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Oh no, the consultants are coming!

Article Excerpt
Management consultants are perceived by some to be increasingly keen to conduct market research on behalf of their clients. As a result, many people suspect that consultants are deliberately trying to steal business from the research community. This paper argues the contrary case. It describes how and why clients use consultants to conduct research and also describes why consultants do not see research as an important revenue stream. The approach described provides a new template for the research industry that will enable good researchers to provide significantly more value to clients and so fill the current gap that exists between researchers and management consultants.

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Most CEOs are desperate to understand more about what motivates their customers and consumers to buy their products and services. Unfortunately, in many instances, the research industry is more of a hindrance than a help to this understanding because it places far too much emphasis on the detail and correctness of the research, rather than worrying about what the research actually means. As a result, companies are increasingly turning to management consultants to provide this insight as part of a larger strategic review of their business. If the research industry is to gain the respect it seeks (and often deserves), it needs to learn from the management consulting industry - not fight it.

The purpose of this paper is to describe how the research industry can learn from the consulting sector and to highlight some of the tricks and secrets that are used by consultants to ensure that the research they conduct is used and acted upon by their clients. The paper is based on over 30 interviews and discussions with top management consultants, CEOs and marketing directors who have used research as part of their strategy, and 20 interviews with market research managers who have worked as part of a management consultancy/client team. In addition, the authors have over 30 years' experience in the research and consulting industries, of which more than half has been spent working for McKinsey and Company, Inc.

The paper is split into three parts:

1. What do consultants do?

2. What is different about a consultant's approach to research?

3. What can clients and agencies learn from consultancies to ensure that the work they (i.e. the clients and agencies) do has more impact?

What do consultants do?

Management consultants generally work on studies that help companies to redefine their strategy and steer a path for the future over the next three to five years. The studies are usually commissioned by senior directors within the client company and are often based on long-term relationships with individuals within the consulting firm.

The exact size of the consulting team and length of the engagement will clearly vary according to the complexity of the work, but a typical study may last for eight to twelve weeks and require a senior consultant for two days a week and a team leader and two junior consultants for five days a week. In addition, two or three employees from the client are often assigned full-time to the study--although they are often still expected to carry out their day jobs! As a general rule, consultants never run over the agreed length of the study, since the fees are based on the number of days that the study will require.

At the start of the study, the team will ensure that the business objectives are clearly defined and will also specify exactly what success means. This way, the team remains focused on the relevant issues and everyone shares the same expectations of the study outcomes.

As a next step, the team will generate a series of hypotheses about the final solution to the project. These hypotheses will then lead to a series of sub-hypotheses and sub-sub-hypotheses, each of which will need to be proved or disproved. The team will then prioritise these hypotheses and decide which ones are relevant to the study and which ones are less interesting. A work plan will then be developed to collect the facts that will prove or disprove each of the prioritised hypotheses. While this is an iterative process and the hypotheses will be refined throughout the study, this approach helps the team to focus its efforts on the important issues and stops them from trying to 'boil the ocean.

In prioritising their work, consultants often apply the 'eighty--twenty rule'. (1) In this case, the assumption would be that 80% of the answer would come from solving the top 20% of the issues. Ultimately, they are willing to trade off some level of precision to save time.

From this point, the facts are gathered by a variety of different means, including interviews with the key stakeholders in the company and its suppliers and clients, analysis of the company's financial data, and examination of company and competitive research data. All decisions are based on facts and logic rather than gut feel or 30 years' experience and politics.

To control the overall process of the study, consultants tend to generate a lot of paper or PowerPoint 'packs'. These packs are initially developed using material collected from other people in the consultancy who have previously worked on similar studies and have then codified and sanitised their work. The packs provide the content and direction that the team needs in order to appear focused and in control. Even if they only show up with a one-page document, consultants will usually have carefully thought through the objectives and desired outcomes of the meeting.

It is also worth mentioning something about the profile of consultants. Most consultants tend to be relatively young (25--35 years old) and are usually very bright and ambitious. In their early years, they are expected to work across a variety of industries and business issues. Consequently, they often have little or no experience of the particular industry of their client. Instead they rely on good training, the ability to challenge long-held beliefs and assumptions, and the support of their team leaders. They are also highly motivated and often willing to work...