A ( Patricia ):
Consultancy Relationship Management
Relationships are everything in the management consulting business. The success of a consulting project depends on the ability of the consultant to build trust and rapport with the client. External consultants need to gain the trust of the client and their team when coming into the client’s organization to help solve a problem (Fincham, 1999). They must be seen as trusted advisors. For an internal consultant, relationship management is a key area of focus and must be executed to help ensure long-term success (Phillips et al., 2015). The consultant-client relationship is best regarded as part of an overarching managerial structure and a contingent exchange that assumes a variety of forms (Fincham, 1999).
The Importance of Relationship Management in Consultancy
Phillips et al. (2015) discussed its importance and emphasized it is a key area of focus to help ensure success. However, it requires a proactive project to engage and cultivate relationships with key sponsors, clients, and other stakeholders. Relationships are to be monitored to help identify unmet needs, meet expectations, and build trust. Of utmost importance is to effectively manage the consultant-client relationship by understanding how to position the consulting organization for maximum influence and impact on the organization. These relationships are often developed and cultivated by gaining access to the planning activities of top-level teams in various units of the organization and creating a partnering type of relationship in identifying opportunities, addressing key issues, and helping to improve performance (Phillips et al., 2015).
There are many ways to build relationships in consulting. It starts with being a good listener, then evolves into honesty and transparency, being proactive, remaining flexible, supportive, and obtaining feedback. Listening allows the consultant to understand the client’s needs. Honesty and transparency allow consultants to gain clients’ trust, especially by being upfront about elements in a contract such as fees, qualifications, and experience. Proactively identifying and addressing potential issues rather than waiting for the client to come to you with problems increases your chances of success. Success is to know that things don’t always go according to plan, so it is important to remain flexible and adaptable. The very act of consulting an external expert implies an inadequacy in the client’s own understanding, (Fincham, 1999), therefore, understanding that the client is going through a challenging time and being there to help them through the process add weight to the relationship building and increase your chances of success.
Consulting Contract Development Process
A good contract helps to ensure the success of the project, client satisfaction, and timely delivery according to plan. Excellent project management skills allow for success (Phillips et al., 2015). This is where consultants obtain maximum leverage (Block, 2011). Pursuing all possible impacts of a project in a contract avoids the possibility that anything gets lost, therefore it sets the tone for the project (Block, 2011).
A good contract is brief, direct, and almost conversational. Its purpose is to communicate the scope, fees (valid consideration), and other duties of all the parties involved (Block, 2011). It must be established at the beginning of the project, agreed to by all parties (mutual consent), and revised during execution, if necessary (Block, 2011). Its development starts by analyzing and setting boundaries on what you will and will not do; and sets forth the objectives of the project. It further states the information the consultant will seek regarding access to people and information to complete the project. Other elements in the development of a contract are the consultant’s role in the project (intent and spirit must be spelled out), the product you will deliver, what support is needed from the client, if any, and the timeline for starting, any intermediate milestones and completion date. (Brock. 2011).
Consulting Contract Significance
A contract is a significant tool between client and consultant. It protects both parties and minimizes any surprises and disappointments during the fieldwork. It builds on the concept of guaranteed results and provides details about how the project will be accomplished, as well as expected outcomes (Phillips et al., 2015).
Business Models Comparison
The idea of a business model has been a great addition to the consulting arsenal (Stone and Parnell, 2023). There are many. Two notable ones are the thought leadership/knowledge ownership (TL/KO) model and the differentiated positioning (DP) model. The TK/KO model is based on the possession of specialized knowledge not available elsewhere in the market. As thought leadership is important in senior management decision-making, consultancy firms need credibility and brand to persuade clients that engagements based on thought leadership will be productive (Stone and Parnell, 2023). The DP model requires strong subject matter expertise combined with a record of successful projects in target markets (Stone and Parnell, 2023). Specialization may be by type, project, industry, geography, culture, or some combination. This cannot, however, be the sole definition. The consultant must show some differentiation from other firms. For example, how they handle end-to-end marketing communications, from systems to campaign design, delivery, and execution (Stone and Parnell, 2023). Both models provide a framework for developing value-focused ways of doing business, gaining market share, and fending off competition. However, the TL/KO model is deeply rooted in having an in-depth perspective due to vast experience, while the DP model is rooted in deep knowledge and the identification of differentiation areas. Specific insight needs for the TL/KO model include innovativeness trends, and listing of areas of knowledge whereas, the extent of value-focused consulting based on propriety assets may be a relevant insight needed for the DP model.
References
Fincham, R. (1999). The consultant–client relationship: Critical perspectives on the management of organizational change. Journal of Management Studies, 36(3), 335-351.
Peter Block (2011). Flawless consulting: A guide to getting your expertise used. 3rd Ed. 2011. Pfeiffer, San Francisco.
Phillips, J., Trotter, W. & Phillips, P. (2015). Maximizing the value of consulting: A guide for internal and external consultants. Somerset, NJ: John Wiley & Sons. ISNB: 978-1-118-92310.5
Stone, Merlin & Parnell, Brett. (2023). Business Models of Consulting Firms: What do their leaders need to know? Management Consulting Journal. 6. 123-131. 10.2478/mcj-2023-0014
B ( Brian ):
Relationship management is very important when it comes to consulting. When it comes to consulting it is important to establish the relationship, services, a plan for implementation, and results. Relationship management is the process of establishing and maintaining positive interactions with others (Tait, 2020). According to (Tait, 2020) relationship management is the art of influencing people to become to best version of themselves. Consulting is identifying problems or areas of improvement and solutions. Most opportunities within consulting come from relationships and referrals. Relationship management allows the organization to have better, stronger, and long-lasting relationships with its customers (Tait, 2020).
Having a contract is essential to building a consultation, and client relationship. The contract outlines the expectations of both parties. Once the expectations are identified there should be a timeline of who is going to do what and when. Also, it is essential to identify the agreeable rate and how it will be accumulated. If a client retains your consulting services on an ongoing basis, detail your minimum or maximum billable hours each week, month, and quarter (Staff, 2022).
There are several business models when it comes to consulting, but the productized model is when a consultant focuses on one core problem for a specific client. According to (Zipursky, 2023) 80% of what you’re doing is the same for each client, with about 20% being customized to them. Some of the advantages of a productized model are creating a saleable asset, recurring revenue, scalable opportunities, and the ability to be removed from day-to-day operations (Zipursky, 2023). Also, there is the hybrid model which allows a consultant to take elements from more than one of these models to create the perfect consulting business model (Zipursky, 2023). This seems to be the opposite of the productized model which allows a consultant process to be repetitive to resolve a problem with an organization.
References
Staff, I. (2022). What to include in a consulting agreement or contract. What to include in a consulting agreement or contract.
Tait, B. (2020). relationship Management: The Key To Achieving It All. Forbes Coaches Council.
Zipursky, M. (2023). The 3 Proven Consulting Business Models (2023. Consulting Success.