Usually, when consultants start out on a client engagement, they look for information. They try to fill in the blanks, so-to-speak. To achieve this objective, they may:
- Review existing materials provided by the client
- Engage in client workshops or conduct interviews to understand the context
- Build an overview – what’s present, what’s absent, what’s out of the norm, etc.
Groundwork behind the scenes
Most consulting firms try to complete as much background work as possible ahead of time. For example, the engagement team may spend 2-3 weeks understanding the problem. They may build issue trees to break down the possible drivers & root causes behind the issue. They may also try to gather data from the client ahead of time. After 2–3 weeks, they have a solid grasp of the client situation & can now cut right to the heart of the various issues. In short, that’s a lot of work that good consultants do behind the scenes to make an engagement a success. The following quote by Michael Caine aptly captures the essence of what consultants do before an engagement.
Be a duck, remain calm on the surface and paddle like hell underneath
Furthermore, consultants also tap into the collective experience & knowledge base the firm accumulated over the previous engagements. Most consulting firms provide resources that helps consultants quickly learn the industry trends. McKinsey is famous for its ability to collect, organize & enable access to this knowledge base for its consultants. Since 1964, the firm has also been regularly publishing its Thought Leadership via McKinsey Quarterly. Likewise, Deloitte publishes its Industry Outlooks that also provide the general trends across key industries.
I personally got up to speed by readings tons of articles from the internal knowledge base & also from the Internet. At some point, all the disparate knowledge will connect & crystallize. Regularly reading such articles, both from your firm, competitors & other market players, will help you develop a solid understanding of how something works.
Consulting companies have the luxury of using data gather for other projects or even gathered from companies they consulted with. Therefore, the more projects you do in a specific area, function or industry, the more specialized knowledge you collect become your unique value proposition & competitive advantage
Consultants often get reports normally only directly accessible by a company’s management teams. This helps to accelerate knowledge transfer & provides a landscape of the client situation. However, there may be some limitations on the reports the consultants could access. Based on the trust level with the client & any non-disclosure agreements between the consulting firm & the client, you may get to access confidential information & reports that you can leverage
Consultant think in Power Points. Correspondingly, they have templates in their minds & slides for the problems they tackle. Those slide templates capture what has been shown to work in the past. In other words, the templates are best-practice models to approach the client situation in a structured manner. Templates & frameworks are essentially consultants’ tools. These tools are products of consultants’ own experiences or produced by their firm.
Engagement Managers & Subject Matter Experts
There are a lot of colleagues that you can reach out for advice or best practices on specific industries or engagement types. Moreover, most consulting firms have their Alumni networks that they also leverage to acquire specific knowledge or insights
Consultants also get key information through interviews with the client stakeholders. These sessions are usually motivated by the engagement work plan. Client interviews are extremely relevant in current state assessments, identify issues, collect ideas & get inputs regarding business operations
Consultants often review industry reports before starting an engagement, especially if it’s a new client or industry. This can help the consultant come up to speed about industry-specific terminology, product offerings, competitors, new entrants, regulatory issues, geographical considerations, etc.
You can find plenty of ready-made reports for every industry. In many cases it is easier to buy the report than to try to gather this sort of data. Usually, it is a good starting point that you can later enrich on your own. You also have access to several sites that aggregate data & create mini reports. For example, such sites as Statista, Trend Economy & EMIS regularly conduct market research to identify the general industry trends. Likewise, Wikipedia also contains a lot of data & links to sources that you can avail for free
Own Research Institute
Several consulting firms have their own internal research departments that conduct specific surveys or market studies. For example, McKinsey Global Institute does a lot of research on industries & markets. You can use these insights on your consulting engagements
Raw data sources
Reports of companies quoted on stock exchanges
Every company listed on the stock exchange is obliged to publish its financial reports. In addition, companies also publish their company overview, annual reports, strategy, presentations from their annual shareholders meeting, etc. These are valuable source of intelligence about a company you are interested in. IPO filings are also useful as they contain in-depth analyses of the market, competition, products / services, etc.
Interviews with independent experts
Often, you try to find experts from specific fields. In large consulting firms as McKinsey or KPMG, you can find them within the firm. Sometimes, these experts may sit in a different office than yours. You can reach out to them for expertise, guidance & stewardship for your consulting engagements. In other cases, you could also go through your professional networks, LinkedIn, etc. to access domain experts with specialized knowledge that you need
In some cases, official data may not suffice, so you should gather some data yourself. In 2016, BCG helped the City of Dallas to reduce their stray dog problem. Here, the consultants did a market sizing of the number of stray dogs in South Dallas. In fact, the consultants drove along a 235 mile stretch of highway & counted the number of stray dogs. In similar cases, you would do store checks to count inventory or undertake mystery shopping to gather the missing data or intelligence
Estimation by proxy
Many markets cannot be directly observed. There is no transparency of data. Or, the pricing may not be realistic. In such cases, you could find a market that is observable & extrapolate to the market you are analyzing. You analyze the observable market, use proxies & assumptions to estimate the target market. For this, you may have to estimate the market sizes using both, & top-down approaches
Existing on-line data
In this category, you can use online tools, such as Facebook Audience Insight that provides a detailed tool enabling segmentation & cohort analysis, Keyword Planner by Google that provides information on the monthly number of searches per keyword & categories, Similar Web that provides estimates of traffic, bounce rate, spent time, traffic sources, etc. for online businesses, etc. In addition, online marketplaces, such as App Store, Google Play Store, Airbnb, Google Trends (data on changes of searches in time), Google Consumer Barometer (extensive consumer research showing preferences of online consumers, etc. are additional data sources you can leverage. Furthermore, you can access resources & reports from companies like LinkedIn, Airbnb, etc.to gather data for analysis. Furthermore, you can scrape data from online sites, but please check the legal terms, as companies may explicitly discourage web scraping as means to protect their intellectual property
Previously created presentations
You can find lots of data & ready-made presentations on SlideShare, interviews on YouTube!, etc. These artefacts were prepared by others as a part of their research, product / service offerings, conference materials, etc. Likewise, there are several podcasts that teach specific concepts, technologies, skills, etc. Some podcasts also give you information & insights from leading industry experts, Thought Leaders, futurists, CEOs of companies, etc. that you can use for your research
Own online & offline interviews
You can also run your own on- or offline surveys & interviews to collect data. However, I advise this approach only after you have done your preliminary research. Before you embark on administering your own surveys, make sure that you have the required background knowledge on the subject. Depending on the scope of your research, you may want to pose general or specific questions to broad or targeted audience
In this amazing day & age of free information, you can learn a ton about a new industry, the opportunities & challenges, the major players with a simple search. Though internal documents, expert interviews & deep client conversations are important, a quick search on Google might point you to other sources that you may have not thought about
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