ solution.
This is often the case with management consulting services: the consultant may identify an issue different from the client’s expectations, and propose different solution to what the client expected. In this case the easiest, and most risky thing for the client, is for the consultant to deliver what the client asks for, take the money, and hope to still be around to fix the client’s next problem.
Choosing the ‘right’ management consultant requires checking the ‘hard’ points such as skills, experience, background and proposed process. Equally important are the ‘soft’ points of professionalism such as adherence to set of professional standards and code of conduct.
Perhaps the most important conclusion to be drawn from our survey is the importance of ensuring professional standards are applied to management consulting and the CMC qualification becomes widely accepted and demanded by clients.

Peter Senior CMC is management consultant and president of IMCNZ.
Email: [email protected]

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