Master Thesis Final version

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30/7/2012

Master Thesis - Business Administration | Niels den Ouden

EXPLORING THE FIELD OF DUTCH MANAGEMENT

CONSULTING

:

W

HAT ARE THE DIFFERENCES BETWEEN REGULAR

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Master Thesis

Final version

Date: 31st of July 2012

Institution: Vrije Universiteit Amsterdam

Academy: Faculteit der Economische Wetenschappen en Bedrijfskunde

Program: Master Business Administration

Specialization: Management Consulting

Author: Niels den Ouden

Student number: 2108879

Home address: Schlegelstraat 177, Den Haag

Phone: 06 226 886 52

E-mail: [email protected]

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‘’Constantia et labore’’

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Foreword

This master thesis has been developed between April 2012 and August 2012 and finalizes the final stage in reaching a master degree in Business Administration (specialization: Management Consulting) at the VU University in Amsterdam.

The report aims at providing insights in the Dutch management consulting industry and its habitants. The results can be valuable and relevant to a wide range of professionals and stakeholders, such as management consultants, sole practitioners and/or the management of management consulting firms.

I would like to thank my thesis supervisor prof. dr. L.I.A. de Caluwé for his guidance and his efforts during the route towards this report. Further, I would like to thank all the 27 participants for their contributions in terms of information, time and energy. Without them, this research would not have been possible.

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Executive summary

The Dutch management consulting industry consists for 87, 7% of sole practitioners, but not much qualitative research has been performed to expose their core characteristics_{in respect to their peers}

that work for a consulting firm. In order to provide valuable insights on this area of expertise, a

qualitative research approach_{has been favored, since this allows the researcher to collect and}

interpret experiences, meanings and opinions of the research subjects. The data to be analyzed will be collected through semi-structured interviews_{. This type of data collection allows the researcher to}

deviate from the initial list of topics/questions which allows the conversation to flow more. This paper tempts to answer the following central research question.

What are the main differences for management consultants working as an employee of a consulting firm _{and working as a}sole practitioner_{, given the circumstances of the Dutch consulting industry,} and what are both the roots and the consequences of these differences?

The Dutch management consulting market is very dependent_{on the}tendency of the market_{and the}

economical circumstances. The year of 2011 has been tough for the Dutch consulting business. The joint turnover was around € 9 billion Euros which meant a negative growth for the sector of 2, 1 % in comparison with 2010. The market can be recognized by its large amount of sole practitioners.

To define the core differences between regular consultants - i.e. consultants that work for a consulting firm – and sole practitioners – i.e. consultants that are self-employed – a total of 27 interviews has been performed to discuss five core themes_{: (1) acquisition and the acquisition process, (2) efforts}

during unfavorable market circumstances, (3) learning and developing, (4) innovation and (5) the most important qualities and competencies to act successfully as a management consultant.

On a high level of abstraction, the following differences have come forward out of this research. The differences that exist can be directly related_{to the}work form_{. Regular consultants benefit from the}

organizational context that embraces resources, facilities and opportunities that are not (directly) available for the self-employed management consultants. Sole practitioners have much more autonomy and freedom in the activities that they carry out, but often lack resources (in terms of time, money and knowledge) that would be available in a proper management consulting firm. In addition, the suspicion has risen that there are forces_{on a higher level of abstraction that influence these}

differences and have relationships with the causes. More concrete: some differences might not be related to the work form, but have other origins. The main force fields are the personal qualities of the consultant, the personal or private situation of the consultant and the tendency of the market. Further research could indicate the weight of these force fields.

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Introduction

The Netherlands has 66.950 consulting firms. 87, 7 % of the market consists of sole practitioners: self-employed management consultants. The joint turnover of the independent individuals constitutes almost a third of the total Dutch consulting market earnings. Thus, the existence of the sole practitioner has an enormous impact on the landscape of Dutch management consulting. The (economical) importance of the sole practitioners is evident. Despite this statement, not much research has been performed on how these individuals experience working in the consulting industry and which factor(s) form(s) the main difference(s) between working within a consulting firm and working as a sole practitioner.

This master thesis tends more towards qualitative research and aims to dig in the experiences of the independent individuals. The goal is to perform an inquiry in which a large amount of characteristics (features as opinions and experiences) will be collected among many respondents. The research has been built around five central themes where a comparison between the regular consultant and the sole practitioner will be carried out.

The report opens with a chapter on the research purpose. It zooms from the perspective of the European management consulting market towards the area of interest.

The problem definition of the research, including the research design and research question(s) are presented in chapter two. Further, there will be provided information on the methodological characterization of the research, the research population and sampling, the description and motivation of the data collection instrument(s), the way of analyzing and preparing the research data and risks and limitations of the research.

Chapter three embraces the theoretical part of the research and constitutes of the information and data that is available on the research subject. The literature review contributes to composing a clear overview of what is known on the Dutch management consulting market, the professionals that act on this stage and, more specific, the five domains that form the basis of comparison between regular consultants and sole practitioners.

The fourth chapter has been founded on the field research. It opens with an overview of the field research and then presents the results that have come out of the interviews with the respondents.

The assessment of the differences between regular consultants and sole practitioners is performed in chapter five. The report will finalize with the conclusions and evaluation of this research.

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T

he European management consulting market has witnessed an enormous growth in the past decade. Between 1998 and 2010 the turnover of consulting firms within Europe has tripled from € 24, 7 billion to € 86, 2 billion (FEACO, 2010: 8). Where there is money, there is competition. The cliental demand for organizational advice has attracted a large quantity of firms and professionals. The wide range of providers of management consulting (MC) does reflect the diversity of the clients and markets served, services offered, approaches taken and personalities involved.

The European Federation of Management Consultancies Associations (FEACO) has classified management consultancies on the firms’ turnover (FEACO, 2010: 9). They identify large sized MC’s (top 20 MC’s), medium sized MC’s (turnover of ≥ €500.000) and small sized MC’s (turnover of < €500.000). Kubr (2009) enlarges this model by adding the average market growth and concentration (Kubr, 2009: 45). The result of his analysis has led to the development of multiple profiles of actors who shape the current management consulting market, e.g. large multifunctional consulting firms, medium sized generalists, sole practitioners and consulting professors (Kubr, 2009: 49).

Out of the total 2010 turnover by European management consulting market (€ 86, 2 billion), 3, 62% could be attributed to the Dutch management consulting industry (FEACO, 2010: 10). In 2011, the Dutch consulting industry consisted of 66.950 firms of which around 80% is involved in management consulting (ABN Amro, 2010: 18). The market can be considered fragmented as shown in figure 1.

Figure 1: Management consulting firms classified by amount of employees (ABN Amro, 2012: 19)

Respectively, 87, 7% of the Dutch management consulting market consists of sole practitioners. The joint turnover of the independent individuals constitutes almost a third of the total Dutch consulting market earnings (CBS, 2012). Thus, the existence of the sole practitioner has an enormous impact on the landscape of Dutch management consulting.

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The (economical) importance of the sole practitioners is evident. Despite this statement, not much research has been performed on how these individuals experience working in the consulting industry and which factor(s) form(s) the main difference(s) between working within a consulting firm and working as a sole practitioner.

Prior research, as done by large institutions like Centraal Bureau voor de Statistiek (CBS), ABN Amro (Visie op Zakelijke Dienstverlening) and the European Federation of Management Consultancies Associations (FEACO) has focused more on quantitative questions: how many sole practitioners are there? What is their average growth rate? What is their average turnover?

This master thesis tends more towards qualitative research and aims to dig in the experiences of the independent individuals. The goal is to perform an inquiry in which a large amount of characteristics (features as opinions and experiences) will be collected among many respondents (Baarda & De Goede, 2006: 361). Thus, a survey will be conducted.

The problem definition of the research, including the research design and research question(s) are presented in chapter two.

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Chapter 2: Research Design: A Qualitative

Approach To The Research Question

2.1 Problem definition 2.2 Research goal 2.3 Research questions

2.4 Methodological characterization of the research 2.4.1 Research method

2.4.2 Research type 2.4.3 Research design

2.5 Research population and sample

2.6 Description and motivation for data collection instrument(s)

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2.1 Problem definition

ithin the Dutch domain of management consulting, respectively, 87, 7% of the Dutch management consulting market consists of sole practitioners. (ABN Amro, 2011: 19). The joint turnover of the independent individuals constitutes almost a third of the total Dutch consulting market earnings (CBS, 2012). Despite their (economical) importance, little (qualitative) research has been performed on the differences between working in a (large sized) consultancy firm or working as a sole practitioner, as experienced by the worker itself.

Thus, the problem can be defined as follows:

The lack of deep understanding of the main differences for management consultants working as an employee of a consulting firm _{or working as a}sole practitioner_{, given the circumstances of the} Dutch consulting industry, and the unclear character of both the roots and the consequences of these differences.

2.2 Research goal

From the problem definition, there has been developed a research goal for this master thesis. This thesis aims at providing insights into the minds of sole practitioners working in the Dutch management consulting industry and comparing their viewpoints and circumstances with those of their colleagues working for a consultancy firm. By using a well-built approach, using the existing literature and collecting field-data, I focus on presenting a model that presents the main differences between working as an employee or as an independent individual. The research will not only target the hard organizational aspects as turnover or profit, but also softer aspects as feelings and experiences.

Thus, the goal of this master thesis is as follows:

Providing a better understanding of the main differences for management consultants working as an employee of a consulting_{firm or working as a}sole practitioner_{, given the circumstances of the} Dutch consulting industry, and clarifying the character of both the roots and the consequences of these differences.

The research can be valuable for both regular employees at consulting firms and sole practitioners as it highlights the main differences between their positions and circumstances, while working in the same industry. The paper will pose a model that highlights the factors that are important to succeed as a sole practitioner in the Dutch management consulting industry.

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Furthermore, the research will be valuable to me as well. First, it gives me the opportunity to develop and execute a research design, perform field research, doing a proper data-analysis and to present the results. This will be a great learning experience. Second, the topic to be studied has a clear connection with the management consulting profession. As I aim for working in this particular field, gaining insights inside (a part of) the industry might be very valuable.

2.3 Research questions

Following the problem definition and the research goal, the main research question is as follows: What are the main differences for management consultants working as an employee of a consulting firm _{and working as a}sole practitioner_{, given the circumstances of the Dutch consulting industry,} and what are both the roots and the consequences of these differences?

To answer the main research question in a proper fashion, the following sub questions have been constructed.

1. How can the Dutch management consulting industry be characterized? What are current trends in the Dutch management consulting industry?

2. How can the regular employee be characterized and what is his position in the Dutch management consulting industry? What are the driving forces to act as a regular employee?*

3. How can the sole practitioner be characterized and what is his position in the Dutch management consulting industry? What are the driving forces to act as a sole practitioner?*

4. What are the differences between living the profession of a management consultant as a regular employee or as a sole practitioner?

5. Where do these differences derive from and what are the consequences of choosing for either working as a regular employee or working as a sole practitioner?

* In order to sufficiently compare the two target groups (regular consultants versus sole practitioners), the following basis for comparison has been constructed.

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• The reason why they favored either working as a regular consultant or as a sole practitioner

and their main reason(s) to switch from one to the other;

• The efforts to be done to acquire new consulting assignments; • The efforts to be done during unfavorable market circumstances;

• The efforts to be done to gain personal and professional development;

• The efforts to be done to innovate and to respond to new market opportunities; • The competencies and qualities required to perform successfully as a consultant.

2.4 Methodological characterization of the research

The problem definition, research goal and research questions have been defined. Saunders et al. (2009: 141) stress the importance of performing along a clear research strategy as the change of success (i.e. answering the research question properly) is dependent on this choice. Further, they argue that no research strategy is superior to any other: it depends on the research question.

The paragraphs 2.4.1 – 2.4.3 will provide more information on the research method, the research design and the research type.

2.4.1 Research method

In order to answer the research question and to meet the research goal, a qualitative research approach_{has been favored. Qualitative research is the type of research in which situations,}

experiences and persons will be described along the assistance of qualitative data, e.g. experiences, meanings and opinions which are derived from (open) interviews, observations and/or the usage of documentary sources (Baarda & De Goede, 2006: 353). Quantitative research offers insights in terms of numbers or percentages and tempts to answer questions that are associated with problems that can be expressed in quantities (e.g. the amount_{of sole practitioners) (Baarda & De Goede, 2006: II).}

These types of questions are not applicable to this research.

The question whether qualitative research can be qualified as ´valid´ and ´reliable´ depends on a number of factors. Validity_{is concerned with whether the findings are really about what they appear}

to be about: do you measure what you want to measure? (Saunders et al., 2009: 157). Robson (2002: 172) has identified five criteria to secure validity in qualitative research, which are (1) triangulation

(usage of multiple sources of data and viewpoints), (2) audit trail_{(reporting data collection process),}

(3) peer debriefing_{(control by colleagues), (4)}member checking_{(control by the members that are}

involved in the research) and (5) negative case analysis_{(acknowledgement of exceptions on the}

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The research has been set-up to secure the highest form of validity. By interviewing both sole practitioners as regular consultants and adding expert interviews and document analysis, triangulation

has been performed. The entire research process has been laid down in this master thesis and its appendices; thus, the audit trail_{criterion has been met. Fulfilling the}peer debriefing_{principle might}

not suffice this type of research, as there are no real ‘colleagues’. However, this thesis has been revised by both fellow master students of Business Administration and my mentor, prof. dr. Léon de Caluwé. Thus, other ‘researchers’ have analyzed and criticized this piece of work. The interviews have been recorded and transcribed entirely. The transcripts have been sent, through e-mail, to the respondents to offer them an opportunity to (1) check the content on correctness, (2) check the way statements have been put forward and (3) to add information or arguments to statements that have been made. This means that the member checking_{criterion has been met. Final, the}negative case analysis _{has to be taken into account. The existing literature and the interviews will cover a substantial}

part of the Dutch management consulting industry, but one has to face the fact that there will always be exceptions to the results that are found. This will also be discussed in paragraph 2.8 (risks and limitations).

The reliability_{of qualitative research refers to the extent to which the data collection techniques or}

analysis procedures will result consistent findings (Saunders et al., 2009: 156). Easterby-Smith et al. (2008: 109) pose three questions to assess the reliability of qualitative research: (1) will the measures yield the same results on other occasions?; (2) will similar observations be reached by other observers?; (3) is there transparency in how sense was made from the raw data?

The answer to question one is: not per se. As put forward in the paragraph on validity and the paragraph on limitations (2.8), this research paper poses a model that fits the Dutch management consulting industry to some extent. It is not unthinkable to assume that other researchers that interview other consultants might end up with conclusions that differ from this master thesis’ findings. The second question refers to the reliability of the data collection technique. In case of the usage of the same topic list (view paragraph 4.1) with the same respondents, it is likely to assume that the same answers will rise. The third criterion of reliable qualitative research has been fulfilled. Paragraph 2.7 shows the phasing of gathering, analyzing, sense making and processing of raw data into usable sources of knowledge.

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2.4.2 Research type

This master thesis covers some elements from both descriptive and explorative research. Descriptive research_{means that the researcher develops precise and accurate descriptions of characteristics of}

research units (Baarda & De Goede, 2006: 102). In order to create a comparison between sole practitioners and regular consultants, the characteristics of these two target groups need to be identified and described well. The explorative part of the research lies in the analysis that comes after the data collection. Explorative research_{can be recognized by central questions that stress}

relationships or differences between variables (Baarda & De Goede, 2006: 103). The paper tempts to pose a model that highlights the main differences between two types of consultants and might explore relationships between certain variables (e.g. valuable competences) and the working form of the consultant.

2.4.3 Research design

The research design has been build around the central research question. To answer the question in an orderly fashion, survey research will be performed. Survey research_{, which literally means}

‘overview’ or ‘panorama’, implies the gathering of a large amount of characteristics among many research units (Baarda & De Goede, 2006: 115). In this thesis, the data required will be collected through semi-structured interviews among consultants.

2.5 Research population and sample

The research has been set up to provide insights in the differences between sole practitioners and regular consultants on the Dutch management consulting market. To compare the two target groups and to answer the (sub) research questions in paragraph 2.2 and 2.3, the research subjects are those professionals who ‘know both worlds’. So: regular consultants that have been working as a sole practitioner and sole practitioners who have previously worked for a consulting firm.

To fit within this research, management consultants have to meet these specific criteria. The sampling methods to identify members of the desired population is snowball sampling_{, as this is suitable when}

it is difficult to obtain the appropriate research units (Saunders et al., 2009: 240). Snowball sampling consists of the following phases:

1. _{Making contact with one or two cases from the research population;} 2. _{Ask these cases to identify further cases;}

3. _{Ask these new cases to identify further cases (and so on)}

The first cases will be selected through a range of activities that will be described in paragraph 4.1. The researcher can stop when either there are no new cases or when the indented target is reached.

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2.6 Description and motivation for data collection instrument(s) The data collection technique that has been chosen

the appropriate method when one is looking for attitudes, opinions, thoughts and/or knowledge (Baarda & De Goede, 2006: 218). This technique matches the central research question and research goal.

The data to be analyzed will be collected through

collection allows the researcher to deviate from the initial list of topics/questions which allows the conversation to flow more (Saunders et al., 2009: 320). In general the same themes will be discussed with different respondents, but the emphasis and additional questions differ from respondent to respondent. The topic list can be found in

The interviews will be held with three target groups:

• With consultants that now work for

practitioner. The moment

• With consultants that now work as a

of a consultancy firm. The moment of the switch m (5) years;

• With experts that have experience guiding small firms and independent professionals during

the (start-up of) the entrepreneurial process

research subject.. Experts can be considered as valuable sources of information, as t experience with similar cases and they might be able to provide more general information. In total, 25 interviews will be performed. The amount of interviews is based on the (average) master thesis workload and the additional

division of the interviews is shown in the figure on the right.

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Description and motivation for data collection instrument(s) The data collection technique that has been chosen is face-to-face in-depth interviews

appropriate method when one is looking for attitudes, opinions, thoughts and/or knowledge (Baarda & De Goede, 2006: 218). This technique matches the central research question and research

The data to be analyzed will be collected through semi-structured interviews

collection allows the researcher to deviate from the initial list of topics/questions which allows the more (Saunders et al., 2009: 320). In general the same themes will be discussed espondents, but the emphasis and additional questions differ from respondent to respondent. The topic list can be found in paragraph 4.1.

The interviews will be held with three target groups:

With consultants that now work for a consultant firm, but who have

practitioner. The moment of the switch may be back in time for a maximum of five (5) years With consultants that now work as a sole practitioner, but who have operated as an employee

The moment of the switch may be back in time for a maximum of five

that have experience guiding small firms and independent professionals during up of) the entrepreneurial process or that have another valuable connection to the

. Experts can be considered as valuable sources of information, as t experience with similar cases and they might be able to provide more general information. In total, 25 interviews will be performed. The amount of interviews is based on the (average) master thesis workload and the additional capita selecta course that has been connected to the research. The division of the interviews is shown in the figure on the right.

10 10 5 Sole practitioners Regular employees Experts

Description and motivation for data collection instrument(s)

interviews_{. Interviewing is}

appropriate method when one is looking for attitudes, opinions, thoughts and/or knowledge (Baarda & De Goede, 2006: 218). This technique matches the central research question and research

tured interviews_{. This type of data}

collection allows the researcher to deviate from the initial list of topics/questions which allows the more (Saunders et al., 2009: 320). In general the same themes will be discussed espondents, but the emphasis and additional questions differ from respondent to

ave operated as a sole of the switch may be back in time for a maximum of five (5) years;

, but who have operated as an employee ay be back in time for a maximum of five

that have experience guiding small firms and independent professionals during or that have another valuable connection to the . Experts can be considered as valuable sources of information, as they have experience with similar cases and they might be able to provide more general information. In total, 25 interviews will be performed. The amount of interviews is based on the (average) master

se that has been connected to the research. The

Sole practitioners Regular employees

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2.7 Risks and limitations

On the topic to be studied, the main differences and its consequences in acting as a sole practitioner or as a regular consultant on the Dutch management consulting market, has not been performed much research. However, much valuable information about sole practitioners, regular consultants and the (Dutch) consulting industry is available. There is a great amount of sufficient sources, e.g. articles and publications in journals as Management & Consulting, industry- and market reports as made by ABN Amro, FEACO and PWC and books on management consulting as published by Kubr (2009).

The performance of survey research implies a higher form of external validity (Baarda & De Goede, 2006: 133). However, the results may not be representative of the population of sole practitioners acting in the Dutch management consulting industry. First, the sampling frame (i.e. OOA newsletter and LinkedIn page) implies that only OOA-members will participate in the survey. So, there is a selection bias. Second, the amount of interviews (of which 20 with consultants) does not meet the norm of 379 interviews that is required to cover the entire population properly (Krejcie & Morgan, 1970, cited in Sekaran & Bougie, 2006: 295-296). Thus, the researcher has to be careful with claiming external validity of his research.

Another limitation of this research is that, due to the nature of this assignment (limited amount of interviews), the point of theoretical saturation might not be reached (Sekaran & Bougie, 2006: 197). This means that the research might not be able to cover all the possible differences and experiences.

Final, there are limitations that are associated with the data collection instrument. Saunders et al. (2009: 328) highlights a reliability issue regarding the semi-structured interviews. They mention that it is very hard for other researchers to replicate the research, as the interviews are held according a non-standardized format. Second, the external validity of the interviews will not be very high. The external validity, the extent of generalizability, depends on numerous circumstances (Sekaran & Bougie, 2009: 157). Due to the fact that the sample is not sufficient in terms of size, I have to be very careful in claiming external validity of this research.

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Chapter 3: Literature review: Overview of the

Dutch management consulting market

3.1 Exploring the profession: what is a management consultant? 3.1.1 The roots of the management consulting profession 3.1.2 The definition of a ‘management consultant’

3.2 Zooming in: what are the characteristics of the Dutch management consulting industry? 3.2.1 Characteristics of the Dutch management consulting industry

3.2.2 Trends and developments in the Dutch management consulting industry

3.3 Notion of the professionals: what are the characteristics of the professionals working in the Dutch management consulting industry?

3.3.1 The characteristics of the regular consultant 3.3.2 The characteristics of the sole practitioner

3.4 The area of interest: what is known?

3.4.1 Acquisition and the acquisition process

3.4.2 Efforts during unfavorable market circumstances 3.4.3 Personal and professional development

3.4.4 Innovation and responding to market opportunities

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3.1 Exploring the profession: what is a management consultant?

3.1.1 The roots of the management consulting profession

he profession of management consultant has its origins in the Industrial Revolution and its alliance with institutional and social transformations. Based on the work of Cody (1989: 24), one could argue that the most influential factor in the growth of modern management consulting was the development of the concept of ‘scientific management' by Frederick Taylor (1911). The concept combined the practice of engineering with the principles of economics, and it was out of this coupling that today’s profession was born. The substratum of this approach was that methods and principles applicable to various organizations and situations have to be identified and described and that the clients needed to be made aware of the possibility to enhance the business performances (Kubr, 2009: 31). So: clients could use consultants. Management consultants are professionals with specific competencies and abilities with advice that mattered (De Caluwé & Reitsma, 2010: 8-9). The profession has developed itself from one focused on factory and shop floor productivity (elimination of waste, increased productivity) to a more wide and more diversified perspective on its added value: the development of new, special services, the strategic choice for a subject (e.g. strategy), profession (e.g. publishers) or industry (e.g. the financial sector) and the bundling of services to provide a comprehensive and integral cliental solutions (Kubr, 2009: 34).

3.1.2 The definition of a ‘management consultant’

The role of management consultants is subject to change. From the original expert-role as defined by Schein (1990: 59), where clients ‘ask’ a consultant how to do something and then do it, nowadays assignments take more and more place in a co-production, which has its resemblances with Schein’s process consultant role (1990: 60). The adequate role depends on the demands of the client and the qualities and preferences of the organizational advisor (Twijnstra, Keuning & De Caluwé, 2002: 62).

Kubr (2009: 16) has defined ten principal ways or roles through which consultants can intervene in cliental systems. These are:

• The information provider: providing information on relevant and important areas to the

client, e.g. markets, customers and sector trends;

• The specialist resource provider: supplementing the client organization’s staff;

• Establisher of business contacts and linkages: ‘bonder’ between client organization and

relevant business contacts, e.g. suppliers, merger partners and potential clients;

• Provider of an expert opinion_{: acting as an independent third party or sounding-board to}

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• Performer of a diagnosis: providing diagnostic work on the entire business or a part – a

department, sector, function, process, information system or structure;

• Developer of action proposal(s): developing action proposals on the area that has been

diagnosed;

• Developer of systems and methods: development of systems and methods in specific areas of

expertise and the ability to establish its feasibility, adapt it to the client’s conditions and putting it into effect;

• Planner and manager of organizationalchanges: identifying the need for change, developing

a change strategy plan, choosing and applying the right approaches to encourage change and overcome barriers to change , monitoring the change process, evaluation of the progress made and results that are obtained and adjusting the approach taken by management at all stages of the change cycle.

• Trainer and developer of management and staff: training management and staff the new

techniques and methods, so that they become autonomous;

• Counselor and coach: one-to-one counseling or coaching may concern personal feedback and

‘relaxed and friendly’ advice on areas like leadership style, behavior and work habits.

Clients and consultants may choose among many roles and combinations of roles, that it is impossible to develop an exhaustive range of possibilities. The basic characteristics of a management consultant are anchored in the roles mentioned, but today’s management consulting service providers combine these characteristics together with related or associated disciplines, as interim management (e.g. Twynstra Gudde), project management (e.g. ATOS), talent management (e.g. Finext) and/or online services (e.g. Deloitte) (Twynstra Gudde, 2012; ATOS, 2012; Finext, 2012; Deloitte, 2012).

In pursuing to define what a management consultant constitutes of, the following definition of a

management consultant_{(Kubr, 2009: 10) has been adopted and will be leading throughout the}

research.

A management consulting is an independent professional advisory service provider assisting managers and organizations to achieve organizational purposes and objectives, solving management and business problems, identifying and seizing new opportunities, enhancing learning and implementing changes.

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3.2 Zooming in: what are the characteristics of the Dutch management consulting industry?

From the broad and abstract perspective of paragraph 3.1, this paragraph shows more insights inside the Dutch management consulting market. It will zoom in on the characteristics of the market (paragraph 3.2.1) and discusses trends and developments (3.2.2).

3.2.1 Characteristics of the Dutch management consulting industry

The profession of management consultant in the Dutch landscape took shape in 1921 with the establishment of the ‘Adviesbureau voor Organisatie en Metaalbewerking’ (Twijnstra, Keuning and De Caluwé, 2002: 18). Similar with developments outside of The Netherlands, the industry grew and evolved from providers of approaches which are directly connected with technical processes to much more diversified service providers.

Twijnstra, Keuning and De Caluwé (2002: 20-21) delineated the most important developments that have brought the management consultant industry to the sector as we know it today.

1. THE RISE OF THE BUSINESS ECONOMISTS

With the genesis of management consulting as a profession in The Netherlands, the practitioners of it were mainly engineers with a technical background. Thus, the advice was targeted at technical processes and smoothening their working atmosphere. Not much later, the organizations in which these processes took place, became the objects of interest. This implied the rise of the business economists.

2. EXPANDING AND DIVERSIFYING OF THE CONSULTING SERVICE OFFERINGS

The perspective on organizational advice expanded from technical production processes to the organization itself as an entity that could be improved. Next to the economical perspective, that focused on efficiency and production levels, other disciplines that were associated with organizational performances such as psychology, sociology and change management showed themselves on the stage of management consulting.

3. MULTIDISCIPLINARY EXECUTION OF CONSULTING ASSIGNMENTS

The development described at point 2 has led to the division of two types of consulting firms: the multi-disciplinary firm that combined different areas of expertise and the mono-disciplinary firm that focused on one particular field (i.e. possessing a specialism).

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4. KNOWLEDGE OF THE FIELD VERSUS KNOWLED

The fourth development refers to the professionals that act on the consulting stage. The pioneers that made the development of the managem

knowledge (of their field of interest), knowledge about the profession of management consultant.

The ‘new generation’ of organizational advisors lack knowhow on ‘working as a consultant’ and h had difficulties with overseeing the effects and consequences of the by them intended advice and implementation strategy.

Back to the present. The current Dutch

SMALL - _{On the European scale}

player. Out of the total 2010 turnover by European management consulting market ( 3, 62% could be attributed to the Dutch management consulting industry (FEACO, 2010: 10).

DIFFERENT – _{The Dutch consulting market differs from the sector in other European nations, as the}

financial services industry makes less usage of management consultants than the European average (15 % lower in 2011; Management & Consulting, 2011). Further

which constitutes of 17% (the European average was 13% in 2011) of the management consulting market (Consultancy.nl, 2012b).

FIELD VERSUS KNOWLEDGE OF THE PROFESSION

The fourth development refers to the professionals that act on the consulting stage. The pioneers that made the development of the management consulting profession happened possess, next to technical knowledge (of their field of interest), knowledge about the profession of management consultant.

The ‘new generation’ of organizational advisors lack knowhow on ‘working as a consultant’ and h had difficulties with overseeing the effects and consequences of the by them intended advice and

current Dutch industry can be characterized along the following subjects.

On the European scale, the Dutch management consultancy industry is a relatively small player. Out of the total 2010 turnover by European management consulting market (

3, 62% could be attributed to the Dutch management consulting industry (FEACO, 2010: 10).

The Dutch consulting market differs from the sector in other European nations, as the financial services industry makes less usage of management consultants than the European average (15 % lower in 2011; Management & Consulting, 2011). Further, it does more depend on the public sector which constitutes of 17% (the European average was 13% in 2011) of the management consulting The fourth development refers to the professionals that act on the consulting stage. The pioneers that

ent consulting profession happened possess, next to technical knowledge (of their field of interest), knowledge about the profession of management consultant.

The ‘new generation’ of organizational advisors lack knowhow on ‘working as a consultant’ and have had difficulties with overseeing the effects and consequences of the by them intended advice and

industry can be characterized along the following subjects.

, the Dutch management consultancy industry is a relatively small player. Out of the total 2010 turnover by European management consulting market (€ 86, 2 billion), 3, 62% could be attributed to the Dutch management consulting industry (FEACO, 2010: 10).

The Dutch consulting market differs from the sector in other European nations, as the financial services industry makes less usage of management consultants than the European average (15 , it does more depend on the public sector which constitutes of 17% (the European average was 13% in 2011) of the management consulting

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MANY SP’s - _{In 2012, the amount of consulting}_{firms in the Netherlands counted up to 66.950.} Respectively 87,7 percent of the industry consists of sole practitioners and only 0,2 % of the professionals works for a management consulting firm that consists of 20 persons or more (ABN Amro, 2011: 19).

VOLATILE – _{The Dutch management consulting market is very dependent on the tendency of the}

market and the economical circumstances. For the third year in a row the market turnover has decreased and the expectations for 2012 are far from propitious. ABN Amro (2012: 19) expects the demands from the private sector to be stable and from the public sector to decline even more.

2011 – _{The year of 2011 has been tough for the Dutch consulting business. The joint turnover was} around € 9 billion Euros which meant a negative growth for the sector of 2,1 % in comparison with 2010 (ABN Amro, 2012: 19). This was caused by the shrunken expenses of organizations and clients in both the profit and non-profit sector.

DYNAMIC – _{The sector can be recognized by its dynamic character. There are many mutations every}

year regarding the amount of employees and the amount of firms. Only in 2012, the amount of consulting firms has grown with 11,5 % (ABN Amro, 2012: 18).

INNOVATIVE – _{The Dutch management consulting industry can be regarded as innovative. Dutch}

firms seem show the courage to experiment in order to improve the business propositions (Management & Consulting, 2011) and to revise the fit between the business model and the market (Consultancy.nl, 2012b).

E&Y: THE BEST –_{According to the MT100 (Management Team 100: Beste Adviesbureau,}

Consultancy.nl, 2012c), Ernst & Young is considered to be the best management consulting firm of 2011 in terms of client satisfaction. The top 5 is completed by Twynstra Gudde, Deloitte, Berenschot and McKinsey & Company.

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3.2.2 Trends and developments in the Dutch management consulting industry

The Dutch consulting industry has witnessed complex and challenging periods recently as an outcome of two contemporaneous developments: (1) the entrance of many young professionals to the consulting market; (2) the decreasing market demand as a result of unfavorable market circumstances (Het Financieele Dagblad, 22-09-2011: 13). The sector has witnessed a large growth of newcomers (11,5% in 2011: ABN Amro, 2012: 18) with a decreasing volume. In these circumstances, it is almost impossible to keep the hourly rates and amount of assignments intact.

This trend has resulted in the occurrence of both mergers and acquisitions_{, e.g. Bakkenist and}

InterExcellent (Bakkenist, 2011), and reorganizations_{, e.g. at BMC and Sogeti (Geijtenbeek, 2010;}

Consultancy.nl, 2012a).

Further, the client is now, more than ever, in control. Clients have become much more demanding towards consulting firms. They have requested more reasonable tariffs, more transparency and the possibility to act more together (ABN Amro, 2012: 18). A request that has been fulfilled.

3.3 Notion of the professionals: what are the characteristics of the professionals

working in the Dutch management consulting industry?

This paragraph will shift from the Dutch management consulting market as a whole (par. 3.2) to the professionals that, together, form this industry. There are many bases to draw a comparison on, but this paper distinguishes the two major working forms that are present: the regular consultant and the sole practitioner. The division of the market, classified by the amount of employees per firm, is shown below.

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Respectively, 87,7% of the Dutch management consulting market consists of sole practitioners_{. The}

joint turnover of the independent individuals constitutes almost a third of the total Dutch consulting market earnings (CBS, 2012). Thus, the existence of the sole practitioner has an enormous impact on the landscape of Dutch management consulting.

The other 12,3% of the market consists of regular consultants_,_{i.e. consultants that work for a small-,}

medium- or large-sized consultancy firm. Despite the fact that this group possesses a relatively small market share in terms of the amount of employees, they are responsible for over two third of the total Dutch consulting market earnings (CBS, 2012). This can be partly explained through (1) the size of the major players of the consulting market in terms of the amount of employees (e.g. Berenschot, Deloitte, Twynstra Gudde) (The Consultancy Group, 2012) in combination with their hourly tariffs (2) that are often €50 - €75 higher than the fees of sole practitioners (Consultancy.nl, 2012d).

Sub paragraphs 3.3.1 and 3.3.2 will present the characteristics of both the research subjects.

3.3.1 The characteristics of the _{regular consultant}

In the respect of this research paper, a regular consultant can be described as a management consultant that it working for a small-, medium- or large-sized consulting firm. Consulting firms can be classified from the large sized international player that is able to offer ‘total service packages’ to clients to the medium-sized generalists and specialist firms (Kubr, 2009: 46-48). De Jong (2010: 143) describes the culture inside of management consulting firms as ‘hard to access, difficult to manage’. Professionals enjoy much personal discretion and autonomy and cannot be steered easily with procedures, protocols and policies. They run their own offices and practices and serve their own clients.

Kubr (2009: 612-613) confirms that it may be difficult for consulting corporations to manage its employees. Consultants are ‘difficult to manage’, as they handle situations regarding their work on an autonomous basis without waiting for the instructions of a superior. The managers within consulting firms are the shapers of the proper conditions for consultants to perform in.

The regular consultant seeks a connection with a consulting firm, since the firm may offer benefits that fit the consultants’ preferences and/or expectations. Kubr (2009: 46) mentions that large-sized consulting firms often possess more than one discipline, thus, are capable of offering integral client solutions. It allows the consultant to switch to another discipline, but also to combine forces with peers that have a different area of expertise. Further, Kubr (2009: 613) indicates the human dimension. Some people want to work on a regular basis with other people, i.e. having colleagues. They appreciate the teamwork and collaboration with other colleagues. There is also a group of consultants that works for a firm as this allows him to concentrate on the content of his work, rather than on paper

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burdens of an administrative or financial origin (Kubr, 2009: 613). Final, there is a group of regular consultants that views working for a firm as a learning experience (Kubr, 2009: 613). The consultant will stay loyal to the firm, until the moment of saturation has been reached.

Vrakking & Cozijnsen (1994: 29-30) use a suitability approach to describe regular consultants and the requirements they have to meet. Consultants should be well educated_{(preferably with an academic}

background), be creative and orientedon solutions_{rather than problems, possess}perseverance_and

have the ability to perform independent_{and autonomous.}

Lorsch & Tierney (2002: 153) use a lens that takes the perspective of the organizational culture within a professional services firm. They acknowledge the presence of five core beliefs that the regular consultant has. First, there is the belief in partnership_{, where professionals believe that the senior}

consultants own the firm and major decisions will not be taken without proper without consensus among the partners. Second, the professionals believe in extraordinary teams_{. It is the team that}

makes a person successful, being an effective team member is what counts. Third, professionals share the belief of community_{. This is the proposition which holds the feeling that the members belong to}

the same organization, that they are expected to work together and that they try to help each other. Fourth, there is they believe in the balance_betweenstars first_andclients first_{. They are seen and}

treated as equally important. Final, there is the belief in perpetuity_{. The firm members are building a}

firm that transcends generations.

De Jong (2010: 144) stresses the importance of working with a diverse squad within a management consulting firm. This fits the needs and expectations of the consultants, as it leads to a better client services and has become a necessity as assignments tend to become more complex and, as such, require a team of specialists.

3.3.2 The characteristics of the _{sole practitioner}

The second group of management consultants on the Dutch market that will be discussed in this report are the, so-called, sole practitioners_{. Within the Dutch economy, sole practitioners are better known}

as zzp’ers_:_{zelfstandigen zonder personeel (literally: self-employed without personnel). The term of}

sole practitioner originated from the beginning of the previous century, at the point that more and more professionals started to work for themselves instead of working for a superior (Kösters, 2008: 9). Their strength lies in a highly personalized and flexible approach, something that is highly complex to develop and sustain in a larger consulting corporation (Kubr, 2009: 48).

The group of sole practitioners has become more and more dominant on the Dutch economical plateau. At this point, the amount of sole practitioners is around 749.000 (Captein, 2012: 31) of which

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the largest part (574.000) acts within the domain of management consulting (Nu.nl, 2012a). This comes from the relatively low barriers of professionals towards knowledge, consulting methods and tools (ABN Amro, 2008: 18).

The independent management consultants have the ability to work for lower tariffs than the larger consulting firms, as many of the overhead costs no longer exist (Kubr, 1009: 48). They are often associated with other colleagues in informal networks so they can undertake also larger and more complex assignments. Here lies one of the pitfalls of being an independent professional: they gain a much weaker position, in regard to larger firms, when it comes to big tender contracts (Dutch: raamovereenkomsten) (ABN Amro, 2011: 18).

Nu.nl research (2012b) has provided the major advantages and disadvantages of ‘living the profession’ as a sole practitioner. Hereunder, the characteristics that are considered as advantages are presented.

FREEDOM AND FLEXIBILITY – _{The possibility to design and perform around your own personal}

qualities and competencies. No boss who tells you what to do and how to do it.

RESULTS AND PRIDE –_{The results that are obtained are the results of the entrepreneur. This results}

in both personal satisfaction (pride) and material outcomes (money).

BEING ABLE TO WORK ANYWHERE – _{Being able to work anywhere, as a result of the internet,}

public WiFi hotspots and Het Nieuwe Werken. No more traffic jams or crowded trains.

SPACE FOR CREATIVITY AND DEVELOPMENT –_{Professionals would be much more motivated to}

learn and develop when the interests are bigger. Further, there are no internal mountains to climb: no money-, time-, and energy wasting discussions and business cases.

SOCIAL RESPONSIBILITY-_{Entrepreneurs stand ‘in the middle of society’ and can act more easily in}

a social responsible way, e.g. by offering internships to young potentials.

POSITIVE NETWORK – _{Every entrepreneur has its network. The networks of sole practitioners are}

more aimed at helping each other: sharing information, exchanging experiences and opportunities.

DIVERSIFIED AND TENSIVE- _{The work of sole practitioners is very diverse in terms of}

roles/functions and the type and amount of clients. The workweek has a variable character which can be both exiting as it can be tense.

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The life of the sole practitioner also has it downsides or pitfalls. Nu.nl (2012b) lists the following ones as the most important.

WORK-LIFE BALANCE – _{The existence of being a sole practitioner is not an easy one. It requires}

devotion and hard work to become and to remain successful. This may result in lower amounts of spare time and vacation.

ON YOUR OWN –_{The other side of being independent and autonomous is that sole practitioners have}

to do everything_{on their own. They have to develop a vision, a strategy, a business model, marketing,} sales, finance and so on. The luxury of delegating tasks to colleagues is not there.

ADMINISTRATION –_{One of the less popular tasks is doing the administration. One is responsible for}

dealing adequately with bookkeeping, insurances and pensions.

LONELY – _{The existence of the independent professional is more lonely than working for a (large)}

organization. Professionals lack the regular contact with colleagues for both social (chatting) and professional (feedback, consulting) purposes.

(FINANCIAL) INSECURITY – _{Regular employee have the ‘luxury’ of a fixed income every month.}

Sole practitioners live their life with the financial insecurity that comes with the work form. They are 100% accountable for creating work and cash flow. Further, they cannot claim unemployment regulations.

PRESSURE AND ENVY – _{The pressure to perform successfully to the outside can be hard and}

demanding. Besides this, some professionals experience envy from other workers, friends, family or former colleagues.

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3.4 The area of interest: what is known?

The paragraphs 3.1 – 3.3 have presented a clear and compact picture of the consulting profession and its origins (3.1), characteristics of the Dutch management consulting industry (3.2) and characteristics of the professionals working in this industry (3.3). To compare the two target groups working in this industry (i.e. regular consultants and sole practitioners), there has been developed a basis for comparison. For more information, please view paragraph 2.3 of this report.

The basis of comparison constitutes of (1) acquisition and the acquisition process, (2) efforts during unfavorable market circumstances, (3) learning and developing, (4) innovation and (5) the most important qualities and competencies to act successfully as a management consultant. These themes have been selected to compare the foundation of being a management consultant, both the regular consultant and the sole practitioner. The supposition is to find remarkable differences regarding these themes that can be related directly to the work form.

Kubr (2009: 22) stresses the importance giving enough of attention to the acquisition_{(1) stage as the}

subsequent stages are highly dependent on the quality of the process as a whole. Will this differ between regular consultants and sole practitioners? The year of 2011_{has been tough for the Dutch}

consulting business (2). The joint turnover was around € 9 billion Euros which meant a negative growth for the sector of 2,1 % in comparison with 2010 (ABN Amro, 2012: 19). Do the activities that consultants undertake, then, differ? Consultants can be characterized by their intellectual abilities and their motivation to learn_anddevelop themselves _{(3): as a human being and as a professional (Kubr,}

2009: 785). Do the activities differ to do so differ between regular consultants and sole practitioners?

Change_{in knowledge-intensive professional firms is driven by experiences of learning from client}

interactions that are appropriated into new forms of expertise (Anand, Gardner & Morris, 2007: 424). Thus, the ability to innovate is vital. Does the innovation process of the sole practitioner have another shape than the one of the regular consultant? Final, to perform well as a consultant, they should possess certain qualities and have certain characteristics. Do they differ? Has the step from the one work form to the other caused the consultant to invest time to develop certain, other, qualities?

This paragraph is devoted to present what is there on these specific fields of interest. The findings from the existing literature and reports can be marked as secondary data _{which implies that the}

information has been collected for other purposes than the one of the researcher (Kotler & Armstrong, 2009: 131). For this report, this statement reserves the fact that the characteristics cannot be allocated yet to neither regular consultants nor sole practitioners in this phase of the research. The collected material has not been tailored to meet the properties of the division between regular consultants and sole practitioners, thus: it is more suitable for the profession of consultant as such.

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3.4.1 Acquisition and the acquisition process

The majority of all consulting assignments starts with acquisition, a process that includes the preliminary contacts with (potential) clients, discussions on what the clients would like to achieve, the roles of both of the parties, a preliminary problem diagnosis, a concept action plan and the agreements of the consulting contract (Kubr, 2009: 22). Thus, it can be considered as an important phase as it forms the foundation of the consulting process as a whole.

To perform successfully in the first phase of the consulting process, the consultant should possess the ability to ‘read’ and analyze the market on its opportunities and cliental needs (OOA, 2007: 8). The Body of Knowledge and Skills (BoKS, 2007: 8) of the Orde van organisatiekundigen en –adviseurs (OOA) presents the requirements that have to be met to act effectively during the acquisition stage.

First, the consultant should be aware_{of its own core qualities, competencies and experiences. Second,}

he should be able to select promising target areas_{which fit the business proposition of the consultant}

and/or consultancy firm. There should be a linkage between the (type of) clients to be served and the reputation that has been build. Third, the consultant has to be able to build a network_{and attain} personal relationships_{with (ex) colleagues, (ex) clients and so on. This can be valuable for both}

acquiring new consulting assignments as well as creating awareness of their strengths to co-operate on assignments or projects. In that case, the consultant also becomes some sort of headhunter. On areas where the professional lacks certain knowledge or expertise, contacts from the network that possess that ‘piece of the puzzle’ can be exerted. Fourth, the consultant should have rapid access to relevant documentation_{about the client and/or industry that he is working in. Fifth, the consultant should}

know and monitor the competitors_{that act on the same stage as the consultant or consulting firm}

does. What are their strengths? What are their propositions? What is their reputation? Sixth and final, the consultant should have the skills to execute fast, effective and oriented researches_{to gain insights}

in the organization. What is the problem? Where is room for improvement? Does the organization ‘want’ to change?

De Caluwé & Reitsma (2010: 16) characterize the acquisition process as a remarkable one as it includes acquaintance (between the client and the consultant), a preliminary diagnosis of the problem, creation of perspective of the consulting assignment but also the negotiations about the content of the assignments, the duration and the tariffs. Kubr (2009: 22) stresses the importance of taking enough time for this stage as the subsequent stages are highly dependent on the quality of the process as a whole.