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Premise: The key to success is delegating and outsourcing, not doing everything yourself.
Laziness and efficient laziness are not the same. A lazy person really does not want to do any work whereas an efficient lazy person seeks to finish an assignment by delegating much of the workload. In order to do be able to delegate effectively, however, a considerably effort must be allocated to planning, preparation and execution and that, in my opinion, is what efficient laziness is all about.
When I engage in projects, the first issue on my agenda is to clearly define what the client wants to do, how he or she prefers to do it, and what elements are critical for project success. Instead of attempting to do everything myself, I outsource nearly 90% to professional firms and individuals that I trust will deliver satisfactory results. Understanding what is needed and who can deliver it is basically what I do. This approach increases the service level to the client for multiple reasons:
- Instead of engaging tasks sequentially, they are engaged in parallel which shortens time to market and begins to generate client revenue faster.
- Placing too much on one plate can create burn-out and fatigue while outsourcing spreads the workload more evenly, thereby reducing the risk of error or misjudgment.
- Through outsourcing or delegation, responsibility is shared which means that instead of the entire weight of the project being on the consultant’s shoulders, he or she can leverage that against other professionals in charge of specific tasks (the consultant is still ultimately responsible for the project outcome but it is far easier to supervise and audit the work of others rather than do everything personally).
I usually deal with the planning stages concentrated on opening up new market territories for clients. In order to determine the investment required and the ROI, concrete quantitative and qualitative data has to be complied. While I could do this myself, it would mean that the time-to-market would extend which results in time lost. Therefore, when engaging in strategic planning, I prefer to subcontract those elements so that I can fully focus on how to position the client in the territory with minimal risk. In like manner, I am often on the other end as other consultants outsource marketing strategies here while they concentrate on the client overall business strategy. Keeping things focused works in the favor of the client and gets the job done faster and more efficiently than if one and the same consultant attempts to do everything. Micromanagement is not what the consultant should engage in for two main reasons:
- It isolates the consultant from other, skilled professionals and contracts the network.
- It puts the consultant under too much pressure that can lead to confusion and even project collapse.
- It prevents the consultant from building a real consulting business as micromanagement usually results in a sole operation.
Many consultants attempt to do it all and few if any really succeed. Some even end up hospitalized as a result of over-exhaustion and stress. In my opinion, a consultant that cannot effectively manage own operation efficiently cannot help clients achieve a similar objective as they fail to grasp the importance of delegation and efficient task allocation. A strategic consultant effectively provides CEO support and as such is not supposed to perform individual tasks covered in the strategic outline anymore than the CEO does. Instead, his or her role is to ensure that the job gets done properly, is delivered on time and meets objectives; it is all about managing the workflow, not to drown in it.
Failing to delegate and utilize the vast resources available through professional firms and individuals renders the consultant unfit to undertake strategic projects as he or she will be bogged down by mundane tasks. We have all heard about CEOs that micromanage and the effect this has on employee turnover. Many consultants fall victim to that and I find it counterproductive. There are only so many hours in a day and they have to be leveraged. Trusting those we work with is essential and I prefer to handpick the best teams available.
As usual, this is my approach to the consulting business that some may not agree to. It does work for me and my clients, however, and therefore I wanted to share it. I have always been fond of delegation as it helps we take on more and larger projects faster while maintaining a lean operation. For some that may not work; for others it will. It depends on the context. I would greatly appreciate feedback.
Premise: The key to success is communicating to the reader, not yourself.
English is my third language, so I am being quite bold to presume I can provide any advice on how to deliver material in that fine language. Still, I have repeatedly succeeded in getting the desired results using a minimal amount of words, be it an email message or a social network post, a survey or a presentation, a business plan or a corporate strategic action plan where it is imperative that everyone clearly understands the objectives and is willing to participate.
Three sentences is really all it takes to find whether a target is willing to engage, be it on a personal level or professional. Consider the following when you are composing an important email message:
- Sentence 1: Opening statement – If you know the recipient, start of a personal note, if you don’t, find the common denominator.
- Sentence 2: Disclose the reason why you are contacting the recipient and outline potentially mutual benefits.
- Sentence 3: Suggest a follow-up that invites the recipient to reject the proposal without that hurting your relationship.
This may sound a bit cold and impersonal, but the fact is that lengthy messages are unlikely to be read. Usually they are left to be read later and eventually end up unread. When writing messages, matters tend to go wrong between sentences 2 and 3 as the sender begins to prove the concept in order to reduce the risk of rejection. Such messages tend to look like this:
- Sentence 1: Opening statement.
- Sentence 2: Beating around the bush a bit.
- Sentence 3: Beating some more around the bush.
- Sentence 4: The core issue; why you are contacting the recipient in the first place.
- Sentence 5: Evidence why the issue should be of interest to the recipient.
- Sentence 6: Further evidence why the issue should be of interest to the recipient.
- Sentence 7: Even further evidence why the issue should be of interest to the recipient.
- Sentence 8: Go personal leaving the recipient no means to reject the proposal without that hurting your relationship.
The first message can be read in seconds; the other takes a minute or more. The damage done using the latter approach is threefold:
- It demonstrates lack of confidence (fear of rejection).
- It demonstrates lack of clarity (fear clouds the ability to think).
- It puts a wedge between you and the recipient (fear is weakness and causes recipient discomfort or irritation).
Business schools, especially in marketing, emphasize the use of normal language when communicating as most people have only basic vocabulary. That does not apply when writing to executives, Board members, investors and other professionals. People at that level are quite sophisticated and can take offense if an issue they understand quite well is explained to them. If they do not understand the issue, they will find out about it privately or simply ask for a clarification.
Snorri H. Gudmundsson, CEO, GC Venture Consulting
Premise: The key to success is focusing on your client’s value chain, not the client’s immediate target audience.
I do quite a bit of market research for businesses, government agencies and international organizations. What I have found is that an overwhelming amount of these clients focus on their immediate customers and direct surveys toward how better to service them. The problem here is that these customers usually have their own customer-base and that configuring a survey targeting their needs does not extract sufficient information as to how their customers gain by participating in the survey. This usually leads to a low response rate.
Market research surveys need to look past the client to the end customer in order to extend the value-chain forward. When executing a survey for an international institution like the World Bank Group, asking its immediate customers whether or not a certain project would benefit them provides insufficient information as to whether they are likely to participate in that given project. Taking it forward, however, by asking them how they could better approach their own customers was the World Bank to launch said project renders the survey far more accurate as we get responses based on actual opportunities. I have found that the most effective surveys are not directed toward the immediate customers but to their customers. Example:
A website hosting firm wants to attract more business. If it directs the survey to potential customers, the deciding factors will revolve around price, security, backup, support and down-time. If it directs the survey to actual customer needs, it will revolve around how they can gain more business by doing business with that hosting firm. This approach causes the survey to double as a sales vehicle.
I was recently involved with a survey where customer needs were assessed. The problem was that it did not extend to address the needs of the target audience’s and so resulted in a low response rate. The survey was directed toward what it would take for the client – a hosting company – to attract more business but it did not address how the client’s customers would benefit from doing business with that firm or what their needs were. The insights generated revolved around price, security, backup, support and down-time which, while providing some information, did not help the client formulate an effective go-to-market strategy.
A survey that does not extend to encompass the entire value-chain (this excludes surveys intended for direct market targeting) will fall short as it skips the needs of the end-customer. Therefore, before engaging in market surveys, I prefer to map out the value-chain and transform the survey itself into a sales vehicle that, while generating the data needed for client decision-making, will present a solid argument toward its immediate customers that the client in question is the ideal choice in order for him or her to increase own revenue generation.
Market surveys are usually considered to be a vehicle for data gathering while I consider them to be partly that, partly a marketing weapon. Any individual that takes a survey is subject to what a client is offering. It is a marketing opportunity that most survey companies fail to recognize. Why ask a respondent whether or not price is a factor when it is just as easy to ask what his or her customer’s concerns are? The respondent may answer with ‘Yes’ while his or her customer may answer ‘No’. A survey that is directed toward the immediate customer does not address the value-chain whereas a survey directed toward the customer’s customers does. A survey has the target’s attention – use it!
The purpose of a survey is to extract information that is useful to the customer. Why not expand that to encompass the value-chain instead of limiting it to the immediate customer? I have found that by extending the survey increases the response rate significantly as respondents perceive a direct value for their own business as opposed to merely generating results useful only to the immediate client.
I would appreciate feedback and comments from other market researchers that have similar or other experiences with this.
Premise: The key to success is selecting clients based on vision, not business volume.
Lawyers will completely disagree with this premise and so may many consultants. The premise rests entirely on what type of consultant you are. Still, consider the following scenarios:
Consultant A lacks focus and vision and has three clients that have no common denominator. For the sake of clarity, let us assume that one client is a bank and that the project revolves around internal cost analysis, another a pharmacy chain that seeks to improve its customer experience, and the third a five-star restaurant facing a PR crisis due to a customer experiencing an allergic reaction to slatur (Icelandic dish made from the innards of sheep and similar to haggis) that has been trending on Twitter for two weeks with no end in sight.The consultant’s ability to leverage them against one another is very limited.
Consultant B has focus but lacks vision. He or she has the same three clients but this time, they all share a common denominator: customer insights. The bank wants to increase market share and business volume using the most recent emerging and disruptive technologies and methods available, and so does the pharmacy and the restaurant. As the same technologies and methods can be used (with minor variations), the consultant can practically deliver his or her services using the assembly line approach. This may, however, restrict the consultant’s playing field and prevent him or her from engaging in very large projects that call for a broader scope.
Consultant C has both focus and vision and shares the same three clients. As he or she has selected them based on how well they fit his or her own vision, the playing field can be very large. This is the realm of management consulting and international strategy. This consultant does not accept the three as primary clients; instead, he or she has accepted an international institution as a client to formulate a strategy to which the three secondary clients play a part. An example of this would be an institution that seeks to increase infrastructure growth in an emerging region through direct investment in key sectors. By placing investments so that they have the desired effect, an opportunity presents itself for the three secondary clients to become first to market in that region. Once the region begins to grow, the demand for banking services increases and residual income levels warrant the entry of the pharmacy chain to that market. It also presents an opportunity for the restaurant to open up another venue. These projects are much larger than Consultants A and B can tackle. They are also unattainable if the consultant lacks vision and allows him or herself to be sidetracked by projects that do not fit that vision.
Vision is associated with having a goal – objective or target – that the individual strongly believes in. Merriam-Webster defines vision (in this context) as “a thought, concept, or object formed by the imagination” which is exactly what it is. The challenge of operating using vision as a primary weapon is that it is intangible and therefore has to be supported by a strong, logical framework. Steve Jobs had a vision that we would carry the internet around with us and now we do. Nokia did not share that vision and has been acquired by Microsoft as a result:
“Two years after hitching its fate to Microsoft’s Windows Phone software, the Finnish phone maker that once dominated the global market collapsed into the arms of the U.S. software giant, its mobile business ravaged by nimbler rivals Apple Inc and Samsung Electronics.” Reuters
Vision relies completely on the ability to sell it. It is a future often very different from the world as it is today. Consider this:
“[Steve Jobs] had cajoled AT&T into spending millions of dollars and thousands of man-hours to create a new feature, so-called visual voicemail, and to reinvent the time-consuming in-store sign-up process.” Wired Magazine
That is an example of how vision is extended outward to encompass secondary entities that are targeted as key players to bring the vision about. Understanding consumer behavior and economic interaction is fundamental is providing a solid backbone to any form of vision, for vision needs capital in order for it to manifest; else it will perish as our dreams do once we awaken.
Without vision, consultants struggle to make ends meet since they cannot leverage their clients nor secure projects much larger than themselves. They also fail to attract the right people to work with, for they do not look for individuals that share their vision – and can deliver parts of it – but those can perform mundane and often uninteresting tasks (such as typing, proof-reading or data gathering). A consultant with a clear and convincing vision will not only seek to realize it; he or she will strive to surround him or herself with the right people and select the right clients to bring that vision into fulfillment.
Premise: The key to success is entering into a contractual agreement with your client, not working for free in the hope that something comes of it.
Many consultants fail to enter into a contractual agreement with their clients before engaging in work on his or her behalf in the hope that they will reap their reward later. What it does, however, is that it creates a lot of confusion and uncertainty down the road for both parties. A consultant that knows what he or she is doing should not work outside a contractual agreement for that very reason.
In Betting on Equity, I raised some issues regarding working for a stake in a business instead of operating on fixed fees and commissions. I am still in favor of the latter scenario as the former usually begins with the parties not entering into a contract in the first place. For some reason, many consultants forget that they actually invested in the process that enabled them to acquire their skills when approached by a potential client. This makes them literally avoid the contract issue altogether. Often, they start helping the potential client – a non-paying client is not an actual client – out for free, fantasizing that they will reap the rewards with interest later. That sets the stage for a major headache later on when the contract issue really becomes imperative. When that point is reached, this is usually what happens:
Seeing the business reap the rewards of the work done on its behalf, the consultant suddenly realizes that he or she is not sharing in the gains or even future prospects. That is a dreadful experience that often makes the consultant act erratically. In a worst case scenario, the consultant attempts to charge the client retroactively without realizing that the client has never agreed to pay for the consultant’s services to begin with. The relationship can go very sour very quickly if this is not resolved fast. Basically, we are looking at two halves of a boiled sheep head (“Many Icelanders consider the eye to be the best part of the head.”) wondering how they got on that plate.
The potential client offers the consultant a seat on the Board, a minor stake in the business and, perhaps, a promise of future work that will be paid for. In my opinion, a consultant should never be on any client’s Board as that is a major conflict of interest. If approached with that type of offer, the consultant should advise the potential client that doing so creates a volatile situation whereby the consultant can – and probably will – attempt to block competing consultancies using his or her Board member vote. It does not matter if the position is non-voting; having a consultant on the Board is an ethical violation that is likely to affect the company’s growth strategy by eliminating other – and often very competent – consultants.
Without a contract, no real work is actually done, especially in terms of business strategy. It is mostly talk and taking care of minor details. Without a contract, the client is not a client and the consultant is not really doing any solid work. A good consultant may help the business by making minor adjustments and suggestions, but he or she does not engage fully until a contract has been signed – be it for fixed fees and commission or equity (and I maintain that equity consultants do less for their clients than fixed fee and commission consultants; please do a study on that, market researchers – it would be great to have an actual measure to confirm or rescind my gut feeling on that).
When working outside a contract, entering into one is only delayed. Eventually doing so is unavoidable or the relationship fragments. I have detected two main reasons (there are probably many more) why consultants fail to present a potential client with a contractual agreement before doing any work:
The consultant is insecure. That does not mean he or she cannot do the job; on the contrary, the consultant is quite likely to understand own field far better than the potential client but lacks training in closing actual sales. That weakness will not interfere with the consultant’s work early on, but it can easily lead to a challenging situation later.
The potential client has insufficient funds to commit the company to such an obligation in order to secure the consultant’s services. If the consultant believes in the company and its offerings, he or she usually offers to work for equity. That translates to a consultant working for free for one client and having to sustain own operations and personal well-being by working for other, paying clients or even an employer. Another – and a very serious – problem that arises is that the consultant has no budget to work with which limits current and future activities and planning. Of course, this depends on in what field the consultant operates (I deal mostly with go-to-market and exit strategies which require a well-defined budget that needs to be allocated to the right channels at the right time) but having a contract frames the project and sets the rules of the playing field (and determines the playing field itself).
Waiting to enter into a contract is a bad idea due to the problems it creates at later stages. It also tells the potential client – although he or she may be consciously unaware of it – that he or she is dealing with a struggling business. And if the consultant is struggling, how likely is it that he or she can help the potential client succeed?
It would be great to get your experiences on both sides of the fence.
Premise: The key to success is thinking things through, not rushing into uncertainty.
Whenever we perceive something, our brains immediately compare, categorize, classify, and evaluate it. We also project what will happen next and lay multiple contingency plans automatically. This ability is often lost when we engage with clients, especially when taking the first steps as business consultants. We tend to evaluate clients based more on wishful thinking than actual strategy, which means that our strategies rely on what we wish will happen instead of what the most logical course to the most optimal outcome will be.
When starting out in this business, my strategies were often influenced by how management wanted to do things, not how they could – and should – be done. An effective consultant will lay the best strategy he or she can as long as management overall expectations (usually growth and profit target) are met. A few years ago, I would present management with strategies that corresponded closely with how it wanted to run things but were largely ineffective as there were better options available. Today, my focus is on what will secure the operation in the long-term and secure its continued growth. Working with investors is slightly different as their primary objective is to recover their investment fast with interest. Securing that results in higher management salaries, a higher social status and the intoxicating effect of success. Management often attempts to resist strategies that are different from what it is used to seeing, but investors are generally more open for new ideas and pathways.
A strategy that does not result in increased wealth and status for management will be rejected and for obvious reasons. A strategy must therefore be shared in order for management to warm to it and be willing and even eager to participate. Laying everything on the table at once, however, is not recommended as it causes management impatience. Rather than revealing the entire hand, gradually unfolding the strategy piece by piece enables management to understand the main components and their sequential nature, and perceive that future that objectives can be achieved. The majority of this work is undertaken by thought, not working on a computer terminal.
When someone utters the word ‘work’, we immediately connect it to labor – that of physically doing something. Those that want to be laborers are encouraged to hold on to that image, those that do not are encouraged to alter what the word means to them. Some consultants appear busy all the time but have little to show for it; others appear to do very little but somehow get a lot done. A while back, I began perceiving this and decided to stay away from the computer and concentrate on human interaction instead (see ‘Selling your brain‘. The transformation was a game changer. Strange as it may sound, humanity prides itself on its ability to think yet appears to assign a greater value to physical labor.
Today, I spend my time speaking with investors, management, stakeholders, potential customers, partners and colleagues to gain a clear picture as to what the optimal strategy for any given scenario should be before drafting anything. It is a collaborative effort where each contributes valuable insights. I call it efficient laziness (that some misinterpret as over-delegating) that is based on creating the strongest core competency chain possible for each situation. Horizon 2020 consulting projects are particularly dependent on the ability to divide tasks among experts as they will eventually be evaluated by Expert Evaluators and EC Officials in Brussels. The first item on the agenda is to clearly understand what the client wants to do, formulate a plan as to how client objectives can be most successfully met, and then present the client with an outline that he or she can fine-tune if necessary. At this stage, we only compose a very short outline, usually half a page, that describes how client objectives can be accomplished. The majority of the work is done through thought and communication.
As with all these thoughts, this is my personal experience and journey through the business consulting world. Comments and counters are always welcomed.
Premise: The key to success is transformation, not free labor.
If you are an SME consultant, chances are that you would rather take an equity stake in a company rather than get a sales commission. You bet your time against the success of the venture and thereby condemn yourself to free labor. I did this for years until it dawned on me that I was working for the wrong client!
SME management is usually bootstrapped with little capital to spend on consultants. It is usually as delighted to get a consultant on board that will work for equity as the consultant is to get that equity. While it looks neat on the surface, it really stinks like Icelandic skate (“… has a smell that can clear your sinuses from a mile away.”). The two parties have literally signed an agreement whereby the company will gain little from the relationship as the consultant is starving to death! If consultants aren’t paid, they won’t deliver; simple as that. They intend to, but the reality is that paid projects always take precedence leaving the client in the low priority category. The problem is easily solved but it takes a dose of confidence to do it (and that confidence is based on your own skills plus who is in your network).
Consultants that are new to the game want to prove themselves by taking a company from nothing to billions. The first month, they still believe they can do this and deliver excellent material that the client can use. The second month, the consultant realizes that the task at hand is actually more difficult than expected and goes into overdrive to prove him or herself to the client. Month three, the client begins inquiring when the consultant expects to deliver tangible results and the consultant snaps into defensive mode. Month four, this deteriorates into a situation where the consultant begins to regret having committed to a deal lacking cash inflow and starts looking for a way out. During this period, the company is relying on the consultant who is delivering nothing. This is why I advise against equity-linked consulting as a starting point for a consulting career; the consultant is committing financial suicide and is dragging the client down as well!
The root of this problem lies in targeting SME management. SMEs are financially starved – bootstrapped – and can’t really afford consultants. SME management will never allocate 30 – 40% of their budget to a consultant as it believes itself more than capable of delivering expected results. Subconsciously, management does not really believe in the consultant either as he or she operates outside the budget – anyone that works for free is basically sending a message that the work done has no value (there a exceptions to this). An equity consultant can rarely convince management to allocate capital toward specific channels to accelerate growth if those channels do not suit management. Working for equity therefore puts capital constraints on the consultant, which literally puts him or her in chains. In order to reverse this, the consultant should consider changing the target from SME management to SME investors.
Working for investors changes everything. Investors want to recover their investment and make a solid profit and have the power to override management when it comes to budget allocations. A consultant with the right network and has the ability to lay sound strategic plans concentrated on driving up revenue and profitability will get the funds required to execute. In return for a fixed fee and sales-based commission, the consultant is very likely to deliver as he or she has the funds needed to execute the strategy. The consultant that works for equity does not have that luxury. In addition, working for one investor causes other investors to pay attention (investors talk and word spreads quickly).
Equity consulting usually becomes free labor whereas commission-based consulting enables the consultant to quickly build reserves that will later be used to convert the consultancy into a hands-on investment firm that is already connected to investors. In my opinion, a consultant that works for equity is unsure whether he or she can deliver the expected results within a given time frame whereas the consultant willing to accept commissions instead of equity has complete confidence in own ability to deliver the results by managing resources – including human – efficiently. The reason is not that equity consultants are unable to do this; they simply have no immediate incentive to do so other than possible future gain which largely relies on company management. A commission consultant takes charge backed by investors, an equity consultant is unable to do so as management will not allocate capital in that direction.
I have a lot of very close friends who operate as equity consultants and are very good at it. Some have managed to build up a nice cash cushion which enables them to work for free, others are struggling. In my opinion, working against an equity stake is fine as long as the consultant has no need for a fixed revenue stream. If that is not the case, the consultant needs to step up the game and be sufficiently confident to take on projects on fixed income/commission-based terms. Do not confuse confidence with fixed income; if the consultant fails to deliver, the reputation goes down the drain,
This is just my opinion based on my personal experience in this field. I consider the consulting phase to be the preliminary phase to becoming a hands-on investor and am taking the transformation path. Once projects have generated sufficient reserves, our consultancy will transform into an investment agency and then fun begins.