Commando Consulting: December 2007 - Six Things To Do And Six Things To Avoid Doing In Premium Consulting Firms

by Tom "Bald Dog" Varjan, Organisational Provocateur

Summary: Starting a new year is always the time for making resolutions to do things better. Here we discuss 12 ideas you may consider implementing in your firm.... Audio Version (MP3): 64 minutes

Of course all partners of all consulting firms say they want to build practices that provide both great revenues for their firms and fulfilling lifestyles for their people, but the most typical step they take to achieve this is acquiring more people, clients and activities, thus increasing overall busy-ness. So, sales volume goes up, while profit per person and profit per engagement go down.

And while at that moment the firm may be bathing in this incredible success, what they ignore is that now people are working 60-80 hours a week to sustain this performance, and as their quality of life is going down the toilet, they get gradually burnt out, and the best of them leave the firm.

Then attrition sets in. People get pissed off with the daily grind it takes to make that money and start leaving the firm because they can't see the point of being peak performers at the price of giving up their families and personal lives. Law firms are definitely the worst in this area, but consulting firms come pretty close too. Many of them demand 2,000 plus annual billable hours from their people.

But how to pull that off? There are just over 2,000 normal working hours in a year, and in order to bill 2,000 hours, the person has to work at least 2,500 hours, which is about 50 hours a week. But considering how ineffective consulting firms are when it comes to their own internal performance, that is, effectively serving clients and improving their own performance, these 2,500 hours are more likely to be 3,000.

So, let's take a closer look at the...

Six Things To Avoid

1. Talking About It Instead Of Actually Doing It

In general consultants are brilliant at talking about business but when it comes to executing their own internal strategies to advance their own firms, consulting firms are some of the most inefficient business entities.

And this is rather strange if we consider that most of them use all sorts of fiendish devices to make them more efficient in their work. They have a Blackberry in one pocket, a Palm in the other one, a Bluetooth - I think permanently - plugged in their ears, multiple phones and pagers on their belts and the latest model of laptop in their suitcases. So, they are seriously armed and dangerous.

Yet, when it comes to implementation time, many of them run to their laptops to perform one more analysis to make sure all the ducks are lined up. Action? Well, that's another ballgame.

We all have our peak productivity at different times of the day. So, just figure out your peak times and make those hours uninterruptible for any reason except the house's being on fire. This will enable you execute lots of your own strategy in a shorter space of time.

I believe prime time must be used for...

1. Taking care of current top-drawer clients (for typical consultants this is about 5-15% of the clientele)


2. Executing your own firm's strategy of acquiring new top notch clients


3. Learning new skills that are sellable at premium price on the market

All in all, prime time must be dedicated to activities that require you to operate at full brainpower. And this excludes networking which is great to advance relationships but doesn't require you to be in top mental gear.

So, be careful with those interruptions and you'll see the progress you can make around your own firm.

The other thing is prioritising activities. When you're meeting someone in person, do you really want to interrupt the dialogue and answer the phone or checking your email? What I've found is that serious buyers just stand up and walk away because they regard you as a low-level person. Like Pavlov's dog that starts salivating (jumps to respond) when Pavlov rings the bell (gadget bleeps).

2. Falling Behind On Industry Matters

The other side of the same coin is to learn every little detail about the industry. Both are problems. If we fall behind, we lose touch with what is going on in the industry. If we learn every little detail, we can get blinded by them. That happens when people over-learn about fads and try to turn them into trends. Now we know that the concept of reengineering was a fad, but at that time many consultants tried to turn it into a trend. Well, it even worked for a short while.

Many consulting firms are overworked because their fees are attached to the number of hours they work. So, if there is a choice of doing the unpaid work of learning new stuff or dispensing the old stuff and getting paid for it, most consultants opt for dispensing the old stuff and getting paid for it.

Here are the dynamics of spending too much time learning about the industry. It doesn't leave you enough time to advance the relationship with current clients. Also, at one point the quality of your service will suffer because you try to maximise learning time, and now the only place where you can steal time from is client service.

The other side of the same coin is that if you don't spend enough time learning, then clients can push you into a dark corner and discover that you don't know what they want to know. And if that happens a tad too often, then clients may get pissed off because they don't feel they get value for their money.

So, what I do is I use my prime time - fours hours a day - of the day to serve clients and do revenue-generating activities, and use non-prime time to do learning. I do a hell of a lot of learning both on the consulting profession and clients' industries, but never let learning cut into my prime time when my brain is in peak performing mode.

3. Trying To Do Everything

In a typical consulting practice many things can be delegated, so you end up doing only the few key activities that no one else can do. What I mean is that others can do the work per se, but clients want the work plus your personality and unique thumbprint on the work. When you offer premium services to the premium market, this becomes increasingly important. It also becomes a negotiating gambit for you, that is, either a delegated subcontractor does the work at a lower fee, or you do it with your personality and thumbprint at a premium fee.

For about eight years I've been a partner of a couple of farms where we raise free-range, organically grown animals. I mean the folks raise them and I slaughter them. That's a profession I learnt in a previous life working on a farm and at a slaughterhouse while I was paying my way through university.

They could call anyone to slaughter, after all there must be many people in the Lower Mainland who can technically do it, but, unless I'm away for a longish period, they call me because my slaughtering capabilities come with a personality they like.

The same in consulting. I can't claim I'm the best at what I'm doing. I have huge passion and enthusiasm for my craft and I keep advancing my skills, but I can't claim I'm the best. Clients call me back because they like my provocative, confrontational yet caring style and receive good return for their investments. So, it's not only what I deliver but how I deliver it.

But there are many activities that are not client-related, thus I can delegate them.

So, what are the activities that shouldn't be delegated? For instance...

1. Client acquisition: Working on attracting great clients with sexy, exciting opportunities


2. Practice development: Working on the firm's reputation and brand


3. Talent acquisition: Working on attracting "real" top-tier talents (as opposed to hiring the top percentile of the graduating MBA class at the local university)

And what can be delegated? For instance...

1. Repetitive tactical work like stuffing envelopes and licking stamps for direct mail campaigns


2. Bookkeeping


3. Answering requests from people before they become qualified prospects

So, the idea is that you should do only what you can do, and should separate activities that should be done in your peak time and non-peak time. Most of your work as the firms' owner should be strategic in nature, setting the overall direction of the firm. Whole tactical work is seductive in nature, it's also not the most effective way of spending prime time.

4. Frequently Checking In With Clients

I do believe in staying in touch with clients, but there is a limit to that. Just think about your dentist. Her keep in touch process, besides some holiday cards, is probably just some reminders of when you are due for your next check-up. Or, for the really good one is a monthly newsletter.

But they don't pester their clients with constant phone calls. They know that clients are busy living their own lives, and there is a limit to their time and attention they can dedicate to dental matters.

The same goes for consultants. Unless there are emergencies, clients have their own things to do, places to go and people to see. So, instead of personal meetings, we can just send a periodic (weekly, fortnightly or monthly) report, depending on the length of the engagement, and that's it. When clients need more they can contact us. We don't have to become invaders in their lives.

So, what I recommend is that you set up your schedule of client contacts, and then keep yourself to it. There is no need for random, unscheduled meetings.

Of course, your meetings can include monthly lunches with clients where you discuss what's happening without an agenda, but these lunches are pre-planned too.

5. Dealing With Unforeseen Events - Fire-Fighting

Fire-fighting happens in every firm. There are plenty of unforeseen events, and we have to be ready for them. There are two options here.

One option is that we deal with them personally and while doing that we remove ourselves from doing prime, revenue-generating activities. It certainly gives us the sense of command and control, but it also wastes our time on something that could be done by staff members.

The other option is to basically empower staff members so that they can handle these situations. Just think of the Ritz Carlton hotel chain (if I remember correctly) where every staff member is allowed and authorised to spend up to $2,000 to rectify a guest's problems. They do take seriously this clients delight stuff.

In 2005 I worked with a consulting firm where every staff member had a $500-limit company credit card, so client issues could be dealt with instantly without harassing senior management. Now some people may say, "This is silly. Those staff members may abuse their credit cards!" Maybe. But at the end of the month, the credit card invoices arrive which is reconciled by the firm's accountant, and if the invoice has entries like "Downloading mobile phone ring tones" or "Subscribing to porn sites", it's not the firm that pays for those purchases.

But these cards can be very handy when clients need instant solutions to their problems, and the problem can be solved without involving senior staff members.

As a senior staff, you have your rainmaking work cut out for you, so don't let trivia kick you out of your groove and force you to deal with emergencies.

6. Becoming Overeducated On The Wrong Stuff

We all like advancing our skills, but this is often the wrong skills. Many consultants love collecting designations behind their names. Six Sigma Black Belt, Seven Alpha Purple Sash, Eight Theta Blue Bra or Nine Delta Pink Sock may sound great designations, but do we really need all of them?

And while these are great activities to become better in certain areas, it doesn't make you better at running your firm. And we have to remember that by putting together 10 top-notch Harvard MBAs, you don't necessarily have a top-notch consulting firm.

And while I believe in advancing our skills, we also have to be careful about what skills we are advancing. I believe that we have to spend time to learn more about human skills, like communications and psychology.

We also have to clearly define our expertise, and deepen our knowledge in that area. All in all, we have to learn skills that translate into more value to clients, so we can charge more for our work. After all, more value delivered to clients justify higher fees. Well, provided you're practising value-pricing.

So, how can we find the time to keep ourselves up to date? Well, either we steal it from family time or we develop automated systems to deal with things that can be automated. For instance, the initial stages of client acquisition.

Are you getting your clients through cold prospecting or are they coming to you through your automated client acquisition systems? You can gain a lot of time here. Well, in the absence of systems, you can also lose a lot of time here.

When a skill development programme comes up, do you really have to go or can you get the home study version of it, which you can study in your non-prime time and repeat it?

So, make a list of what your best prime-time activities are and try not to deviate from hem.

Six Things To Do

Having discussed six performance-dodging "window-dressing" activities, let's discuss now some prime-time activities.

1. Helping New Clients To Get Clear On Their Objectives And Keep Their Eyes On The Big Picture

As a consultant, your biggest value is bringing strategic help to your clients, that is, helping them to see the big picture of their futures. This is what internal staff in the client's company can't do because they, as a result of daily involvement in their businesses, are too tactical in their thinking.

When it comes to a direct mail campaign, you think of the overall impact of the message and similar big picture things, whereas they start thinking about who stuffs the envelopes, who addresses them and who licks the stamps. It's like agonising over the colour of the boarding pass but ignoring where the plane is flying.

The clearer clients become about their objectives, the more enthusiastically they will collaborate with you to achieve what your Collaboration Agreement set out to achieve. This is when clients start doing their homework and don't slide you aside saying "I'm too busy for this". I've had clients who would tell me, "Just write me that business plan but don't bug me for details. I'm far too busy with important things." It took some major confrontation to tell him pull his head out of his arse and realise that his business plan is the blueprint of his business and right now that has top priority over his pet activities. Luckily he got it, so we could proceed in peace.

And the great thing is that as you help them to keep their eyes on the big picture, you become more familiar with their big pictures, so you can be more helpful as an advisor.

Remember, big picture (strategic) help is always more valuable than merely being a contract labourer of sharing tactical activities with clients. Using personal training language, if they want to lose weight, it's them who have to go on diet and start exercising not you. As a trainer, you're already doing it, thus are in pretty good shape. It's their health, their fitness and their wellness. They have to do the work. As Jim Rohn says...

"No one else can do your push-ups."

Your clients have their own staff members, so there is plenty of help available. They don't need you to join in and perform tactical work for them. Clients hired you for your care, protection and guidance. Look at the world of sports and when athletes train for competitions. You can clearly recognise the coaches and the athletes. It's the coaches who use the whistle and the stopwatch not the athletes. And it's the athletes who do the running and jumping not the coaches. Coaches help athletes to become champions but not by doing the work for them but with them.

Remember you can't want to achieve your clients' objectives than they do.

2. Holding Their Hands And Kicking Their Arses

This is about accountability. Your clients know what to do. More often than not they also know how to do it. So, what is the problem? The problem is what we all humans are struggling with to a higher or lower degree. It's called temptation. We know what to do? We know how to do it. We are also tempted not to do it because it's hard, it costs money, in inconvenient and uncomfortable.

Just think of the time when shortly after starting your firm you were agonising over hiring your first person. How long did it actually take to hire that person? And how much agonising, procrastinating and vacillating preceded the hiring process? In most cases we don't just make up our minds and do it? No! We make up our minds and start agonising over what can happen if something goes apeshit and the action doesn't work out. We start agonising over how much we can lose in the process and how we will look like idiots in our peers' eyes.

So, the key is making a decision and going ahead with it. This is how client work is done. I believe both managing people and managing client work can be based on two pillars...

1. The care and compassion of a loving parent


2. The tough demands, challenges and expectations of a drill sergeant

In your client work you have to be both tough and tender. You must demand more from clients than what they could do without your help and support. At the same time, you also have to show care and compassion, so they know that all you're a tough-as-nail hard arse with them in their best interest not because your ego demands this kind of behaviour. If you've ever watched celebrity chef Gordon Ramsay in action, then you know what it means to be compassionately caring and ruthlessly demanding.

Is it surprising that most of his client work ends in success? But the process can be pretty messy, and he can certainly bring many of his clients to tears or nervous breakdown. But, hey, change is often a messy process.

Why?

Because external change can only be achieved after internal changes, that is, change in our philosophy, change in our perspectives on life, change in how we perceive the world and people around us. Or as Stephen Covey puts it in Principe Centered Leadership...

"If you want to make minor, incremental changes and improvements, work on practices, behavior, or attitude. But if you want to make significant, quantum improvement, work on paradigms."

So, while many people believe that consulting is basically contract labour to perform activities the client has neither time nor inclination to do, it's really about creating a plan and holding the client accountable to executing the plan. Just like personal training. Although I quit traditional personal training (personal repetition counter) years ago, I always coach a handful of businesswomen on health and fitness issues. But I never go to the gym with them. We devise a plan and set milestones.

Then they go to the gym and we debrief on what's happened. They know what to do. And some staff members in the gym can show them how to do bench press or squats. I "just" keep them accountable to make sure that the plan is being executed. And I try to be both caring and compassionate and pretty demanding and ruthless in my demands. But my demands are based on the plan we jointly crafted, and now my job is to make certain that clients stay on track and don't fall victim of short-term temptations.

And we all do that as consultants. But we also have to realise that at the end of the day clients are in charge and if they decide to deviate from the plan, there is not a sausage you can do about it. It's like parenting. No parents want their kids to land in prison. But many do. It's not the parents' fault. People craft their own lives. Similarly, some clients may go bankrupt in spite of your help.

But going back to personal training, in the worse case clients stay where they are but hardly ever get worse off than they were before starting working out with a trainer. Clients hardly ever get worse off as a result of diligently working with a consultant. But here are two words here: "diligent" and "with."

The clients who get screwed are the ones who say, "Do this for me and leave me alone with the details."

So, keep communicating to your clients that this is a collaboration and not a "Do it for me and make me rich!" as many clients would like to arrange the relationships. As consultants we deliver value to clients that make the achievement of new results possible, provided clients have the smarts and the resolution to integrate the new value into their current approaches. So the result is in the clients' hands.

3. Harnessing Clients' Resources And Capabilities

Many consultants volunteer to do more muscle work than needed. The kind of work clients' internal people could easily do using the company's own resources. Imagine you've just had a meeting with some key people and the client asks you to distil the meeting into a 20-page report. Some people volunteer to write the report, and some people (including me) would say, "Here is the MP3 recording of the meeting. Have your assistant transcribe it. Then distribute it to your people and email me a copy. We're debriefing in one week from today."

Let's remember that clients hired you for your brain and knowledge not your ability to transcribe audio files.

Also, the more clients are involved in the process, the more they buy in to the fact that they own the results whatever they may be. They create the results not you. In my engagements I tell clients that they are the project managers, which means that this initiative we're working on will take up 50% of their total working time. So, we have to make an agreement on what they ditch from their schedules while working together, so they can actually "manage" the initiative we're working on.

Have you noticed that many clients want to be in control but don't want to invest the time and effort that are necessary to be given an "in control" position on the project team? Well, make them understand what exactly what it will take to be the project manager.

4. Hiring Fewer High-Paid Top-Notch People Instead Of An Army Of Low-Wage Mediocre Folks

For many consulting firms, when it comes to growth, first it means growing the number of personnel. Here in Canada, many consulting firms are almost permanently hiring "entry level" people. These firms promise them blazing careers, starting low and working their ways up. But my view is that if you start low, you stay low. There are not many "from the mailroom to the boardroom" stories are going around nowadays.

My experience is that the effort it takes to manage a group exponentially increases with every new member. So, if it takes level four to manage two people, it takes level 100 to manage 10 people.

So, if we want to maintain the attributes of a good military commando, which I so passionately believe in as a pretty damn good consulting model, that is, agility, flexibility, speed, simplicity and boldness, what we need is not an army of entry-level people but a few highly capable people.

And by highly capable I don't mean highly schooled folks with fancy certificates. For instance, survey shows that 56% of MBAs lie and cheat to get their papers. So, we have to go for something deeper. Personally I believe in hiring people with good character.

Yes, it's tempting to hire a legion of entry-level people for chickenfeed compensation, but does it work? Just look at the fitness industry that is based on lots of part-time, low-level, low-paid people, instead of highly skilled well-paid professionals. Don't get me wrong. These people have degrees and certificates oozing out of their ears but you can't expect serious engagement, commitment and dedication for close to minimum wage.

And what is the result? Fitness in general is treated as a commodity and people price-shop fitness services. Many fitness clubs have 100% annual member attrition rate which obviously shows what a great service this minimum-wage part-time army provides. But is it their fault? No. It's short-sighted moronic management practices.

So as Tom Phillips said at a Jay Abraham seminar...

"Hire the best and cry only once!"

Low paid, disempowered, demoralised staff members don't make worthwhile commitments and cannot be made accountable for their actions. If you don't take them seriously by paying them properly, they don't take you and your requests seriously either.

Or as Clarence Francis put it...

"You can buy a man's time, you can buy a man's physical presence at a certain place, you can even buy a measured number of skilled muscular motions per hour or day. But you cannot buy enthusiasm, you cannot buy initiative, you cannot buy loyalty; you cannot buy the devotion of hearts, minds, and souls. You have to earn these things."

And since these people are knowledge workers not manual labourers, you'd better forget about time sheets and hourly wages. There is no correlation between their value contribution and the time that takes to dispense that value.

5. Having And Using Your Own Up-To-Date Business And Marketing Plans

This is a big thing. In many firms, after doing the annual modification of business- and marketing plans, the manuals get re-printed, packed into new three-ring binders and then... get forgotten. But the whole idea is that if you invest time to develop your yearly roadmap, you actually follow that map, so you have a chance to arrive where the map leads.

Because if it's not followed, then all sorts of disasters can happen. Do you know, for instance, that CRM companies have atrocious customer service and lose clients left, right and centre? They try to help their clients to improve their businesses while they're ignoring their own and treat their clients like dirt.

But again, in a world where the doctor who advises his patients to stop smoking and start exercising is likely to be an overweight chain smoker with a serious drinking problem.

If it's done correctly, both the business and marketing plans are the synergy of many key people's combined brainpower. Now if this is the case, why would we ignore this concentrated smarts? What is the chance that we can individually create something better? Not much.

I've just read somewhere that businesses that follow their marketing plans see 24-40% higher improvement than the ones that ignore their marketing plans.

Few words about marketing investments... This information comes from the Marketing Commando, a Hungarian premium marketing consulting firm, led by accomplished marketer, Gabor Wolf.

Typical companies invest 4.5% of their gross revenues in their marketing and grow by up to 5% annually. Excellent companies invest 13-15% of their projected gross revenues in marketing and grow way higher than 50% annually.

Also, most firms invest the most money in generating tryers and first-time clients and invest almost nothing in converting first-time clients into repeat clients.

So...

• Invest 20% to generate tryers to start on your complimentary stuff


• Invest 20% to convert tryers to first-time clients using small, low-risk engagements


• Invest 40% to convert first-time clients to repeat-clients


• Stash it away for 20% emergency reserve

Boston Consulting Group's research, conducted between 1980 and 1995 found that when the shit hit the fan, most companies stepped on the marketing brake and grew by by 5% over the next 15 years. The ones that stepped on the marketing accelerator grew by 500% over the next 15 years.

So, let's remember Peter Drucker's words...

"Because its purpose is to create a client, the business has two - and only two - functions... Marketing (getting paid for creating a client) and innovation (getting paid for creating a more valuable way of serving clients). Marketing and innovation produce results, all the rest are costs."

So, before you hire a full-time graphics designer, webmaster or other auxiliary experts, make sure you have a kick-arse marketing expert on board. And remember...

"Any fool can make soap, but it takes a genius to sell it." ~ Andrew Pears, founder of Pears Soap, London, UK

The same applies to consulting services. Being a great consultant is not enough. You must be able to sell your expertise.

6. Eliminate Hourly Pricing For Your Clients And Hourly Wages For Your People

Hourly compensation, both from your clients to your firm and from your firm to your people, is a disaster.

Clients don't hire you for your time. They hire you for your expertise and your ability that you can put your expertise to work to improve their condition.

Similarly, your firm doesn't hire your people to mark time. Your people are on the payroll for the intellectual property they have between their ears not for the manual labour they can perform.

Remember your firm is not a union shop. By the way, have you ever seen a passionate, enthusiastic union worker? I haven't.

Just think about it. An incoming call comes in from a prospect. A potential gig. A well-paid salaried receptionist takes the time and learns how to handle incoming calls. She clicks into sales mode and starts diagnosing the prospect's situation, so the firm has a good chance to win the gig.

And what do you get from a receptionist on an hourly wage? Hm? The minimum skill set and the minimum commitment not to get fired. Learning new things? No way. As long as she can look busy, she can keep the job. I think this why union people have a hard time to fit into non-union positions. After all, now they are in an environment where they're facing some new terms of employment. Terms like commitment, accountability and discipline. Terms they never met in their former union jobs where they got paid for showing up and dispensing time.

I've just read a survey that typical hourly-paid employees operate at about 39% of their full potential. Hourly paid employees were told they could go home as soon as they'd finish their daily workload. Eight hours of work was done in three hours and seven minutes. Hourly payment also turns even the most exciting work into demoralising drudgery because the value of the work is based on how long it takes to perform it.

Instead of measuring time, create an environment in which your people are naturally aspired and inspired to do kick-arse work and work effectively. What matters is not the amount of time they're sitting in your office but how engaged, energised, excited and enthusiastic they are about serving the big vision of the firm that in turn serves their personal goals and allow them to act out their personal values.

Summary

Look, there are 12 ideas here. Where the sausage to start? Well, start with the easiest one. The reason for that is that if you implement the easiest thing, that's a victory for your firm, and it gives you momentum for the next one. And even if temporarily you fall flat on your face on the second item, the victory of the first one gives you enough momentum to get up, dust yourself off, bandage your conk if needed, and you can move on and try again.

"Dynamic Duo" Mentor Programme... ...has 3 openings for August and 4 for September 2008. Click here to continue to the fiendish details.

Recommended Reading

Go Put Your Strengths to Work: 6 Powerful Steps to Achieve Outstanding Performance

by Marcus Buckingham

In this book, Marcus Buckingham, the author of bestsellers Break All the Rules and Now Discover Your Strengths, provides a step-by-step process of how managers can bring out the best in their people by having them play to their innate strengths, and how people can find the kind of work for themselves that allows them to do their best work. You learn a six-step formula that Marcus recommends to integrate into our lives over a six-week period, swe can be more effective at work and get more enjoyment out of it.

What makes Marcus's approach different from conventional wisdom, is that he advocates the concept of maximising people's innate strengths, whereas the traditional approach is to ignore people's strengths and fiddle with their weaknesses trying to improve them. So, the world is full of people with lots of improved weaknesses.

And what is the result? Some 80% of employees hate their jobs and/or bosses. 59% of all employees are disengaged from their work. They merely show up to put in a face. Go through the six steps and see what it does to your sense of strengths. You'll like the change.

Place your order with Amazon.com for Go Put Your Strengths to Work. You'll be glad you did.

Value Pricing Assault Course... ...has 2 openings for August and 5 for September 2008. Click here to continue to the fiendish details.