Management Consulting News - Vol. 3, No. 9- September 7, 2004
In This Month's Issue:
Welcome
From the e-Mailbag
Meet the MasterMinds: Suzanne Lowe on Competing to Win
After the Speech, by Stephen D. Boyd
Consulting Pay Rates Survey
Top-Consultant.com Has a Recruiting Event for You
Guerrilla Marketing for Consultants Webinar
Airport Security--How Long Will You Wait?
This Month in History
Coming Attractions
The End Page
* * * *
One night last week I plopped down to read the executive summary of Kennedy Information's report, Fees, Utilization and Other Key Metrics. The 150+ page report, including over 120 different charts, is a survey of more than 135 consulting firms.
Kennedy's researchers asked consultants what their firms are doing to maintain profit levels. They found consultants focused on activities such as:
You may disagree but I think that, while such incremental actions may brighten profit forecasts in the short-term, they are unlikely to create a consistently profitable future. After all, clients view quality service and superb project management as table stakes. And running a tight ship is essential to all businesses, not just consulting. What's worse is that raising utilization targets suggests that consultants have lost focus on their raison d'etre, which is serving clients.
Now is not the time to tinker around the edges of profitability. Rather, it is a time to explore untapped strategies that lead to long-term profitability. So, what can you do in addition to focusing, for example, on SG&A reductions? How about examining your firm's client relationship strategies, market positioning and approach to innovation? And can utilization targets be raised without increased sales?
We take up some of these issues this month with Suzanne Lowe, author of Marketplace Masters. Lowe shares her views on how consultants can avoid being perceived as "me-too" players by implementing a series of straightforward differentiating strategies.
Enjoy this month's issue and, as always, if you have comments, just send me an email.
Mike McLaughlin
Publisher
"A great secret of success is to go through life as a man who never gets used up." - Albert Schweitzer
* * * *
From the e-Mailbag
Reader responses to last month's MCNews hit an all-time high. When asked whether a consultant is better off as a specialist or generalist, opinions reflected the diversity of MCNews readers and the industry as a whole. As you'll read below, no clear cut consensus emerged.
The suggestions I received for ridding a yard of gophers ranged from gentle to medieval. I've included the tamest of the lot. That pesky gopher is still tearing up the yard, but I think I've got it on the run now.
Here's a sample of the mail from the past month.
On Generalists vs. Specialists
"I believe the best method of finding the right information is to go to
the specialist, with the necessary specialist knowledge where difficulties arise,
or might arise. You would not ask a carpenter to fix your leaking radiator,
nor would I, as a lawyer, try to provide advice to a person with a problem in
IP or Admiralty."
- - - -
"I think a generalist is a better choice though I would want to go with
one who had a very broad background and experience. The problem I have run into
working with the specialists is they see the world too much like their clients
see it--and therefore can't really bring new and fresh thinking to the problems."
- - - -
"I believe it is the specialist who always carries the day."
- - - -
"In my long career in consulting working for large international
firms, regional firms, locals, and for myself since 1991, I have seen the positives
and negatives of both sides of the specialist versus generalist issue. Some
specialists have well-known histories of great success."
"…I believe that taking a position in one extreme or the other misses
the target of gaining long-term success. That is achieved only through innovation,
willingness to undergo change, and timely adaptation."
The Gopher War Rages On
"I think it is time to crack a beer and rent the movie Caddyshack...Gophers
are particularly stubborn breed--I don't have any bright ideas--other than get
a couple of hungry cats."
- - - -
"I have been told that dropping a nice, fresh stick of Juicy
Fruit gum down the hole results in the little pests being transported to that
great "mound" in the sky."
- - - -
"On the farm we always used a shotgun."
As always, keep those emails coming.
* * * *
Meet the MasterMinds: Suzanne Lowe on Competing to Win
Suzanne Lowe, President of Expertise Marketing and author of Marketplace Masters: How Professional Service Firms Compete to Win, believes that "too many professional service firms compete by trying not to fail rather than by trying to win."
We tapped Lowe's twenty years of experience in services marketing by asking her what it takes for consultants to become Marketplace Masters.
MCNews: How would you characterize the current state of professional service firms' marketing efforts?
Lowe: Most firms are not proactive marketers. Rather than doing the hard work of marketing--like learning more about their clients than they already know, stretching to gain untapped competitive advantage, or measuring the results of their strategic initiatives--most firms stick to the seemingly safer path of acquisitions or incremental improvements to existing services.
The result is that most consultants are selling the same thing in the same way for the same price.
MCNews: Many clients are critical of the industry's lack of differentiation.
In today's market, which differentiation strategies are working for consultants--and
which are not?
Lowe: It's surprising to me that, all of a sudden, everybody's interested
in the subject of differentiation. Unfortunately, it appears to me that many
firms are employing differentiation strategies that have been less than successful.
For instance, differentiation on service delivery is not that effective. Telling clients that your firm will be the most responsive, customized, excellent, or the best at listening is not going to give a firm a long-term competitive edge.
Every consulting firm can beef up its service delivery capabilities to be more available, more responsive, and deliver higher quality. But differentiating your firm on client service will only give you an advantage for about two weeks--maybe. Some firms claim that it works for them because none of their competitors can be as client-focused as they are. But it's the most copyable of all differentiation strategies.
I would say it will work today, maybe tomorrow, but you won't have much of a preemptive competitive advantage on that alone because it's too easy for others to duplicate.
MCNews: Which differentiation strategies do work?
Lowe: Simply put, the most effective differentiation strategies are those that are difficult to copy. One that I think will emerge is differentiation based on the client experience. And I'm talking about the client's emotional experience. You may have read Joseph Pine and James Gilmore's book, The Experience Economy.
That presents a very challenging concept for professional service firms: that we should intentionally provide a uniquely favorable emotional experience for our clients. We may think clients are just buying a transaction--tax advice, IT implementation, or organizational strategy. Well, what's more difficult to copy and more competitively preemptive, especially with first mover advantage, is the emotional experience.
Maybe the experience you are going to deliver is tranquility or confidence.
Or maybe you want to deliver entertainment or humor. Consider how Southwest
Airlines completely shook up the commoditized airline industry with the experience
it provides to passengers.
Some professional service firms are starting to work on this very strategy.
MCNews: Consultants have their own ways of interacting with their clients. For example, some behave collaboratively, while others are more aloof. Is that what you're talking about?
Lowe: Yes, but it's not only behaving in a certain way. That's only one element of delivering an emotional experience. It's the intentional delivery of an experience that causes and stimulates a strategically intended response from the client.
For example, there's a restaurant in Chicago--Ed Debevic's, which is a 1950's style diner. People don't go there because they're desperate for a hamburger or hot dog. They go there for the retro atmosphere and to get yelled at by that gum-popping waitress.
Obviously, there are variations on the theme. And delivering emotional experiences
is much easier when there's a product- or a retail-oriented support system.
I've documented eleven or twelve different foundations of differentiation. Some
are older, dustier and easier to copy because people have figured out how to
do that. The elements of differentiation that are working today are the ones
that are difficult to copy, are operationally deep and usually more complex
to implement.
MCNews: Can a firm's culture be part of its marketplace strategy?
Lowe: Sure. But many firms think culture is only something that needs to be proclaimed to the world, when in fact it's more deeply nuanced and integrated than that. It imbues all of their operational approaches and, in fact, should be harnessed to their competitive advantage.
As an example, consider a firm whose main "personality DNA" reflects a lack of self-esteem. There are firms like this, believe it or not! Everyone in the firm is a worrywart, concerned about their competitors sneaking up on them and stealing clients. How does that culture impact their market behaviors in a way that benefits them competitively?
Well, they meticulously double check themselves on the accuracy and completeness of every work product. They are aggressive in gathering and using competitive intelligence, and they are focused on training and developing their professionals. It also means they push for innovation because they're so worried they're not good enough that they are driven to stay ahead.
Now would they ever actually announce to the marketplace that they have a lack of self-esteem? No, but they could align their market behaviors around their cultural DNA, their personality profile. And that does translate into appropriately successful competitive behaviors.
I believe that culture can be a powerful market strategy, but most professional firms are not yet intentionally developing the alignment of their culture with their go-to-market strategy.
MCNews: Let's shift to the concept of thought leadership. What is your perspective on using thought leadership as a differentiator?
Lowe: During my years in marketing, I have been at once pleased by and worried about the emphasis on thought leadership. It makes people stretch their basis of expertise and stay current with the state of the thoughts regarding their craft. That's a good thing, right?
But what is not good is to simply stay slightly ahead of the incredibly low common denominator that is out there. That does not ultimately serve clients or substantively improve one's expertise base. In fact, it works against true innovation.
Thought leadership works when it becomes the basis for robust new services--reengineering, the balanced score card, and so on. These methodologies were born from thought leadership, and they became value-added service propositions that clients paid billions of dollars for.
Those are examples of effective thought leadership. But the thought leaders
who came up with those methodologies did a lot more than write an article or
two. They engaged in deeply integrated innovation exercises.
Thought leadership simply as a promotional strategy advances the state of
thinking in a very minimal way. And I do believe many consulting and professional
service firms use it as a crutch. On the other hand, thought leadership can
be a powerful marketing strategy when it's followed and supported by a robust
service.
MCNews: Most firms ask their consultants to sell and deliver services. Is that, in your view, the best way to sell services?
Lowe: I would like to challenge not only consultants but the professional service profession as a whole for spending so much time on training professionals to sell. Why try to make them do something so many struggle to do well?
Wouldn't firms have more competitive success, maybe even save money by using business developers? Why go through this massive training effort and require all people who want to be partners to become rainmakers?
Look at the way this model works in engineering and construction management.
Some civil, mechanical and structural engineers are so technically oriented
that they can barely talk to another person. But they can plan and construct
buildings that will never fall down. In that field, business development and
operations people work together very effectively. And clients gobble it up.
MCNews: You've suggested that data mining can make marketing two to three
times more effective. Can you describe how?
Lowe: You know about the proliferation of contact management databases? Well, it's been my experience that consultants have become overly enamored with contact management databases for the purpose of relationship management. But they fail to use these tools for real competitive advantage.
If done well, relationship management can, of course, create a competitive edge. There are many pieces of information that can be captured and organized to provide valuable perspectives. But currently, patterns in the way clients buy are too anecdotally captured. They're not captured with a keen eye to discovering nuances. So I'm suggesting that data mining as a practice needs to be much more wholeheartedly embraced.
MCNews: How can consultants use data mining more effectively?
Lowe: A good example is the Numerica Group, which is a UK business consultancy
and accounting firm. Their contact management system is linked to their practice
management system, which is then linked to their accounting system so that they
can discern where profit margins are being trimmed.
Then you can see where softness is developing, where competitors are starting
to make inroads, where proposals are being lost. That's one of the more simplistic
examples of this, but most firms have not yet built their technology infrastructure
to enable data mining opportunities to surface in a competitively preemptive
way.
One could argue that it's not profitable to do so, but I think that argument
is rapidly losing traction.
MCNews: If you could give a consultant one piece of advice, what would it
be?
Lowe: Understand the environment in which you do business. Whether you're
in a change management practice or a new products development practice, or whatever,
you're there because the marketplace has asked for it. But that's never going
to stay the same. It's got to change.
I'll give you an example. I recently visited a management consulting firm and the CFO took justifiable pride in telling me about how much they honor their employees. They are uniquely positioned in the marketplace. Their people are deeply satisfied with the work they do, and they have an incredibly low attrition rate. It's a great place to work.
That culture also benefits their clients, who are well served because the consultants are happy to be collaborating on important and cutting-edge projects. My reply was cautionary. I said I guess that means you don't think the marketplace is ever going to shift, right? My point was that they are too focused on themselves, rather than on the long-term, ever-evolving needs of their clients.
MCNews: Thanks for your time.
Find out more about Suzanne Lowe, her book and services at www.marketplacemasters.com.
* * * *
After the Speech
By Stephen D. Boyd
Most advice about making an effective speech emphasizes the preparation
you do before your presentation begins. But if you speak often, what you do
after the speech can help you become a more effective speaker.
As soon as possible after the speech, write down impressions of how you felt
it went. Answer at least two questions about the speech: What was the best part?
What part of the speech could you improve the next time?
Some of your best ideas will come to you as you are speaking. Write them down
as soon as the speech is over so you can be prepared to use those lines or ideas
next time.
Think about the peaks and valleys in the speech. Consider when the audience
seemed to listen best and when the audience seemed restless and disinterested.
Write down your reactions while they are fresh in your mind.
Talk to someone about the speech within the first day after your presentation.
As you summarize your speech to a friend or colleague, you'll remember best
what you talked about and you might discover a better way of telling a story
or making a point.
Keep track of the stories you tell and case studies you include so you won't
repeat yourself if you speak to that audience again. In addition, keep records
of how long you spoke, what you wore, key people you met, and anything unusual
about the speaking context.
Occasionally, review your records of individual speeches and look for trends
in your speaking that you might not have noticed before. When you speak to a
group again, this information will be the basis for your audience analysis.
This is especially important if you speak frequently within your company and
your audience will be made up of listeners who have heard you before. You don't
want to develop a reputation for telling the same stories over and over.
If the group has speaker evaluations, ask that a copy of the summary be sent
to you. Look for patterns in the comments. If one person said you talked too
slowly, it may be a personal preference and you don't need to give much consideration
to the critique. If four or five people made that comment, however, then you
might want to consider changing your pace for the next speech.
Certainly your main concern should be with your preparation before the speech.
However, don't underestimate the value of analyzing the speech after the audience
has left the room.
Stephen D. Boyd, Ph.D., CSP, is a professor of speech communication at Northern
Kentucky University. He works with organizations that want to speak and listen
more effectively to increase personal and professional performance. You can
find out more at http://www.sboyd.com.
* * * *
Consulting Pay Rates Survey
In September, Abbott, Langer & Associates, Inc. will begin its 10th annual survey of compensation in consulting firms.
If your firm would like to participate, in exchange for:
Then:
1. Click on the following (or paste it in your web browser):
2. Mark the box for Consulting Firms (of course).
3. Complete the remainder of the form.
4. Click on Submit Information.
* * * *
Top-Consultant.com Has a Recruiting Event for You
Top-Consultant has a career event
for consultants coming up in London on September 24th. This is a great opportunity
to meet recruiters from firms such as Accenture,
Booz
Allen Hamilton, Boston Consulting
Group and IBM.
If you'd like to attend, reserve your place at:
http://www.top-consultant.com/UK/events/Article_display.asp?ID=12
Spaces are limited so make your reservation ASAP. The venue is in the Mayfair
area of London, and the event will run from 8.30am to 1:00pm.
* * * *
Guerrilla Marketing for Consultants Webinar
Jay Conrad Levinson, the father of Guerrilla Marketing, and Michael McLaughlin, Editor of MCNews, have a new book coming out--Guerrilla Marketing for Consultants. It will be in bookstores in October 2004.
On October 14, 2004, Levinson and McLaughlin team with Tom Sant, author of Persuasive Business Proposals, to offer a no-cost Webinar entitled Guerrilla Marketing for Consultants. For more details and registration information, follow this link.
Here's some of the recent buzz about the book:
"Wow! If you're the sort of person who tells someone how to build a watch
when they ask you what time it is, this is the book for you. No baloney, essential,
useful hands-on advice for anyone who's serious about being a consultant."
- Seth Godin, author of Free Prize Inside
"Great consultants don't just talk about marketing, they do it--every day.
That's why they win. Follow the marketing advice in this book, and you'll outsell,
outperform, and outlast your competitors." - Jeffery Fox, marketing
consultant and author of How to Become a Marketing Super Star
* * * *
Airport Security--How Long Will You Wait?
Remember the days when you could allow twenty minutes to check in for a flight, get to the gate and still board the airplane on time? Well, those days are gone for good. Some airlines advise passengers to arrive up to two hours before a flight. Whether you heed that advice or not, one thing you should plan for is the line at the security checkpoint.
The Transportation Security Administration (TSA) now provides wait time information at security checkpoints for U.S. airports. Check it out at http://waittime.tsa.dhs.gov/index.html.
* * * *
This Month in History
On September 2, 1752, Britain and the American colonies made the "Gregorian Correction" to the calendar and declared the following day to be September 14. There was rioting in the streets by those who demanded the eleven days back. Talk about losing track of time. http://webexhibits.org/calendars/year-text-British.html
On September 10, 1913, the Lincoln Highway opened. The first paved, coast-to-coast highway in America went from New York to San Francisco. To fund the $10 million dollar project, entrepreneur Carl Fisher asked auto manufacturers and accessory companies to donate one percent of their revenues. http://www.ugcs.caltech.edu/~jlin/lincoln/history/part1.html
* * * *
Travel is part of the job for consultants around the world. To help with the journey, next month MCNews will talk to Theo Brandt-Sarif, coauthor of Guerrilla Travel Tactics: Hundreds of Simple Strategies Guaranteed to Save Road Warriors Time and Money. Brandt-Sarif is editor of Travelexpert.com and a consultant on travel strategies. Whether your travel is for business or pleasure, you won't want to miss this interview.
Look for the next issue of MCNews on October 5, 2004.
* * * *
"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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