35.2 Management and operations structure

Corporate governance and top management

The pattern of the consulting organization’s top management depends very much upon its legal statute. In firms constituted as corporations (limited companies) there will be a board of directors. In a small firm the directors would generally be the general manager (managing director) and the senior consultants (partners). In a large firm there may also be external board members who, being non-executive, can play a useful role in the sense that they may preserve the same detachment in guiding the firm as the consultants have in advising their clients. They also tend to be chosen because of their range of business interests and contacts. In partnerships, decisions on key policy matters may be reserved for periodical meetings of all partners.

Consulting units that are not independent firms may have a governing body comprising a cross-section of managers from private and public enterprises, representatives of chambers of commerce and employers’ associations, senior government officials, and possibly other members in addition to one or more senior managers from the unit.

The key position in the management hierarchy is that of the chief executive officer (CEO), who may be called principal, general manager, president, managing director, managing partner, director-general, or simply manager or director. In a partnership, the CEO would be elected by a partners’ meeting for a fixed period.

The CEO may use a management committee in the usual way for involving other managers or designated senior partners in dealing with issues requiring collective discussion or decision. Other committees may be established for dealing with issues such as strategy, quality, business promotion and marketing, IT, or staff compensation. They may be permanent or ad hoc. As in other businesses and public organizations, there may be a tendency to create a committee each time an issue cannot be immediately resolved or needs to be examined in a collective. A proliferation of overlapping committees, and meetings of the same people under different committee denominations, are not signs of effective management.

The individual at the top will most probably be a career consultant (a senior partner) with considerable experience and managerial talent. On reaching the top, he or she may experience problems similar to those faced by managers of research and other professional services – he or she must stop thinking and operating primarily as a technician and concentrate on managing (see also Chapter 27). Some consulting organizations have recruited top managers from outside, from among individuals who have been excellent business managers but not necessarily practising consultants. There is no universal rule – the candidate’s competence and personality will determine whether he or she will be able to cope with the challenge of the job, provide strategic leadership and strengthen the firm by subtle but persistent coordination and control.