Each year management consultants in the United States receive more than $2 billion for their services.¹ Much of this money pays for impractical data and poorly implemented recommendations.² To reduce this waste, clients need a better understanding of what consulting assignments can accomplish. They need to ask more from such advisers, who in turn must learn to satisfy expanded expectations.

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This article grows out of current research on effective consulting, including interviews with partners and officers of five well-known firms. It also stems from my experience supervising beginning consultants and from the many conversations and associations I’ve had with consultants and clients in the United States and abroad. These experiences lead me to propose a means of clarifying the purposes of management consulting. When clarity about purpose exists, both parties are more likely to handle the engagement process satisfactorily.

A Hierarchy of Purposes

Management consulting includes a broad range of activities, and the many firms and their members often define these practices quite differently. One way to categorize the activities is in terms of the professional’s area of expertise (such as competitive analysis, corporate strategy, operations management, or human resources). But in practice, as many differences exist within these categories as between them.

Another approach is to view the process as a sequence of phases—entry, contracting, diagnosis, data collection, feedback, implementation, and so on. However, these phases are usually less discrete than most consultants admit.

Perhaps a more useful way of analyzing the process is to consider its purposes; clarity about goals certainly influences an engagement’s success. Here are consulting’s eight fundamental objectives, arranged hierarchically (also see the Exhibit):

Most consultants work on a long-term contract with one or more hospital trusts, and these posts are known as substantive consultant positions. Various titles (such as senior consultant, clinical director, medical director, lead consultant etc.) exist for consultants who have particular responsibilities for the overall management of the hospital. Since dlb business development executives interact with corporate executives and key decision-makers, excellent interpersonal, communication and presentation skills are essential. We take pride in our team and how they interact with each client on any level.

1. Providing information to a client.

2. Solving a client’s problems.

3. Making a diagnosis, which may necessitate redefinition of the problem.

4. Making recommendations based on the diagnosis.

5. Assisting with implementation of recommended solutions.

6. Building a consensus and commitment around corrective action.

7. Facilitating client learning—that is, teaching clients how to resolve similar problems in the future.

8. Permanently improving organizational effectiveness.

The lower-numbered purposes are better understood and practiced and are also more requested by clients. Many consultants, however, aspire to a higher stage on the pyramid than most of their engagements achieve.

Purposes 1 through 5 are generally considered legitimate functions, though some controversy surrounds purpose 5. Management consultants are less likely to address purposes 6 through 8 explicitly, and their clients are not as likely to request them. But leading firms and their clients are beginning to approach lower-numbered purposes in ways that involve the other goals as well. Goals 6 through 8 are best considered by-products of earlier purposes, not additional objectives that become relevant only when the other purposes have been achieved. They are essential to effective consulting even if not recognized as explicit goals when the engagement begins.

Moving up the pyramid toward more ambitious purposes requires increasing sophistication and skill in the processes of consulting and in managing the consultant-client relationship. Sometimes a professional tries to shift the purpose of an engagement even though a shift is not called for; the firm may have lost track of the line between what’s best for the client and what’s best for the consultant’s business. But reputable consultants do not usually try to prolong engagements or enlarge their scope. Wherever on the pyramid the relationship starts, the outsider’s first job is to address the purpose the client requests. As the need arises, both parties may agree to move to other goals.

1. Providing Information

Perhaps the most common reason for seeking assistance is to obtain information. Compiling it may involve attitude surveys, cost studies, feasibility studies, market surveys, or analyses of the competitive structure of an industry or business. The company may want a consultant’s special expertise or the more accurate, up-to-date information the firm can provide. Or the company may be unable to spare the time and resources to develop the data internally.

Often information is all a client wants. But the information a client needs sometimes differs from what the consultant is asked to furnish. One CEO requested a study of whether each vice president generated enough work to have his own secretary. The people he contacted rejected the project because, they said, he already knew the answer and an expensive study wouldn’t convince the vice presidents anyway.

Later, the partner of the consulting firm said, “I frequently ask: What will you do with the information once you’ve got it? Many clients have never thought about that.” Often the client just needs to make better use of data already available. In any case, no outsider can supply useful findings unless he or she understands why the information is sought and how it will be used. Consultants should also determine what relevant information is already on hand.

Seemingly impertinent questions from both sides should not be cause for offense—they can be highly productive. Moreover, professionals have a responsibility to explore the underlying needs of their clients. They must respond to requests for data in a way that allows them to decipher and address other needs as an accepted part of the engagement’s agenda.

2. Solving Problems

Managers often give consultants difficult problems to solve. For example, a client might wish to know whether to make or buy a component, acquire or divest a line of business, or change a marketing strategy. Or management may ask how to restructure the organization to be able to adapt more readily to change; which financial policies to adopt; or what the most practical solution is for a problem in compensation, morale, efficiency, internal communication, control, management succession, or whatever.

Seeking solutions to problems of this sort is certainly a legitimate function. But the consultant also has a professional responsibility to ask whether the problem as posed is what most needs solving. Very often the client needs help most in defining the real issue; indeed, some authorities argue that executives who can accurately determine the roots of their troubles do not need management consultants at all. Thus the consultant’s first job is to explore the context of the problem. To do so, he or she might ask:

Which solutions have been attempted in the past, with what results?

What untried steps toward a solution does the client have in mind?

Which related aspects of the client’s business are not going well?

If the problem is “solved,” how will the solution be applied?

What can be done to ensure that the solution wins wide acceptance?

A management consultant should neither reject nor accept the client’s initial description too readily. Suppose the problem is presented as low morale and poor performance in the hourly work force. The consultant who buys this definition on faith might spend a