Shaping up for the recession

A recession sharpens the instincts of any company. It focuses on its customers, tightens its belt and hones its skills. And the same is true of consultancies. After years of double digit growth, the industry is feeling the impact of the economic slowdown. But, while many are cutting staff, professional training is as important as ever.

Peter Graham is a management development consultant at Cranfield Management School. “The majority of consultancies have a very serious focus on developing people – they are acutely aware that their people are how they make money.

Firms like PricewaterhouseCoopers and Accenture have well-worked out products but they are well aware that what makes the difference is the client having confidence in the individual and that the client is more conscious of behavioural aspects than technical expertise,” he says. “So they put a fair amount of effort into helping staff get better at interpersonal skills and being able to handle the client more effectively.”

In a recession, he says, consultancies re-emphasise what they believe are the core advantages for the clients they are already working for.

“They ramp up the quality so that there is no delay on phase three or whatever, making absolutely sure of current ongoing work. They also put lots of emphasis on work just about to be sold to make sure it is sold, and they clamp down on things not seen as essential.”

There is a state of mind that recession is a temporary thing and, in general, he adds, firms tend to resist free work because it has all kinds of damaging connotations. “In any kind of downturn,” says Graham, “not everyone is in recession. For example, basic food retailers are slightly more recession-proof than other sectors. Most of the big firms compete in a number of industries. Their projects are big enough and their people multi-skilled and flexible enough to enable them to shift effort. If they need more effort in something that is easier to sell they will pull people to do that.” To a certain extent, he says, this flexibility is a function of the way firms are constructed. “Every few months a project is sold and a team set up to undertake it. Managing partners monitor each quarter, gauging whether there is a drop across the board or too much exposure to a suffering sector.”

Just in time
He says consultancies are very keen on Just in Time training. “Training is very relevant and linked to work. They win a piece of work, quickly train people to do it and start doing it a month later. Professional development is different. Most firms are constantly putting people through client development and interrelationship development work.”

In a recession, particularly, most of the big firms put a lot of effort into focusing on client relationships, he adds.

Calvert Markham, managing director of Consultancy Skills Training, agrees.

“The greatest interest in training this year is in customer engagement skills. Two years ago technical skills, such as Java, were all the rage.

Now consultancies are saying ‘we need to be much more effective at working with clients’. They want people who are able to conduct a charm offensive.

Given a choice clients will work with people they like rather than those who are just technically competent.”

A second area within this, he says, is that consultants have to be much more commercially aware. “They have to think about the commercial context in which they are working. Part of that is not only looking at the current project but also where there is scope to work elsewhere with the client.

That has always been on consultants’ agendas but people are now saying ‘where are the opportunities to work more effectively with this client?’ That is the theme for 2001/2002.”

Markham’s firm does work for mainstream consultancies, internal consultants and emergent consultancies, selling their knowhow in order to create a revenue stream and/or enhance competitive advantage of a mainstream product.

Dennis Sobey, managing director of DBS Associates, which tailors interpersonal and behavioural skills training to company needs as well as running public courses, says recession is an ideal time for sharpening skills. He cites a client company in the design and rebranding area that has made 1,000 people redundant worldwide. “I am going to train the heads of its various operations. They recognise that they need to be sharper and that this is the ideal time to do that. Such skills are not such a priority when a company is busy because business is coming in anyway.”

Markham believes many consultancies are still very busy, however. “You don’t find a lot of consultants on the bench. If they are, they tend to be got rid of,” he says. “What is interesting is that a lot of firms are still investing as much as they are in training. It is a mixed bag – some have cut all training but others are still investing a lot. Indeed, some are investing even more at the moment. I think that’s to gain competitive advantage.”

While client skills have a high priority, however, Markham and Sobey agree that big consultancies tend to be less good at managing their own staff. Says Markham: “Good consultants don’t necessarily make good managers and vice versa. Management is an undervalued skill and management training is often the poor relation. Real value is attached to selling and implementing projects and managing the practice tends to come third.”

So how important are management skills in recession? Val Hammond, chief executive of Roffey Park, which specialises in people dynamics, says: “In any time of anxiety or pressure it is essential to do things that keep good morale, keep leadership going, give people energy and maintain a positive attitude. All the human aspects actually become more important.

Our type of work is such that in good times people like to spend money with us; in bad times they need to spend money with us.”

DBS’ Sobey adds: “Consultancies need to focus on managing their younger consultants. They are normally good at initial and ongoing training but when people get promoted and are interviewing, for example, they often have no selection or interviewing skills. Key areas of management – training and coaching staff, motivating individuals and keeping up staff morale, and interviewing – are generally weak.” He adds: “Some younger consultants have never experienced a downturn before and this is where the management team has to be strong. And some firms have laid off older and more experienced people who could help them in that.”

So what of the consultancies themselves? Big firms like Deloitte Consulting tend to do much of their staff development in-house. Says Andrea Gawn, HR director for the UK: “So far Deloitte has weathered the recession quite well but certain segments are not as busy as we would like. Most of that spare effort is focused on sales processes rather than training. The real emphasis is to maximise efforts on sales, to keep winning work.”

In general, she says, the firm would not change too much in terms of training in a recession. But, due to costs and people’s reluctance to travel overseas since the events of 11 September, courses normally run on a global or European basis are generally running in smaller groups locally.

All new Deloitte joiners, particularly graduates, of which the firm recruited 150 last year and plans to take 80-100 this year, are given in-house basic consultancy training, including presentation and interview skills. “When a person gets to manager grade, he or she gets counselling skills training,” says Gawn. “As a company we are strong on career and people development, so everyone gets appraisals, career counsellors and so on.”

In its new manager and senior manager courses the firm has started to focus much more practically on financial management of the business, says Gawn. “We are making sure that people on those higher grades understand the financial levers and what they can do to make the company more profitable.

Some of that is applied at the client engagement and some of it is related to how they manage within Deloitte.”

As part of the counselling training, she adds, managers get interviewing skills. “The courses involve quite a lot of role-playing to help people feed back development needs to individuals, for example, or explain why someone has a poor performance rating.”

The motivational side can be quite difficult. “We try to build that into ongoing daily work. We have a large proportion of young consultants – around 300 graduated in the last two or three years – comprising a big group who haven’t experienced recession. Now, when people first join the firm our MD talks to them about it. I think they are worried and the danger is that individuals will focus on themselves rather than the company. That is what we are trying to avoid. We don’t want them worrying about pay and bonuses – the way to make everyone more successful is to make the company more successful.”

Deloitte runs events called ‘grade days’ to try to build a community within a grade. “At each one partners and directors explain the important contribution that the particular grade can make to the success of the practice. The events were initiated before the downturn as a retention tool designed to create a sense of belonging and community so that people would stay with the firm,” says Gawn. “It has been useful in retention but has also given people confidence, enabling common messages to be put across on how the firm is doing, and making sure that people don’t panic because one project is cancelled.”

The firm has also been very fortunate, she adds, because so far it hasn’t had to make anyone redundant. “That can hit motivation in a big way.”

Smaller firms, which often recruit from a different pool, share a commitment to professional training. Most recruits joining Compass, a specialist in IT performance analysis and fact-based consulting, are IT or business managers with operational experience but little or no consultancy experience, says head of delivery services, Andy Chestnutt. “They have people management skills but they need training on managing customers.”

In the longer term he favours a mix of pragmatic, hands-on teaching and sharing of experiences. External trainers are used for presentation skills, business development or general consultancy. “CPD is a very important part of our culture and people joining are often surprised by how much training there is. But young, upwardly mobile people in small organisations can feel hampered by a lack of an obvious career path as in a big firm,” he says. “We have worked hard to show that there is a career path that they can progress along here.”