Why management consulting is on the rise, and the importance of choosing the right one.

What is behind a rise in the need for qualified management consultants? For one, the pandemic has made many aspects of life more complicated. These changes to our personal lives have bled into our businesses, complicating the business environment even further. The Great Resignation is upon us, and companies need to solve increasingly complex problems. The use of technology is becoming an imperative, not an option. But skill shortages are leaving gaps in perspective and strategy. 

According to the Economist, "Companies are trying to go from 0 to 60, and it shows." With the large numbers of employees quitting their jobs, new jobs aren't being created as fast as expected in the US, and job vacancies are soaring, suggesting that companies are finding it hard to fill positions. Although these are observations about the economy, it's hard for businesses to ascertain an accurate summary of the problems. 

Skill shortages are found all over the board, with companies facing tough decisions in various areas. According to Clay Christensen of Harvard Business School, management consultants are essential "where clients [businesses] are less confident about how to solve the problem and are looking for a new and different approach or perspective, or the lessons of other industries."

According to research from the Business Talent Group (BTG), the projects most in demand for management consultants currently are: 

• Marketing and sales strategy

• Growth strategy

• Opportunity assessment

• Businesses processes

• Product launch planning

• Supply chain

• Financial services

• Insurance

Qualified and experienced management consultants are trained to solve problems and improve business performance in all of these areas. 

Small, independently-owned businesses are especially vulnerable and should rely on qualified management consultants to fill gaps in core competencies. Businesses need help navigating this new landscape—management consultants are in high demand as they help piece businesses back together after being disrupted by the pandemic. Experienced management consultants have developed deep skillsets in core business areas. They can see the overall business scope, compartmentalize complex issues, and work through the details to solve the problems and improve business performance. 

What does a Management Consultant do, exactly? 

The Institute of Management Consultants (IMC) lays out a comprehensive definition stating, "Management consulting is the providing to management of objective advice and assistance relating to the strategy, structure, management, and operations of an organization in pursuit of its long-term purposes and objectives. Such assistance may include the identification of options with recommendations; the provision of an additional resource or the implementation of solutions." 

Additionally, IMC defines a Management Consultant as "an individual who provides independent advice and assistance about the process of management to clients with management responsibilities. The individual can be a generalist or a specialist and may approach an assignment with, for example, a purely financial point of view, as required by the client.

According to a Forbes article "Management consultants work with domestic and/or global clients (organizations, executives, leaders, and teams) to identify and solve complex business, organizational and operational problems and define and improve processes...The best management consultants are those who have a propensity for strategic thinking and a bent toward statistical analysis, critical thinking and process improvement." (https://www.forbes.com/sites/terinaallen/2020/02/26/this-is-what-it-takes-to-become-a-successful-management-consultant/?sh=472e69814ce1). 

What is the CMC designation, and why is it important?

In an environment where anyone can slap "Consultant" by their name, how can a business owner or manager know they are getting the best management consultant for their money? My advice is to trust a Certified Management Consultant because each CMC is stringently screened to ensure only the most experienced and qualified consultants can call themselves a CMC. The Institute of Management Consultants USA has the highest standards in the world for competency and ethics. 

A Certified Management Consultant (CMC) is defined by the IMC as "a management consultant who views management consulting as a profession and has been evaluated as meeting certain requirements pertaining to character, qualifications, experience, independence and competence as defined by the professional body issuing certification."

The CMC is the most coveted designation for management consultants; it is similar to an attorney passing the Bar examination, an accountant receiving a CPA, or an engineer obtaining their PE license. The reason earning the CMC is so special is because the certification is competency-based, and a CMC candidate must adhere to the most rigorous vetting process in the profession. The vetting includes having satisfaction surveys sent independently from clients, taking multiple in-depth written examinations covering consulting competencies and ethics, and sitting for an oral exam via panel interview by fellow CMCs (all three CMCs for my oral examination were also PhDs in Management).

Below are some requirements for a management consultant to earn their CMC®:

• Experience: CMCs must be current consultants, not part-time – and must have spent three of the past five years delivering consulting services, e.g., high-level business consulting, strategic planning, change management, teaching a core competency of consulting, etc.

• Education: CMCs must have at least a bachelor's (4-year) degree, but most experienced consultants have obtained an advanced or terminal degree in their areas of expertise.

• References: Candidates must provide five satisfactory client evaluations from officers or executives of client organizations for whom they have provided consulting services, thus demonstrating excellence not only in their subject matter expertise but also in the critical consulting competencies, skills, and behaviors that a professional consultant must-have.

• Engagements: Candidates must provide at least three comprehensive written summaries of previous consulting engagements. These will be used as part of the oral examination of the certification process.

• Competence: The certification process is competency-based, not based solely on a written test. Candidates must submit to a qualifying written examination followed by an oral examination with senior CMC® examiners, all of which are designed to show the candidate's professional competence, currency, and experience as spelled out in IMC USA's Competency Framework – CMC® Scheme.

• Ethics: Ethics is a huge part of the certification process and must pass both written and oral examinations on the IMC Code of Ethics, and must pass ethical aspects of consulting.

[Requirements taken from: https://www.imcusa.org/benefits-and-process.]

Accordingly, when you engage a consultant who has earned their CMC, you can be confident they have a history of excellent performance in delivering results to clients (whether with internal or external consulting). You can be confident your consultant has met world-class standards of competence, ethics, and client satisfaction; and has maintained this level of professionalism through education and periodic certification renewal. According to the Institute of Management Consulting USA, less than 1% of all consultants worldwide have achieved this level of excellence. 

Management consultants can be external and internal, depending on the business's needs. Business owners facing tough decisions should find a CMC to help them improve performance and get back on track. And with high demand comes the need for more qualified consultants. Current consultants who want to improve and develop their practice should engage with other management consultants in the profession.

Preparation leads to confidence. Confidence leads to results

Negotiating can be a lot like taking a test. Have you ever spent a sleepless night worrying about a big exam the next day, where your worry stemmed from the fact you did not prepare enough? The next day, you begrudgingly take the exam, unprepared, and failed...hard. On the other hand, have you ever studied hard, worked through sample questions, known the information inside and out, and gone on to ace the exam?

There are a surprising number of similarities between test-taking and negotiating. Preparation and thoroughness are some of the best ways a negotiator can succeed. Preparation and practice build confidence, and confidence results in positive outcomes.

Global research conducted by Huthwaite International of over 1,300 professionals in 52 countries revealed that 62% of successful negotiators are very confident when entering negotiations.

The negotiation survey defined 'successful' negotiators as those who concluded 75% or more of their negotiations without going back to the table to renegotiate. Those defined as unsuccessful were negotiators who had to renegotiate more than 50% of their deals.

Based on the study, under-confident negotiators are successful in just one out of five negotiations they're involved in (19%). The survey also found that those who feel 'neutral' achieve an even lower rate of success in negotiations, with only 16% of them succeeding. Compared to the 75%+ success rate of confident negotiators, you can't help but wonder how to get a little more confidence!

According to the research, successful negotiators build confidence through preparation, planning, strategies, tactics, and behavioral skills. Going through the available information, formulating a plan, developing genuinely curious questions, building a framework and process, and anticipating the counterpart's interests are critical in the preparation process.

Confidence has a significant impact on how we behave and what we achieve. The first step for building confidence is by thoroughly assessing the strengths and weaknesses of each negotiation with a plan for how to best use the available information. I spend considerable time thinking (my wife calls it obsessing) about upcoming negotiations.

I don't want any surprises in a negotiation, and I truly want to empathize with my counterpart. What are their best and worst-case scenarios? What are their interests? What are engaging questions I can ask along the way? How do I want the process to flow? After answering these questions, I feel much more confident about starting a discussion.

Pitfalls in Negotiation Planning: Real-World Example of the Most Common Mistake

I was sitting in a DFW terminal during a recent trip layover. A businessman behind me was talking on the phone to a teammate. They were strategizing for an upcoming and seemingly crucial negotiation later that day. The terminal was quiet, and I couldn't help but overhear his conversation. 

After a couple of minutes, I quickly picked up the following facts from the conversation regarding his situation: he worked for a construction management software company. They were meeting with the CFO of a large construction company for the second time. During their initial talks, subsequent correspondence, and first in-person meeting, the CFO did not see the value in the construction software. Essentially, the CFO saw the software as too expensive for what it did. He could not justify spending the money to purchase this product and declined to move forward with the sales team.  

The conversation developed from there. The two salespeople discussed how they attempted to "sell" the CFO on the option before and how they will sell to him this time. An actual selling strategy was unfolding in front of me. They would focus on the value of their product, armed with long lists of how great the product was. They would go back and forth with each other, using varying approaches for peppering the CFO with value-heavy features. They would pique his interest by referencing success stories of current clients. They would get the CFO to offer small yes statements, working up to bigger yeses (this is 'Momentum Selling'). It was the perfect plan. How could it fail?

I don't want to be a pessimist, but I'd be willing to bet their upcoming conversation didn't end how they wanted it to end. Their strategy painted them into a corner. The CFO had anchored on price (not enough value is code for too expensive). With price being the main objection, this has devolved into a distributive negotiation. Who can get the largest piece of the pie? The CFO wants to pay less; the Software sales team wants the CFO to spend as much as possible. This is the classic showdown in an outdated and all too common perspective. 

What's missing? They were, after all, spending their time planning for an important negotiation. The planning phase is the essential phase of any negotiation. The first part of planning should establish the foundational elements of the talks that will: help (a) create & increase the ZOPA, (b) reduce the barriers to deal-making, and (c) increase leverage. Ignoring these elements can make at-the-table actions/tactics ineffective or even irrelevant.

With a well-thought-out plan, negotiators can anticipate potential objections, suppress the urge to react or make preemptive moves based on fears about the other side's intentions, identify their wants and needs from possible outcomes, and set a roadmap for the upcoming conversation. They'll be able to prepare for the worst but not trigger it—and to identify the actions most likely to have a significant impact on deal outcomes.

Their major pitfall is underestimating the power of asking questions. The main problem was relying on tactics and selling to the CFO rather than asking calibrated questions and framing the process. 

In the article "Enhancing Your Effectiveness as a Negotiator," professor Robert Wilkinson, Lecturer in Public Policy and Leadership at the Harvard Kennedy School of Government writes: "[people] have a natural tendency of telling the other side what they think the right answer is...The problem is, advocacy is often the least influential path to persuasion. The research on this is overwhelmingly clear. Instead, start a negotiation by trying to understand the other party's perspective first. Ask lots of questions — and listen to the answers. Be curious. The person or people you are negotiating with will be more open to hearing what's driving you if you authentically care about what's driving them."

Expert negotiators ask questions at a 3:1 ratio to advocating for their position. Asking more questions has undoubtedly improved the effectiveness of your conversations if you have already gotten into the habit of doing so. But how do questions improve our negotiation efforts? 

Recent research at Harvard confirms how important asking questions can be. In It Doesn't Hurt to Ask: Question-Asking Encourages Self-Disclosure and Increases Liking (http://nrs.harvard.edu/urn-3:HUL.InstRepos:35647952), researchers found that asking questions helps us accomplish two major goals: information exchange (learning) and impression management (Liking). The researchers told some people to ask many questions (at least nine in 15 minutes) and others to ask very few (no more than four in 15 minutes). In the online chats, the people who were randomly assigned to ask many questions were better liked by their conversation partners and learned more about their partners' interests.

In a recent Harvard Negotiation Master Class session, Harvard Business School professor, Deepak Malhotra, spoke about the need for proper planning. And the correct use of strategy. Effective negotiation requires a preparedness to adapt. Not your willingness to adapt. If you don't prepare to adapt, you might not be able to, no matter how willing you are. Take the case of the salesman I overheard in the airport: They did not prepare to adapt. The strategy remained the same and it will become harder - if not impossible- for them to adapt even if they are willing to do so. 

The key is not to learn or use a lot of negotiation tactics. There are an infinite number of tactics. What's much more limited are the principles- these are the most important aspects of guiding the negotiation where it needs to go. 

When you're thinking about strategy, you need to embrace that you won't use all your good ideas (in fact, you won't have all your good ideas yet before asking great questions). You have to use a subset of good ideas. Your best ideas will come from asking calculated questions, being genuinely curious, and being strategic about how your questions will advance your process. Preparedness equals foresight plus an investment of time and planning. Strategize the process. The process involves when you will be implementing various parts of your strategy. If you find yourself talking too much, be quiet! Begin asking questions with real curiosity. Stay true to the belief that the magic of a conversation will produce a whole that is greater than the sum of its parts.

Don’t consider yourself a negotiator? Here’s why you’re wrong.

Do you consider yourself a negotiator? What does negotiation mean to you? What percentage of your time do you think is spent negotiating? Odds are, it’s more than you think. Studying or reading about negotiation will help you navigate the business and personal interactions that arise so frequently each day.

One of my favorite negotiation scholars, Deepak Malhotra, explains negotiation as more than deal-making. He explains that "At the end of the day, negotiation is not about dollars and cents, it's not about deal terms, and it's not about emotions. At the end of the day, negotiation is always fundamentally about human interaction."

According to William Ury, in "Getting Past No" Negotiation is broadly defined as "the process of back-and-forth communication aimed at reaching an agreement with others when some of your interests are shared, and some are opposed."

And again, another (similar) broad definition by William Ury: "Negotiation is back and forth communication between two or more people who are trying to reach agreement on some issue, however small. The parties may have some interests in common and some interests in tension."

Based on these definitions, each one of us negotiate constantly. “Like it or not, you are a negotiator … Everyone negotiates something every day,” write Roger Fisher, William Ury, and Bruce Patton in their seminal book on negotiating, Getting to Yes: Negotiating Agreement Without Giving In. But most people I talk to about negotiation typically have ideas of businesspeople or attorneys sitting around a conference table hammering out complicated contract agreements when the word is brought up. For example, a friend of mine is a scientist. When I asked him if he would be interested in negotiation training, he said, "Why would I need that? I don't ever negotiate!" 

In the same conversation, my friend told me about a subordinate team member in the division he managed. He wanted the subordinate to change how a project was being executed, but the team member was stubborn, saying he "had been doing my projects like this for years." It was time for a change, but, short of firing this person for such resistance, my friend could not get him to budge. He could order the team member to do whatever he wanted, but that wasn’t consistent with his company’s culture. How should he handle this gridlock?

Simply put: successful negotiation revolves around relationships, interactions, and understanding your counterpart. Despite your perspective on negotiation, you negotiate multiples times each day, from the time you wake up until you go to bed. And negotiations probably consume a large number of your interactions.

Negotiation is not coming up with a list of things you want, why you want them, and then explaining this to your counterpart- whoever that may be. There are relational, psychological, and cultural factors that must be considered. Understanding what negotiation is, and what negotiation isn’t, will help you be more aware of how a few tools, strategies, tactics, and perspectives can influence daily interactions. Preparing yourself with a better understanding of how negotiation impacts your life will allow you to learn more about how to create and gain value in negotiations, manage fairness concerns, and reach the best deal possible—both for you and for your counterpart.

Follow my blog and articles for examples, tactics, strategies, and explanations that will help you negotiate in every aspect of your life.