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Meet
the MasterMinds: Jack Trout Talks Strategy
 With
his 1981 classic book, Positioning,
Jack Trout and coauthor Al Ries changed the language
and practice of marketing strategy. In the more than
two decades since then, Trout has authored or co-authored
some of the best-selling marketing books of all time,
including Marketing
Warfare , Bottom-Up-Marketing,
and The
22 Immutable Laws of Marketing.
Trout's latest book, Trout on Strategy,
expands on and integrates many of the key ideas from
his earlier work in an easy-to-read format. MCNews talked
with Trout to get his views on marketing in the consulting
business and what prescriptions he could offer consultants
to help them become better marketers.
MCNews: So much has been written about business
strategy that it's hard to sort through--what is your
definition of strategy?
Trout: There's no end to the jargon-rich writing
on business strategy, so I like to keep my definition
simple. Your strategy describes what makes your business
unique, and what is the best way to get that difference
into the minds of your clients and prospects.
MCNews: How you would assess the state of strategy
in the consulting industry?
Trout: Terrible. Many consultants' strategy
is simply to stay on at their clients, no matter what
problem needs to be solved. It could be a corporate
strategy project, organizational design or implementation
work. Lots of consultants tell clients they can do any
project that comes along. They are trying to be all
things to all clients and that's a flawed strategy.
What's unfortunate is that so many great companies have
followed the advice of consultants and now find themselves
on the brink of disaster. And that's because too many
consultants will tell clients exactly what they want
to hear, instead of being objective advisers who look
you in the eye and give you the good news with the bad.
MCNews: So what are the keys to an effective strategy
for a consultant?
Trout: First and foremost, I'd say specialization.
Clients are looking for the best of breed when choosing
consultants. They'll pick one consultant for creative
work, another for strategy work, and a different one
for change management projects. The client will use
consultants they perceive to be specialists in a coordinated
way to achieve the total result they're after.
General Electric learned the lesson of specialization
many years ago when they launched a concept called the
turnkey power plant. The concept was simple: GE would
provide all of the components that an electric utility
needed for a complete power plant. It was a one-stop
shop concept.
But they found that customers wanted to give different
parts of the contract to those who they believed to
be the specialists in those areas. GE may have received
the contract for the turbine generators while other
specialists got the contracts for the controls, switchgears
and other components. Even though GE is credited with
inventing electricity, that fact wasn't enough to overcome
their customer's strong desire to buy from specialists.
Consulting clients are behaving in the same way. They
are buying services from a variety of specialists, not
relying on generalists.
MCNews: Any thoughts on why consultants resist the
idea of specialization?
Trout: Most consultants don't want to be tied
to a single specialty. They want to be as many things
to as many clients as possible. What they fail to understand
is that, once they start to extend into areas outside
of their true areas of expertise, they leave space for
new specialists to creep into their markets and take
their place.
The advantage of specialization is that it simplifies
the marketing, selling and buying of consulting services.
If clients understand that you're a marketing strategy
consultant, they won't ask you to help them solve a
logistics problem. They'll know exactly how and when
to use your firm and when to seek help from someone
else.
Specialized consultants don't waste scarce resources
chasing projects that are outside their areas of expertise.
It's easier to qualify a prospective client when your
specialty is well defined. It's more efficient and more
effective.
MCNews: You've said that strategy "is all about
perception, so don't get confused by facts." What
do you mean?
Trout: Consultants tend to spend a lot of their
marketing time and money discussing their complex case
studies, qualifications and methodologies when they
should be working harder to position, in the minds of
their clients and prospects, how they are differentiated
from competitors.
Let me give you an example from the current U.S. presidential
campaign. Both candidates are hoping to gain an advantage
by positioning themselves in the minds of the voters.
The incumbent, George Bush, has a natural advantage,
as he's been pushing his "strong leadership"
position since his first presidential campaign. And
that is many voters' perception of George Bush and his
administration.
Bush's opponent, John Kerry, has a different positioning
challenge. He is the lesser-known candidate, so he must
find a way to identify himself in the minds of voters
who don't know him or his political views.
Kerry could attempt to dislodge the voting public's
perception of Bush, which would take a long time. Or
he could relate his own position, in some way, to Bush's
positioning to get his message across.
For example, Kerry could take the stance that Bush
is "Strong, but wrong." That would be a simple,
but powerful, way to use the president's own positioning
to create a different perception in voters' minds.
Consultants have the same opportunity. What's important
is to create a perception in the minds of your clients
and prospects, not just present facts about your firm.
And most consultants are not good at creating that perception.
MCNews: Many consulting firms believe they win with
the quality of their people. Is that an effective strategy?
Trout: No. Every firm makes that same claim.
It's not believable, nor is it a good differentiator.
There's a standard distribution of people in the world
and no single firm has a lock on all of the good people,
and clients understand that.
MCNews: What one thing should a consultant remember
when putting together a strategy for a practice?
Trout: To thrive, specialize. Don't be tempted
to do everything for your clients. It's not good for
them or for you.
MCNews: What's on your reading list these days?
Trout: Three books come to mind. The first is
The
Wisdom of Crowds, by James Surowiecki. The
second is Testosterone
Inc.: Tales of CEOs Gone Wild, by Christopher
M. Byron. And finally, I'd recommend The
Tipping Point, by Malcolm Gladwell.
MCNews: Thanks for your time today.
You can find out more about Jack Trout, his books and
services at www.TroutandPartners.com.
Was this useful? Send a quick e-mail
with your thoughts.
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MCNews'
One-Minute Survey
Last month, we asked readers three questions to get
their opinions on the state of the consulting industry.
The results speak for themselves, but what do they say
to you?
1. What is your outlook for new business over the
next 12 months?
| Bright |
25% |
| Good |
57% |
| So-So |
25% |
| Dim |
0% |
2. How has the length of your sales cycle changed
in the past 12 months?
| Lengthened |
39% |
| Stayed the Same |
18% |
| Shortened |
29% |
| No Change |
11% |
3. What's your observation on the direction of consulting
fees?
| Declining |
36% |
| Holding Steady |
50% |
| Going Up |
14% |
Send me an email
with your thoughts on this survey.
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Meet
the MasterMinds: Jerry Weinberg Reveals a Few Secrets
of Consulting
 For
more than 40 years, Jerry Weinberg has worked on transforming
client organizations. He is author or co-author of many
articles and more than 25 books, including, The
Secrets of Consulting, More
Secrets of Consulting, and
Are Your Lights on?. Weinberg has worked
for IBM and Project Mercury, and he has taught at Columbia
University and the University of Nebraska.
Weinberg discusses how client attitudes have changed
(and stayed the same), and tells why consultants shouldn't
try to overcome clients' resistance to change.
Read
the interview
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Do
You Know Your Client CEO?
SpencerStuart,
the global executive search firm, recently released
their "Route to the Top" survey of Fortune
700 CEOs. The research gives you a snapshot of today's
CEOs. Among the major findings:
-
The average age of CEOs is 56
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30% of CEOs have international experience
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Median company tenure for CEOs is
16 years
-
Finance and Operations roles are
the most common career paths to CEO
You'll find the entire report by visiting
here.
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Why
Off-Shoring of IT Rolls On
According to a recent study conducted by Mercer Human
Resources Consulting, it's no wonder corporate execs
continue to off-shore information technology positions.
Salaries for IT positions in Europe and North America
can be as much as four to eight times higher than those
paid in countries such as India or China. The salary
gap shrinks at the more senior level positions. Mercer's
consultants studied the compensation of more than 43,000
IT professionals in 3,300 companies around the world.
|
Annual IT
Salaries by Country and Job Title
|
| Country |
Team Leader
|
Supervisor
|
Manager
|
Senior Manager
|
| Switzerland |
$75,100
|
$97,600
|
$126,900
|
$164,900
|
| Germany |
$64,100
|
$83,200
|
$107,900
|
$140,000
|
| USA |
$59,000
|
$67,800
|
$ 89,800
|
$141,200
|
| India |
$ 9,700
|
$15,400
|
$ 24,500
|
$ 39,000
|
| China |
$12,400
|
$19,100
|
$ 31,700
|
$ 58,400
|
Here's a note to compensation specialists: The survey
shows that the lowest-paying countries deliver more
pay in the form of variable short-term compensation
(i.e., bonuses and incentive pay) than high-paying countries
do. In fact, U.S. companies deliver a lower proportion
of pay for performance than 29 of 32 countries included
in the survey.
The study is available for a fee from Mercer. You can
review a summary of the report, however, by visiting
here.
You'll have to register with Mercer's site to read
the summary.
Note: MCNews receives no commission or consideration
for purchases made by MCNews subscribers.
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Fast
Facts in Consulting
Management, Scientific and Technical Consulting
is one of the highest paid occupations in the U.S.,
and ranks among the fastest growing industries through
the year 2012.
Nearly 25% of all consultants are self-employed, and
73% have a bachelor's degree or higher.
Source: U.S. Bureau of
Labor Statistics
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 Guerrilla
Marketing for Consultants: Sneak Preview
Jay Conrad Levinson, the father of Guerrilla
Marketing, has teamed with Michael McLaughlin, Editor
of MCNews, to develop the new book, Guerrilla
Marketing for Consultants. It's due out
in October 2004.
The book is an owner's manual for a consultant's career.
In it, you'll find strategies and tools for handling
every aspect of marketing a consulting practice--from
building market visibility to creating winning proposals
and pricing your services.
You'll also find unbeatable guerrilla strategies for
selling your services and creating profitable client
relationships once you've been hired.
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Where
Life is Good
Which world cities can boast the best quality of life
for its residents?
Mercer Human Resource
Consulting has the answer. Their consultants measured
the quality of life in 215 world cities based on 39
quality of life determinants in 10 categories, including
availability of consumer goods, economic, political,
social and natural environment, medical and health considerations,
and education.
The top five cities for 2004 are:
- Zurich/Geneva, Switzerland (tied for 1st place)
- Vancouver, Canada
- Vienna, Austria
- Auckland, New Zealand
- Bern, Switzerland
See the full survey results at www.mercerHR.com/qol.
Registration is free.
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This Month in History
On August 1, 1957, the Solar Building in Albuquerque,
New Mexico became the first commercial building to
be heated by the sun's energy.
On August 1, 1774, British minister and chemist,
Joseph Priestley, identified a gas--which he called
"dephlogisticated air"--later known as oxygen.
On August 4, 1922, all 13 million telephones
in the U.S. and Canada went dead as AT&T and
the Bell System shut down all its switchboards for one
minute in memory of Alexander Graham Bell, who had died
two days earlier.
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Coming
Attractions
Consultants are often "employing the easy differentiation
strategies that have proven not to work," according
to Suzanne Lowe, author of
Marketplace Masters. Lowe spent five
years researching the differentiation strategies of
professional service firms and developed a winning formula
for consultants. We'll talk with Lowe about the results
of her work in September.
Look for the next issue of MCNews on September 7, 2004.
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The
End Page
"Now this is not the end. It is not even the beginning
of the end. But it is, perhaps, the end of the beginning."
- Winston
Churchill
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Michael McLaughlin
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Management Consulting News ISSN 1539-2481,
Washington, DC, USA
Copyright © 2004 Management Consulting
News All rights reserved
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