Commando Consulting: October 2007 - Five Signs of a Smart Client Acquisition Strategy

by Tom "Bald Dog" Varjan, Organisational Provocateur

Summary: As the world of consulting is becoming more and more competitive, consulting firms are basically forced to step beyond haphazard and reactive client acquisition techniques, like word of mouth or the local country club. They have to step up to proactively fill their sales funnels with both short- and long-term opportunities. And this change hits medium-sized consultancies the worst. Large firms and most solo consultants have always had proactive client acquisition programmes to create leverage, and most tiny firms (between 2 and 10 people) are likely to carry on with their current "fly the seats of their pants" approach. But it's middle-sized firms with an ear count of 100 plus that have to make drastic changes to their operations. They don't have to, but without systematised client acquisition programmes they will be forced into the stressful world of competitive bidding. And we know that bids, issued by the purchasing and procurement departments, focus on price not on value. So, let's see how to avoid these nasty bidding wars. Audio Version (MP3)

Do you know that a cockroach can survive for nine days without a head, before finally dying of starvation? The reason why I mention this is because, by a staggering coincidence, this is roughly how long a consulting firm can survive without a good client acquisition strategy before sinking into the dreaded feast and famine disease. A good client acquisition system is the firm's engine room.

And this usually happens because of, what Jim Rohn calls, the law of Diminishing Intent. It means that firms do their fancy off site strategy meetings, and then the strategy binder goes onto the bottom shelf of the filing cabinet. After the fancy meeting, people go back to their real lives and real busy-ness, and implementation is as good as dead and forgotten.

Firms have great intentions when it comes to the planning of the strategy, but when it's time for implementation, well... the picture is a tad overshadowed by laziness and chronic busy-ness and general paralysis.

Here we discuss five signs of a smart client acquisition strategy. Don't let them get to your tits by trying to do all of them right away. You probably don't even need all of them.

Select an easy one because if you do that, an early victory will give you satisfaction an inspiration to carry on. And then the momentum will take you to the next level. Well, you still have to work on it, but a little momentum always helps. Just think about how frustrating it is to ride a bicycle in oncoming wind, and how inspiring it is to ride in following wind. This is the same.

Now let's see the five signs of a smart client acquisition system...

1. A Smart Strategy Is Client-Focused

The more consulting firms give in to hiring separate salespeople to sell their services, the more they turn themselves into commodities. Salespeople who were selling pots and pans yesterday, and today they're selling complex consulting services. Something's wrong with this picture.

It seems that in many consulting firms, especially technology consulting, partners and consultants are not interested in building relationships with their clients, so they abdicate this role to the least trusted, least respected, least reliable, most fickle, most troublesome segment of any business venture: A commissioned sales force.

Tom Stevenson and Sam Barcus wrote in their book The Relationship Advantage: Become a Trusted Advisor and Create Clients for Life...

"Few companies make building relationships with customers a top priority for the whole organization. Rather, most delegate it to the area in their organization that experiences the highest level of employee turnover - their sales force."

But this wouldn't be a problem per se. The problem is how these salespeople are integrated into the firm, how they're compensated and how up to speed they are with the firm's mission, vision and overall strategy. No, not merely the services they sell. Well, more often than not, they are not up to speed on them because their firms don't allow them to be.

They often get hired on a 100% commission basis, so they have to produce almost instant results if they want to live and feed their families. And this is the problem. The typical B2B sales cycle is somewhere between nine months and three years. What that means is that these salespeople are expected to spend all that time pursuing new business totally and utterly on their dimes. What also happens is that when firms don't have a "skin" in client acquisition, then it becomes unimportant.

It happened to me many years ago that I generated sales leads from a magazine and one company was ready to buy. Sadly my boss was so busy that he totally forgot to write and send out a proposal to a qualified buyer. So because of my boss' incompetence (what else?) I lost my commission, while he got paid as if nothing had happened. The fact that he negligently lost a nice six-figure project opportunity wasn't mentioned. Not even at his annual review where he scored a perfect ten for his outstanding work and exemplary leadership.

Salespeople are the first human contacts of the firm, so they are setting the firm's first impression and the perceived value of its solution. It's also known that commissioned salespeople's annual turnover rate is 43%. So, when prospects are facing the possibility of meeting sales reps or account executives, they know a few things right away...

• "This person is most probably on full commission, so he tries to take money from me right away."


• "This person is a salesperson not a consultant, so he won't understand my unique problems."


• "This person is most likely to give me a canned dog and pony show presentation, which I could get from the firm's website anyway."


• "My plate is full with mission-critical work and I have neither time nor inclination to add anything new to it."


• "Considering the 43% annual attrition rate of sales folks, this sales guy probably doesn't know his own firm well enough to represent it to me."


• "I really don't want to waste my time on a salesperson and then passed on to someone who can actually help me."

Are prospects right? Well, at least partially.

Consulting firms can brag all day long that their mandates are to help their clients, but this mandate goes down the toilet when the firm is represented by salespeople with one mandate coming from the firms' partners: "Go and get 'em!", "Make your numbers!" or "Exceed your quota!"

I know this sounds a tad harsh, but think about how deal with salespeople who cold-call on you.

What amazes me is that the same people who expect their salespeople to do cold prospecting grunt work, dialling for dollars, pounding pavements, wrestling with gatekeepers, dodging no solicitors signs, sneaking through toilet windows to see decisions-makers, ruthlessly screen their own incoming calls, set up barbed wire fences and armed security in their premises to avoid meeting salespeople.

Selling consulting services is the total opposite of selling "things," which are more transaction based, while consulting is more relationship-based. And it's not just the price tag. Buying a $40,000 SUV is still transaction-based. But hiring a consultant to review and critique a business plan for a start-up for a $10,000 fee is much more than a transaction. It requires trust on both sides.

Client's side to make sure the client discloses all the information the consultant needs to make a valuable diagnosis and a prognosis of the plan.

Consultant's side to make sure that the consultant is not merely knowledgeable on the topic but is also unbiased and is not offered financial or other incentives to make shortcuts. This is vital if we consider that in healthcare millions of doctors are...

...Losing Their Objectivity Through Incentives

The problem is that many of these salespeople are on partial or full commission, so their objectivity and long-term vision are gone, and their focus is on selling as much and as quickly as humanly possible.

"I know all you have is a blocked toilet, but what I propose is this: We'll come in, bulldoze your home, plough up your garden, kill your livestock, burn down the neighbouring forest, drain your favourite fishing lake, and then we'll build you a dream home with a new forest and a new lake. It will take 10 years and about $20 million of your money. What do you think?"

Of course, salespeople sell their most expensive solutions since they make them the most amount of money. The fact that they undermine their firms' reputation in the process is irrelevant because by the time the shit hits the fan and clients start smelling it, these salespeople, due to the 43% annual turnover, have left the firm and they are beyond ditch and bush, making them impossible to track them down and question them about the project.

Of course, the firm enjoys the quick buck, but, as Stephen Covey says in the 8th Habit...

"When you choose and action, you also choose the consequences of that action."

"The one-night stand lasts for one night only, but the resulting syphilis lasts for a lifetime."

Flooding a consulting firm with commissioned salespeople is a short-sighted strategy of going for many one-night stands, and enjoying the resulting instant gratification of the quick buck. It may be sweet in the short-run, but it also brings you the proverbial syphilis of the dreaded feast and famine and the market position of a peddler.

Instant gratification plagues many industries. Let's just take a quick look at healthcare...

We know this is a huge problem in healthcare, where large drug companies have been building lucrative relationships with doctors based on short-sighted, often unethical kickbacks. According to a recent study, published in The New England Journal of Medicine^[1]...

• 94% of doctors have some type of relationship with the drug industry


• 80% of doctors commonly accept free food and drug samples


• 33% of doctors were reimbursed by the drug industry for going to professional meetings or continuing education classes


• 28% of doctors have been paid for consulting, giving lectures, or signing their patients up for clinical trials

Contacts between doctors and sales reps have jumped from an average of 4.4 visits per month in 2000, to an average of:

• 16 times per month with cardiologists


• 9-10 times per month with internists


• 8 times per month with paediatricians


• 4 times per month with surgeons

The only group appearing to be meeting drug company representatives less often than before is anaesthesiologists, who now see reps twice a month, which is interesting because anaesthesiologists are the proverbial implementers. They are there to "implement the project," but clients don't go to them to discuss their problems.

And just as this issue plays out in medicine, it plays out in consulting too...

The U.S. Department of Justice^[2] is now suing Accenture for accepting large sums of money from large companies like IBM, Hewlett-Packard, Sun Microsystems to help them to secure government contracts. And while Accenture calls this arrangement a strategic alliance, according to the U.S. Department of Justice, the sole purpose of this "Alliance" is to use Accenture's existing relationships and influence to help the other companies to "infiltrate" lucrative government opportunities.

The problem is that in this scenario, whether or not the company is qualified to do the work is not even questioned. Now I know that IBM and HP are companies with great products and services but I find it hard to believe that they qualify for every type of technical work they apply for in this fiendish arrangement. It's their money that instantly qualifies them.

What Happens To Trust?

If we want to have our client acquisition system to be client-centred than we have to let trust guide the process.

Here is one more section from Tom Stevenson's book...

"The word trust is derived from the German word trost, which means comfort. It implies instinctive, unquestioning belief in, and reliance on, something."

"The American Heritage Dictionary (New College ed.) provides a simple definition: Trust: A firm reliance on the integrity, ability, or character of a person or thing; a confident belief; a faith."

But how can we achieve trust with our market if we rely on salespeople whose only incentive is to sell as much as possible, so they can earn their commission and put food on the table and pay their mortgages?

We can't. And the market knows that.

Prospects are sceptical enough even when they talk to salaried consultants. Let's not make the situation worse by forcing them to talk to commission-hungry salespeople. I see two options here.

1. If you insist on having a sales force, then integrate your sales force into your firm. Put them on the same pay structure as everyone else. Also, when you hire them, accept the fact that they spend at least six (more likely 12) months learning about your firm, your people and services. They need to know the full picture of what they're selling mot merely a canned sales pitch.


2. The other option is that you forego the sales force and create a systemised client acquisition programme. Quite appropriately, Alan Weiss of the Summit Consulting Group calls it "Marketing gravity." Basically you build a system that creates ongoing demand for your firm's services. And as the demand grows, you don't increase headcount but increase your fees and become more selective of new clients. Have you noticed that smaller firms are more profitable (net profit per person) than larger ones?

To avoid misunderstanding, I want to emphasise that I have nothing against commissioned salespeople. They are not bad people. They are forced into a bad system, and that bad system brings out the worst in them. They lose their objectivity and go for the quick buck. That's just normal human nature, and most of us would fall for it.

When I look at some of my consulting mentors and role models, like Alan Weiss, David Maister or Robert Middleton, they are all "one-man bands," but their performance (net profit per person) far outweighs the performance of some of the most prestigious consulting firms.

And the message I've learnt from all three of them is that trust-based relationships and good marketing come first, and money follows, which instantly invalidates many consulting firms' approach when they send out newly hired salespeople with a message, "Go and sell them something!"

So, consulting firms must become prospect- or client-focused, and distance themselves from incentives that focus on short-term instant gratification type results.

2. A Smart Strategy Is Profitable

Now back to the basic scenario. Consulting firms want to increase their sales by hiring more salespeople. What happens is that short-term revenue goes up? Great. It's time to celebrate.

But what also happens is that the cost of sales goes up too. Now, hold back on that celebration, man! Yes, we can expect the cost of sales go up a bit but not as much as it usually does. By the same token we could even expect the Spanish inquisition.

When you hire new salespeople, it takes 8-12 months to get them up to speed on your organisational strategy, long-term vision, etc. that is, to fully integrate them into your firm, so they can operate at their full potential.

And what you're likely to find is that the cost of having new salespeople on board goes up a lot more quickly than the value they can contribute. But this is a good investment because once they're up to speed, they can produce really well.

The sales force loses its profitability when salespeople spend their precious time to do cold-prospecting. An activity that could be easily automated, so salespeople could deal with the incoming enquiries from qualified prospects with genuine needs and requirements.

According to the Dartnell 28th Sales Force Compensation Survey, average salespeople spend 71% of their time prospecting because their marketing departments fail to provide them with qualified leads. In many consulting firms marketing departments are too busy manufacturing fancy slogans and retarded images that don't contribute a dickybird to sales but is a great ego trip for some award-pursuing creative people.

The remaining 29% of time is split between actual selling, attending company meetings, handling paperwork and travelling to and from appointments. I don't even mention professional development, because in most cases it is an unknown entity due to lack of time.

Furthermore, according to McGraw Hill, one face-to-face sales meeting costs some $350. An out-of-town meeting costs over $1,000. Have you ever calculated how many in-person meetings have you had lately?

So, can you see that by hiring more salespeople with the intention of boosting gross sales can actually bust your net profits?

The sad fact is though that most firms are obsessed with gross sales but blissfully ignore net profits.

Alan Weiss often mentions the timely wisdom in his books...

"It's not what we make but what we actually keep that counts."

And most consulting firms are obsessed with gross revenue. They have two great wishes: 1) Higher gross sales and 2) more clients. They operate like cattle ranchers who are obsessed with headcount. Once the firm had 10 salespeople chasing prospects and spreading fear (of being cornered for appointments) among them. Now there are 20 sales folks. "Let's spread fear among our target market more quickly and more efficiently."

But let's look at this problem through the eyes of the cattle rancher. All right, you go for headcount and keep acquiring more cattle increasing the total weight of your livestock. But if the new cattle you acquire were farmed incorrectly and have astronomically high body fat content, then you're in trouble because the quality of beef you produce is really rubbish. The total weight is there but what smart ranchers need is well fed cattle that will provide top-notch low-fat beef. If your beasts are grossly overweight, their value goes down.

Years ago I funded my way through university by working at - among others - a slaughterhouse, and I killed and processed thousands of cattle. They were traditionally farmed "volume-produced" cattle. They were high in fat and not exactly top notch in meat quality. After a while I ended up on a small ranch slaughtering organically grown cattle for the highest calibre meat money can buy. A totally different ballgame. And a totally different meat structure. Actually these beasts had untreated, non-manipulated lean meat. The meat wasn't enveloped in layers of fat, the result of endless sessions of hormone treatment and biomedical manipulations.

So, paraphrasing Alan Weiss, the idea was not how many beasts we slaughtered but how much lean, high-calibre meat we got out of them. The large slaughterhouse had a gross weight mentality. The small ranch had a lean meat mentality.

And I believe running a successful consulting firm requires the lean meat mentality of a small ranch owner. Keeping waste, that is, organisational fat, to the minimum, and keep improving the methodologies of trimming it away more efficiently. And this is why the key is to increase sales without increasing the cost of sales.

I think this is why most solo consulting firms are more profitable than large firms. Large firms have "gross weight" (gross sales) mentality, whereas solo and tiny firms have "lean meat" (net profit) mentality.

While there are many solo consultants who produce $1 million plus annual revenue, take most firms with 10 plus people, and the performance is often less than $150,000 per person. It seems, the more people there are in a firm, the lower performing the firm is.

You can make a fortune in gross sales but if your cost of landing new clients is too high, high gross sales are just useful as a chiropractor clinic on the steps of the gallows. Of course, at this point enters the accountant and announces that the company has to cut operating costs. And the firm annihilates a Google AdWords campaign that costs $50,000 a year and lands high quality sales leads that turn into additional annual revenue of $1 million a year like clockwork. A mere 1,900% ROI. Maybe 1 in a million accountants, with some kind of brain damage, says, "We have to increase profits." But that's not typical.

So, the key is not about increasing sales but increasing margins. And that's a touch more complicated, hence many consulting firms don't even try to do it. They mislead themselves by hiring more salespeople because that brings in instant revenue. And in their blind determination to boost gross sales, the end up busting their net profits.

So, what is the solution here? Coming from engineering I may be biased here, but I believe the solution is automation. Look, sooner or later you have to cough up the dough to generate new sales leads.

Either you make an upfront investment and design a client acquisition system that serves you for the rest of your life or fall into the never-ending vicious cycle of "hiring -> training -> motivating -> firing -> replacing" of salespeople. The former takes a bit of upfront time, money and effort but works forever. The latter is comfortable, convenient and traditional, and is cheap and easy to start but it will sap your money and energy day in day out for the rest of your life.

The way I see it if a one-time upfront investment can help me to avoid a lifetime of money drain, I do it. Edwards Deming once said that 94% of business problems are system-related. Then why would I waste the majority of my time and money on an issue that is only 6% of my problem; the human stuff? Also, when those humans are given a good system, at least half of them can be pretty damn good. Or even more. Asking salespeople to produce sales miracles without a good system is like asking a master chef to make a top-notch gourmet meal over the heat of a cigarette lighter.

So, what to do here? Calculate the lifetime value of the typical client and calculate what it is worth to you to land this client. Then monitor your client acquisition and properly write down all the costs that go into both 1) client acquisition in general and 2) the acquisition of specific clients. For instance, if you're on the 10th in-person meeting with a prospect and he's still evaluating competitive bids from 10 other firms then you'd better move on. Using the McGraw Hill study, the 10 meetings already cost you $3,500. Cut your losses and move on.

I may look at it the wrong way when I compare client acquisition to dating, but I wouldn't want my date, after the 10th dinner, still to be pursuing nine other relationships with nine others guys. And if so, then I may be chasing the wrong girl.

If this happens to you, then some of your prospects may be thinking that you're of great value for free brain-picking, and they know they can carry on dragging you on without ever asking them for making up their minds. And this dragging on process is fine as long as it's automated.

3. A Smart Strategy Is Optimised For Minimum Human Effort And Maximum Automation

In the information age we can observe a few interesting developments. Nevertheless, many consulting firms are still evaluating the effectiveness of their client acquisition strategies based on how many hours their people take to implement it. And the sad reality is that a mediocre system that takes a long time and lots of effort to operate is valued higher than a good system that takes less time and effort to operate. Consultants who are doggedly chasing prospects using manual labour are deemed to be more productive than the consultants who seemingly effortlessly generate sales leads for themselves. Firm leaders should seriously consider the R.O.W.E. system (Results Only Work Environment).

Many practice leaders still believe in what Karl Marx's wrote about in his Communist Manifesto...

We arrive, therefore, at this conclusion. A commodity has a value, because it is a crystallisation of social labour. The greatness of its value, or its relative value, depends upon the greater or less amount of that social substance contained in it; that is to say, on the relative mass of labour necessary for its production. The relative values of commodities are, therefore, determined by the respective quantities or amounts of labour, worked up, realised, fixed in them. The correlative quantities of commodities which can be produced in the same time of labour are equal. Or the value of one commodity is to the value of another commodity as the quantity of labour fixed in the one is to the quantity of labour fixed in the other ~ Karl Marx, Value, Price and Profit, 1865

Essentially, the longer it takes to make a contribution, the more valuable it becomes because it consumed more manual labour.

I think this is the point where consulting firms have to start modelling one-person consultancies, where the same person acquires clients, does the work and keeps in touch with both clients and prospects. And they seem to have time for everything. The problem happens later when many of them start hiring salespeople, hoping that with every new salesperson revenue goes up by the same amount they made on their own. And when the new people are hired, no time is dedicated to integrating the new people into the firm. Instead, they are expected to perform right away. And it hardly ever happens.

But here is the sad reality. Doubling your sales force doesn't mean doubling your sales. Besides, what's the logic in doubling my sales if my cost of sales triples? But the conventional (classroom) wisdom says that the success of a consulting firm is measured by its size and total gross sales. I'm not sure why, but to me this is ridiculous.

Here is something from my local paper. Business In Vancouver on British Columbia's fastest growing companies. This is one of the top five companies, specialising on software development, that is, a professional knowledge firm.

Annual revenue is $2.5 million. Number of employees 76. Gross performance (revenue per employee) is 2.5 million / 76 = $32,894. Four years before the firm was doing a total revenue of $53,000 with nine employees ($5,888 revenue per person). So, revenue-wise the firm grew by some 4,500%. In terms of performance the growth was "only" 458%. And we don't even know the net profit and how much the firm is leveraged on external investors.

This is like measuring a hospital's performance based on average temperature. Half of the patients are dead and the other half have high-fever. But the average is very "award-winning-ly" nice.

And I believe this problem of low performance happens because many consulting firms don't use the right amount of automation, especially in their client acquisition processes, one of the very few functions that can be automated even in a high-touch profession like consulting. This is why this automation stuff is important: The average B2B sales cycle is between nine months and three years. The idea is to guide prospects through the sales funnel with as little manual labour as possible. There is some in-person time to be invested towards the end, when prospects are close to making buying decisions, but no in-person time should be wasted on tyre-kickers, plate-lickers and bargain-hunters. We have to let the system take care of them.

Your lead generation and lead qualification systems should qualify prospects just as precisely as the size of the eye on the fisherman's net does. Some fish are to stay and some are to go. The better the net qualifies the fish, the less work the fishermen have to do to check the size of the fish.

4. A Smart Strategy Is Supported By Partners and Practice Leaders

One of the biggest reasons why initiatives fail in consulting firms is the lack of partner-level buy-in. When people at the associate level develop a direct mail campaign, partners nod in apathetic agreement. But when these associates want to implement the programme and need money for envelopes and stamps to send out the letters, the partners kick up a fuss about the wasted money.

According to a 1997 survey, conducted by KPMG Canada, consulting projects fail for the following reasons. And while in the traditional sense projects are initiatives consulting firms do with their clients, client acquisition is an internal project, and must be treated with the same dedication as a client project.

1. Poor project planning - Specifically, inadequate risk management and a weak project plan. Risk management becomes more important as the organization gets bigger, so larger organizations need to pay more attention to this area. What often happens though is that in pursuit the quick buck, some clients want to skip or shorten the planning process and start implementing. But without a plan there is nothing to implement. Also, as a rule of thumb, every one hour of planning can save three hours of implementation time.


2. Weak business case - There must be a solid business case to initiate the engagement. The initiative must 1) increase revenue, 2) reduce costs and/or 3) avoid new expenses. And these ROI categories must be quantified. Hence the pretty detailed diagnosis.


3. Lack of management's commitment, involvement and support - After starting the engagement, many clients say, "Do it FOR me but leave me out of it. I'm too busy to get involved." This passive couldn't-care-less attitude usually kills engagements even before they start. Securing buy-in from the top, initiated by a strong business case and backed up with a realistic project plan, is an essential step to get started.

The 1995 Chaos Report by the Standish Group established the following reasons for project failures. Although this is for information technology projects, I believe we can safely use it as a guideline for any kind of project.

As you can see, most problems come from partner level either in the form of unclear expectations or lack of support. A friend of mine works at an IT consulting firm, and towards the middle of 2006, after sending out direct mail packages, the firm wanted to do telephone follow-ups. But no one knew how to do it without sounding pushy. I suggested that they got a copy of Ari Galper's Unlock The Game programme. The result: The partners choked on the $950US price tag of the programme, and decided to do it their way. 1,500 letters, fancy brochures and hours and hours of telephone work resulted in... nothing.

When the initiative of using direct mail to acquire new clients came up, the partners were excited to make more money. When it came to investing in the initiative to make it successful, the same partners decided to save money. And by now, the competition has scooped up many of those clients this direct mail initiative targeted. So, the whole initiative, tens of thousands of dollars calculating personal time, went down the drain because the partners refused to invest in a $950 programme to learn how to do telephone follow-up the proper way.

Time Commitments For Managing Initiatives

Every initiative takes time to properly manage. Practice leaders must allocate sufficient time for associates to manage client acquisition initiatives. So what are these time frames?

Here are some numbers from project management, and from this we can guesstimate how much time each member of the team working on client acquisition must be allotted to do the work properly.

Note that times are cumulative, meaning if a person is both the project manager and a team member, that person needs to commit 75% of the person's total working time to the project.

These numbers are given by the Project Management Institute for various levels of project involvement.

So, partners must not expect initiative (I use the word "initiatives" as internal projects) leaders and team members to fully participate in doing billable work as well. If you participate in the engagement in any capacity, then adjust your normal working commitments accordingly. And these numbers are for one initiative, be it a direct mail campaign, newsletter writing/editing, blogging, etc.

Of course, in larger firms there are full-engagement client acquisition teams that don't do client work. Although I believe it's good practice to mix client acquisition and client work, and get everyone involved. All the people must feel what it feels like going after new work not just enjoying the fruit of other people's work.

5. A Smart Strategy Supports People's Lifestyles

Did you know that the Union General, John Sedgewick's last words were, "They (the Confederate soldiers) couldn't hit an elephant from this dis..." - then he died?

I mention this because many consultants believe that their lives are so on track that nothing could derail them. Yet, when we consider the exorbitant amount of hours consultants work, we tend to wonder what sort of lives they lead.

I believe, regardless of what sort of work we do, it must support our personal lives, not enslave them. It's not enough to be merely profitable. There are many consulting firms out there that are extremely profitable... on the surface at least. You dig a tad deeper and you'll find chronically stressed out, morbidly overweight consultants past their second or even third divorces, gobbling up boxes of doughnuts and buckets of Coke at their desks. And all because they are pushed to produce more and more billable time. Maybe one more reason why the billable hour model should be abolished in consulting firms.

This may sound as a very simple approach, but you may like it.

If I work 20 hours a week and make an annual revenue of $200,000 and want to grow, I have three options...

1. I can work an extra 20 hours and hopefully double my revenue (It hardly ever happens)


2. I can keep working 20 hours a week plus spend an additional five hours a week to figure out how to increase the perceived value of my services, thus increasing my fees


3. It's option two plus investing an additional five hours a week to create information products which I can sell from my website 24/7/365

The way I see it, becoming more productive and profitable is not about doing what we've always done harder and longer, but about doing something drastically different. So, if I work with 10 small business engagements, then based on option one, I can either engage with 10 more small businesses, or abandon 5 small business clients and replace them with one larger client. My workload goes down and income goes up. Also, I'm not running the typical "small business client" risk of not being paid or being sued to recover the project fee, so the business owner can buy a new SUV.

And to best support our lives, we have to make our work as effective as possible, so we can achieve more, that is, generate more value for our markets while using less of our time, money and effort. In his book, The Effective Executive, Peter Drucker wrote...

"To be effective, every knowledge worker, and especially every executive, therefore needs to be able to dispose of time in fairly large chunks. To have dribs and drabs of time at his disposal will not be sufficient even if the total is an impressive number of hours."

This is why it's short-sighted to compensate associates in a consulting firms with hourly wages. They will accumulate the total hours, but, as knowledge workers, they manage what they pack into those hours. And with that packing, even if you try to control the number of total hours, they control the real value of those time chunks.

So, what's important is telling people what we expect them to accomplish and let them do it. Yes, we are there to help, but we don't need to micromanage them.

Also, modelling successful people is great, but it's also important that we look at their personal lives. We may want to model their professional accomplishments but maybe not their divorces, the stomach ulcers and the exorbitant child support payments.

And remember the slogan on Eddie Bauer's shopping bags...

"Never confuse having a career with having a life."

Or as the late Thomas Leonard said...

"Have a fulfilling life, not merely an impressive lifestyle."

So, make sure that everything your do in your firm supports both your own life and the lives of all your people. Otherwise the whole venture is useless.

^[1] A National Survey of Physician-Industry Relationships (Vol. 356:1742-1750, April 26, 2007) http://content.nejm.org/cgi/content/full/356/17/1742. Continue where you've left off

^[2] U.S. DOJ Joins Lawsuit Against HP, Sun, Accenture http://www.infoworld.com/article/07/04/19/HNdojjoinshpsunlawsuit_1.html. Continue where you've left off

"Dynamic Duo" Mentor Programme... ...has 2 openings for February and 4 for March 2010. Click here to continue to the fiendish details.

Client at the Core: Marketing and Managing Today's Professional Services Firm

by August Aquila and Bruce Marcus

• Clients have become more sophisticated than ever. They want collaboration not rigid prescription


• Clients expect more industry-specific knowledge than before


• The professional firm's success revolves around trust. So, building trust is becoming a more highly valued skill than closing sales


• Narrow specialists no longer make it. Clients require well-rounded, as Andrew Sobel calls them, deep generalists to be able to see clients' businesses in a holistic manner way


• Marketing is more important then ever since clients have unlimited choices

Although the book focuses on law and accounting firms, the practices can be used in any professional service firm.

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