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The Difference Between Consulting & Advisory



A consultant typically solves specific, granular problems for clients that result in substantial impact. On the other hand, an advisor often has a longer-term involvement with the client, and depending on the expertise of the advisor, may be involved in a broader range of issues. When thinking about advisory vs. consulting and discussing the differences, lets start with the profession of consulting.


Consulting

Role and Nature of Work

A consultant is not involved in the long-term operations of the client and is typically staffed in a team to solve a specifically defined problem for 3-6 months. The engagement can be longer if implementation of the defined strategy is a part of the scope.

Examples of the type of short-term work consultants do:

  • Defining a path to greater profitability (EBITDA)

  • Creating a market entry strategy to introduce an existing product in a new geography

  • Determining the root cause for a sudden drop in revenue and developing a strategy to reverse it

  • Identifying process optimizations to cut costs

As you can see, the objectives are well defined, the impact is quantifiable, and engagements are undertaken on a project-to-project basis. Top consulting firms generally vie to maintain long-term relationships with clients in the form of multiple shorter-term projects. This is a main reason that consulting firms have been on an acquisition spree lately, acquiring specialist boutique firms. If the strategy team at McKinsey identifies sustainability as a core strategic objective, the firm can sell a downstream project with subsidiary Material Economics, a sustainability focused firm that McKinsey just acquired.


Strategy firms are usually comprised of generalists – individuals who focus on problem-solving agnostic of industry or function. However, industry-specific firms are gaining market share. KSA is one example – they perform projects across the value chain, but in the retail space only.


Advisory

Role and Nature of Work

An advisor’s nature of involvement is usually long-term and specific to his/her industry expertise. Some advisory services used by clients are:

  • Tax advisor: optimizing the client’s tax liabilities

  • IT advisor: helping the client build and optimize their IT backbone

  • Communications advisor: advising the client on how to deal with day-to-day press events, public relations, or even internal memos

  • CEO advisor: this position will provide executive-level support to the President / CEO and organizational assistance to the business; strategic planning and analysis, policy advice and political counsel; establish, maintain and foster effective relationships with various stakeholders; play a lead role in outreach and advocacy efforts, and participate in multi-disciplinary teams assigned to special projects.

The nature of advisory work is not as project based. The overall objective for the advisor is to help the client achieve its long-term strategic goals through influencing day-to-day operations. Thus, an advisor develops deep relationships with clients.


Advisors are typically professionals who have years of experience in a particular industry. Their selling point isn’t a problem-solving approach, it’s subject matter expertise.


An executive advisor provides advisory services to a management team, a company's founder, or other clients. As an executive advisor, your duties are to study the organizational goals and strategies of a business and determine what changes can be made to better serve the company and its executive team.


CEO Advisors are deeply trusted partners to CEOs who face difficult challenges and decisions on a daily and hourly basis. One client described his relationship with his Advisor as feeling like he has a partner.

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