Master Thesis
Organization Studies
2010/2011
Client-consultant engagement success and how it is influenced by a
consultant’s competencies
Details student
Name: Robbert van Woudenberg ANR: 530461
Details supervisors
Name supervisor 1: Drs. A. Stoppelenburg Name supervisor 2: Dr. R.P.J.H. Rutten
Master circle
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Abstract
Purpose – The primary intent of this study is to examine the effect of a consultant’s
competencies on the success of the client-consultant engagement from the client’s point of view. This is done by conducting research in the population, which is the consultant’s clientele in the Netherlands.
Design/methodology/approach – A deductive research design was used for this study. Data
were collected by distributing partially self-developed questionnaires amongst the clients of consultants. These clients were approached via email, telephone and using LinkedIn. It was tested whether the competencies of a consultant influenced the success of the client-consultant engagement. Descriptive statistics are presented, followed by reliability analyses and hierarchical regression analyses in order to test the formed hypotheses.
Findings – The results of the analyses reveal that five independent variables effect
client-consultant engagement success positively. Empirical evidence was found for a positive, significant relationship between these independent variables and the dependent variable.
Limitations and recommendations– The most important implications are discussed, such as
the cross-sectional research design which makes it rather difficult to prove causality. Furthermore, recommendations for further research are addressed.
Originality/value – This research contributes to the academic field by providing insights in
the effects of consultant related competencies. It gives explanations why some competencies do have an effect on client-consultant engagement success and others do not.
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Preface
This thesis is written as a final product for the Master program of Organization Studies at Tilburg University. The subject of this thesis is the client-consultant engagement. Academic literature has provided me with new and useful insights which led to the completion of this thesis.
Although writing this thesis was an individual activity, it would not have been possible without the help of several people. I would like to take this opportunity to thank the persons who have supported me while conducting this research. People who provided me with sound feedback, useful insights and challenging questions. First, I would like to thank the supervisor of the thesis circle, Drs. Annemieke Stoppelenburg, for her help and guidance during this process, for her effort in finding respondents for this study and for providing me with useful literature. Furthermore I would like to thank my family and friends for their support, Marc van Herpen for opening up his network to me, Ferry Heeneman for opening up his network to me, the respondents for filling out my questionnaire and last, but not least, my fellow students in the master circle.
Robbert van Woudenberg August 2011
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Table of content
1. Introduction ... 5
1.1 Problem statement ... 6
1.2 Research goal and question ... 7
1.3 Relevance ... 7
1.4 Structure of the research ... 8
2. Theoretical background... 8
2.1 Dependent variable: client-consultant engagement success ... 9
2.2 Independent variable: consultant’s competencies ... 12
2.2.1 Basic Competencies ... 16
2.2.2 Approach specific competencies ... 19
2.2.3 Intervention specific competencies ... 22
2.3 Control variables ... 24 2.4 Conceptual model ... 25 3. Methodological framework ... 27 3.1 Research design ... 27 3.2 Data collection ... 27 3.3 Data analysis ... 29 3.4 Sample strategy ... 29
3.5 Research quality indicators ... 30
3.5.1 Construct validity ... 30 3.5.2 Internal validity ... 31 3.5.3 External validity ... 31 4 Results ... 32 4.1 Preliminary analyses ... 32 4.2 Secondary analysis ... 33 4.2.1 Consultant’s competencies ... 33
4
4.2.2. Hypotheses ... 35
5 Conclusion ... 39
6 Discussion and reflection ... 42
6.1 Discussion ... 42
6.2 Reflection ... 46
7 Limitations and recommendations for future research ... 48
7.1 Limitations ... 48
7.2 Future research ... 50
5 References ... 52
Appendix A: Operationalization ... 57
Appendix B: Definitions basic competencies ... 60
Appendix C: Definitions approach-specific competencies ... 61
Appendix D: Definitions intervention-specific competencies ... 62
Appendix E: Questionnaire ... 63
Appendix F: Descriptive Statistics ... 72
Appendix G: Reliability analysis dependent variable ... 75
Appendix H: Coefficients table hierarchical multiple regression analysis ... 77
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1.
Introduction
In the past the reliance on the use of management consulting services has increased (Jang & Lee, 1998). The management consulting industry emerged and structured itself in the twentieth century, growing very rapidly in the process (McKenna, Djelic & Ainamo, 2000). Since 1990 the overall revenues in management consulting have grown with 10 to 30 percent per year (Appelbaum and Seed, 2005). Management consulting has become a dynamic and rapidly changing sector of professional services. In order to be, and stay, relevant and of added value to their clients, management consultants need to possess certain skills, abilities and capabilities, otherwise known as competencies. It is important that they use these competencies to anticipate on future changes that may affect their clients (Kubr, 2002) and that they are able to cope with sudden, unforeseen changes.
These competencies are an important asset of the management consultant. It is no secret that management consultants are expected to be competent in advising, improving processes and achieving success in the client-consultant engagement.
It is not only important for the management consultant to possess a certain set of competencies. It is also important for the organization that employs the consultant. When an organization has a lot of very competent consultants it can gain competitive advantage (Lado and Wilson, 1994). Consultants are hired mostly through HR-departments. These departments select the consultant using competency models and competency assessments. It is therefore important that the HR-departments know what competencies are important and influence success and performance so that they can select the right consultant. Large consultancy firms like McKinsey work with assessment systems which include competency models. These competency models are addressed in the training and development of the consultant.
Although recent research (De Caluwé & Reitsma, 2006) indicated that it is possible to define a set of competencies that a management consultant is ought to possess, there is not much literature known that focuses on the effect of the competencies that consultants are perceived to have on the success of the client-consultant engagement. In other words: the relationship between the possessed competencies of a management consultant and the success of the client-consultant engagement, as perceived by the client, is not much studied before. Even despite the size and significance of the management consultancy industry, many authors have noted that there does not seem to be a correspondingly amount of empirical data on the practice of management consulting (Appelbaum and Seed, 2005).
6 Though research has been conducted on the role of factors such as knowledge, personality characteristics and client characteristics on the success of an engagement (Jang & Lee, 1998), this study will focus solely on the relationship between the consultant’s competencies and the client-consultant engagement success.
It would be interesting to know and understand the relationship between these variables, as it would simplify the decision for a specific consultant for both the client as the consultancy firm. If it is known which competencies contribute most to a successful client-consultant engagement, both clients and client-consultants could benefit from that. Based on the above, it is possible to create a research problem, a research question and a theoretical framework. Subsequently, the methodological part of this study will be presented.
1.1 Problem statement
In a dynamic and rapidly changing sector consultants are expected to perform well. Although clients are critical towards consultants, there is a lot of willingness to praise the contributions of management consultants (Czerniawska, 2003). Benefits of consultants are the focus on outcome, speed of delivery and the fact that they do not carry any in-house baggage. Another salient characteristic of management consultants is that they bring up-to-date skills, otherwise known as competencies (Czerniawska, 2003).
The competencies a consultant has, influence the outcome of the consulting project. Consultants must have the technical and behavioral skills that are specific to consulting (Kubr, 2002). It is argued by several authors (Czerniawska, 2003; Hoekstra & van Sluijs, 2007) that it is important to choose your consultant carefully and, therefore, to know what kind of consultancy-job there is within the firm so that you can select your consultant on the competencies he or she has.
De Caluwé & Reitsma (2006) specified a list of competencies needed by the consultant. In this list they made a distinction between several types of competencies; basic competencies, approach specific competencies and intervention specific competencies.
What these scholars did not study is the relationship between these competencies and the success of a client-consultant engagement. In fact, this relation is not studied much at all. Although scholars agree that competencies are needed by the consultant in numerous occasions (Jang and Lee, 1998; Appelbaum and Steed, 2005; Rothwell and Sullivan, 2005; De Caluwé and Reitsma, 2006) the effect of competencies on the result of success of the
client-7 consultant engagement does not seem to interest a lot of scholars. It is, however, an interesting area and this study will focus on that specific relation.
1.2 Research goal and question
The main purpose of this study is to gain insight in the effect of the competencies of a consultant, as perceived by the client, on the success of the engagement. Based on the aforementioned research problem and research goal, the following research question is used:
To what extent do the consultant’s competencies contribute to a successful client-consultant engagement?
This research question is formulated with a few underlying notions in mind. First, the X-variable, the consultant’s competencies, will be the consultant’s competencies as perceived by the client of the consultant. Second, the success of the client-consultant engagement will be measured by using the client’s ‘satisfaction’, as defined by Van Aken (1996).
1.3 Relevance
This study gains insight in the effect of the consultant’s competencies on the success of the engagement. The outcomes of this study are expected to be interesting for both consultancy firms as for client organizations. Consultancy firms can use the results to train their (future) consultants and to let them develop the most important competencies or train their current consultants to develop their weaker competencies, while client organizations are being enabled to better select a consultant who fits the situation. Furthermore, since there is little literature focusing on the relationship between a consultant’s competencies and the success of the client-consultant engagement, this research will contribute to a better understanding of this relationship and it will contribute to this understanding with empirical data.
Although it might seem obvious that a competent consultant will successfully end an assignment, it is not entirely the case. The success of the engagement is influenced by many other factors. Because of the limited time frame only the factor competencies will be taken into account. This study will try to give insight in which competencies are important and influence the relationship more. HR-departments can use this information to alter their selection procedures and to create competency profiles which match their expectations of new employees.
8 Introduction Theoretical
Framework Methodology Results Conclusion Discussion 1.4 Structure of the research
The general theme of this research has been explained in the preliminary chapter, as have the research problem, research goal, research question and the relevance. The following chapter will outline the theoretical framework used in this thesis. The literature that is used is presented and the relevant theories and concepts are determined. The dependent variable, the independent variable, control variables and the hypotheses are clarified and the conceptual model is presented.
The chapter that follows is the methodological chapter. In this chapter the research design is outlined and the used method regarding data collection and the analysis of the variables is enlightened. Hereafter the findings of this study are presented. This is followed by the conclusion and discussion, which will shed light on the limitations of this study, as well as the recommendations for future research. Figure 1 illustrates the structure of this study.
2.
Theoretical background
In this chapter the theoretical base for this study is described. Theoretical notions that are found in the literature will be used to form a theoretical framework. This framework will be used to form propositions which will later be empirically tested. By doing this, also the theoretical framework will be empirically tested.
This chapter consists of the following sections: First, the dependent variable, client-consultant engagement success, will be addressed. Several definitions of success will be given and finally a clear and concise characterization of client-consultant engagement success is provided in order to define the dependent variable.
9 Subsequently, the independent variable, a consultant’s competencies, will be discussed. Propositions which represent the theoretical mechanism between the dependent and independent variables will be formed. After that, the control variables will be presented, which are used to control for different effects that may be found when the gathered data is analyzed.
Finally, a conceptual model is presented which gives a graphical presentation of this study.
2.1 Dependent variable: client-consultant engagement success
In this research client-consultant engagement success is the dependent variable. In order to measure the success of the client-consultant engagement, a clear definition needs to be used which clarifies what success is, why success is a good measure and how exactly it should be measured.
Kubr (2002) underlines the importance of creating and maintaining a successful client-consultant engagement. He states that success can only be achieved by making all involved actors aware of human, cultural and other factors that will affect their relationship. These factors can influence the success of the relationship between a consultant and the client. But what exactly is ‘success’? How can it be defined and how can it be measured? De Wit (1988) asks this question too. He states that first it must be clear if success can be measured at all. This is confirmed by the aim of the PMI conference (Project Management Institute) of 1986 in Montreal, which was to focus on how important good measurement of progress, cost and quality is to the success of a project (De Wit, 1988).
The success of a client-consultant engagement is a construct which can be interpreted in many ways. Many scholars developed different criteria and definitions for the concept of client-consultant engagement success (Srinivasan, 1985; De Wit, 1988; Gable, 1996; Van Aken, 1996; Philips, 2000; McLachlin, 2000; De Caluwé and Stoppelenburg, 2004; Warren, 2004) and when scanning the literature, it becomes clear that all the discrepancies in notions and measures provide it difficult to measure the success of the client-consultant engagement.
The fact that there are so many different notions and definitions of client-consultant success implies that the debate on this matter is still going on and that the scientific field is still not in consensus about how to measure the success. Wright and Kitay (2002) state that not all of what consultants do can be easily measured, because “(a) it is intangible (b) there are too many changes happening at once to isolate the effects of any one change, or (c) the change involves a long time frame and the effects are not immediately apparent” (p. 275).
10 Wright and Kitay (2002) argue that when assessing success, hard measures are not always appropriate. This is in line with the arguments of Armenakis and Burdg (1988) who argue that “hard” criteria, such as productivity and profitability are often not applicable to consultancy programs. They state that sometimes “soft” measures need to be used like satisfaction, self-reported measures of leadership and group processes. This is what many researchers argue. Literature shows that many researchers (Gable, 1996; Van Aken (1996; McLachlin, 2000; Philips, 2000; Kumar & Simon, 2001) use soft criteria in their papers.
The downside of soft measures, like satisfaction, is that they require the perception of people, which can bias the results. This is in line with Clark’s (1995) reasoning. He states that managing client impressions is a critical aspect in the client-consultant engagement and that it is important to create a favorable perception of the consulting success. This implies that consultants can manipulate the perception of clients and, therefore, the results as perceived by the clients. However, the client pays the consultant to deliver good work and for that reason the client is the one to judge the consultant and the engagement success. However, it is still not clear what criteria exactly should be used to measure success.
McLachlin (2000) states that a consulting engagement may be considered successful if the client is satisfied that the consultant has met expectations and if the consultant is satisfied that his or her reputation has been enhanced. He identified three engagement objectives: (1) improving client performance (2) improving client capabilities and (3) changing organizational culture.
In addition, also Van Aken (1996) uses a soft measure to measure project success. In his study he states that there is not a conclusive and irrefutable operationalization of project success. He studied 1111 articles in order to create a definition of project success and a criterion to measure it. In the operationalization he established from this research, he concluded that project success is defined in terms of satisfaction of involved actors, since satisfaction is not an absolute construct.
This notion is accompanied by a small limitation. Van Aken (1996) states that only projects with a result can be included. Ergo, projects without a result cannot. Projects without a result are projects that did not reach the implementation phase (Van Aken, 1996). This study only focuses on projects that have been finished and therefore do have a result. In this case, a result is seen as either positive or negative. Both positive and negative results can be explained by the satisfaction of the client (Van Aken, 1996). In sum, the limitation is not affecting this study.
11 Consequently, Van Aken (1996) defined project success as follows: “Project success is the extent to which the project result satisfies the involved actors” (p. 90).
In his study, Van Aken (1996) uses ‘project success’ instead of ‘client-consultant engagement’. Although it might look like these are two completely different constructs, they are quite alike. The first construct is adopted from the project management field and the second construct is adopted from the consultancy field. However, these two fields do not differ that much. Van Aken (1996) states that his research in the project management field will deliver useful insights for internal and external advisors. In addition he argues that the need for practical tips is large in the advisory practice. Van Aken mentions the link with advisory assignments often in his dissertation. He claims for instance that a certain type of project result can be an advice regarding an organizational structure or reorganization. Another example of a project is given by Van Aken when he mentions the actors in several types of projects. One of these projects is the reorganization of a hospital. A reorganization is also an example of a consultancy assignment.
The examples above illustrate the thin line between project management and consultancy. Because of the fact that ‘projects’ can also be advisory assignments, or consultancy assignments, the theory and notions of Van Aken can be used in this study. In this study, however, instead of using ‘project’ the construct ‘client-consultant engagement’ will be used. This construct is used to clarify the consultancy assignment and is similar to ‘project’.
The aforementioned definition about project success entails some clarification regarding the involved actors. According to Van Aken (1996) the involved actors in a project consist of nine different actors (the principal, project manager, project team, project executers, users, line management, direct stakeholders, indirect stakeholders and social groups) which can be divided into three groups categorized on level of importance. Instead of using all the involved actors this study only measures satisfaction of the client (as the client pays the consultant to deliver good work and for that reason the client is the one to judge the consultant and the engagement success), which makes it necessary to slightly alter Van Aken’s (1996) definition:
Client-consultant engagement success is the extent to which the project result satisfies the involved client(s).
12 The slight modification of Van Aken’s (1996) definition has no significant implications because of the fact that project success and client-consultant engagement success can be considered the same (as mentioned above). Furthermore, as already mentioned there are a variety of clients. The client that is used in this study, however, is the ‘user’. The user is the client which is most important when assessing success (Van Aken, 1996), as they are the ones who are dependent on the result of the client-consultant engagement.
2.2 Independent variable: consultant’s competencies
In this research the independent variable is a consultant’s competencies. In general, the construct of competencies is a very wide and often defined concept. Several authors (Van Muijen, 2003; De Caluwé and Vermaak, 2006) argue that among the concept of competencies other constructs are used to explain the same notion. Van Muijen (2003) states that competencies are known as the characteristics of an individual that lead to high performance in a certain job. According to Wordreference.com having competencies, or being competent, means “having the necessary ability or knowledge to do something successfully”. Van Muijen (2003) notes that competencies are seen as common knowledge, personality characteristics, skills and capabilities. Other scholars argue that competencies are employees’ abilities to perform the skills required for a specific job and that they are used for a variety of purposes like selection, performance management and succession planning (Spencer and Spencer, 1993). Hoekstra and van Sluijs (2003) define competencies as ‘something someone is good at’. This definition is also in accordance with the aforementioned definitions. All these definitions are quite similar, which is not shocking since the word competency stems from the Latin word competens which means ‘capable’. The aforementioned definitions all define competencies as something that someone is capable of, or capabilities that one has.
As Spencer and Spencer (1993) noted, competencies are often used for selection procedures, performance management and succession planning. Lawler and McDermott (2003) state that the use of competency assessments is fairly widespread in selection and performance management. The reason for this is that competency assessments predict success (Goldstein, Yusko & Nicolopoulos, 2001). This is acknowledged by Levenson et al. (2006) who state that competencies have a positive effect on performance and thus success. Also Breman and Bruinsma (2006) conclude that competencies have a positive influence on performance. They state that the relationship between competencies and performance has not been a very popular topic and that very little empirical evidence exists regarding this relationship. However, the relationship between competencies and performance or success as
13 such may not have been studied much, competencies and management of competencies has. Van Assen (2000) states that competencies are part of inimitable and valuable organizational and individual resources, providing competitive advantage. Competency management includes the management of strategic, organizational and individual competencies. According to Van Assen (2000) and Hoekstra and Van Sluijs (2007) organizational competencies are based on individual competencies. As organizational competencies can lead to competitive advantage (when inimitable and valuable) the individual competencies are an integral ingredient for gaining this competitive advantage. With the right competency assessment, competency management and the right consultants, consultants can be even more valuable for their organization.
In order to conduct competency assessment it must be clear which competencies will be assessed. The variety of definitions of the concept of competencies is encompassed with an even larger variety of different competencies. Organizations and associations develop competency profiles and models in order to train and guide their professionals. In the consultancy field, several organizations and professional associations have created guidelines and models that provide knowledge and insight in the professional standards for consultants. On an international level, the International Council of Management Consulting Institutes (ICMCI) developed a competency model consisting of three dimensions. One of the main points of interest in this model is the notion that the consultant is always learning and developing his or her own skills and capabilities, and always expanding his or her experience. The three dimensions of this model are: Business Acumen (knowledge about the market), Technical Competences (functional specialization and consulting skills) and Values and Behavior (social, ethical and analytical skills) (De Caluwé and Reitsma, 2006).
Another international effort to create a conclusive framework for competencies was made by ICM UK. The ICM UK developed a Competence Framework in together with large consultancy firms, independent practitioners, universities and other interested parties. This framework is a commercial product and is sold to consultancy firms. It is also being used for accreditation in the United Kingdom. What immediately is noticed when comparing the two models above is that they are almost similar. The ICM UK framework also has three dimensions: Market, Advice specific competencies and professional behavior.
A third professional organization that tries to compose a framework or guideline for consultants and competencies is the Dutch Orde voor Organisatie Adviseurs (OOA). This organization is responsible for the Body of Knowledge and Skills (BoKS). The BoKS describes what competencies a consultant should possess by use of an advice trajectory. The
14 purpose of this guideline is to create insight in the characteristics and aspects of the consultancy process. These characteristics are translated into the necessary competencies (OOA, 2010). Like the ICMCI competency model, BoKS states that it is hard to create a model or framework which is suitable for the industry for a longer period, because the professional knowledge of organizational professionals is changing rapidly in several fields (OOA, 2010). The BoKS uses a list of competencies composed by De Caluwé and Reitsma (2006) in order to let consultants test themselves. The organization claims that the results of this test can be used to fine-tune the learning process of the consultant. The BoKS is an important tool for consultancy firms and consultants to distinguish the competencies that are needed and to examine their consultants.
The self-test of De Caluwé and Reitsma (2006) that is included in the BoKS is based on the work of Hoekstra and van Sluijs (2003), Yukl (1993) and Volz and De Very (2000) and is divided into three sets of competencies: Basic competencies, approach specific competencies and intervention specific competencies. Like the ICM UK framework and the ICMCI model, the results of the research of De Caluwé and Reitsma (2006) claim that a consultant must possess at least a set of basic competencies. These competencies are required in order to function properly as a consultant. The other two models (ICMCI and ICM UK) also state that a consultant must possess a set of basic skills.
This study uses the three sets of competencies from De Caluwé and Reitsma (2006) to measure the consultant’s competencies. The reason why this study is chosen is that their set is based on an extensive amount of both national and international academic literature and because it is adopted by the Dutch OOA. The fact that it is accepted by the OOA and that it is adopted and supported by other authors (Buono and Jamieson, 2010; Hollaender, 2008) makes it reliable enough to use. Furthermore, models of large bureaus like McKinsey were used to investigate which competencies they require in a consultant. The fact that it is based on several other studies and the fact that it is used by the OOA implies that it is reliable enough to use the study as a source of inspiration and as a starting point for this research.
Like De Caluwé and Reitsma (2006) this study will use the following definition created by Hoekstra and van Sluijs (2003) for the construct of competencies:
“A competency is something someone is good at.”
This definition leads to a small discussion about the measurement of competencies. As the definition above implies, a competency is a characteristic of a person. The question that
15 arises is: how do you measure that? The self-test that is included in the BoKS tries to measure the competencies of a consultant by letting themselves do the test. For that to be a success, the consultant must have a lot of self-knowledge. This study will measure the competencies of consultants by asking the clients. Instead of asking the opinion of the consultant, the client (who worked extensively with the consultant) will fill in the questions as the client is also the person who judges the success of the client-consultant engagement. As competencies are recognizable characteristics of people, they can be perceived very well (Hoekstra and Van Sluijs, 2007). This makes it possible to ask the client what he or she thinks of the consultant and of the results of the client-consultant engagement.
The study of Jang and Lee (1998) is one of the few studies that researched the effect of a consultant’s competencies on the success of the client-consultant engagement. They claim that there are three factors that influence the success of a consultancy project. One of those factors is the competence of the consultant. The study argues that it is important for a consultant to possess specific skills and knowledge, because the client more or less expects him to. Jang and Lee (1998) state that “in order for the consultant’s expertise to be instrumental in solving the client’s problem, he or she needs to mobilize various skills or competencies.” (p 68). Unfortunately, they only studied competencies as a whole and did not, like i.e. De Caluwe and Reitsma (2006) or the BoKS (2010), split up the concept of competencies in several other operationalizations. This study will split up the concept of competencies like De Caluwe and Reitsma (2006) do, and will try to prove the different influences of the different components.
As mentioned above, the results of De Caluwé and Reitsma (2006) state that there are three different types of competencies. These types of competencies will not contain any competencies that are required by specialists in certain fields, like ICT, but only competencies that are necessary to successfully start and finalize the client-consultant engagement. A schedule is presented and the independent variables will be elaborated on below.
16 2.2.1 Basic Competencies
The aforementioned models and framework about competencies show that in general there is a consensus about the types of competencies consultants must have. These are called the basic competencies. The ICMCI and ICM UK both state that there is a need for a set of basic competencies. De Caluwe and Reitsma (2006) agree in this matter and have created a set of basic competencies which are (according to their research) needed to perform every basic consultancy job. They state that these competencies should be mastered by every consultant, without any distinction by age or experience (De Caluwe and Reitsma, 2006; Reitsma and De Caluwé, 2009). The basic competencies of the different models and frameworks are quite the same. The ICMCI model characterizes the basic competencies with consultative skills like project management, partnering and networking and client focus. This is reasonably similar to the ICM UK model, where the consulting competences are client focus, building and sustaining relationships and applying expertise and knowledge. These basic competencies are not exhaustive, but give a clear overview of how these models define the basic competencies.
17 The BoKS also gives an overview of basic competencies: organizing, managing and reflecting on professional behavior. All these models and frameworks are largely similar to each other. The framework of De Caluwe and Reitsma (2006) contains the following basic competencies: Flexibility, analytical skills, conceptual thinking, learning orientation, creativity, balanced judgment, awareness of external environment, generating vision, listening, sensitivity, communication, presentation, persuasion, integrity, reliability, loyalty and creating a favorable atmosphere. These competencies will be included in a multiple regression analysis.
There is little literature that explicitly studies the effect of competencies on engagement success. Jang and Lee (1998) researched this variable as one of the many factors that influence engagement success. The literature on competencies states that the basic competencies are the most important competencies (De Caluwe and Reitsma, 2006), as these are the competencies that every consultant should have. Without these competencies consultants are not able to properly bring a consultancy project to an end. Kloosterboer (2010) argues that basic knowledge and competencies are required by consultants and organizational advisors. He states that the basics serve as a general foundation for the professional practice. Consultants can specialize as they get older and thus gain more experience. Experts will possess the basics more than beginners.
As the literature shows, basic competencies are important to every consultant because these competencies form the foundation for the consultant’s performance. As every consultant is expected to possess the basic competencies (De Caluwe and Reitsma, 2006; 2009; Kloosterboer, 2010) these competencies are expected to contribute to client-consultant engagement success. The following hypotheses can be formulated from this reasoning:
H1: If a consultant is perceived to be competent at the competency Flexibility by its client, it will have a positive effect on the client-consultant engagement success.
H2: If a consultant is perceived to be competent at the competency Analytical skills by its client, it will have a positive effect on the client-consultant engagement success.
H3: If a consultant is perceived to be competent at the competency Conceptual thinking by its client, it will have a positive effect on the client-consultant engagement success.
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H4: If a consultant is perceived to be competent at the competency Learning orientation by its client, it will have a positive effect on the client-consultant engagement success.
H5: If a consultant is perceived to be competent at the competency Creativity by its client, it will have a positive effect on the client-consultant engagement success.
H6: If a consultant is perceived to be competent at the competency Balanced judgment by its client, it will have a positive effect on the client-consultant engagement success.
H7: If a consultant is perceived to be competent at the competency Awareness of external environment by its client, it will have a positive effect on the client-consultant engagement success.
H8: If a consultant is perceived to be competent at the competency Generating vision by its client, it will have a positive effect on the client-consultant engagement success.
H9: If a consultant is perceived to be competent at the competency Listening by its client, it will have a positive effect on the client-consultant engagement success.
H10: If a consultant is perceived to be competent at the competency Sensitivity by its client, it will have a positive effect on the client-consultant engagement success.
H11: If a consultant is perceived to be competent at the competency Communication by its client, it will have a positive effect on the client-consultant engagement success.
H12: If a consultant is perceived to be competent at the competency Presentation by its client, it will have a positive effect on the client-consultant engagement success.
H13: If a consultant is perceived to be competent at the competency Persuasion by its client, it will have a positive effect on the client-consultant engagement success.
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H14: If a consultant is perceived to be competent at the competency Integrity by its client, it will have a positive effect on the client-consultant engagement success.
H15: If a consultant is perceived to be competent at the competency Reliability by its client, it will have a positive effect on the client-consultant engagement success.
H16: If a consultant is perceived to be competent at the competency Loyalty by its client, it will have a positive effect on the client-consultant engagement success.
H17: If a consultant is perceived to be competent at the competency Creating a favorable atmosphere by its client, it will have a positive effect on the client-consultant engagement success.
Every competency presented above has its own definition. These definitions are adopted from the authors that have been used by De Caluwé and Reitsma (2006). The definitions for the basic competencies can be found in appendix B.
2.2.2 Approach specific competencies
The results of the study of De Caluwé and Reitsma (2006) showed that consultants should not only possess basic competencies, but also approach specific competencies. Every consultancy job requires a different approach as every client-consultant engagement and every situation is unique (Kubr, 2002). In addition to the basic competencies, consultants need approach specific competencies as distinguished by De Caluwé and Reitsma (2006) in order to execute and use a specific approach (BoKS, 2010).
De Caluwé and Reitsma (2006) state that there are two types of approach in a client-consultant engagement. These two types are the expert approach and the process approach (Cash and Minter, 1979; Schein, 1997; De Caluwé and Reitsma, 2006). The notion of these two types dates back decades. Through the years several scholars (Cash and Minter, 1979; Schein, 1987, 1997; Kubr, 2002; De Caluwé and Reitsma, 2006) used this operationalization of consulting approaches. Other operationalizations like Theory E and Theory O (Beer and Nohria, 2000), Episodic/Continuous change (Weick and Quinn, 1999) and Design/Develop (Boonstra (2000) can be used too, but like De Caluwé and Reitsma (2006) this research will try to keep the operationalization simple and clear. The expert and process approach suits this line of reasoning well. An advantage compared to the other theories and notions on
20 approaches is that the respondents are not expected to possess any knowledge on the aforementioned authors.
The distinction between the two approaches, or roles, a consultant can use is very clear. The expert approach is characterized by little collaboration between the consultant and the client. The consultant tries to suggest the client what to change (Kubr, 2002). In this role, the consultant tries to help the client by providing technical expertise and doing things for and on behalf of the client. Activities that are included in this approach are (i.e.) information supply, diagnose the organization, undertake feasibility studies, train staff in new techniques and recommend organizational and other change (Kubr, 2002). Also the management that has hired the consultant will collaborate with the consultant, but this may be limited “to providing information on request, discussing the progress made, accepting or declining proposals, and asking for further advice on implementation (Kubr, 2002; p. 57).
The consultant who uses the process role or approach will collaborate more with its client. The process consultant can be seen as a true change agent and attempts to help the organization to solve its own problems. The consultant does this by making the organization aware of processes, their likely consequences and of intervention techniques for stimulating change. According to Kubr (2002) “in various descriptions of process consulting the organization behavior (OD) approach comes across loud and clear” (p. 58). This underlines the statement of Schein (1987), who describes process consulting as “a set of activities on the part of the consultant that help the client to perceive, understand, and act upon the process events that occur in the client’s environment”.
The competencies that belong to the approach specific competencies are:
Expert competencies: Entrepreneurship, market oriented, boldness, independence, result orientation, quality orientation, leadership, consultation and risk awareness.
Process competencies: Restraint, organizing ability, making coalitions, energy, awareness of organizational context, coaching, personal appeal and decisiveness.
According to De Caluwé and Reitsma (2006) the consultant always makes a choice how to approach a certain client-consultant engagement. Nevertheless, they state that a lot of engagements can be approached with either type, or even a mix of the two. The approach specific competencies are additional to the ever-required basic competencies (De Caluwé and Reitsma, 2006, 2009). Not all consultants will possess the approach specific competencies as well as the basic competencies. They might even possess the expert competencies better than they do the process competencies and vice versa. But the client is asked to judge the competencies of the consultant and a client will most-probably recognize and/or perceive the
21 approach of the consultant better than his standard capabilities. Therefore, it can be argued that the approach-specific competencies contribute more to the client-consultant engagement than the other types of competencies do. This leads to the following hypotheses:
H18: If a consultant is perceived to be competent at the competency Entrepreneurship by its client, it will have a positive effect on the client-consultant engagement success.
H19: If a consultant is perceived to be competent at the competency Market Oriented by its client, it will have a positive effect on the client-consultant engagement success.
H20: If a consultant is perceived to be competent at the competency Independence by its client, it will have a positive effect on the client-consultant engagement success.
H21: If a consultant is perceived to be competent at the competency Quality orientation by its client, it will have a positive effect on the client-consultant engagement success.
H22: If a consultant is perceived to be competent at the competency Leadership by its client, it will have a positive effect on the client-consultant engagement success.
H23: If a consultant is perceived to be competent at the competency Consultation by its client, it will have a positive effect on the client-consultant engagement success.
H24: If a consultant is perceived to be competent at the competency Risk awareness by its client, it will have a positive effect on the client-consultant engagement success.
H25: If a consultant is perceived to be competent at the competency Restraint by its client, it will have a positive effect on the client-consultant engagement success.
H26: If a consultant is perceived to be competent at the competency Making coalitions by its client, it will have a positive effect on the client-consultant engagement success.
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H27: If a consultant is perceived to be competent at the competency Energy by its client, it will have a positive effect on the client-consultant engagement success.
H28: If a consultant is perceived to be competent at the competency Personal appeal by its client, it will have a positive effect on the client-consultant engagement success.
H29: If a consultant is perceived to be competent at the competency Decisiveness by its client, it will have a positive effect on the client-consultant engagement success.
Every competency presented above has its own definition. These definitions are adopted from the authors that have been used by De Caluwé and Reitsma (2006). The definitions for the approach-specific competencies can be found in appendix C.
2.2.3 Intervention specific competencies
The third, and last, set of competencies created by De Caluwé and Reitsma (2006) includes competencies regarding interventions in client-consultant engagements. These interventions are characterized by goals; every intervention is initiated with a specific goal and aim (De Caluwé and Reitsma, 2006). The definition that is used in this study to define interventions is derived from an earlier study of De Caluwé and Vermaak (1999): one or a series of planned change activities aimed at the increasing the functioning of the organization. Interventions are usually aimed at the individual, a group or the entire organization. This is confirmed by Kubr (2002) who states that a lot of intervention techniques have their roots in social sciences. These interventions are aimed at changing attitudes, values and individual and group behavior. Kubr (2002) refers to these interventions as ‘soft’ techniques, whereas ‘hard’ techniques can be seen as interventions aimed at restructuring business and organizations. These techniques can also be referred to as OD (Organization development) interventions (Kubr, 2002).
A lot of authors (Kubr, 2002; Cummings and Worley, 2005; Schein, 1999; Boonstra, 2004 and Keuning and Eppink, 2004) have operationalized interventions and when these interventions are compared it is clear that these interventions are overlapping. De Caluwé and Reitsma (2006) have created their own set of interventions based on the authors mentioned above. The four types of interventions can be found in figure 2. The results of their research
23 pointed out that several competencies are needed in order to successfully perform an intervention. These competencies differ from the basic competencies and the approach specific competencies. The intervention specific competencies are: Awareness of organizational context, planning, organizing ability, result orientated, boldness, attention to details, problem solving, and inspiring.
For these competencies it must be taken into account that the nature of the work being performed is important (Rothwell and Sullivan, 2005). Intervention specific competencies define who one needs to be, what one needs to know and what one must be capable of doing (Rothwell and Sullivan, 2005).
Rothwell and Sullivan (2005) studied intervention specific competencies and concluded that, in order to be successful, the consultant must be able to apply the ‘soft’ and ‘hard’ interventions. According to their reasoning, intervention specific competencies are associated with individual characteristics and lead to successful performance and results. This leads to the following hypotheses:
H30: If a consultant is perceived to be competent at the competency Awareness of organizational context by its client, it will have a positive effect on the client-consultant engagement success.
H31: If a consultant is perceived to be competent at the competency Planning by its client, it will have a positive effect on the client-consultant engagement success.
H32: If a consultant is perceived to be competent at the competency Organizing ability by its client, it will have a positive effect on the client-consultant engagement success.
H33: If a consultant is perceived to be competent at the competency Result oriented by its client, it will have a positive effect on the client-consultant engagement success.
H34: If a consultant is perceived to be competent at the competency Boldness by its client, it will have a positive effect on the client-consultant engagement success.
H35: If a consultant is perceived to be competent at the competency Attention to details by its client, it will have a positive effect on the client-consultant engagement success.
24
H36: If a consultant is perceived to be competent at the competency Problem solving by its client, it will have a positive effect on the client-consultant engagement success.
H37: If a consultant is perceived to be competent at the competency Coaching by its client, it will have a positive effect on the client-consultant engagement success.
H38: If a consultant is perceived to be competent at the competency Inspiring by its client, it will have a positive effect on the client-consultant engagement success.
Every competency presented above has its own definition. These definitions are adopted from the authors that have been used by De Caluwé and Reitsma (2006). The definitions for the intervention-specific competencies can be found in appendix D.
As mentioned earlier, the model of De Caluwé and Reitsma (2006) contains three different types or sets of competencies. These sets are based on extensive research and comprise the competencies a consultant is ought to possess. However, one minor notification should be taken into account. There are competencies in this model that are duplicates. Needless to say, these competencies will not be used in the analysis twice.
2.3 Control variables
The relationship that will be researched in this study is between the competencies of the consultant and the success of the client-consultant engagement. It has to be taken into account that other variables can influence this specific relationship and have an effect on client-consultant engagement success. Hence, a number of control variables will be included in this study. These control variables will be studied by asking the client. Even though there are control variables that measure personal characteristics of the consultant, the client is asked to judge these characteristics and answer the question accordingly.
Consultant personal characteristics
The personal characteristics of a consultant that will be taken into account are age, gender and work experience. The criteria for gender will be split up in man and woman. The criteria for work experience will be measured in years. The more experienced a consultant is, the higher the chance a client-consultant engagement will be successful. Also, the competencies of the consultant are also likely to be perceived better when a consultant is
25 experienced. As the consultant does not participate in this study, the client is asked to judge the work experience of the consultant he or she hired. The control variable age will be measured using the following criteria:
Table 1: Age criteria
Category Criteria Category Criteria Category Criteria
1 16-20 5 36-40 9 56-60
2 21-25 6 41-45 10 61-65
3 26-30 7 46-50 11 >65
4 31-35 8 51-55
Duration of the engagement
It could be argued that the duration of the project could influence the extent to which the client is able to perceive or judge the consultant. Kubr (2002) for instance, argues that the chance that the client gets used to the consultant gets bigger when the duration of the client-consultant engagement is longer. On the other hand, the duration of the engagement could also influence the extent to which the consultant is capable of displaying his competencies. Therefore, the duration of the engagement will be taken into account.
Earlier collaboration
Another control variable that will be taken into account is whether both parties (client and consultant) have worked together before. This is a factor which also might influence the perception of the client. If a consultant returns to a familiar client, entry and processes will be simplified (Kubr, 2002). It is logical to assume that a client is more likely to choose for the same consultant if the previous result was positive. Therefore a client is more likely to perceive the consultant as competent and the engagement is more likely to be successful.
2.4 Conceptual model
Based on this theoretical background, the research question and the hypotheses can be visualized in the following conceptual model:
26 + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + + Control variables Flexibility Analytical skills Conceptual thinking Learning orientation Creativity Balanced judgment Awareness of external environment Generating vision Listening Sensitivity Communication Presentation Persuasion Integrity Reliability Loyalty Creating a favorable atmosphere Entrepreneurship Market oriented Independence Leadership Consultation Risk awareness Restraint Making coalitions Energy Personal appeal Decisiveness Planning Awareness of organizational context Coaching Inspiring Consultant characteristics - Age - Gender - Work experience Duration of the engagement Result oriented Problem solving Attention Boldness Organizing ability Earlier collaboration Client-consultant engagement (as perceived by the client)
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3. Methodological framework
The methodological framework will describe the approach used in order to provide an answer to the posed research question. Because the foundation of this study is based on the works of De Caluwé & Reitsma, (2006) Kubr, (2002) and Van Aken (1996) this study is deductive. In order to research the variables and the relations between them, a quantitative approach is used.
3.1 Research design
This research has a cross-sectional research design because it is conducted at one single moment in time. Based on a theoretical framework derived from earlier literature, the variables are studied and the relation between these variables is researched. This type of design makes it possible to study the selected variables in several environments. The variables are studied in organizations which have dealt with consultancy jobs in the past five years. This means that the client-consultant engagement has ended and is no longer active. In this research the unit of analysis is the consultant assignment and the unit of observation is the client who worked with the consultant. Data is gathered from a large variety of consultancy assignments. This study only gathers data from the client. In this study the client is defined as the person who was closely involved in the client-consultant engagement and who can form a clear opinion about the engagement and the result.
3.2 Data collection
The data collection consists out of one method: quantitative data collection. The following section will describe how exactly the data will be collected and what dimensions and indicators will be used.
The questionnaire is constructed using the theoretical framework and will measure the relation between the variables. Items consist out of existing scales and scales that were sefl-developed. The questionnaire consists of a 5-point Likert scale for the items of the dependent variable. The reason why a 5-point Likert scale is used is because it is more reliable than a 7-point Likert scale (Likert, 1932). For the items of the independent variable also a 5-7-point Likert scale is used. The questionnaire was handed out to clients who participated in a client-consultant engagement.
28 The independent variable is defined using the works of De Caluwé and Reitsma (2006). Due to the use of this definition, also the composed set of competencies is used. This set of competencies consists of three types of competencies which consist of several core competencies. This set is converted into a questionnaire in which respondents can judge their consultant on the different competencies.
As this research uses an altered definition of Van Aken (1996) to define the dependent variable, it also adopts the scale Van Aken (1996) constructed. This study will use this scale to measure the client-consultant engagement success. Van Aken performed a factor analysis on this scale and therefore it is unnecessary to repeat this step. To ensure that this scale is reliable, the Cronbach’s Alpha was checked. The α of 0.8546 confirms the reliability of the scale, as it can be judged as ‘good’ with the aim of the test being research at group level. A benefit of the scales of Van Aken (1996) is the number of items. Due to the fact that it only contains six items it is not very time consuming.
The final version of the survey has been checked by three independent people: the thesis circle supervisor, a statistics professor and a consultant. The survey has been adjusted according to their feedback. Subsequently, the survey was sent to the clients. A digital version of the survey was constructed in order to simplify the process for the client and to increase the likeliness to respond. Respondents had the possibility to fill out the survey anonymous, so that any change on social desirable answers was eliminated. Also, the clients were asked to fill out the questionnaire about only one project, preferably their last project. In addition, for every client-consultant engagement a maximum of two respondents was required. The purpose of this was to obtain a high number of client-consultant engagements.
The variable Competencies of the consultant can be divided into three operationalizations: Basic competencies, intervention specific competencies and approach specific competencies. In order to clarify how these three sets further consist out of several other competencies, a scheme is presented in figure 2.
An indicator of the basic competencies is Conceptual thinking. This indicator can be described as: Provide deeper or broader insight in situations by making connections with other types of information. The question that will be posed in the questionnaire to measure this indicator is: How would you rate the consultant on the following competency: Conceptual thinking? A 5-point Likert scale – with the following answer categories: Not competent at all, not competent, neutral, competent, very competent – will be used in order to measure the indicator.
29 3.3 Data analysis
The data that is collected by the use of questionnaires is analyzed with the statistical program SPSS 17.0. This is done in order to gain insight in the relationship between the independent and dependent variables and the effect of the moderating variable on that specific relationship.
The data is checked for missing values, errors and outliers. All scales that were used in the questionnaire were existing scales. The dependent variable was adopted from Van Aken (1996) and the independent variables were adopted from De Caluwe and Reitsma (2006). The scales that were adopted from De Caluwé and Reitsma (2006) are analyzed using multiple regression analysis.
A hierarchical multiple regression analysis is used to test the relationship between the independent variables and the dependent variable. All the independent variables were entered into the equation simultaneously. After that, each independent variable was evaluated in terms of its predictive power, over and above that offered by all the other independent variables. The control variables were included to check whether there are different influences from these factors. All relations and regressions were checked for significance.
3.4 Sample strategy
This research has collected data from organizations that have recently worked with external consultants. In this study ‘recently’ is seen as the past five years. These client-consultant engagements can be either successful or unsuccessful. Respondents were found in three ways: through my personal network, through the networks of others and by randomly selecting organizations and approaching them.
Respondents who were found through my own network were people who work in a large variety of organizations which used the services of a consultant in the past five years. Among these organizations were big multinationals in the telecom industry and oil industry. Also several smaller organizations were asked to cooperate. Besides that a small number of consultants in my network was approached with the question to participate in the quest for respondents. This resulted in the references of these consultants and access to their networks, was consisted out of respondents from, i.e., the twelve provinces of The Netherlands.
Respondents who were found through the networks of other persons were also employees of several different organizations. This also contributed to a lower selection bias,
30 as this included organizations from different sectors. Next to that, it is fairly unclear to what extent the consultancy projects or engagements are comparable.
Both strategies included the search for respondents via LinkedIn. My own network was asked to participate and a number of these persons forwarded my request through their own network. In addition I placed the request in ten different LinkedIn groups with a total number of 25.000 members. Also the supervisor of this circle forwarded the request to persons in her network.
Another strategy that was used was to select organizations and approach them. Organizations were randomly selected in order to reduce selection bias. These organizations were approached by email and telephone.
The total N that was achieved is 67. Due to outliers and missing values, the total usable N is 59. Stevens (1996, p. 72) states that “for social science research, about 15 subjects per predictor are needed for a reliable equation”. As this study has 43 predictors (independent variables and control variables), a minimum amount of 645 respondents (43 x 15 = 645) is needed for a reliable equation. Unfortunately, due to the limited timeframe of this study, this number of respondents was not feasible and this can be seen as a limitation of the study.
3.5 Research quality indicators
In this section of the study the research quality indicators will be clarified. These research quality indicators are: Construct validity, internal validity and external validity.
3.5.1 Construct validity
There is little empirical data on the relation between a consultant’s competencies and the success of the client-consultant engagement. The studies that do include the competencies of a consultant do not test it empirically (Jang and Lee, 1998). The theoretical framework of this study is based on literature that is accepted in the consultancy field (BoKS, 2010). The independent variable is based on research conducted by De Caluwé and Reitsma (2006). Although a list of competencies can be endless, the set of competencies created by De Caluwé and Reitsma (2006) is extensive enough for application on consultancy jobs (Hoekstra and Van Sluijs, 2007). Together with the used definition for competencies, the construct validity is tolerably covered for the independent variable.
The dependent variable uses an altered definition of Van Aken (1996) for measuring the client-consultant engagement success. This minor adjustment was necessary to make the
31 definition suitable for this research. The scales for measuring satisfaction have been untouched, though, and have been proved reliable. In addition a lot of scholars use satisfaction as a measure for success, so it is safe to state that satisfaction is widely accepted. The construct validity for the dependent variable is therefore considered sufficient.
3.5.2 Internal validity
Bryman (2008) states that internal validity in a cross sectional research design is generally low. As stated before, there is little literature or empirical evidence that shows that there is a causal relationship between the independent variable and the dependent variable. Researching this is already hard enough and the limited time frame does not make achieving high internal validity any much easier. In addition to that, the cross-sectional research design only allows for measurements at one moment in time. This makes it harder to prove causality. In order to keep the internal validity as high as possible, control variables have been used to be able to test for the specific effect of a consultant’s competencies only. Based on the available literature it is safe to state there is a causal relationship between a consultant’s competencies and the success of the client-consultant engagement (McLachlin, 2000; Van Aken, 1996).
3.5.3 External validity
As the sample strategy already revealed, the aim of this study is to generalize its findings to the population. The population in this study is the clients of consultant’s. As the number of respondents in this research is 59 the results can be generalized to the population.
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4
Results
4.1 Preliminary analyses
This study obtained 67 respondents of which 8 were found to have not completed the questionnaire, or only filled out a few questions. These respondents, or missing values, were deleted from the data set, for they had no usable contribution to this study.
The data set was also checked for outliers; respondents who have filled out the questionnaire with unusual answers. No unusual or remarkable answers have been discovered and therefore no outliers were removed.
The total number of respondents that have participated in this study is 67. However, as already mentioned above, only 59 respondents proved suitable to take into account when performing the analyses. The total sample is therefore 59.
The questionnaire contained questions that asked for the client’s opinion about the consultant. Also it contained questions about characteristics of the consultant. It did not contain any questions about the client.
The sample showed that 66,1% of the consultants was male and 33,9% was female. When looking at the age of the hired consultants, it is immediately clear that 57,6% of the consultants was between 36 and 50 years old. 18,7% was younger than 36 years and 23,7% was older than 50 years. The respondents indicated that 35,6% of their consultants had between 21 and 30 years of experience in consulting. Only 3,4% of the consultants had more experience (between 31 and 40 years).
The statistics show that 27,1% of the clients indicated that they have worked with their consultant before. The majority, 72,9%, indicated otherwise, meaning that they have created new contacts and hired a consultant which was unknown to them.
The duration of the client-consultant engagement was distributed irregular, but, according to the clients, most engagements had a duration of 5 to 7 months (42,3%).