Management consultants are always looking for ugly problems and broken things to fix. After all, we only get paid when we uncover difficult problems and fix them.
Clients do not always know what is wrong
What really surprises me is that many clients have trouble explaining what is exactly wrong and what they want done. They often talk about symptoms – flat revenues, dropping margins, or increased receivables – not the root causes. As a result, much of the burden of scoping the project often falls on the consultant’s shoulders.
There are a number of diagnostic tools that consulting firms have created over the years to help identify problem areas: SWOT, benchmarks, McKinsey 7S, pricing waterfalls, financial analysis, BCG growth matrix, surveys, workshops and even simple checklists. Borrowing the analogy of consultants as business doctors, these tools are like the x-ray, thermometer, blood pressure gauge or blood tests used in a physical exam. It is not treatment, just the diagnostics to find the sickness.
A common tool is the maturity model which gauges the client’s maturity in a number of areas and points out the areas of improvement. It’s actually a simple thing that often looks like a report card or an excel table. It looks simple, but there is good stuff there.
In the example below, the different functions / capabilities are shown on the left and the different maturity levels are on top. So in the first row, the supply chain planning group is performing at a level 3, which for this client, is about where they want to be.
Here are some common questions people have about maturity models:
#1: Shouldn’t the target be level 5 (highest capability) for everything?
- Probably not. Getting to level 5 (highest maturity) is usually prohibitively expensive, or potentially impossible. How difficult will it be to be as efficient as Southwest, as customer-driven as Nordstrom, and innovative as Apple? Probably smarter to choose the areas you want to really excel, and pick your battles
#2: What is the criteria for the maturity levels?
- The criteria is set ahead of time. The consultant has a “description” for each of the boxes in the grid. So, there is a definition for planning L1, L2, L3, L4, L5. It can be laborious putting it together, but without clear definitions, the bucketing of performance will not have meaning. Click on the graphic below to see the detail or see the entire AICPA / CICA Privacy Maturity Model (March 2011) here.
#3: Isn’t this all just subjective opinion?
- Yes . . . There will be some subjective elements and room for interpretation. In the AICPA example above, what does “adequate and qualified” privacy resources mean. Is that a chief risk officer with a PhD or 2 college interns with online training?
- . . . and no. a) Many of the maturity models are industry-specific (e.g., healthcare vs, automotive) so it can be more detailed and relevant. b) Good maturity models are based off of benchmark or survey data, so there is quantitative data to back up the definitions. c) Finally, consultants survey a large enough group of people (e.g., executives, senior managers, line workers etc) so that the results are representative. Don’t want to simply survey the CEO and keep that as gospel.
#4: Who decides the current level of performance?
- The consultant can decide . . . The team can assess the client’s maturity (based on interviews, data analysis, comparison to competitors) and present it to the client. If you have fine-tuned with the client, your assessment will be 80% right.
- . . . or the client can decide. Youcan poll the stakeholders ahead of time with an online survey or give them scorecards and ask them to self-evaluate during the middle of a workshop. Both work well. The hardest part is describing the maturity levels in a coherent and succinct way. If not, it can get really boring, really quickly.
#5: Isn’t this a big marketing tool?
- Of course. This stuff works. Take a look at Accenture’s Green Maturity Assessment online survey tool here. Very slick and easy to use. It has the added benefit of collecting “baseline” data (company size, geography, performance) which creates more data points to compare future survey respondents too.
#6: Are there other formats of maturity models?
- Yes. Deloitte has a Business Maturity Model that shows a zip-zag line here
- Yes. AT Kearney has a maturity model that looks like a stair-step. Click on the graphic below for more detail or see the entire report here.
#7: What happens after the maturity model?
- Prioritize the opportunities. Maturity models are usually the first step in a larger opportunity identification process. TheBooz Allen Supply Chain Maturity Model white paper linked here shows this process clearly.
#8: What else are maturity models good for?
- Structuring the problem. One of the most insightful parts of the maturity model is not the detailed description and words, but it is the high-level structure or the “buckets” of capabilities that are being evaluated. Usually, the consulting firms have spent a lot of time and heart-ache to pick the categories that are most relevant and also MECE (mutually exclusive, collectively exhaustive). It helps to frame the discussion and ask the right questions, which is half of a consultant’s job.
- Why consultants love best practices
- How consultants interview clients
- DMAIC: A great consulting tool for process improvement
- 4 Reasons Why Management Consultants Love Data
Photo credit: Flickr, Ernstl, AICPA website, Accenture website, AT Kearney website, and Booz Allen website