Your assets: six lessons

More notes from Managing the Professional Service Firm

Your assets as a consultant basically boil down to your knowledge, technical skill, counseling skill, and the depth of your client relationships.

Six lessons about your assets as a consultant:

  1. Your existing knowledge and skills will depreciate in value
  2. The health of your career has less to do with the volume of business you do than with the type of work you do and the type of clients you do it for
  3. When you take control of your own business development, you take control of your own career development
  4. The same is true of asset development
  5. Balance using your existing skills with developing new skills
  6. Marketing to existing clients is the best way to build your assets

Build experience through industry depth first, then breadth of clients

Skill in counseling consists of activities such as facilitating groups, building consensus, resolving political conflicts, etc.

You not only want to solve problems, you want to educate the client.

Managing the marketing effort

More notes from Managing the Professional Service Firm

  • Organize and reward marketing efforts as you do billable time
  • Different activities require different skills, so allocate them to people according to ability and preference
  • Form small teams, each focused on one type of marketing
  • Ask everyone to devote the same minimum time to it
  • Include junior staff

Attracting new clients

More notes from Managing the Professional Service Firm

Raspberry Jam Rule: the further you spread your marketing tactics, the thinner they get.

It’s always better to demonstrate than to assert.

In-person, individualized methods are always better than broadcasting.

  • The first team
    • Seminars (small-scale)
    • Speeches at client-industry meetings
    • Articles in client-oriented (trade) press
    • Proprietary research
  • The second string
    • Community/civic activities
    • Networking with potential referral sources
    • Newsletters
  • Clutching at straws tactics
    • Publicity
    • Brochures
    • Seminars (ballroom scale)
    • Direct mail
    • Cold calls
    • Sponsorship of cultural/sports events
    • Advertising
    • Video brochures

How clients choose

More notes from Managing the Professional Service Firm

So far How clients choose has been one of the most eye-opening chapters of the book. If were we to apply user-centered design principles to clients, we’d end up with this chapter.

From the consultant’s point of view, there are two main stages to getting clients: marketing (speaking to the entire market) and selling (speaking to one particular prospect). From the buyer’s point of view, these two stages are qualification (determining who has the technical skills to do the job) and selection (who do I like enough to do the job). The first is a technical evaluation, the second is much more personal. This is because of how the buyer feels during this process…

  • Insecure about decision
  • Intellectually threatened
  • Risk losing control
  • Impatient to fix problem
  • Exposed about work secrets (both advantages and embarrassments)
  • Concerned you won’t give me enough attention

As a result, the buyer looks for these qualities in a consultant…

  • Preparation and initiative
  • Discussion of their situation, not your impressive abilities
  • Not discussing their problem until they trust you
  • New, relevant, valuable information and education
  • Low pressure sales
  • Not claiming to know more about their industry than they do, you should post knowledge in the form of questions and then listen
  • Sensitive to their position in the organization
  • Stops to answer their questions, well
  • Gives them options, not just the usual approach
  • Doesn’t just lecture or present, but engages in conversation

Being client-centered

More notes from Managing the Professional Service Firm

About a third through the book, Maister starts to repeat himself a little, hammering home one of his overarching themes of service. He says you must be client-centered, particularly interesting advice when you’re running a user-centered design firm. This is a balance we’re familiar with, and as designers learn more about business it becomes less a conflict and more a synthesis of the two goals.

  • Make clients feel special. Imagine the effect of a hand-written note.
  • Explain the process; they should know what’s going to happen before it happens
  • It’s not about schmoozing, but simply having a great attitude
  • To do this on a firm-wide basis, it must be implemented as a system
    • Measurement
    • Management
    • Tips and tools
    • Training
    • Rewards
  • See the tables on pgs. 106-7, 9

Service and Work

More notes from Managing the Professional Service Firm

  • He points out that the work is only part of the consultant’s service. We are also judged on our responsiveness, attitude, manner, etc. When the quality of the work product is difficult to measure (as with consulting advice), the service aspect is actually more important than the work product. A great lawyer may lose a case and still retain a client. Troublesome architects rarely get their buildings built.
  • If you question if you really need to work this hard on service, think about the vendors you use – accountants, doctors, etc. – don’t you wish they provided this kind of service?

Lately, since reading this, I see every business I patronize through this lens. Some firms are able to deliver consistently lousy service simply because of supply and demand, or location, but not forever.

Practice Development Activities

More notes from Managing the Professional Service Firm

  • He identifies 3 vital categories of practice development (i.e. marketing) activities and what percentage of time to spend on each:
    • Broadcasting (writing papers) – 10%
    • Courting (forming a client relationship) – 25-40%
    • Superpleasing (Going beyond satisfaction to delight) – 10-15%
    • Nurturing (Spending extra, non-billable time to understand client needs) 30-35%
    • Listening (…to the market, to develop services) – 10-15%
  • ROI – via word-of-mouth – and Broadcasting the lowest ROI.
  • Identifies a few ways of listening:
    • User groups (review future development ideas with a group of clients)
    • Reverse seminars (have client come in to talk to us)
    • Attending client industry meetings (with the client)
    • Market research
    • Senior partner visits
    • Engagement team debriefings
    • Systematic client feedback (e.g. survey)

Profitability vs. Health

More notes from Managing the Professional Service Firm

  • Rather than focusing on chargability and realization reports, look at profits per partner.
  • For each activity the firm strives to improve (e.g. delagate better, develop higher value services) examine how each contributes to both short-term profitability and long-term health.
  • These activities, in order of importance to health, are
    • Raise prices
    • Lower variable (delivery) costs
    • Fix underperformers
    • Increase volume
    • Lower overhead costs
  • is so important and offers a systematic method for improving it.

A Firm’s Mix of Consultants and Projects

As mentioned last week, I’m reading David H. Maister’s Managing the Professional Service Firm, and it’s very very very good. I’ll post some summaries here, though it’s almost a sin to summarize it as his writing is already clear and concise.

Staff falls in 3 basic levels: Partner, Manager, and Consultant.

He identifies 3 main types of projects:

  • Brains (require extensive expertise, little can be reused)
  • Grey Hair (requires experience, some can be reused), and
  • Procedure (familiar problem, much is reused).

The right staffing mix is needed for the project mix, e.g. more Partners for Brains projects, more Consultants for Procedure projects. Over time, you need to factor in how consultants are to be promoted, what kind of projects you attract, and how that affects the mix.

Big companies breed small minds

Two views on the same idea:

Daniel Dennett in How The Mind Works, courtesy of Alex Wright:

A flow chart is typically the organizational chart of a committee of homunculi (investigators, librarians, accountants, executives); each box specifies a homunculus by precribing a function without saying how it is accomplished (one says, in effect: put a little man in there to do the job). If we then look closer at the individual boxes we see that the function of each is accomplished by subdividing it via another flow chart into still smaller, more stupid homunculi. Eventually this nesting of boxes within boxes lands you with homunculi so stupid (all they have to do is remember whether to say yes or no when asked) that they can be, as one says, “replaced by a machine.” One discharges fancy homunculi from one’s scheme by organizing armies of idiots to do the work.

Jim McGee, courtesy of Bill Seitz:

Years ago I worked for one of the big systems consulting firms. In a conversation on a flight from New York to Chicago, one of the partners told me, “Jim, we can’t have everybody thinking for themselves, 90% of the people here are just pulling on the oars. If everybody decides to steer we won’t get anywhere.” There’s a huge amount of industrial logic in this. You want to control risk. You want predictable results. You want control and replicability. What makes the transition to a knowledge economy so scary is that it disrupts this equation. What if one of those guys pulling on the oars figures out how to make a sail? Contemplation of these questions makes innovation and new knowledge creation feel like potential chaos. Easier to push the problem into the categories that promise continued control.


Some terse notes from the free bits of Seth Godin’s Survival Is Not Enough. I find his prose a bit wordy, but I think he’s trying not only to communicate the ideas but also to inspire.

  • Evolution in business is a theme…‘Extinction is part of the process of creation. Failure is the cornerstone of evolution’ and ‘[Kinko’s] had a posture about change that treated innovations and chaos as good things, not threats’ and ‘Sooner or later, every winning strategy stops working. The competition catches up. Technology changes.’
  • Small, quick, cheap feedback loops allow for low-risk experimentation. Ask: ‘How much will it cost to find out if it works, how long will it take and how much damage will be done if we’re wrong?
  • Factories – any kind of large, long-term investment – make it hard for companies to change. Lease, don’t buy.
  • Echoing the broken windows theory, he cites the stupid little things big companies do to piss off customers, reminding us that small customer interactions matter
  • ‘Discovering your winning strategy and saying it aloud is critically important in getting ready to change it. The easiest way I can describe for finding your strategy is to do this: Figure out what changes in the outside world would be the worst possible things that could happen to your company. (No fair picking something that affects every business . . . it’s got to be something that is specific to your industry.)’
  • Competent people resist change. Why? Because [giving up what they do well] threatens to make them less competent.’
  • Knowing when to pile on (as AOL did once ICQ started to succeed) or when to abandon ship (as Amazon did with their Junglee shopping service) is an art.’
  • And yet, sending signals that you are a robust company (an expensive lobby) affects – as in sexual signals – a client’s perception: ‘The companies that can waste the time and money to send these signals are the ones that we believe are more likely to have the resources to provide good customer support, more likely to be in business years from now…Signals aren’t right or wrong. Instead, they either work or they don’t.’
  • On assholes that don’t work well in groups: ‘A bully gets what she wants at the expense of the group’s well-being. And because bullies operate from a zone of fear, they’re the most likely to effectively oppose change of any kind…Firing people is dramatically underrated as a management strategy.’
  • And last but not least, and one big reason I left SBI/Razorfish: ‘Choose Your Customers, Choose Your Future…Every time you interact with clients, you swap memes with them. They affect the work you do, the prices you charge, the rate at which you change and the kind of person you hire.’

Thinking in Groups

In Group Think, Malcolm Gladwell compares “Saturday Night Live,” the founders of psychoanalysis, and mid-eighteenth century scientists and observes that ‘We are inclined to think that genuine innovators are loners, that they do not need the social reinforcement the rest of us crave. But that’s not how it works…in all of known history only three major thinkers who appeared on the scene by themselves.‘ By way of explaination he quotes Erasmus Darwin (Charles’s grandfather), who

‘called it “philosophical laughing,” which was his way of saying that those who depart from cultural or intellectual consensus need people to walk beside them and laugh with them to give them confidence. But there’s more to it than that. One of the peculiar features of group dynamics is that clusters of people will come to decisions that are far more extreme than any individual member would have come to on his own. People compete with each other and egg each other on, showboat and grandstand; and along the way they often lose sight of what they truly believed when the meeting began. Typically, this is considered a bad thing, because it means that groups formed explicitly to find middle ground often end up someplace far away. But at times this quality turns out to be tremendously productive, because, after all, losing sight of what you truly believed when the meeting began is one way of defining innovation.’

Another quotable bit:

Uglow’s book reveals how simplistic our view of groups really is. We divide them into cults and clubs, and dismiss the former for their insularity and the latter for their banality. The cult is the place where, cut off from your peers, you become crazy. The club is the place where, surrounded by your peers, you become boring. Yet if you can combine the best of those two states‹the right kind of insularity with the right kind of homogeneity‹you create an environment both safe enough and stimulating enough to make great thoughts possible.

Thanks to Charles for the heads up.

Is Talent Overrated?

Malcolm Gladwell’s The Talent Myth story in the New Yorker is a surface analysis of McKinsey’s philosophy regarding hiring and promotion, but raises the important question whether companies like Enron misinterpreted the potential of individuals: ‘The talent myth assumes that people make organizations smart. More often than not, it’s the other way around…stability in a firm’s existing businesses might be a good thing…the self-fulfillment of Enron’s star employees might possibly be in conflict with the best interests of the firm as a whole.