2.2 Management structure in consulting business and types of consulting activities

Consulting business has distinctive features that differ from other type of business by management structure. For better business planning the author of the thesis discovers these features and types of consulting activities.

Consulting firm can be regarded as a modern incarnation of the medieval craft shop, with its apprentices, artisans and senior masters. The first years of the employment in a consulting company can be likened to an apprenticeship, and the relationship between junior and senior masters’ apprentices are identical: the senior craftsmen as the price for hard work and help of those apprentices trains them and pass on the secrets of mastery.

Other words, the most common organizational structure for a management consulting firm is that of a corporation. A typical consulting firm might employ research associates at the lower level, with consultants and senior consultants at the next level. Managing consultants are next in the hierarchy. At this level, individuals typically have greater degrees of client interaction, as well as responsibility for the success of consulting projects. Finally, at the top of a typical firm's hierarchy are partners. In addition to running the operations of the organization, partners are generally responsible for bringing new business into the firm, new clients and sales.

Each consulting project (and, respectively, in each consulting company) uses the most suitable combination of the three types of people. Traditionally, they are called "seekers, intellectuals and hard workers."¹⁵ This division of the most accurate interpretation of the activity in which they have to deal with in the consulting project.

Searchers (commonly referred to as the highest caste) are responsible for finding and attracting new customers, designing and scoping projects, participation in negotiations with clients at the highest level, without which it is impossible to continue work. The main task of intellectuals is to manage projects and groups involved in them. Hardworking (lower level) perform analytical tasks.

Naturally, it’s possible to talk about an idealized structure, and, depending on the company, there may be situations where all parties involved in the analysis and (or) the junior staff has the authority, which, in the idealized structure inherent in most people of higher rank.

The required form of organization (the relative number of younger staff, secondary and tertiary level) is usually called the “structure of checks”, and is primarily determined by a set of requirements to the skills that are essential for execution of work: a combination of tasks of higher, secondary and primary level, of which construction conducted by the project.

Market services offered by the company determine the amount of the fee, which may be requested for a specific project, the company's cost depends on the ability to provide the claimed service with the assistance of the most profitable mix of junior, middle and senior staff (and the time distribution of their work). If a company can find a way to provide its services to keep the same quality but at a higher proportion of junior officers and senior staff, it should be able to lower the costs of providing services. Thus, an important component of the company's profitability is the structure of the team working on commercial projects.

The extents to which individuals are needed and level of communication with customers vary widely depending on the particular company and even the direction of its activities.

There are four types of professional activity, and people involved in it¹⁶, to illustrate an example call pharmacist, nurse, neurosurgeon and psychotherapist.

Pharmacist

Pharmaceuticals - is the area of activity in which the client is trying to buy on the usual services, and it does not need special counselling, advice or additional communication. The client wants to perform the services in strict accordance with technical standards at minimal cost.

It should be noted that this type of activity is called a standardized process, carried out with minimal or even zero communication (contact) with the client. This does not mean that the result can not be sufficiently fine-tuning the requirements of the client, just the process to be followed when creating a result in advance is clearly defined. Although this type of work is most common in companies engaged in equipment installation and other IT-tasks, it occurs in the strategy of companies to report professional services, in which the component analysis of the cost structure, market share, competitive positioning and many other studies. Despite its high value, it is procedural in nature and can be performed with sufficient care and accuracy of junior staff. Methods of analysis do not change, irrespective of the person posts.

In this work, quality standards, in the sense of "conform to the requirements" should be very high. The client does not require that the project to "sharpen" specifically for him. The client wants to get honed techniques and technologies, rather than innovation and creativity.

In fact, the client says: "I have a headache, and I know that you, as well as many others, have a license to sell aspirin. Do not even try to convince me of the need for brain surgery - only to lose his vain and my time. I'm not the first time my head hurts, I know when I need an aspirin, and when the neurosurgeon. Now I need an aspirin! How much you ask for it? "

Nurse

Nurses also provide relatively familiar services, which do not require a high level of innovation. However, they differ from pharmacists that should not just be able to issue the necessary pills at the right time (which is also very important), but also the ability to give advice, refer the client on the specified route. In this case, the client expects the care and concern: "Help me understand what is happening, tell me what you're doing and why. Trip me at the stage of decision-making help me understand what I have a choice. Stay with me and talk to me during procedure until all is over. I need an advisor, with whom I communicate face to face, not engineer, sitting in his office." (The work of nurses differs from the proportion of pharmacist time in the course of the project, which must be in communication with the client).

The rules in force in this area, based on the fact that the consultant should help the client (and client's organization) to reach its own decision or conclusion, but not to conduct independent research and not to provide any consulting advice.

Neurosurgeon

Neurosurgeon combines a high level of optimization for customer requests, creativity and innovation with little personal interaction with the client. The client is looking for a specialist, who mastered a certain skill and ability to bring innovative thinking to meet the unique challenges.

In this case, the client says: "I have a problem that can be solved only by your company. Save me! I do not need more, simply find the right solution! If in the morning I wake up in good health, will pay you all that I have! Price I have absolutely no interest - I'm trying to find the most talented and technically savvy professionals." In this case, the consulting company is considered as a provider of creative solutions that can offer a unique solution to unique challenges in strategy, technology or organization.

The therapist (or family doctor)

And finally, when it comes to the therapist (or doctor), the client says: "I have again a problem that can be solved only by your company. But this time I do not want to be back under anaesthesia and fall out of the process. I want to participate directly in the process of solving the problem. I'm trying to get the person who sits next to help me come to understand why my company is disintegrating, how do I distinguish symptoms from causes, what do I need to do, but that can wait for later. Sit next to me and my "headquarters" and help me understand the problem and possible options for further action."

As in the case of the neurosurgeon, the emphasis in the work of the therapist is equally in the nomination of the diagnosis and treatment. When purchasing services nurse or pharmacist customers know what they need: they simply hire someone who will fulfil their order. But when referring to a neurosurgeon and psychiatrist customers waiting for help in determining what should be done and how it should be done.

Practice-therapists work in the most professional consulting companies, since many customer orders are built on the need for initial diagnosis. With the exception of single professionals and small companies, few consulting companies spend all their paid time on such activities. Table 4 shows different types of activities examples in consulting business.

	Standardized process Bet on the performance	Individual approach Bet on the diagnosis
The high degree of communication with customers The main value of services provided is manifested by direct interaction with the customer	Nurse	Psychotherapist
Low level of communication with the customer The main value of services reflected in the final result	Pharmacist	Neurosurgeon

Table 4. Different types of activities ¹⁷

It is important that the specialization of the company to be consistent with the nature of treatment. Thus, standardized requests should fall on companies-pharmacists, the most difficult - psychotherapists. Marktune will use different types of activities depending of customers requirements.