04
Dec '08

Distinguishing between managers and management consultants

We are sometimes asked to distinguish between the skills and capabilities of management consultants from one of the big professional service firms and their close cousins, interim managers.  The popular perception of a branded management consultant is of a high flyer, with a good brain and sound business training. An interim manager, by contrast, is thought to be of a lower capability, mainly because they are sole traders without a brand.

Maybe this was once true, but now interim management is becoming a career of choice for successful managers and former consultants, particularly those who are action, project or change oriented. Successful businessmen and women, perhaps disenchanted with corporate politics, or promoted up and away from a role they really enjoy, are increasingly turning to a life of interim roles; frequently many will have been trained by one of the consultancy firms.  There is, however, a distinct difference between specialist interim managers and consultancy employees acting in an interim capacity.  This paper sets out some of the implication of these differences.

Why use Management Consultants?

Many companies use back-fill resource from consultancy firms because it’s easy and familiar.  In spite of popular perception of questionable delivery, consulting firms can rapidly mobilise teams of people to address complex issues, and if more resources are needed, they can usually provide that too.  They take the problem away from the company and provide one solution: – but at a cost.

Why look at Interims then?

Especially in a recession, value for money, accountability, objectivity and timeliness are becoming key drivers for most companies which, when added to resource constraints caused by large scale investment, mean they need to look for alternatives.  Interim management is the prime alternative and in many cases a better substitute. Interims usually have more experience; they focus on delivery and cost considerably less.

Interim Managers

True, interim managers are self-employed; they are accountable for their own actions and trade on their own reputations.  The client interviews appropriate candidates and decides who should deliver the assignment. The interim manager does what the client needs and only has the client’s best interest at heart.

The advantage of the self employed model is that interim managers are only as good as their last job, so only the best survive. The reputations of both the interim service provider and the interim manager are paramount.  Interim service providers will have a substantial talent pool to choose from; Burden Dare has access to over 5,500 senior interim managers.

Typically an interim manager will have a minimum of 15 years business experience and a demonstrable track record of delivery and success.  Frequently they will also have worked for one of the Big Five management consultancies and have direct experience of delivering advisory services as well as line management. Once a consultant leaves a consultancy, the client can hire exactly the same person at about 50% of their previous fee, less in some cases.

Management Consultants

Candidates presented by a consultancy or systems integrator are employees. They trade on a brand and are accountable to an external manager. Frequently, they are also encouraged to focus on sell-on work, to increase revenue for their employer. After all, this is the company which pays their salary.

There are two main implications of this employee model.  Firstly, a consultancy has a more limited pool of talent to choose from, perhaps up to 300 people but across all grades, which will be depleted when the consultancy or systems integrator is busy.  The best consultants tend to be placed on consultancy assignments first, which reduces the selection even more for clients unlucky enough to be further along the queue.  Secondly, clients rely heavily on the consultancy brand and frequently do not, or are not allowed to, participate in the candidate selection process.

Consultants usually join a consultancy straight from university.  While they will have the opportunity to work in many environments for different clients, they are much less likely to have line management experience, or to have been accountable for implementing their own ideas.

Teams of Interim Managers

The Private Sector is a big user of management consultancy with the consequential price tag, but interim managers can provide a very cost effective alternative.

By swapping just three Big Five programme managers for interims, we saved one bank £575,000 in only six months.  There was no degradation in quality of work delivered at all and indeed the bank remarked upon the breadth and depth of additional experience injected into the project.

A team of interims can be an excellent value-for-money alternative to a team of consultants.  The client hires the interim programme manager and gives them license to hire a team to their specific requirements and within their budget.  A team of interims will be focussed on delivering an assignment quickly and without calling upon additional corporate resources.

Average savings of £800 per day, usually more mean that a team of five would save £20k per week or £80k per month.  On a big project, the savings can be substantial.

Key Differences

The following table sets out the major differences between interim management and management consultancy:-

Management Consultants and Systems Integrators

Interim Managers

Skill Sets

Consultants select from employees not previously recognised as suitable for existing projects.

Burden Dare will select the most appropriate interim from a network of 5,500 people – over 500 being senior Ex-Big Brand consultants.

Experience

About 50:50 between generic consultancy skills and sector specialism. Many are career consultants with little or no line experience at senior levels and are used only to give advice.

Interims have at least 15 years commercial line experience and professional interim managers have at least two years interim experience.   Many have MBAs, most with practical project management training and experience.

Ability to Execute

A consultant primarily offers advice; implementation or execution is usually left to the client.

The interim will have management or project / programme responsibility; both advice when needed and implementation.

Accountability

Managed by their firms and answerable only to them; many are goaled on “sell-on” to their projects. Many consultancies are now owned by system vendors and have their interests at heart.

Blend in with client staff and report to the client – no conflicts of interest and no targets to sell people in.

Fees

Daily fees range from £1400 for a new graduate entrant to over £4000 for a partner.  A manager is usually around £2000 to £2500.

Fees to clients range from £800 to about £1,750 with the majority being around £1000/£1400.

Value for Money

Partnership pressure is to provide the best value-for-money for the supplier, not the client.  Candidates frequently are not interviewed by clients and are selected by the service provider without comparison.

Keen daily rates for high quality interim managers can be negotiated.  Clients have the option to choose the successful candidate and make a value-for-money judgement based on prior experience.

New Value-for-Money Ways of Working

The market for interim management is growing steadily year on year as clients recognise the value and flexibility that interims bring.  Outstanding candidates, sometimes beyond the normal reach of the client, can be hired on short term contracts at highly competitive rates in order to bring about change and transition in a cost effective manner.

The Burden Dare proposition is to introduce high quality professionals in to challenging roles, be they line or consultancy, at exceptional value-for-money.

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