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Advising vs. Doing…Consultants vs. Interim Managers

Monday 19th May 2014

Understanding the difference between management consultants and interim managers when you bring in external expertise will save your organisation money. When deciding how best to resource the various stages of a change, transition or turnaround situation it’s crucial to have a clear understanding of the differing services offered. Knowing these differences is equally useful whether you are hiring or thinking of becoming an interim manager.

Demand for interim management is being fuelled by the actions of management consulting firms themselves. An appetite for growth has led management consulting firms to expand beyond their roots in strategy-consulting. McKinsey’s Jon Garcia (The Economist, May 2014) currently heads their Recovery & Transformation Services practice (RTS). Established in 2010 this is a departure from their core business of selling advice which clients were free to ignore, or implement it themselves. Whilst their focus might largely be on restructuring, this is a move into implementing their own advice.

However, to be successful this requires an immediately available bench of experienced and proven hands to ‘sense check’ that advice and lead its implementation in the real world. Such work is not for novices or recently qualified MBA’s without twenty of so years of business experience and battle scars. Within their ranks of core consultants, management consulting firms probably lack a dedicated bench of experienced, overqualified interim managers, on-call, able to manage change, crisis and uncertainty at senior level with, in some cases, a few days’ notice.

There is also arguably a conflict of interest in implementing one’s own advice without the added checks and balances of an independently-motivated head for hire.

The good news for interim managers is that this should continue to fuel the undoubted growth in demand for interim management services and crucially an understanding of the difference between management consultants and interim managers.

I was asked recently by a ‘Big 4’ management consultancy to help top up their bench of immediately available experienced interim finance transformation managers, but who would also go onto the consultancy’s payroll permanently. They’re missing the point. I know quite a number of this type of interim, but most or all genuine interim managers will remain freelance throughout their interim career. It is for this reason that management consulting firms will either need to establish a dedicated interim management practice or hold a lot of experienced managers on their payroll. This will just feed through to very high fees for the same interim manager who could equally be secured for less from a more independent and specialist interim management provider (IMP).

Consultants vs. Interim Managers

Both management consultants and interim managers have their place in the transition, change and turnaround markets. Given the potentially significant cost differences between the two services it’s really crucial for hirers to understand the relative benefits of each. It’s also important to understand that interim management and management consultancy can complement each other in organisations with change on the horizon.  Hirers of each service should be clear about exactly what external help is needed.

Has the client already decided on their strategy for change?

Organisations would probably be best advised to use a management consultant to help them get to that decision. Then hand over to an experienced interim manager to take this plan, review and sense check it against what will really work in that client organisation. Experienced interim managers can often be used to challenge the potential over-use and cost of management consulting firms. Over-extending the use of a consultant can have significant cost implications. Knowing when to bring in an interim manager allows the client to take back control of their change and transition programmes. Working as part of the client’s management team experienced interim managers will then drive or lead an implementation, transfer their knowledge and exit at just the right time, making sure the client can stand on its own two feet.

Hirers of professional-services beware…

The trend for consulting firms putting an experienced, proven manager into a client on an assignment basis simply serves to underline the expanding demand for ‘experience on an interim basis’. But hirers beware. This secures future revenue streams for the consulting firm and helps maintain control over a client. However, consulting firms won’t have access to some of the best senior-level interim managers in the market today because most interims remain deliberately independent, and many represented by specialist IMPs.

In the words of one high flying senior interim COO to me last week, “…my job is to exit successfully. I’ve been an interim manager for thirteen years and will always remain independent – this lets me give the client a balanced perspective every time…and without outstaying my welcome!”

Now that’s great advice.

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