Based on their examination of how an organisation responds when its identity is substantially misaligned with the experience and perceptions of external stakeholders that form the basis of reputational judgments, the authors outline in this article the strategic ways for successfully managing reputation and identity conflict through a set of remedial actions that shift the focus away from the organisational level to individual-level identities with clients.
It is generally argued that it is difficult for clients to judge the quality of management consultancy work ex ante and ex post because of the intangible nature of professional services and because of information asymmetries where consultants have more information about their expertise than clients. At the same time, many clients are now very experienced buyers of management consultancy and many clients have previously worked in the sector. Therefore, they are likely to be informed judges of consultants’ reputations. And identity is said to drive the reputation, because our actions reflect “who we are”. So, as consulting firms evolve and adapt to different market challenges, this raises the possibility of a conflict between the identity claims of management consultancies (who they are and what they do – their expertise claims) and their reputation (what relevant others actually think their expertise is).
We recognise that all organisations face some disconnect between their identity claims and reputation but for management consultancies this is very important because of the centrality of reputation to their competitive position in client and labour markets. Disconnects undermine consulting firms’ capacity to engage effectively with clients and retain valuable professional talent. We show that the distinct loosely coupled structure typical of management consultancies and the knowledge-based nature of the service require distinct reputation-building strategies, which we explain in more detail in the next section.
This project involved primary research with 116 partners, consultants, clients, non-clients, competitors, alumni and potential employees of a highly prominent global management consultancy across eight countries. We also conducted focus groups, three partner workshops and non-participant observations. All of this provided us with a very rich and unique insight and account into management consultancy.[ms-protect-content id=”9932″]
Reputation is an important means to reduce client uncertainty and vulnerability about the quality of work they are purchasing. At the same time, how management consultancies perceive themselves in terms of their expertise is often not aligned with how clients perceive their expertise. Our study provides practical insights into how reputation and identity conflict can be successfully managed in the industry. We show how organisations can effectively buffer their identity when threatened by reputational judgments through a set of remedial actions that shift the focus away from the organisational level to individual-level identities with clients. We found that there were three different remedial actions that were frequently adopted: first, shifting the focus of attention to the consultant and consulting team; second, building trust from thought leadership; and third, emphasising additional value (see diagram below). We now explore these remedial actions in a little more depth.
First, management consultancies shift the focus of reputation to the consultant rather than the firm. This strategy involves partners reassuring clients of their own credentials, through for example their past experience and reputation for particular types of expertise and experience, during the pitch by providing testimonials, outlining their track record with other high status clients and by inviting previous clients to present with the pitch team.
Second, consultants build trust with clients through acting as a disinterested broker of useful knowledge about sector or market developments. This strategy does not involve explicit selling: the partner offers his or her expert information and insight to demonstrate competence or thought leadership. Partners can implement this, for instance, by organising meetings with clients and non-clients in their sector where they discuss the latest trends and sector-models of innovation or competition. Other options are to send communications to clients about recent or upcoming events and news with their own perspective on the general implications for the dynamics of the sector such as sales, pricing or areas of innovation.
Third, firms emphasise additional value, which relates to its claims to be pragmatic and entrepreneurial in their engagement work, as a form of differentiation from other management consultancies. Emphasis on value can be displayed in two ways. One is to load consulting teams more heavily with senior consultants including partners so that there is greater experience in the consulting project than might normally be offered by other competing firms. For clients, loading on experience is meant to be insurance that they will obtain high quality, practical results. Second is to put additional effort on client projects. The intention is to provide extra value via the delivery of non-contracted services to signal over-delivery. The aim is to demonstrate that the firm is deeply committed to the client’s goals although this remedial action can be problematic. This can have positive reputational implications and for consultants it demonstrates a deep commitment to the client’s goals which reinforces a sense of identification with them. However, this strategy risks implying the firm would do anything, and is therefore not distinctive.
There are several take-home messages from the above remedial steps for how other management consultancies can demonstrate value for clients. First, clients value corporate, team and individual reputation and therefore signalling all of these forms of reputation in a coherent and complementary way is important. Second, providing evidence of expertise through supplementary information, either directly for the client or through broader thought leadership outlets, is valuable tangible evidence for clients to evaluate the quality of management consultancy work. Third, emphasising value through the experience of a project team and through going the extra mile for the client is to some extent valued, but in extreme cases can be perceived as management consultancies desperate to please clients to win work.
This article is the summarised version of the paper “Reputation and identity conflict in management consulting” that was first published in SAGE Journals, May 5, 2016.
About the Authors
Will Harvey is Professor of Management and Associate Dean of Research at the University of Exeter Business School. Will researches on reputation and leadership within organisations. His work has appeared in world leading journals such as Harvard Business Review, Journal of Management Studies and Human Relations.
Tim Morris is Professor of Management Studies in the University of Oxford, and co-director of several of the Said Business School’s key executive education programmes. He is a founding member of the Novak Druce Centre for Professional Service Firms and a project director in Oxford University’s Centre for Corporate Reputation
Dr. Milena Mueller Santos is a research officer at Kellogg College, University of Oxford. Her research interests include corporate reputation and ethical supply chains.