L2 - Understanding the Project Flashcards
What are the consultants main aims?
(1) Develop value proposition
(2) Identify target market
(3) Promote proposition
(4) Sell project to target client
What are the consultants main motivations?
Economic
Weaken competitors
Reputation development
Pro bono
What are the clients main aims?
(1) Identify the issue
(2) Identify potential suppliers
(3) Request project proposals
(4) Buy a project
How can clients see a consultant from a functionalist perspective?
Functionalist - consultants can help improve functions Formal roles: Doctor role Expert Role Facilitator role
How can clients see consultants from a critical perspective?
Stimulate anxiety
Consultants won’t improve or add anything
This person is the wrong consultant
Consultants may provide flawed solution
Consultants provide one-size fits all solution without realising the uniqueness of clients problem
What is a prospect?
A client that has not yet signed the contract and wants to hear more about the project
Explain the probability of generating a lead in the marketing phase?
Cold-calling - low probability
Marketing - mid probability
Reputation - mid-high probability
Referrals - high probability of generating a lead
Successful previous project - this is the highest probability of generating a sales lead
What is the issue with new entrants and generating a sales lead?
Does not have previous evidence of success with client (which is the most effective strategy)
Most rely on successful prior project experience for another client (e.g. referral and reputation)
No experience
With no experience no entrants most use marketing and cold calling
Rely on referral from a formal consultancy they have worked with (referral by the referred)
Explain the sales process
Sales lead - follow up on the generated lead
Contact (first meeting) - do preparatory research, develop the relationship, understand the real hiring reason and intentions
Proposal - detail around the planned project
Contract - the agreement of the project
What is Porter’s 5 forces used for?
Understand industry - Make decisions about whether to enter an industry or not by understanding the industry forces
Strategy - Where to position firms relative to each force
What are Porter’s 5 forces?
Threat of entry Substitutes Buyers Suppliers Firm rivalry
Name some characteristics of the threat of entry force?
Economies of scale Product differentiation Capital requirements Proprietary learning curve advantages Government policy Expected retaliation Distribution channels (access to input and outputs) High switching costs (costs involved in switching to another company)
What is the difference between competitors and substitutes? Give example?
Substitutes come from a separate industry
Competitors exist within the same industry
Airlines and trains
Name the characteristics of substitutes?
Relative price/performance of substitutes
Switching costs
Buyer propensity to substitutes
Name the characteristics of buyers?
Buyer concentration (e.g. high volume of sales means more bargaining power) Buyer switching costs Buyer ability to vertically integrate Substitute products (does the buyer need this input?)
What do the characteristics determine?
The strength of each force.
Name the characteristics of the industry competition?
Industry growth
Concentration and balance
Exit barriers
Switching costs
Apply the forces to the management consultancy industry?
New entrants- low exit costs but have to build up reputation
Buyers - buyers might have high bargaining power in very specialised sector
Suppliers - if there are few specialist suppliers then consultants could have power (e.g. the suppliers are not companies but intelligent employees)
Industry - not focused on industry growth but competition for market share
What is the value disciplines model?
How to position firm to get a competitive advantage
Value leadership model posits that for a company to be competitive it must have (a) operational excellence (b) product leadership (c) customer intimacy
Need to be excellent in one of these disciplines
What is operational excellence?
Deliver quality product or services
Quality price
Product leadership?
Striving to provide customers with cutting-edge product and services
Customer intimacy?
Create tailored product and services to customer
Create bonds and customer loyalty
Describe the level of codification and familiarity of clients problem?
Exploration - low accumulated knowledge and familiarity
Exploitation - low for both
Accumulation
Codified practice - high amounts of codified or accumulated knowledge and based on familiarity of clients problem
What are the various consultant strategies?
Consultant strategy - level of knowledge used to solve a clients problem Brain consultant Grey haired consultant Procedure consultancy Software-based consultancy
What steps are required to understand the hiring reason?
Verify - make sure the prospect is clearly defined
Research - if the prospect is not clearly defined then do more research
Proposal - if the prospect is clearly defined you can investigate that correct issue
Why is it necessary to define the prospect?
Definition provides a foundational basis to investigate an opportunity or problem
Invalid definitions can lead to the wrong problem being investigated
Why does the person matter in client relationships?
Emotionally expressive - some cultures are more emotionally expressive than others
Confrontational - some cultures are more confrontational
Cognitive trust - cognitive trust is task based and people build reliability rather than rapport (transactional relationships)
Affective trust - is more to do with emotional relationship building in business
Risk analysis of stakeholder involvement?
Affected by project? (a) +ve or-ve (b) extent
Required for project? (a) yes or no (b) extent
Potential for negative affect? (a) yes/no (b) extent
Terms - risk of sabotage (Alert/foe) risk of non-cooperation (friend)
Answer - decide whether the extent and direction of stakeholder influence
How should management consultants approach problems?
Scientific enquiry: Where/What/Why/When/How Key properties Key function Advantages/Disadvantages Alternatives Explanation/demonstration of how something works (what are the key steps) Evidence
Explain how to look at problems differently? Give example
Problem framing - how an issue is conceptualised
Solution space - the possible ways to solve the problem
Example - (a) lift is slow -> get faster lift OR (b) lift wait is annoying -> find ways to make the wait more enjoyable
What is the first stage of the evidence based process?
Identify critical assumptions
Check if there is sufficient evidence to support these problems
What are hidden assumptions?
Means clarifying the key terms in the decision problem
Underlying the relationship between these terms
What are the key parts to a proposal?
Project description
Consultants profile
Terms and conditions
Why is it important to have a robust proposal document?
Well drafted proposals easily convert to contracts
Project description?
Part of proposal document
Understand the problem - description of the problem
Purpose of the project - objectives; desired results; scope (responsibilities) ; time needed
Approach to be taken - methods, data etc; division of roles and responsibilities; plan
Consultants profile?
Part of proposal
Profile of project team - competencies; experience
Profile of consultancy firm - practice area competencies; previous reference projects
Terms and conditions?
Part of proposal
Financials - fee; payment schedule
Control - procedures for contingencies; procedure for disputes
Policies - legal; ethical
How are projects priced?
Maximum fee - value perceived by project
Actual fee - higher than minimum but lower than maximum
Minimum fee- marginal cost of consultant
Bargaining power of client - lots of competitive threats
Bargaining power of consultant - competitive advantages
What are the five main contract areas?
Contracting partners (e.g. client and consultant)
Scope (objectives, description of work, time schedule)
Outputs (e.g. expected results, deliverables including reports and presentations)
Inputs (e.g. time, skills, resources, data, information)
Financials (e.g. fees, billing)
Legal (e.g. confidentiality, liabilities, disputes, termination)
Ethics - responsibilities towards client?
Contractual obligations (e.g. billing more hours)
Confidentiality - disclosing sensitive agreements
Misuse of knowledge - insider trading or illegal knowledge broking
Ethics - responsibilities towards stakeholders?
Avoid harm - avoid unnecessarily harmful actions (e.g. staff lay-offs without a gain)
Be cautious to accept project for informal reasons (e.g. legitimator or scapegoat)
