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Why Consulting Firms Fail

By Lew Sauder

Imagine that you have a leak in your bathroom faucet that keeps your significant other awake at night.  As a result, your SO’s insomnia has spread to become your problem as well.  When it comes to plumbing, you invoke the “two-suit rule” – as soon as you own two suits in the closet, you have reached the level of success in which you hire certain tasks out.  You call a plumber who schedules to come to your house at 9:00 the next Friday.

You arrange to take that Friday morning off, but he arrives at 11:00 instead of 9:00, stating that his last job took longer than expected.  You wonder to yourself what he might have scheduled before 9:00 and still allowed time to drive to your house, but you don’t say anything.

After showing the plumber the faucet in question, you leave him alone to do his work.  From your office, you can hear him talking on his cell phone to another customer. There is obviously a dispute and he is using foul language -and lots of it- to make his point.  After ninety minutes of plumbing work and phone conversation, he comes to you and states that he is done.  He presents you with a bill for which he wants immediate payment.  You write him a check to get rid of him and watch him drive away.  When you go into the bathroom, you see that, although the leak is fixed, he did a sloppy job.  The washer is visible and doesn’t look very good.   He also left the bathroom a mess.

Now imagine a different scenario.  The plumber showed up on time and spent the entire time he was there addressing your problem – not talking on the phone. Before fixing the leak, he showed you the cause of the problem, gave you some of the options for fixing the leak and the cost of each, followed by his recommendation for the best alternative.  After following your direction, he made the fix, cleaned up after himself and charged you what he said he would charge.  Additionally, he noticed that the toilet ran longer than it should and made a recommendation to fix it that would cost you less than five dollars.

Which plumber would you hire next time?  Which would you recommend to your friends and neighbors?

Consultants and how they treat their clients are very similar.  There are some consultants like the first plumber that are out to make a fast buck, who will arrive at the client site, do suboptimal work, charge them for time that they deal with other clients’ issues, and leave a mess of issues behind when they leave.

A legitimate consulting firm develops a relationship with the client. Like the second plumber, they do the work right the first time, focus only on the current client’s issues, and keep the customer’s interests in mind at all times.  Whether they provide a solution that costs the client very little, or they get additional billable work from it, the solution is provided in an effort to help the client improve their business, rather than finding situations to make more money.

The second scenario may be more expensive in the short run. But in the long run, you get more repeat business and more referral business.  Consultants – and plumbers – who do it right, realize that it costs a lot more to get a new customer than it costs to keep an existing one.

To some, it seems logical.  Do what’s best for the client and the revenue will eventually come in.  But some are less disciplined and go for the immediate gratification, constantly asking, “What is our margin on the current project?”

Which philosophy does your firm follow?

About the author: Lew Sauder is the author of Consulting 101: 101 Tips For Success in Consulting (www.Consulting101Book.com).   He has been a consultant with top-tier and boutique consulting firms for seventeen years.

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Critical Consulting Skill: Flexibility

As I’ve pointed out in this blog before, one of the things I’ve always liked about consulting is the variety.  You generally work on a project for a few months and, by the time you’re getting tired of your surroundings, you get transferred to another project.  Sometimes it’s another project at the same client, but often times you go to an entirely new client, perhaps in another city.

You could be moved to another project right as you were getting in a groove of the project you were on.  Often times you have some advanced warning.  If you are assigned to a single phase of a project, you know the timeframe of that phase.  You may have hopes to be on the next phase, but you could be pulled off if you lack the right skill set for that phase, or the client loses funding for the next phase or any number of other reasons.  Projects simply go in new directions, causing changes to the staffing model.

You could be informed of a change at a moment’s notice.  Once, while I was unassigned (on the bench in consulting vernacular), I was called at home at 9:00 PM and told to show up in another city the next day.

When you roll off of a project and the firm doesn’t have another project to assign you to, you either go back to the office or to a work-from-home status.  Firms evaluate their consultants on a number of criteria, but the primary ones are on their sales numbers and their utilization numbers – percentage of available hours that you were billable on projects.

While on the bench, it’s important to do two things.  First you want to get assigned to a team working on a project sales proposal.  This will help you gain sales credit, but also can help you get assigned to the project if the firm wins the business.

The second thing to do is to get your name out to partners or whatever roles within the firm assign staffing to projects.  It’s important to let them know who you are, what skills you have and that you are available and ambitious to get on a billable project.

Once you get assigned, it could be on an out-of-town project, requiring travel from Monday thru Friday or at a location that requires a long commute from your home.  You may hear of new projects starting up with new and exciting technologies only to find out that you’ve been assigned to a mundane project with little growth potential.

You can lobby for the projects you desire, but you often don’t get a choice.  Consultants are usually assigned to projects based on the firm’s ability to maximize their billing rate across all clients.  If you turn down a project for any reason, you risk being labeled as a non-team player and they may resist assigning you to projects in the future.

They usually do ask you what you are interested in and what your career goals are and, if they’re able to assign you to a project that fits your interests, they’ll try to find a match for you.  They do have an interest in keeping their employees happy.  But they also need to bill clients to stay in business.

The critical aspect here is to be flexible.  Doing what’s best for the firm in the short-term will often be recognized by management and can be good for your career in the long-term.

About the author: Lew Sauder is the author of Consulting 101: 101 Tips For Success in Consulting (www.Consulting101Book.com).  He has been a consultant with top-tier and boutique consulting firms for seventeen years.

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Filed under Business, Consulting, Flexibility, Morale, Networking, Personal Branding

The Right People at the Right Place at the Right Time

Like most things, coordination is critical in consulting.  Consider the following scenarios:

  • Great news Cindy!  We’ve landed the Johnson account.  We start Monday and we want to hit the ground running.  We will need three business analysts, a technical architect and a project manager to be at the client site in Dallas Monday at 9:00 am.  They should all be strong in the retail industry and they’re all going to need laptops with our standard software load as well as some custom stuff for this client.  Call me if you have any questions.
  • Jeff, our project is in big trouble.  We just found out that we are three weeks behind and Bob just walked out on our project.  We need another project manager that is strong in healthcare and electronic medical records implementations and two more Java programmers with industry experience.  I need all of these guys yesterday if we want to keep our biggest client.

Large consulting firms often carry a bench, a reserve of people that are unassigned in case they are needed when a proposal in the pipeline hits and they need people right away.  They try to keep the bench as lean as possible to avoid paying consultants for non-billable time.

When emergencies hit such as a contract that wins sooner than expected or a project that is in major crisis, firms need to scramble to get people with the right skills as well as equipment such as computers and mobile phones.  Additionally, they often need it on short notice.

Most clients understand that these activities take time.  And consulting firms need to be careful not to oversell, making clients think they can staff up a large project on short notice.

But when a client makes the decision to go with a firm for a large project, they often need to start charging a budget that is only available during the current fiscal year.  And consulting firms don’t want to start a relationship with delays and excuses.

Recruiting is a critical skill in consulting.  The urgency of finding people…

  • In the right geographic area
  • That are available when you need them
  • At the rate that you can afford
  • With the right technical skills
  • And the right industry experience

…is a herculean task.

Candidates usually interview with other companies.  You may find the perfect candidate only to call and find out that they’ve accepted another offer.

As a consultant, it is important that the firm has all of your skills and availability in their skills database.  They usually check internally first, allowing them to quickly identify internal consultants for a project. Sometimes a consultant has worked on a proposal and is being reserved in case that proposal pulls through.  However, “what’s sold is gold” in consulting, and if another project hits that you have the skills for, you may be pulled onto that one.

It’s also critical for consultants to participate in the recruiting process by networking so that you know people that you might recruit at a later date.  When a new project is in need, they may ask people within the firm if they know people with certain skills.

In consulting, it’s everybody’s responsibility to sell projects, staff projects and deliver projects for the firm’s success.

About the author: Lew Sauder is the author of Consulting 101: 101 Tips For Success in Consulting (www.Consulting101Book.com).  He has been a consultant with top-tier and boutique consulting firms for seventeen years.

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4 Ways to Market Yourself within the Consulting Firm

Imagine that you have developed a soft drink that tastes better than Coke.  It has fewer calories, comes in a biodegradable can and contains nutrients that will make its users healthier.  Everything about this product is better than Coke, Pepsi or any other soft drink on the market.  Unfortunately, you have no marketing budget to promote it and have to rely on word of mouth.  The current market seems perfectly happy with the soft drinks they’re already drinking and your new product never gets off the ground.

This fictional scenario can happen to you in a consulting environment.  You may be the hardest, smartest worker in your firm.  But if you don’t get your name out to the decision makers who staff projects or have influence on that staffing, you may get passed up for high-profile projects.

This is not as much of an issue at smaller firms where management already knows you.  It’s more critical for larger firms and critical for 1st & 2nd tier firms like McKinsey, Deloitte and McGladrey.  It’s easy to get lost in firms like that.

You may do a bang-up job on a project and impress the partner and the project manager.  If their next project requires your skill set, they may lobby to get you assigned to their project.  But they may move on to projects that require a completely different skill set.  In larger firms, it’s very important to market yourself within.  Some of the things you can do are:

  • Volunteer to speak at firm meetings. – Most firms hold all-hands meetings on a quarterly or semi-annual basis to update the staff on their progress and provide an overview of a couple of their latest successful projects.  If they showcase a project that you have served on, offer to give part of the presentation.  It’s a great way to get your name out.
  • Make an effort to meet the firm leadership – Understand the firm hierarchy and figure out who the decision makers are (Partners, VPs, Directors).  Get to know their names and faces and introduce yourself in a non-intrusive way.  Selling yourself like a used car will backfire like a… well, like a used car.
  • Volunteer to work on sales proposals – When unassigned (on the bench), show that you are willing to do whatever it takes to make the firm successful.  It exposes your skills to others and increases your chances of being assigned to the project if the proposal wins.
  • First and foremost, do your regular job well – You won’t get assigned to any high-profile projects or proposals if you haven’t already developed a reputation for doing quality work.

About the author: Lew Sauder is the author of Consulting 101: 101 Tips For Success in Consulting (www.Consulting101Book.com)  He has been a consultant with top-tier and boutique consulting firms for seventeen years.

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Critical Consulting Skill: Selling Services

Two of the most critical measures for a consultant are sales and utilization.  Whether you are an independent consultant working for yourself, or an employee of a large consulting firm, these key indicators are both the bread and the butter.  You have to sell projects to clients in order to get work and you have to deliver that work in order to get paid.  Utilization is usually measured as the ratio of the number of billable hours worked divided by the number of available working hours.

Most consultants starting out focus on service delivery more than the sales aspect.  Many firms have a sales staff that does most of the selling for them.    But that doesn’t exclude consultants from the responsibility of selling.  Consultants working a project at a client site have a front row seat to all sorts of issues and problems the client may be experiencing

Keep your eyes and ears open: I’ve been at meetings where many of the client participants were in the same conference room for a meeting in the previous hour.  Their discussion often continues where you learn about another project having issues or a problem they’re having trouble resolving.  Depending on your relationship with the client management, you can suggest to them that your firm has a service offering that could be of help.  If you are unfamiliar with the management – or they are unfamiliar with you – you can relay the information to an account manager within your firm to follow up with them.

Take them to lunch: It’s also a good idea to develop a good enough relationship with clients to go to lunch with them on occasion. It doesn’t always have to be top-level management.  You can learn a lot from your own peers at the client just by talking about other projects they are working on, projects their peers are working on or some that they think should be considered.  They have a front line vision of their business that their managers may not even be aware of.

Know your firm’s service offerings: To be successful in selling, you must be aware of your firm’s product offerings.  As an independent consultant, you should already know your capabilities well.  If you work for a firm with multiple service offerings, you should take it upon yourself to know each offering and the value each one can provide to a client.  The most successful way to sell is to show your potential client the value that you can provide them.  It’s difficult to demonstrate value without that familiarity.

Keep the current project’s scope in mind: Once you find an issue that you or your firm can help them with, there may be the impulse to spend time helping them right away.  If you are already on a well-defined project, you will want to avoid doing additional work outside of the scope of the existing project.  You’ll want to make it clear that you or your firm can help but you’d have to have a separate meeting to discuss the scope of the additional work and the associated fees that you would charge to do the work.  You may spend time discussing the issue in order to understand it well enough to propose on it, but avoid causing your current project any delays.

Develop relationships: Selling in a consulting environment is a long-term process.  Clients hire consultants that they know and trust, which doesn’t happen overnight.  It’s important to develop relationships with client personnel over the long term.  Someone you meet and develop a friendly relationship with today may not provide you with any sales opportunities immediately.  But they may down the road.  Whether they still work for the same company, or have moved on to another one, they’re more apt to turn to you if they know your firm’s capabilities and trust you to deliver them. Connecting with them through LinkedIn, Twitter or some other form of social media is a great first step. Beyond that it’s important to stay in touch.  Connect with them occasionally just to touch base and see what they’re up to.  If they have occasional updates on social media, comment on them periodically to stay top of mind with them.

Don’t oversell: Drilling clients for information on other projects will turn them away and create an environment of distrust.  There is a difference between pestering and staying in touch.  You need to use your best judgment in determining what is appropriate for keeping in touch.  The Dale Carnegie approach of taking an interest in them, works best for two reasons.  First, you develop their trust.  More importantly, you develop a relationship with them.  Instead of selling something to them, think of it as providing them a service.  If you have developed a trusting relationship, they will be more apt to turn to you for the services you and your firm can provide.

About the author: Lew Sauder is the author of Consulting 101: 101 Tips For Success in Consulting (www.Consulting101Book.com).  He has been a consultant with top-tier and boutique consulting firms for seventeen years.

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Doing What You’re Told

I’ve been working since the age of 12 when I became a busboy at an Italian restaurant in my hometown.  I still remember my dad dropping me off on my first night.  As I got out of the car, the last thing he said to me was a rather emphatic “Do what you’re told” (as though I’d had a history of not doing that with him).

Suddenly, at the ripe old age of 12, I was working for the man (even though the boss’s name was Betty).  My dad’s advice served me well, not only for that job, but for other jobs through college.

But once I got my first career job, it wasn’t such good advice.  Certainly doing what I was told would have been OK, but I wouldn’t have gotten far letting others think for me.  To be successful, you need to make decisions and decide for yourself what needs to be done.

One of my favorite Disney/Pixar movies is A Bug’s Life.  In this movie, one of the worker ants, Flik persistently thinks up new ideas and inventions and essentially goes against the ant colony’s accepted norms of following procedure and doing what they are told.  Meanwhile, the colony’s heir apparent, Princess Atta, makes all of her decisions based on what the colony would think of her.  She would ask Flik, “Why can’t you just be like everyone else?”

Are you a rule follower, going through the motions of mediocre obedience?  At some point you need to ask yourself, have I been hired to think or to do.

If you only do what you’re told, you are easily replaceable. What does your employer value most from you, taking direction, or solving problems?

About the author: Lew Sauder is the author of Consulting 101: 101 Tips For Success in Consulting (www.Consulting101Book.com)  He has been a consultant with top-tier and boutique consulting firms for seventeen years.

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