GGI Business Review is a new business series, capturing snapshot of GGI Harvard Case Style Masterclass by CEOs and Industry Leaders.
This Particular piece is a snapshot from Rajat Gupta GGI Masterclass.
Many people dream of becoming a management consultant and out of these, many people dream of getting into McKinsey & Co. But what does it take to become a successful management consultant? India’s first Global CEO Rajat Gupta, the man who spearheaded McKinsey & Co. from 1994 to 2003, shares his insights with the Global Governance Initiative community on the essentials of becoming a successful management consultant from a career spanning over three decades.
Rajat Gupta in his Masterclass at the Global Governance Initiative mapped out the 5 key skills and values to be mastered in order to become a successful management consultant.
1. DEFINING THE REAL PROBLEM
Management Consultants are generally known to be problem solvers and are hired by the clients for the same purpose, i.e., for solving problems. Well, problem-solving might sound like an easily achievable task, but it isn’t.
It is a process consisting of different steps to be followed in order to identify and solve the problem.
The first step in problem-solving is the identification of the problem definition because a lot of times the problem brought in by a client is not the real problem faced by them and the real problem in fact is hidden somewhere. That is why it becomes absolutely essential to identify and define the real problem. A team of consultants at McKinsey & Co., came across a similar situation when AT&T approached their firm for assistance in reducing the cost of recovering 3 million telephone sets around the United States which cost AT&T approximately $75 Million. While trying to identify the ways to efficiently recover these telephones, the consultants identified that losing $75 Million worth of telephones is not the real problem for AT&T. The real problem lies in the efforts to recover the 3 million telephone sets. Here, McKinsey identified that to avoid a loss of $75 Million in lost phones, AT&T was spending more than $1 Billion in terms of labour and other costs to recover these lost phones.
So, by simply doing a root cause analysis of what the real problem was, McKinsey & Co. helped save AT&T billions of dollars. This was a classic example of the need to identify and define the real problem, which is roughly 25 per cent of the task of management consultants.
2. ANALYTICS FOR SOLVING PROBLEMS
Problem definition is one aspect of being a good management consultant, another aspect of it is mastery over the analytical techniques that are necessary to analyse a particular problem.
A good management consultant is one who uses different analytical techniques to approach a problem, and while doing so he uses creativity and out of the box thinking in order to convince the clients that their solutions are effective. During the early 70s, a team of consultants at McKinsey & Co. was assigned to a project where a client involved in the production of processed meat demanded their services in identifying ways to expand its market by building new plants. Tasked with the need to analyse the demand and supply of meat in different geographies, the consultants decided to spend some time understanding the need to expand to new areas for increasing the capacity.
Here, by building a simple Linear programming model, a young Rajat Gupta was able to identify the ways to increase the overall capacity of existing plants which eliminated the need for building new plants. This example highlights the importance of using analytical tools to solve problems and convince clients.
3. THINKING OUT OF THE BOX
As a management consultant, however important it may be to identify and solve problems using various different tools, it is equally important for them to explore outside the purview of the problem as it often leads to interesting insights.
A similar incident happened with the Scandanavian arm of McKinsey & Co., where a Pharmaceutical company in Norway was looking to expand its market into the neighbouring Scandinavian countries. The client here only wanted to expand into the neighbouring regions and did not expect much more than this.
Now, any normal consultant might have worked their assignment and would have helped the client in expanding regionally. But the team at McKinsey followed a different approach and decided to look outside the scope of the problem, and were able to identify a massive opportunity for the client, using which their client was not just able to expand regionally, but also significantly increase the value of its products globally, which led the client in becoming one of the most valued Norwegian companies during that period.
4. DEVELOPMENT FOR GROWTH
Well, all the aforementioned ideologies and techniques would only be possible if the consulting companies are able to attract clients. Client development is a very important process for all the management consultancies as it helps in the continuous growth of the company. Client development is a process which needs to be gradually implemented over a period of time in order to land business for the consulting companies.
There are a lot of consultants who can solve problems, but there are only a few who can develop clients.
Client Development is a very subtle process which needs persistent efforts from the consultants, in order to build strong relations with the clients. A good consultant would always look to add value to their clients through persistent efforts which might not seem to provide short term benefits to the company, but would definitely display their importance over a long period of time. Rajat Gupta emphasizes the point that as a successful management consultant, “The Less You Market Yourself, the Less Commercial You Are, The More Successful You Will Be.”
5. SIGNIFICANCE OF VALUES AND MORALS
In order to build a successful consulting institution, there needs to be a set of strong values and morals that need to be inculcated in the organisation in order to build a strong foundation for any institution providing professional services. Values should be articulated in a proper manner and systems should be put in place to live by those values constantly, a feature that has been mastered by McKinsey & Co over the years.
Finally, the last key aspect of becoming a successful management consultant is the need to take a stand for what is right from time to time in an organisation. A true leader consistently stands for what is right no matter how tough the situation might be.
The ideologies and techniques mentioned above are a result of years of hard work done at the very top level in the management consulting industry. These ideas can be used by both aspiring management consultants and industry veterans to bring about significant changes in their way of operating in the industry.
Rajat Kumar Gupta is an Indian-American businessman who was the first foreign-born managing director of management consultancy firm McKinsey & Company from 1994 to 2003. In 2012. Gupta was a board member of corporations including Goldman Sachs, Procter & Gamble and American Airlines, and an advisor to non-profits such as the Bill & Melinda Gates Foundation and The Global Fund to Fight AIDS, Tuberculosis and Malaria. He is the co-founder of the Indian School of Business, American India Foundation, New Silk Route and Scandent Solutions.
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