With a complex topic like management consulting one of the challenges for an author is deciding what to leave out. There are various topics I have rejected from this book because I think they are of marginal relevance, critical only to a subset of consultants, or not the sort of ideas that are best conveyed via the medium of a book. That left me with a long list of thoughts or tips that will be useful to consultants but which do not fit neatly into any of the preceding chapters. They are very varied points but the features these tips have in common is that they are either helpful, but not obvious, when you start consulting, or they present useful but unusual ways to think about the world of consulting. The tips are a direct result of my experience as a consultant and I hope you find them useful.
Don’t make yourself indispensable to a client.
It can seem a good idea, from a commercial perspective, to make yourself indispensable to your client. If you do a great job, a client may welcome your ongoing and continuous involvement with their business. This can result in strong revenues from the client and it removes the need for unprofitable and time-consuming business development. Unfortunately, a permanent relationship has a number of drawbacks.
Before explaining the disadvantages, it is important to understand that in giving this advice I want to differentiate here between the individual consultant and a consulting company. A consulting company will benefit from a permanent relationship with a client, but the interests of the individual consultant are not the same as those of the whole company. I also want to make a distinction between repeat business, where you periodically sell to and work for the same client, and continuously working with a single client. The former is a sign of success, but the latter is problematic.
The first drawback is that if you personally work for only one client, you are not only indispensable to them, you will become dependent on them. All consulting engagements are eventually terminated, and if you have a relationship with only one client you will find it more difficult to find other work. When you want to leave, the client may not willingly let you. If you work for a big consultancy and your client insists on your continued presence, you may be left in a client organisation for a long time to maximise revenues and to maintain a client relationship. This is not good for your career prospects or your skills development as a consultant. An engagement can start to feel like a prison sentence rather than an opportunity for value-added consulting. If you do pull out, you leave the client with a problem. How will they cope without you? The client may end up feeling betrayed by you because of the challenges they face operating without you. Even internal consultants need to try and work across a business and not for a single client manager on a continuous basis.
What is a reasonable length for an unbroken involvement with one client? That is a ‘how long is a piece of string?’ type of question. My guidance is that value-adding engagements often take several months, but if a single engagement is stretching into years then you should question whether you are still adding value and improving as a consultant.
Always think about your exit plan from an engagement: what will you hand over to whom and who needs to have what skills transferred to take over from you? A consulting company wanting to maintain the revenue stream should try to rotate a different consultant into a client every few months. Soon after you begin an engagement, start sending those subtle messages that you will not be around forever, as it can take several weeks or months to extricate yourself smoothly from a client.
Your client runs a great business, otherwise they could not afford your fees. As a consultant, it is easy to see all the things your client is doing wrong, but if they did everything right they would probably never need your help. Give them some credit, as without it you risk becoming arrogant. Arrogance in a consultant is unpleasant, and usually unwarranted.
Your client has probably achieved things you have not. When you are speaking to the chief executive of a big firm, do not just think about the mess they are making in some aspect of the business you are an expert in. Think about how they manage tens of thousands of staff and budgets of billions of dollars – something most consultants have never done. There is a lot of things consultants don’t do and don’t have to worry about that clients must do every day. Give great advice, be critical where you need to be, but remember that a little humility never goes amiss.
Understand the client’s personal interest.
Why does the client, personally, want the work done? As discussed in Chapter 2, there are many different reasons why clients engage consultants. Try to get below the superficial level and understand why the particular client you are working for now wants the engagement done. What is in it for them as an individual?
This tip is not concerned with determining whether the engagement is for personal interest, as arguably in the end everything we do is for personal interest (even if that is limited to wanting to avoid a punishment). Try to establish whether the personal interest of the client is aligned with the rest of the organisation’s needs. If it is not, it is best to try and avoid the engagement.
A related issue is to learn to differentiate between the issue a client wants resolved and why they have chosen you. You may have been chosen for a range of reasons beyond the current issue. You must primarily focus on the issue the client wants resolved, but if you understand what it is about you that made them choose you as the right person to work with, you have an advantage. Leverage this understanding to enhance your relationship.
Client trust is more important than charisma.
There is an image of the great consultant as vibrant and charismatic. Forget charisma – think about trust. A client trusting you is always more important than great charisma or personal confidence. Charisma and confidence can help, but too much charisma can make some people wary. A client is looking for someone they can happily work with day in, day out, which does not necessarily mean the person with the most alluring or magnetic personality.
Trust is the keystone that will enable you to develop productive client relationships and overcome any lack of confidence or charisma.
Add extra value.
Value is delivered to clients from all sorts of help provided by a consultant. Much of the value of consultants does not come from the primary work in delivering an engagement, but comes in peripheral activities. These can be small tips, advice, pointing at useful articles or books, problem solving, simple tools or even just helpful chats now and again.
If you want to sell-on to a client, then delivering a great engagement to the letter of the proposal is a good start, but clients like working with people they know will willingly add that little bit extra. Of course, you must avoid the scope of your work expanding too much, but willingness to do that little bit more is a virtue. The trick is to find things that are easy for you to give, which add value to your client and which you have the opportunity to provide simply by being around. An old article from Harvard Business Review that is relevant to the client right now may add significant value, but takes little effort on your part. Just because something is easy for you, does not mean it is not valuable to your client, and, conversely, just because something is hard, does not mean it is.
Be flexible, but stick to the brief!
Tip 5 is important, but needs to be balanced with the fact that you have limited time on an engagement and already have lots to do. To consult profitably requires that there is a limit to how much you deliver outside the engagement brief.
Clients expect a degree of flexibility in consultants, and often this is essential. At the point an engagement starts, you may have won a fee-earning assignment, but its precise shape and content may not become apparent until a few more days or even weeks of work. Whatever you do, stay close to the original brief, unless you agree a defined and properly priced modification to it. For example, don’t drift into promising a business change, when what you are being paid to deliver is a report. It’s very easy, in the pressure of trying to keep a client happy, to end up promising all sorts of additional extras, which you will never manage to deliver within the time or budget of your existing work.
Manage your engagement timescale from day one.
Consultants regularly run out of time towards the end of engagements, and end up working from early morning to late at night just to get the final report completed. There are various reasons for this, and some consultants seem to thrive on adrenaline and caffeine at the end of an engagement. Generally, this is just bad planning and poor time management. Most of the activities that delay you at the end of an engagement – being asked to interview one more member of client staff, having to rework a report following a review by a senior manager in your own firm, or clients rejecting your findings – were predictable or at least clear risks from the first day of the engagement.
As all good project managers know, slippage on engagements starts on day one. It’s far easier to catch up on lost time at the beginning than the end. Catching up on one lost day when you have 10 weeks to go is easy. Catching up on one lost day when you have only one day to go is a nightmare!
Keep the pressure up from day one. Predict the problems you may have when finalising an engagement and leave time in your plan to resolve them. It will make your life much less stressful and enjoyable, and usually it enables you to deliver a better quality result to your client.
Take care with risk-reward engagements.
Risk-reward engagements are a type of commercial arrangement in which the consultant agrees to link their fees directly to the value delivered or benefits received by the client. The consultant is therefore taking a risk on the outcome of an engagement, and as a result is looking for the balancing opportunity for increased reward. A classic example is a procurement project, where a consultant is engaged to reduce a client’s procurement spend and, rather than being paid normal day rates, negotiates to take a percentage of the procurement savings as a success fee. On paper a risk-reward deal sounds fantastic. The client only pays for what you deliver, and there is an opportunity for extra margin to be made if you manage the engagement well. Risk-reward arrangements have been shown to work in many situations, and as a result of them there are a number of satisfied clients and profitable consultancies. It is a great value proposition, but take care before you get involved in one.
The often unforeseen problems with risk-reward deals come down to difficulties with measuring the success of the engagement and how you handle the situation in which you significantly over-deliver. There is also the rather obvious risk that you may under-deliver and not get paid, which is inherent in the structure of a risk-reward contract, but I assume you would not enter into one if you did not understand and assess this specific risk!
Risk-reward deals can easily end in acrimony and argument. If you are very successful you may earn a lot, but if you earn too much it can damage your relationship with the client – even if it was the client who suggested the deal and who benefits overall. For example, if your work results in you being paid several times what you would have earned if you were paid your normal day rate, then clients can end up resenting this. I have been involved in projects where the consultant performed what was according to normal fee rates hundreds of thousands of pounds of work, to be paid in millions of pounds based on the risk-reward metrics. Clients should not resent this, as they also benefit. You can argue it is in both parties’ interest and you would be correct. However, there is little point being correct if you irritate a client so much that they will not work with you again.
Additionally, you will obviously focus on delivering the maximum amount to achieve the maximum reward. The problem is that businesses are multi-dimensional and too much change in one area, such as reduced procurement costs, often has a detrimental effect elsewhere in a client’s business. Clients often feel all you care about is the reward, which of course is true, as that was the point of the deal!
Successful risk-reward engagements require a mature relationship with clients, who will perceive the benefits to themselves if they end up paying you more. If you do want to enter a risk-reward deal, make sure the client understands the implications, there is a reliable measurement process in place and the timing of measurement is agreed up-front.
Measurement must be in place at the start of the engagement, or else there is no baseline for comparison. The timing of measurement is crucial. Any change takes time to bed in and problems may not be initially apparent. Collecting data on success at the wrong time may present an overly optimistic or pessimistic picture of engagement success. Avoid this problem by agreeing at the start when and what you will measure as the basis of payment.
When you talk about engagement risk there are two separate aspects of risk: client risk that you will not deliver or will give suboptimal advice, and consultant risk that you will not deliver in the client’s eyes or will lose money on the engagement. You must clearly differentiate between the two. The implications of the two types of risk are different, and the way each type of risk is communicated, managed and mitigated will be different. Client risk is largely the client’s issue to deal with, but you should be conscious of the client’s need to avoid risk, and be engaging in such a way as to give them confidence that the risk is minimised. Consultant risk is yours alone to manage.
Manage your relationship with client staff sensitively.
Client staff will often think of themselves as representing the client and perceive you as just another supplier, whereas you may see the same client staff just as a resource to be used by you to deliver the engagement. There is an inherent conflict in these views and managing it requires a fine balance.
On some occasions you may end up ‘managing’ client staff within the scope of the engagement. Remember, staff are not your personal employees. How they feel and what they say about you can influence your client’s judgement of you. However, don’t treat them with kid gloves or you will not get the work you require done. It’s great to be popular with the troops, but it may not get the work completed.
If there are problems between yourself and client staff, discuss it with the client as soon as possible. Don’t simply ask the client to remove any staff you are having trouble with as this makes it look as if you are a weak manager, but let the client know there is a potential problem brewing.
Sometimes clients want consultants to have zero impact on the organisation. The client may be concerned that the consultant may cause some negative impact, especially if the engagement is dealing with some sensitive issue such as cost reduction or due diligence associated with potential mergers.
It is essential to act with sensitivity and respect a client’s need for you to minimise impact. You can reduce your impact, but you cannot have zero impact. Even an activity like data collection by consultants is visible to the organisation. It is very difficult to do it and carry out an engagement in secret. It is quite possible that staff will not know why an engagement is being pursued, but the fact that something is happening will become apparent to staff sooner or later. Therefore never promise to a client that you can work in such a way that no one in the organisation will have any knowledge of your work.
When in a team, work as a team.
Engagements often require a consulting team to work on them. When you are working on this type of engagement, engage the whole consulting team, accepting the strengths and weaknesses of different consultants. Delivering such a consulting engagement is like taking part in a team sport. You always want the best team you can get, but, like pulling a sports team together, the nature and timing of an engagement means that there is often not a perfect match between the skills required and the consultants available to deliver the engagement.
Continuing the analogy of the team sports, some consultants will be playing out of the position they are best suited to. If you are the lead consultant on an engagement, you must learn to get the best from the team you have, helping those who are in roles they are not familiar with to contribute to the overall engagement goal.
If you are advising a client to act in a certain way, you should act in that way too, otherwise your advice seems insincere. Human beings, including clients, seem to have almost perfect radar to pick up inconsistency of behaviour and hypocrisy. Yet consultants and consultancies are often loath to take their own medicine, and act as if it is not relevant to them. The worst financial systems I ever worked with were in an audit-based consultancy and one of the most inefficient management processes I saw was in a six sigma consultancy. The line management of staff by senior managers and partners in some consultancies I have come across would not be tolerated in many other organisations. The strange thing is that these consultants not only gave advice contrary to their behaviour, they believed it. If you believe your advice – take it yourself.
If you point out the difference between consultant behaviour within their own companies and client recommendations, the consultants usually mumble something about ‘cobbler’s children’ (from the old story that a cobbler’s children have the worst shoes). This is just labelling the problem – it is not a valid justification!
Learn on engagements, but don’t treat them as a time to learn.
What makes you valuable as a consultant is your ability to advise and get things done. These capabilities improve with time and engagement experience. All engagements provide an opportunity to learn. But remember, the client is not paying you to learn or develop intellectual capital – the client is paying you because you already know.
On every engagement think about who is getting value and who is learning. It should be the client more than the consultant. Any value and learning for the consultant should be collateral and not primary. If learning is your primary goal, you have lost the point!
Many consulting contracts are specified on a fees-plus-expenses basis. Consultants are often away from home for long periods of time. Consulting organisations often set expectations that consultants will be well looked after when working. These factors can result in consultants generating huge expenses bills.
Don’t go crazy on expenses, or stray outside the expectations of the client, or differ widely from how client staff operate. Yes, you have a right to be recompensed for reasonable expenses when away from home. But if the chief executive flies economy class, then it is not helpful for consultants to fly first class and bill for that. Do not hide behind the wording of your contract, as the details of what are and are not reasonable expenses are often not thought about when developing an engagement contract.
When you arrive at the client’s workplace, work out what is acceptable and what is not. If you are unsure, spend conservatively. If you make a mistake – apologise – and if you underestimate what is acceptable to spend, it is never a problem to start spending more! You can do a lot of damage and cause significant resentment if you charge for what the client perceives as excessive personal expenses. Clients do not see their role as providing for well-paid consultants to live in luxury.
Avoid ostentatious signs of wealth.
If you do become a hugely successful consultant, have a fleet of Ferraris and Rolls-Royces, then that is absolutely fantastic for you. But don’t turn up to client sites in one of them. Clients like to know a consultant is successful as it gives them confidence they are working with someone who knows what they are talking about. But there is a difference between turning up in a well-appointed executive car and showing off. Clients do not like thinking that the consultant working with them is significantly wealthier than they are, and got that way by charging their organisation. There are lots of ways of reinforcing your experience and competency – ostentatious wealth is not the best. Save it for your family and friends at the weekend.
Be clever, don’t just look it.
Consultants can become obsessed with how clever their work looks rather than how clever it really is. There is some truth that clients can be impressed with reports or presentations simply because they look good. A well-prepared document with excellent graphic design can gain artificial credibility because of how well it looks rather than what it contains. There is nothing wrong with trying to make your presentations look exceptionally attractive, and in modern business it is expected, but do not use it as to hide a lack of thinking. Sooner or later, and often sooner, you will get caught out.
An example of this is in the application of tools – such as spreadsheet-based analyses of client data. Many problems can be solved with simple intuitive tools. When you present a tool it should be because it is good, not because of the ‘now that’s clever’ response. Such responses are short-term. The tools must actually add value!
Knowing ‘what’ is useful; knowing ‘how’ is valuable.
It is helpful to understand the difference between know-what and know-how. An example of know-what is telling a client ‘the relevant regulation is subsection 4.2 of the 2006 regulations’, whereas an example of know-how is telling the client something in the form of ‘the best way to conform with the regulation is to train all your customer-facing staff in a half-day course as we have specified’. Know-what is facts, figures, information and data; know-how is approaches and experience of what works and an ability to make things happen.
Years ago an encyclopaedic knowledge of a business topic was valuable. The person with the most comprehensive set of know-what in an area was sought after and treated as a guru. But increasingly most business information can be easily referenced. A 15-minute trawl on the internet can provide huge amounts of useful information that would have taken weeks of research not that long ago. Hence, simply knowing things is more and more just a basic requirement to consult, it is not a differentiator. Clients need consultants to have access to know-what, but the real value comes from know-how.
Know-how must be real. If you claim to have know-how to make things happen for a client, then you must be able to make things happen and not, for example, simply have the ability to list the sort of things a client should be considering. Clients will soon find out whether your know-how is real or bluffing.
Focus and simplification are of most value to clients.
Value to clients often comes from expressing the problem they really have in simple terms, or explaining how to implement a solution in an easy to comprehend and unambiguous fashion. Being able to express a knotty set of problems that a client has struggled to understand on a one-page diagram is of huge value. Similarly, showing a logical plan for overcoming a problem that can be grasped in a few minutes is worth a lot to a client. In business, the aim is to get results in the most effective way, not to worry about understanding every aspect of every issue. Accurate simplification is powerful.
Simplification is also required so that you can complete your engagement within a reasonable amount of time. To do this, you need to prioritise where you will focus your energies. A consultant must focus on an engagement and remove or ignore peripheral issues. For example, a business problem may have 20 contributory causes and you have time to focus only on the most critical three. When you do prioritise, keep a log of how you made your prioritisation decisions, and ideally keep your client involved in such decision making. Whether you focus on the three causes with the biggest impact on the problem, or the three which are easiest to resolve, will significantly alter the content and outcome of the engagement. A client may challenge, at a later date, your decision to focus on those three aspects of a problem and not the other 17. Unless you can give clear and appropriate reasoning, which the client agrees with, you can end up with an ever-extending and loss-making engagement.
Understand the limitations of simplification.
There is a balance to tip 19. Consultants love developing simple theories and models, and generally clients like them and find them useful. But there is an inherent risk in making the true complexity of real life appear simple. There is always a risk of underdetermination by the data, i.e. there can be competing theories, models or other simplifications that equally well fit your understanding of the situation. The problem can be compounded by a consultant who, after using a model which is intellectually appealing and gives some useful results in one situation, fails to see that what they have is just a model and not the truth that applies equally well to all situations.
Making complexity simple can add huge value and give powerful insights, but you must always remain modest enough to know that at best the theory or model will approximate to reality and is not reality. Business theories are not scientific laws. You must be alert enough to identify when simplifications and models do not work. By all means see the value in models and other simplifications – but also see the limits.
Related to simplification is the modern tendency to reductionism. A reductionist breaks a problem into parts, treating the problem as the sum of its parts. Some problems can be resolved by breaking them into small simple components and resolving the individual parts. However, some business problems are related to the complexity of a business and the dynamic interaction between its components. In these situations, trying to resolve real issues by solving small parts may never work.
In Chapter 4, I introduced the concept of the client’s change process. This can be summarised by saying that most activities have followed on as a result of some previous activity, and the activity that is currently being done will flow on to another. Hence, you may be involved in some strategic thinking which follows on to an operational review, which then follows on to some change planning, and then carries on as a change implementation project.
As a consultant you will be involved only in a part of this process, and often will have to carry on using data, findings, recommendations or plans someone else has developed. For instance, a client may have developed a change plan, but realise they do not have the skills to implement it and ask you to help them run the implementation project.
There is always a risk in taking over from someone else. You may not agree with the prior findings, or what was suggested by the previous person may not be right. Taking the previous example, a client invites you in to complete a project they have planned but do not have the skills to implement. On the surface this may sound fine, but think about it for one minute. If the client does not have the skills to implement the project, do they really have the skills to develop a plan for it? Almost certainly not!
You cannot always start from the very beginning of every change cycle. You will not always be involved in the first stages of strategic thinking through to the end of change implementation, and may just pick up one part of this work. Therefore you must be able to take over from someone else, but at the same time you should be wary.
The solution is not to reject engagements that require you to take over from someone else’s work, but always to build in the opportunity to review previous findings, recommendations or plans. Clients do not always like this, as they can see it as simply an attempt by you to increase your fees. But reviews do not need to take long, and if you have an open conversation with a client about your need to manage risk then they will normally accept this. It is usually in the client’s interest too, since anyone who is involved for part of a change process, but hands over to someone else, may have little incentive to make sure what they propose will actually work. If the client will not allow you the opportunity to review the previous work, it is often better to decline the engagement than take the risk.
Different people work to different time horizons. We all know people who cannot plan or think beyond tomorrow, and others who are not interested in anything that is not measured in months or years. Typically, more senior managers think in longer timescales, but this is not universally true.
If a client only thinks in terms of weeks or months there is little point providing advice that will take years to implement or vice versa. The client will be incapable of utilising your advice, no matter how theoretically perfect it is.
In this chapter, I have described a number of tips gained from my experiences as a consultant. No doubt in 10 years’ time I will be able to add to this list as my experience and knowledge continues to grow. Many of these tips will apply to all consultants, but of course the lessons I have learnt are a function of the type of engagements I have undertaken. The best tip I can give to all consultants is to be observant and learn from the experiences of working on multiple engagements across a variety of clients. It is this diversity that gives consultants their value, in being able to consider a client situation from a broader perspective than the client.
If you have read each of the preceding chapters you have read all the contents of the book directed primarily at consultants. As your career progresses, you will learn, develop and build your own set of tips and techniques. They will be the basis of your growing success. And if you have any different tips, I for one am more than happy to hear them.