DBM 633

ENTREPRENEURSHIP AND
BUSINESS CONSULTANCY
TOPIC 3: Models of
consultancy

By Lecturer: Lillian Bertha Chimungeni

CHAPTER 3: Models of consultancy

3.1: A five-phase consultancy model

During a typical consulting intervention, the consultant and the client
undertake a set of activities required for achieving the desired purposes and
changes. These activities are normally known as “the consulting process”.
This process has a clear beginning (the relationship is established and work
starts) and end (the consultant departs). Between these two points the
process can be subdivided into several phases, which helps both the
consultant and the client to be systematic and methodical, proceeding from
phase to phase, and from operation to operation.

1. Entry and contracting

Authenticity, presence and empathy are the vital components of the entry
process. During the initial conversations, we build trust by listening non-
judgmentally and offering support. Rather than glossing over or censoring
the issues, this approach allows the underlying concerns and opportunities
to surface. By listening deeply, understanding the client’s issues and
establishing the alliance, we uncover the goals and deeper desires. Desires
take us much deeper than goals. By tapping people’s passions, we get
clarity about personal and organizational expectations. Once we’re
connected with their hearts, we co-create desired outcomes, determine
roles and responsibilities and establish business terms.

2. Sensing and discovery

While relying heavily on our intuition, we also collect information based on
hard data. Dialogue, surveys, interviews, assessment tools and focus
groups are used both to collect information and build relationships.
Throughout this process, the emphasis on building relationships means
we’re much more likely to generate trust, which helps us get to the heart of
the matter.

3. Diagnosis and feedback

We come in looking for what works and what we can leverage. Instead of a
pathological approach to diagnosis, we can help members of the
organization identify the life-giving energy in their work experiences and
then discover their needs and wishes. A summarized report of the
information and shared analysis acts as a catalyst for deepening
awareness, inviting choice and stimulating action. Many organizational
cultures have a preference for hard data, a scoring system for analyzing the
current situation and a way to measure progress. When accompanied by
anecdotal data, the impact can be very moving, heart-connecting and
inspirational. Analyzing the data for the client can be highly informative, but
isn’t as empowering as a joint analysis.
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4. Planning interventions and action
We end up with one-way communication and minimal buy-in unless we
intervene with authentic feedback. Feedback leads to a blueprint for change
and collaborative action planning. Action plans are broken down into small
steps with accountability structures, including who is taking responsibility
and agreed-on dates for completion. Implementation of the action plan can
include a wide range of organization development interventions: individual
or group coaching, training, leadership development, team building, diversity
dialogues and conflict resolution are some of the processes used to support
the change initiative.

5. Evaluation and closure

The measures of success established at entry are derived jointly. Evaluation
can include fi nancial measures, such as the bottom-line impact (profitability
or return on investment) or stakeholder satisfaction (quality-of-life or
employee retention). Organization development work is an intimate process
that calls for an empowering closure. Instead of celebrating once a year at
the company Christmas party, we advocate for continuous celebration. We
not only celebrate successes; we also celebrate new insights gained from
disappointment or failure. Both provide opportunities for heart connection
and stimulate dialogue that leads to new opportunities.

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Figure 3.1: Five phase model. Source: Dawson A. 2013
3.2: Partnership model
The term “partner” in itself has no meaning. It is not trademarked, so
anyone can call him or herself a partner. Being known as a partner can
signify anything from being in regular employment to real entrepreneurship.
These differences are fundamental.

Advantages of Partnership consulting

1. Sharing the burden
Compared to operating on your own as a sole trader, by working in a
business partnership you can benefit from companionship and mutual
support. Starting and managing a business alone can feel stressful and
daunting, particularly if you’ve not done it before. In a partnership, you’re in
it together.

2. Access to knowledge, skills, experience and contacts

Each partner will bring their own knowledge, skills, experience and contacts
to the business, potentially giving it a better chance of success than any of
the partners trading individually.
Partners can share out tasks, with each specialising in areas they’re best at
and enjoy most. So if one partner has a financial background, they could
focus on maintaining the company books, while another may have
previously worked extensively in sales and therefore take ownership of that
side of the business. As a sole trader, by contrast, you’d have to do all of
this yourself (or manage someone you employ to do some of it).

3. Better decision-making
Compared with operating on your own, in a partnership the business
benefits from the unique perspective brought by each partner. In business,
very often two heads really are better than one, with the combined
conclusion of debating a situation far better than what each partner could
have achieved individually.

4. Privacy
Compared to a limited company, the affairs of a partnership business can
be kept confidential by the partners. By contrast, in a limited company
certain documents are available for public inspection at Companies House
and a company’s shareholders can choose to inspect various registers and
other documents the company is required to keep.

5. More partners, more capital

The more partners there are, the more money there may be available from
their combined resources to invest into the business, which can help to fuel
growth. Together, their borrowing capacity is also likely to be greater.

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Disadvantages of Partnership consulting
1. Partnership consulting relationship
Like any relationship, partnership consulting can present some challenges.
Let’s explore the most common drawbacks and talk about how to avoid or
resolve them.

2. Disagreements about consulting fees

I’ve found in some limited instances that the lead consultant wants to
propose fees for themselves — and therefore for me — at lower rates than
I would have. This issues is largely driven by the markets in which my
partner consultant does work, what kind of reputation they have as
consultants and what they intend their margins to be. But, surprisingly, this
is also driven by what they think their own services are worth.

3. Slow payment
In most instances, unless your partner consultant’s operation is a large
one, you get paid when they get paid, which can mean delays. Most
emerging firms are managing their cash flow closely.
However, one way to mitigate payment delays from your consulting partner
is to agree to a retainer at contract execution. This approach allows your
partner consultant to request the same of the client, so that funds are
available to pay you as the project gets underway. That way you are
getting steady periodic (usually monthly) payments at a minimum level.

4. The business has no independent legal status

A business partnership has no independent legal existence distinct from
the partners. By default, unless a partnership agreement with alternative
provisions is put in place, it will be dissolved upon the resignation or death
of one of the partners. This possibility can cause insecurity and instability,
divert attention from developing the business and will often not be the
preferred outcome of the remaining partners.

5. Unlimited liability
Again because the business does not have a separate legal personality,
the partners are personally liable for debts and losses incurred. So if the
business runs into trouble your personal assets may be at risk of being
seized by creditors, which would generally not be the case if the business
was a limited company.

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3.3: Expert model
Tom Devane argues that every organisation needs a strategic plan
assessment tool because of the increasingly difficult environment in which
companies must operate i.e.
• Global markets
• Unexpected new competitors
• Technological changes that move at lighting speed makes it difficult
to develop any form of continually relevant, long-term plans that
have listing significance.

In this regard, Tom Devane argues that consultants are recommended to

use a strategic plan assessment tool, as a self-administered questionnaire
that can provide insights into how well an organisation ‘s strategic plan is
positioning the organisation for success in today’s competitive
environment.

This tool is an assessment criterion that is widely applicable to a variety of

industries e.g.
a) Electronic assembly manufacturing
b) Health care
c) Pharmaceuticals
d) Paper products
e) Telecommunications
f) Software developments
g) Government agencies etc

The following are the variety of ways the strategic plan assessment tool
can be used: -

1. As pre-planning checklist (e.g. Budgeting)

2. Evaluating the existing strategy (e.g. research and development
plus monitoring and evaluation)
3. Interim reviews of business direction (e.g. SWOT, PESTLE
analysis)
4. They provide for strategic ides such as mergers, acquisitions and
partnership engagements.
5. Evaluating departmental for with the organisation’s larger strategic
objectives e.g. people design, equipment design and basic
procedural design on assigned employee task functions.
6. Design of corporate culture through roll-out of the existing strategy
on the entire organisation.

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Tom Devane asserts that the expert model of strategic plan assessment
tool consists of six categories, each representing an important aspect of
maximizing the usefulness of a strategic plan.

3.3.1 STRATEGIC FOCUS

On this idea, attention is given to specific areas upon which to focus

attention, mobilizing resources and setting the company apart from
competitors. For example:

1. Value propositioning: This entails how clearly an organisations

strategy is for adding unique value in its selected markets.
2. Trade-off articulation: This entails rating the organisations assumed
recognition of areas of excellence; what it does best. E.g. innovation,
customer intimacy (CRM) or operational excellence.
3. Key goals of the year: This entails rating how well an organisation is in
establishing short 2 year to 5-year goals to achieve and whether they
understand, embrace and work upon the general workforce within one-
year time frame.
4. Initiation of key strategies: This entails rating of what efforts have
been made to move towards achieving its newly initiated strategies.
5. Alignment mechanisms: This entails rating how well the organisational
departments coordinate in integrating overall focus on organisational
goals (organisational structure).
6. To what mechanisms are in place: To rate non-focus articulation to
strategies, that do not add value to the function and activities of the
organisation.
7. Value-chain emphasis: For example, rating the sequence of activates
that add value to a product or service as it moves through the chain e.g.
product conception, product development, manufacturing and
distribution.

3.3.2 ORGANIZATIONAL IDENTITY

This entails, assessment of the organisation articulation of what it stands for

and what it is trying to accomplish e.g.
a. Vision
Which entails rating of how clear its view is of what business will be like and
its external input that is:
- On the world view
- Its niche markets
- Its industry e.g. A personal computer on each desk

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 b. Mission
This entails rating if the organisation documentation of a central reason why
it is in business e.g. most eatery establishments mission is ‘To satisfy the
worlds appetite for good food, well served, at a place people can afford.’

c. Values
This entails rating of an organisation operating roles or guidelines for
behaviours and actions of members of the organisation e.g. customers are
the focus of everything we do.

d. Culture
This entails rating of an organisation identified key factors that impact how
the organisation culture can be instrumental in achieving the business
strategy e.g. ‘We encourage risk taking because it leads to innovative
breakthrough. (An entrepreneurship spirit).

e. Broadcast of the identity

This entails rating how well an organisation has sent messages of its identity
to key outside parties through marketing and advertising etc.

3.3.3 ENVIRONMENTAL SCANS AND PLANS

This entails assessment of the organisation effectiveness in gathering

relevant information from outside world and in developing plans to react to
the outside world. E.g.

a. Customer assessment
This entails rating of organisations active plans to retain existing customers
and used that group as a base from which to expand.

b. Reinvention & renewal

This helps to assess the organisations effectiveness in continually adapting
to the organisation’s external environment.
a) Assumption and belief
This entails rating how well the organisation has identified and
challenged the assumptions that were used in the previous year’s
strategic plans (i.e. review)

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3.3.4 PERFORMANCE MEASUREMENT INTERNAL SCANS
AND PLANS
This helps the organisation to assess its ability to translate its strategy to
measurable easily communicated objectives e.g.
a. Balanced Measurement
This entails, an organisation rating its emphasis on the balance of financial
objectives. Customers service, objectives, process improvement objectives
and learning objectives.

b. Basis for communication, discussion and negotiation

This entails an organisation rating how well its clearly articulated
performance objectives form the foundation for information, dissemination,
discussion and negotiation among organisational levels.

3.3.5 LEADERSHIP
This helps the organisation to assess, how well leaders are helping the
organisation survive and thrive in its environment.
b. Ensuring that a vison exists
This entails rating of how well a organisations leadership ensures that
there is a vision of the impact that the organisation wishes to have on
the world.

3.4: Process / Action-based model

The process / action-based model includes the process consultation model
which focuses on how to solve the problem or process not on diagnosing
organisational problems.

This was first designed by Edgar Scheln (1997).

a) According to Schein (1997), in this model consultants support

clients while the clients perform the process of problem-solving by
themselves.

In this regard consultants emphasize the process of problem-solving

rather than providing clients with the solution.

Schein emphasizes that in the process consultation model, in order to

define problems in the complicated organisations clients need to build
relationships of trust to be able to act as advisors for their
organisational culture.

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Process / Action-based model

Action-based consulting assumes that a variety of data sources need

to be integrated and consultants work closely with clients in a trusting
relationship, enabling ongoing evaluation and change.

As a masterful consulting strategy model; clients are empowered to share

information or build learning processes with consultants during the
consulting process by forming the genuine partnership with the consultants.

In this regard, the consultant’s knowledge is transferred in a timely manner

and the wisdom of the clients is enhanced through learning in the
management consulting process.

Here consultants act as friendly co-pilot in that clients embrace consultants

as a team member, consultants on the other hand, make clients participate
in the consulting process to give opportunities of learning and finding
solutions to organisational problems.

Consultants must illustrate the level of participation consultants have with

their client form proving expertise to the client to being fully involved with
improving organisational effectiveness; this way; the consultants are able to
explain that the task categories focus on facilitating.

• Client learning and

• Permanently improving organisational effectiveness

Knowledge transfer from the consultant the client takes place, and the
organisation improves through its own learning and development.

2.6.2 CONCLUSION
Each management consulting model has sits place depending on situation
factors. Strategy it’s about contingency we may have the same purpose as
consultants but method and approach may differ.

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 Recap your knowledge

1. Briefly explain the advantages and disadvantages of the partnership model.

2. Explain the process/action based model.
3. Highlight the six categories of the expert model strategic plan assessment tools.
4. Explain the vision, mission and culture of a company.
5. Discuss the five phase consultancy model.

Click on the video below on strategic partnerships…

https://www.youtube.com/watch?v=A-bfMVLQbBc

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THE END: THANK
YOU
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