The Purpose of Business Consulting Firms
Self examination is often considered the best way to work toward improvement. Unfortunately, no matter how hard we try it is often extremely difficult to be completely unbiased when we consider matters that are close to us. In times like this it is helpful to seek outside opinions and insight. This holds true in the business world as well as businesses need to be able to adjust and adapt in order to survive in the long term, but companies often struggle to determine what problems and opportunities they face going forward. Business consulting firms exist to provide companies with an outside opinion and fresh insight that can help companies adapt for the future.
Business consulting firms have existed for over a century, with the first notable firm having been established by MIT professor Arthur D. Little in 1886. The industry of consulting experienced a large boom in the decades after World War II though as the American economy grew by leaps and bounds. While business consulting firms employ a variety of approaches considered to be part of a larger continuum, there are two main approaches that are most often employed. These approaches include:
- Expert approach
- Facilitative approach
Firms that employ an expert approach to business consulting provide clients with an “expert” opinion as it relates to their company and its position in the market place. A firm’s consultant will offer their expert opinion and advice to the client, often with little or no input from the client during the process.
A facilitative approach, on the other hand, focuses less on the expert knowledge of a consultant and works more closely with the client to improve the business process. Other approaches to business consulting are deemed to be a mixture of these two approaches.
Business consulting firms are often structured in a manner that allows them to handle various specializations that different clients present them. Firms are often structured with one axis describing a function or type of consulting, while the other axis describes a business focus or specialization. Examples of functions and types of consulting include:
- Strategy
- Operations
- Technology
- Executive leadership
- Process improvement
- Sales
- Marketing
In addition to these types of consulting, there are specialized areas that firms will deal in as well. This allows them to further assist companies with highly specialized businesses. These areas include:
- Natural resources
- Retail
- Tourism
- Hospitality
- Automotive
The formation of a business consulting firm allows it to employ individuals that can meet the needs of almost any client in need of help. For example, a business consulting firm could have one employee who specializes in automotive marketing and sales, while another specializes in natural resource management and operations.
Business consulting firms perform three major tasks for clients that differ depending upon the need of each client that approaches the company. These three main services include:
- Helping a business reinvent itself or revamp its image
- Assisting businesses with acquisitions and takeovers of other businesses
- Helping small business develop a business plan
Each of these services requires different approaches, but there are some constants that can be found in all three services. These include:
- Getting to know the business
- Assessing problems and highlighting opportunities
- Developing a plan of action
Business consulting firms cannot help their clients unless they get to know everything about their client’s business. During that step, consultants begin to discover the problems facing the company and learn what opportunities lay ahead in the future. Finally, they can take the knowledge gained in the first two steps to develop a plan of action that will help the client be successful in the future.