Read an Excerpt
Million Dollar Consulting
The Professional's Guide to Growing a Practice
By Alan Weiss
McGraw-Hill
Copyright © 2009 Alan Weiss
All right reserved.
ISBN: 978-0-07-162619-4
Chapter One
WHAT IS A CONSULTANT? ART AND SCIENCE
An attorney is a person who has graduated from an accredited school of law, passed a bar examination in the state in question, and deals with matters requiring legal opinions and actions. A doctor is a person who has graduated from an accredited medical school, passed state examinations in appropriate areas of expertise, and is licensed to practice medicine in conformance with certain regulatory laws and ethical practices. A certified public accountant is a person who ...
You get the idea. Most professions have a clear definition. They require formal certifications and have specific, enforceable limitations. A teacher needs education courses and a college degree. A bus driver needs a driver's license. A manicurist must be state certified to work on your nails in a salon. But there are no such constraints on the consultant.
Anyone, at any time, and virtually anywhere can be a consultant. There is only one other calling I know of that has as much influence over the public and requires as few formal qualifications, and that's astrology. In fact, I have found that more licensing is required to be a palm reader on the Boardwalk in Atlantic City than is needed to become a consultant.
At the Ritz-Carlton Hotel in Naples, Florida, where I was holding a Million Dollar Consulting® Graduate School, I told senior management that I had 12 world-class consultants in the room to work on some hotel challenges. We weren't asked for hospitality experience, or references, or client lists. The reaction was simply, "Wow, we're lucky to have you."
Later, a woman in the class told me, "When you said there were a dozen world-class consultants present, I looked around to see who they were!"
The horrible news about consulting is that there is no barrier to entry. The great news about consulting is that there is no barrier to entry.
The Institute of Management Consultants (IMC), for which I once served as a board member, has been doing its level best to try to establish a recognized certification process for a couple of decades, but this is unlikely, in our lifetimes, to attain the state sanctions accorded to other professions. Membership in that organization is static or declining and represents less than 1 percent of actual solo practitioners and less than 0.5 percent of those who call themselves consultants.
Yet consulting is a profession that can earn its practitioners wealth far in excess of what can be earned in fields with rigid qualifying criteria. And this wealth is not only in the form of financial success. It also includes a dramatic learning curve, experiences of a broad and diverse nature, and the potential to provide value to clients that can have an impact on tens of thousands of people at any given moment.
In view of this peculiar situation, I would like to begin by establishing a definition of a consultant. This is not a definition for the ages, or one that will be acceptable to everybody. However, it is sufficient to serve as a working definition for the remaining chapters, and it serves to establish what a consultant is and what a consultant is not.
A consultant is someone who provides value through specialized expertise, content, behavior, skill, or other resources to assist a client in improving the status quo in return for mutually agreed-upon compensation. A consultant improves the client's condition.
Consultants may be internal—working for the organization full time—or external. The latter group is hired on a situational basis. Those situations may last for a day or a year, but most are (and should be) of fairly brief duration. There will be more about timing in later chapters.
The most important part of my definition for those of you who are seeking to build consulting practices is the notion of bringing something of value to the equation that justifies a fee above and beyond the client's normal business investment.
Too many consultants do not market well because they fail to identify their value proposition: how is the client improved after the walk-away? This is never about methodology or input; it's about business results and output.
Consulting is not synonymous with implementing, delivering, instructing, or executing, although consulting may include any of these activities. Many and perhaps most of the people working for the big consulting firms (Deloitte or Boston Consulting Group, for example) with thousands of employees are not consultants at all. They are actually implementers, specialists in outplacement or technology, who are the management equivalent of plumbers or electricians. That's right—most consultants really aren't.
A client who hires an outside instructor to conduct programs that the client has developed or purchased elsewhere has no more hired a training consultant than the client who hires part-time office help has hired a typing consultant. A great deal of the confusion that exists in the marketplace and among consultants ourselves is caused by an overly encompassing use of terms.
Some trainers are also consultants, and some professional speakers also consult, just as some Web site developers also consult on search engine optimization. But merely being a site developer, a speaker, or a trainer does not de facto make one a consultant any more than being a consultant makes one a trainer, a speaker, or a programmer.
Only consulting can achieve the final bridge to unconscious competency and the application of new skills to the job.
There are many large training firms that have not been successful in crossing over into consulting and many large consulting firms that have not been able to develop a training function. Although these are compatible, they are two separate disciplines that require separate skills. Thus, try as they might, with advertising, promotion, and attempts to manage public perception, historical training firms such as Wilson Learning, Forum, Kepner-Tregoe, and dozens of others have had little success as consulting firms (no matter what they've put on their business cards), and major consulting firms usually subcontract training assignments to others.
The fact is that consultants must deliver value-added to the client. If the consultant isn't bringing anything to the endeavor that the client doesn't already possess, then why make the investment?
The value added that the consultant brings to bear usually falls into one of six basic categories:
1. Content. This is the most common consulting value, largely because most people enter consulting coming out of a field they already know well. (They didn't go to school to become a consultant nor did they begin their careers that way.) Their comfort, experience, and relationships usually lie within such a field. Consequently, there are retail-store display consultants, textile consultants, shrink-wrap packaging consultants (whose job, no doubt, is to ensure that no one opens a package of batteries or paper clips without dislocating a finger), and a plethora of similar content experts. Whatever the industry or pursuit, its work, or content, provides the basis for someone to consult in it. Although content consulting is often the province of those who break from organizational life to go out on their own, it is also the realm of specialized firms. Any expert witness in a legal case is a content consultant, acting in that capacity.
2. Expertise. Many consultants have a particular expertise that transcends industries and is applicable to a wide variety of environments. For example, Bain & Co. tends to specialize in strategic planning. Its clients are diverse, having only one thing necessarily in common: the value added they are seeking is help with strategic planning. Bain can adapt its approaches to various areas of content. The type of firm doesn't matter. Bain can apply its expertise and formulas equally well to any type of business, whatever its exact nature. Many consultants who strike out on their own after working for a larger consulting firm include expertise as their value added because they have been so intimately exposed to those areas of expertise during the course of their work. (No, this is not illegal, unethical, or even uncomfortable. Ideas cannot be patented, and indeed, there is nothing new under the sun. The basic analytic problem-solving skills we all use today were first postulated by the Greeks two millennia ago.)
3. Knowledge. In my definition, knowledge is largely experiential. People who have knowledge are the ones who have "been there before." A bank board on which I served chose to hire a former regulator as a consultant because he had vast knowledge of the rules and procedures the regulators would be enforcing in a stricter banking environment. Engineering consultants are often hired out of this same need. In general, knowledge is a broader category than expertise, just as engineering is a broader discipline than the specific pursuit of calculations of projected shareholder value. Moreover, knowledge includes an understanding of process as opposed to content. That is, the consultant understands the process of time management irrespective of content or the process of decision making regardless of the environment. This is often referred to as process consultation. It involves form as well as substance.
4. Behavior. The value added in this case is interpersonal. These consultants may facilitate groups to achieve conflict resolution or teach others how to make presentations and interact with an audience. They are virtually never behind the scenes, as the others may be, but are hired specifically to be onstage. They possess a set of interpersonal competencies that enables them to resolve conflict, enhance brainstorming and creativity, focus on critical issues, listen to customer or employee feedback, and so on. Their utility is in the overt role they play, which, for any number of reasons, management itself cannot assume. Sometimes an objective third party is required, and sometimes specific behaviors must be applied. Many people who specialize in these areas have found themselves naturally drawn to them because of previous successes in dealing with such issues. Mediators and arbitrators come to mind as consultants in this field.
5. Special skills. Some people have highly developed, well-defined skills that can be in great demand. These are often talents and innate abilities. For example, image consultants, who are able to improve one's wardrobe and grooming, bring to bear an instinctive sense of style and impact. (Contrast this with shareholder-value specialists, whose approach can be reduced to formulas, matrices, and calculations.) An image consultant may know nothing of the content of the client's work and may not have precise expertise or knowledge (e.g., about where to get the best buy on clothes or how to arrange a closet), but nonetheless has a talent for creating a certain look. Consultants in this area have a gift, or specialized talent, that the client usually cannot acquire independently or finds cost-prohibitive to acquire. "We are translating this program into French-Canadian. Find someone who knows the particular idioms and cultural norms and who can put it into conversational language that doesn't appear to be an insensitive translation from English."
6. Contacts. Basically, consultants who are called in to help because of their contacts are lobbyists of one stripe or another. Whether they are truly consultants is a question I don't propose to debate here. I've included the category primarily because a great many people entering consulting do so on the basis of being able to introduce clients to key contacts in public or private life. While consulting fees are paid for this work, it is the role that is least able to fulfill the definition I provided earlier. Those who enter the field as so-called introducers are advised to broaden their scope into other areas fairly rapidly if they are serious about making it big as a consultant. Former presidents have always struck me as a good example of someone in this capacity who never chose to or could not leave it. They are hired for their name value only, and appearances at events or memberships on boards have never been dictated by any intrinsic expertise or ability other than having been the president. Calling them consultants is courtesy, not accuracy.
Consultants bring one or more (and in more cases than you would suspect, all) of these competencies to bear to help a client move from the status quo to an improved position. If I were moving an operation to South America for the first time, I might need content to understand the nature of the competition for my goods and services in the new locale, expertise to provide the requisite language skills to my transferring managers, knowledge to gain the proper licenses and tax permits, behavior to help with the advance work in preparation for our arrival and in dealing with the local press, skills to assist in the acculturation process (what we should do to assimilate as rapidly as possible), and contacts to build relationships with local governmental and business leaders.
I've previously suggested that there are several hundred thousand independent consultants in the United States. In addition, there are thousands of consulting organizations, from tiny practices to the Deloittes and McKinseys of the world. It is folly to attempt to make sense of that panoply in any conventional manner, because huge organizations such as International Business Machines (IBM) and General Electric (GE) often prefer to use the lone wolf for one assignment and Deloitte for another just down the hall. (Over the past couple of years, IBM and Hewlett-Packard also have established their own quite successful consulting operations; in the former's case, it has become the top contributor to corporate profits.) Consequently, it's probably more useful to view the market in terms of the values the consultant brings to the client rather than in terms of an arbitrary category or size.
There's one more point to be made from the perspective of the consultant, which I've found over the years (and through more than 1,000 participants in my private mentoring program) to be true of all entrepreneurs. Three paths must converge for you to be successful:
Market need. You must have an existing need or be able to create one. Akia Morita created one for the Walkman. Now the iPod and the iPhone, two of the most successful new products ever launched, have exploited that previously created need. But needs such as sales ability and strategy formulation will always exist.
Competency. You must have the skills to meet that need or be able to develop them, and the buyer must perceive that you possess them. Fortunately, we can all become lifelong learners, although I'm not about to learn quantum mechanics no matter what market need may develop.
Passion. You have to love what you do and be perceptibly enthusiastic.
Note that two of the three are not enough. The greatest competency and passion will fail if the market need isn't there, and the most compelling need and highest passion will succumb to poor skills. You must develop in all three areas, but be aware that you can't learn passion—you have to feel it.
HOW ORGANIZATIONS CHOOSE CONSULTING HELP—HOW TO BE "DISCOVERED"
There is more logic in the Internal Revenue Service tax code, or in the myriad pieces of billing information you get from the phone company, or in any Rube Goldberg invention for catching a mouse than there is in the selection process for consulting help. (My estimation is that approximately 50 percent of consultants don't really know what they're doing, but that about 90 percent of potential buyers don't know that until it's too late.) Consequently, it is difficult and even foolhardy to try to market against a consistent buying habit unless you are in a highly specialized area such as government, in which requests for proposals (RFPs) are uniform and the only way in which the customer will do business.
(Continues...)
Excerpted from Million Dollar Consulting by Alan Weiss Copyright © 2009 by Alan Weiss. Excerpted by permission of McGraw-Hill. All rights reserved. No part of this excerpt may be reproduced or reprinted without permission in writing from the publisher.
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