Consulting projects: What really matters

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1 Consulting projects: What really matters The factors that influence the success of management consulting projects Case 138: het 'Zwijsen future proof' project met de inzet van GEA Results PhD 2014, Bart Albers

2 2. Summary PhD (1/5) Introduction and purpose of the study Purpose The management consultancy profession took a rapid growth over the last century. The market can be characterized as a dynamic market. In the near future, the market of management consultancy will be even more dynamic than it is now due to emerging markets and economic crises for instance. Clients continue hiring consultants to help them with problems concerning corporate strategy, HRM, logistics, marketing, application implementation and so on. Although clients keep on employing consultants, there are still many projects that do not bring what is expected. Can one explain why that is? Practitioners and researchers are often capable of explaining, content wise, why a project is more successful than the other. But the opinions are diverse when it comes to factors such as the contribution of the client, the consultant, the context of a consulting project, and the relationship between the client and the consultant, that contribute to the success of consulting projects. There is an ongoing debate in the consultancy-science domain and the daily practice about the contribution of the mentioned factors and what consulting success actually is. Due to a certain scarcity of empirical and quantitative evidence and scientific argumentation, there is still no consensus about what is meant by success and how it is influenced by the mentioned factors. Therefore, it is useful to study how success of consulting projects can be increased. So the central research question of this study is why are certain consulting projects more successful than others under the same circumstances?. This study attempts to find an answer to this question when the factors, as mentioned above, are taken into account. As a result, the following sub-research questions are used to find an answer to the main research question: What is success in consulting projects? To what extent is success influenced by the outcome and execution of consulting projects, the client, the consultant, the context, and the client-consultant relationship? To what extent do clients influence consulting projects? To what extent do consultants influence consulting projects? To what extent does the context influence consulting projects? To what extent does the client-consultant relationship influence consulting projects?

3 3. Summary PhD (2/5) The applied methodology Methodology A quantitative as well as a qualitative research approach is applied to find an answer to the research questions. A cross sectional research design is applied where questionnaires as well as semi-structured interviews are used to retrieve data from clients as well as consultants in retro-perspective. 392 respondents filled in an online questionnaire. These respondents are spread over 140 consulting projects. Each consulting project includes at least one consultant and one client representative, which is mostly the principal. Factor analyses helped to reduce the amount of quantitative data. Afterwards, multilevel analyses are conducted to find effects between the variables. As a second-opinion, regression analyses are executed to verify the found effects. In addition, ANOVA-analyses are carried out to find significant differences between, for instance, the year a consulting project ended and whether there are differences between certain types of consulting projects. Afterwards, five consulting projects are selected that deviate from the core findings of the quantitative analyses and confirm the findings of the analyses. For each selected case, the involved respondents are separately interviewed to reveal why the deviations or confirmations occurred and how they influenced the project. Quotes of the interviews are used to explain the mechanisms behind the found effects of the quantitative analyses.

4 Summary PhD (3/5) The findings of the analyses Findings This study argues, logically and theoretically, that success of consulting projects is synonymous to the perceived satisfaction of the client and the consultant about a consulting project. The level of success is determined by the realized improvements within the client organization due to a consulting project and the fulfillment of the pre-agreements at the end of a consulting project, which are so-called assessment factors about the execution and outcome of consulting projects. The research shows that the realized improvements influences success the most. Thus the more improvements are realized within the client organization due to a consulting project, such as more efficiency, more consensus, more effective collaboration and so on, the more successful the consulting project is perceived. The same goes for the pre-agreements. Thus the more the formal pre-agreed arrangements are met such as the agreed budget, planning, assignment, tasks and so on, the more successful a consulting project is perceived. This explains why certain projects are considered more successful than others. The realization of the improvements and the fulfillment of the pre-agreements are influenced by several factors. From the client perspective, personal benefits of client members strongly influence the realization of the improvements. The more beneficial consulting projects are for client members personally, the more likely the improvements are realized due to the consulting projects. From the consultant perspective, the basic competencies of a consultant, as the aggregated construct skills, positively influence the realization of client improvements and the fulfillments of pre-agreements. Thus the better the skills of a consultant are developed, the more likely that the improvements are realized and that the pre-agreed agreements are met. From the context perspective, the priority of a consulting project, the quality reduction of the outcome, and client mandate influence the execution and outcome of consulting projects: (1) The higher the priority of a consulting project within the client organization, the more likely that the client improvements are realized; (2) The less concessions are made towards the outcome during consulting projects, the more likely that the pre-agreements are fulfilled; (3) When the involved client members have the proper mandate to execute the consulting project, it is likely that the improvements are realized and that the pre-agreed arrangements are met. This study found that there are some factors that can be beneficial, but affect success indirectly-indirectly. Thus via multiple other factors. In particular top management support, the knowledge of the consultant, client readiness, and mutual trust can be strong influencers during consulting projects. They positively influence all factors as described above and contribute indirectly to realize the intended execution and outcome of consulting projects. Regarding the types of projects, this study shows that the differences in perceived success can be explained by the variables that were analyzed. The mechanisms as described above apply for different types of projects and there are no particular differences between the types of projects regarding the analyzed factors. In addition, this study shows that there are no significant differences between the types of projects regarding success. This study confirms the generality of the conceptual model as specified in this study. 4.

5 5. Summary PhD (4/5) The added value for today s practice and consultancy-science domain Value The results of this study contribute to today s practice as well as to the consultancy-science domain. Regarding the former, this study gives a useful insight in what a client and a consultant and his/her firm can do to make a consulting project a success. This makes this research practically relevant. Based on the results, nine lessons learned are formulated that should be applied by practitioners. These nine lessons can be used to increase the success of consulting projects: 1. Maximize the client s and consultant s satisfaction. 2. Success of consulting projects is determined by the realized improvements within the client organization due to a consulting project. 3. Success of consulting projects is determined by the fulfillment of the assignment. 4. Make consulting project beneficial for the involved client individuals. 5. Conduct consulting projects with skillful consultants involved. 6. Start consulting projects only when the involved client members have the necessary mandate to execute the project. 7. Do not reduce the quality of the outcome.. ever! 8. Start consulting projects that have priority within the client organization. 9. Know that there are 4 elements that, if present, are positively influencing consulting projects: top management support, client readiness, mutual trust between the client and the consultant, and the possessed knowledge of the consultant. Regarding the scientific value, it can be stated that this research is relevant for today s literature: (1) this study is consultant and client-focused, which is rare in the current literature. The client is often left out-of-scope and the existing literature regarding this specific topic is mostly theoretical and inductive; (2) this study is an extensive empirical study, which is rare as it includes a complete range of general factors such as success, the client, the consultant, the context, the relationship, the execution and outcome, and their underlying relationships; (3) this study attempts to settle the debate about what consulting success actually is; (4) the research question demands a firm empirical investigation of success in various consulting projects. That makes this research unique and relevant, when compared to other similar studies in the field of consultancy.

6 6. Summary PhD (5/5) Research limitations Limitations Regarding this study, there are some limitations that must be taken into account when using the results of this study: This study does not investigate everything practitioners might be interested in or answer all the questions practitioners have within the consultancy field regarding the gathered data. The researcher is aware that more results can be derived from the gathered data. But the intention of this study is to keep a broad perspective. Due to the scope of this study, choices are made what to investigate and what not. A second limitation concerns the external validity. This study found relations among commonly known factors that play an important role in consulting projects and are generalizable for the target population. Although this study includes many consulting projects, it would have been better to include even more. Nonetheless, it is argued that the sample is large enough to assume that most results apply to a broader population. Caution is required when readers interpret the results and speak of any form of causality. Many relations and correlations are found between factors and success, but the causality of the relations is ambiguous. The focus of this study is primarily on the process of a consulting project. The content per consulting project is barely measured nor judged by the researcher. Neither content documents were analyzed to discover certain relationships nor that documents were analyzed to check whether or not the right choices have been made. The content is only judged by the respondents, by means of the questionnaires and the interviews. The researcher is aware of the fact that respondents could have a different opinion during a project and that certain opinions can be inflected. As a consequence, respondents might have difficulties in judging a consulting project because of their changing opinions. This dynamic is hard to grasp with a methodological approach that has been used in this study.

7 Conceptual model Everything in perspective Top management support Team diversity Personal involvement team members Presence client leader/sponsor Personal benefits team members Client readiness Collaboration team members Collective participation Knowledge Skills!! Important!! All arrows imply positive effects between variables, except where a is drawn. These are negative effects. To keep this model transparent, all intergroup effects are excluded (e.g. effects between mutual trust and personal benefits). 4 variables seem to be relevant due to the inter-group effects: top management support, client readiness, knowledge of the consultant, and mutual trust. Priority of a consulting project Timing of a consulting project Quality reduction of the outcome Improvements within client organization Fulfillment of the preagreements Success Legend = Client (independent variable) Strict use of an approach = Consultant (independent variable) = Context (independent variable) = Relation (Independent variable) = Assessment factors (intervening variable) Client mandate Equal contribution = Success (dependent variable) Mutual trust 7.

8 8. Your case in perspective The scores of your case compared to the other consulting projects Type of variable > Dependent variable Related to > Success Variable > Overall mean > (1..5) Score case > (1..5) Top management Support Presence of a client leader/ sponsor Client Team Diversity Client Readiness Collaboration client members Independent variables Personal benefits Personal involvement Knowledge Skills Context The timing of a consulting project (no urgency) The quality reduction of the outcome Client mandate Mutual trust Priority of a consulting project (importance) Improvements within client organization Intervening variables Assessment factors Collective participation Fulfillment of pre-agreements 4,2 4,3 4,1 3,7 4,3 4,2 3,8 4,1 4,2 4,0 2,9 3,3 4,0 4,3 3,9 4,2 4,0 3,1 3,4 4,0 5,0 4,9 4,6 4,2 5,0 4,0 4,0 4,3 4,3 4,8 3,0 3,3 4,5 4,6 4,1 4,8 4,0 3,4 4,0 4,3 Approach Equal contribution Consultant Relationship Success!! Important!! There are no significant differences found between specific types of projects. Therefore, no mean scores are presented of peer projects. The study shows that the differences in success between consulting projects, if they exist, can be explained by the factors that are included in the conceptual model (and the table above).

9 9. Contact me Feel free to contact me if you want to discuss the results Bart Albers

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