Management Consulting News

Management Consulting News - Vol. 4, No. 11 - November 1, 2005

In This Month's Issue:

Welcome

Meet the MasterMinds: Robert Schaffer Gets Rapid Results

Quick Facts on E-Newsletters

Increase Your Sales: Ask "Which" Instead of "If," by Tom Sant

Who's Winning the War for Talent?

Top Ten MCNews Downloads

E-mail Sabotage: Killing Your Brand Softly, by Lewis Green

Additional Articles

Coming Attractions

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Welcome:

Every month as we pull this newsletter together, you can bet on one thing: At least one or two nights, dinner will consist of take-out food from a local ~~hole-in-the-wall~~ favorite. The restaurant’s tri-fold menu, which sits conveniently in a drawer next to the phone, is ragged from repeated use.

That menu is a staple of the restaurant’s sales strategy. It doesn’t matter what page you’re looking at, you’ll find the restaurant’s phone number, fax, and hours of operation.

We can learn a thing or two from my favorite restaurant.

When consultants were asked if a Web site visitor could send feedback, such as an e-mail, from every page of their sites, almost 60% answered no. People move so quickly through Web pages that asking them to search for a way to contact you may be a lost opportunity.

Have a quick look at your site and be sure it’s as easy for a visitor to reach you as it is to find the phone number on a take-out menu.

Enjoy the newsletter and, if you have any comments, please send me an email.

Mike McLaughlin
Editor, Management Consulting News

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Meet the MasterMinds: Robert Schaffer Gets Rapid Results

MCNews welcomes back consultant and author Robert H. Schaffer to talk about his new book, Rapid Results! How 100-Day Projects Build the Capacity for Large-Scale Change. He’s the founder of Robert H. Schaffer & Associates, and he helped start the journal, Consulting to Management. His previous books include High-Impact Consulting and The Breakthrough Strategy.

We asked Schaffer how we can help clients succeed with large-scale change using the Rapid Results method.

MCNews: Would you explain the Rapid Results approach?

Schaffer: Too often, in companies that are trying to make big changes—mergers, going into new businesses, or opening up new plants or new markets—a few people at the top dream stuff up, create elaborate plans, and then expect everybody else in the organization to carry out those plans.

But they don’t have the capacity. They haven’t learned how. And many large-scale changes flounder because of that.

In addition to achieving short-term results and teaching people how to work together, the Rapid Results way creates the grassroots capacity to carry out large-scale, complicated changes.

With the Rapid Results approach, we take clients’ big objectives and tackle them on a small scale to achieve measurable results in a short period of time. We use 100 days because it’s a nice, round number, but a project can take more or less than that. We help clients learn from the 100-day process and apply that knowledge to other initiatives.

In addition to achieving short-term results and teaching people how to work together, the Rapid Results way creates the grassroots capacity to carry out large-scale, complicated changes. Once people learn how to take the initiative in small ways, they can deal with larger and larger change projects.

MCNews: With so many companies attempting change programs, why is there a lack of capacity to execute on those initiatives?

Schaffer: Because you have little or no ability to implement change unless you’ve worked on it, learned from it, and experienced it a number of times. Often, people come up with all the things that a company ought to do but they struggle with implementation.

Often, people come up with all the things that a company ought to do but they struggle with implementation.

At one company, a team spent eight or nine months studying how to improve specific quality issues. Then, they had a three-hour presentation about what needed to be done, including significant capital investment by senior management. But they had not actually done anything.

If you start with Rapid Results, at the end of a couple of months you’ve accomplished something concrete and you’ve learned.

MCNews: Could you give an example of how you’ve used the Rapid Results approach?

Schaffer: Sure. Banorte, a large Mexican bank, had roughly 2500 ATMs that were out of service more than they wanted. They had been working very hard to improve the reliability of their ATMs, but they weren’t making enough progress.

Our team said, let’s go after a few of them in one place and see what it takes to improve reliability. So we started with one neighborhood in Mexico City that had forty-four ATMs. We formed a cross-functional team and helped them learn how to work together to diagnose the problem and implement a solution. Within a few weeks, the team cut the ATM down time by half.

The client saw the Rapid Results approach work. They got it. They immediately picked other neighborhoods and eventually expanded the improvement program across the country.

MCNews: When you think about it, breaking a problem down into smaller pieces to achieve a larger goal is logical. But it seems completely opposite to the way most companies operate.

Schaffer: We’ve been writing about this for many years and have had many successes. But I think that many managers get impatient and they look for the big fix. And, of course, the large consulting firms are not interested in working on a smaller scale because then clients don’t need huge teams of consultants.

MCNews: Is that because with this approach you’re building organizational capability for change?

Schaffer: Right. We build capacity by using small-scale projects to get immediate payoff. People learn how to take initiative and how to develop and execute a work plan.

Many companies begin improvement projects by asking for things like extra training, new equipment, additional capital, and more people. The Rapid Results methodology focuses on getting started and accomplishing more with what you already have. So it’s also a productivity enhancer.

MCNews I’m paraphrasing, but you talk about beginning with results, not preparation. You’re probably not saying you shouldn’t plan, but what do you mean by that?

Schaffer: Let’s say, for instance, that within 100 days you want to increase sales or open a new market. If you say, well, in the next 100 days we’re going to train all the salespeople who are going to open up that market, that’s not a result—it’s preparation.

By contrast, if you say that by the end of 100 days we’re going to have ten new customers in this region, that’s a result. Of course, it’s fine to conduct training as part of that. Whatever else happens, the imperative of getting a measurable result changes the whole nature of what you do.

Many consultants fall into this trap: when clients want better results, they say, okay, we’re going to get this new equipment, we need a new system, and we’re going to train people. Those are preparations, but you can do that forever and never make progress.

MCNews: There does seem to be a lot of that in large organizations—let’s get ready to get ready.

Schaffer: Well, of course, nobody is really put on the spot that way. Everybody is busy and reports great successes: we’ve got the new system or program; we’re ready to go. But making a commitment to an actual result changes everything.

Banorte bank had people from multiple functions trying to improve the performance of their ATMs, and they were all having success. They were delivering cash better and they were keeping the machines functioning better.

But the actual number of breakdowns wasn’t changing. Once they made the goal to quickly and significantly reduce the amount of down time for the machines, they really made change happen.

MCNews: Do you find on a Rapid Results project that the people who are making change happen are more motivated and get more satisfaction from their work?

Schaffer: Yes. One of the things that got us started down this path many years ago is the observation that when organizations face a crisis or a must-do situation, people suddenly mobilize themselves to get things done that they never would have attempted previously.

The classic case is Apollo 13, the moon mission that went bad. To save the astronauts and bring them back to Earth, the people at Mission Control had to write new software. They created those new programs in three days. Under normal circumstances, it would have taken three months.

My point is that when there’s a must-do and you have to produce a result, people respond. What makes those situations different? Well, there’s a real consequence, and it’s very clear whether you’re succeeding or not. It’s not fuzzy.

MCNews: If an organization uses the standard project approach, how do you shift the mindset to Rapid Results?

Schaffer: We tell people how it’s worked in the past and suggest they try it. The risk is low and they don’t have to make much of an investment. They might ask, “How do we know it’s going to work?” The answer: “Let’s pick a few areas and try it.”

For example, one client wanted to grow faster. They had tried various ways to accelerate growth and felt they were not getting where they wanted to go. We suggested that they try Rapid Results, so they picked three divisions and each division picked a couple of pilot growth projects.

The idea was not to just go off and do market research and report back at the end of 100 days. The goal was to get new sales. The pilots worked. The client was quite excited and expanded the program. By the end of the first year, they had generated $50 million in new sales.

MCNews: Does that kind of success change your approach to future projects based on what you’ve learned?

Schaffer: Yes. At the end of 100 days, teams want to know: How can we keep whatever we’ve learned? How can we build it into the ongoing way the organization works? What are the next steps that we ought to take—what are some of the next things we can do? How can we use these successful new methods to expand the effort?

MCNews: One last question: What one piece of advice would you give consultants to move their clients in the Rapid Results direction?

Schaffer: Look at your client’s most important goals and carve out one result that can be accomplished in a few months. Form a team to experiment with how to get to that result, see what you learn, and then take it from there.

MCNews: Thanks for your time.

Find out more about Robert Schaffer, his books, and services at http://www.rhsa.com.

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Quick Facts on E-Newsletters

If you’re using e-mail newsletters to reach clients, here are some interesting facts from a thirty-day study conducted by AWeber Communications, a provider of e-mail management services.

Although AWeber’s clients prefer to send their e-newsletters on Monday, open rates are only about 23% on Mondays—the lowest of the week. The highest open rate during the standard work week (Monday-Friday) is on Wednesday.

Sending e-newsletters at 8:00am US EST generates an average open rate of 50%. Those who send e-mails just one hour later, at 9:00am US EST, generate an open rate of less than 35%.

When the e-mail subject line includes the date of your newsletter, the average open rate is above 50%. Personalizing the subject line with the subscriber’s first name drops the open rate to 41%. Using the subscriber's full name or last name generates even lower average open rates at 20%.

E-newsletters sent without any personalization in the subject line generate average open rates of 29%.

Keep in mind that this sample reflects the experiences of one e-mail management company for a month. As they say in the car business, “your mileage may vary.”

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Increase Your Sales: Ask "Which" Instead of "If," by Tom Sant

One way to increase sales, particularly for add-ons and incremental sales, is to phrase the question as an assumption.

Elmer Wheeler, who wrote many books about effective sales processes, said it well: “Ask WHICH, not IF!” What this means is that if you ask people which of two choices they prefer, they are likely to choose one of them rather than saying “None.” But if you ask them if they want something in the first place, it’s very easy to say “No!”

Think of a waiter who takes your dinner order. The waiter might then ask, “Do you want wine with your meal tonight?” You might say, “Yes,” or “What do you have?” or “Let me see your wine list.” But it’s also quite probable that you would say, “No, I don’t think so.” And in that case the restaurant has lost out on a high-profit sale of a glass or perhaps even a bottle of wine.

But if the waiter says, “Would you prefer a red wine or a white with your meal?” the odds are that more customers will actually choose to order wine. In fact, when Wheeler trained the wait staff in upscale restaurants in New York to use this technique, wine sales jumped off the chart.

How would this apply to you? Think about the incremental or add-on components you can offer to your customers. For example, if you are selling a software application, you probably include maintenance and support at an additional charge. You could ask, “Would you like to sign up for a year of support?” which would likely provoke the response, “How much is it?” at best or just plain “No!” at worst.

For most businesses, add-ons are lucrative, and research proves that the best time to ask for the customer to buy them is after they have just agreed to the main part of your offer.

But what if you asked, “Would you prefer our workday maintenance coverage, which gives you support Monday through Friday, from 7 a.m. to 7 p.m. Eastern, or would you prefer comprehensive coverage, which gives you access to technical support 24 hours a day, seven days a week?” Obviously, this can apply to a written offer, too—giving a client a choice of two options and assuming they will take one of them is just as effective in your sales proposal as it is in the sales presentation.

For most businesses, add-ons are lucrative, and research proves that the best time to ask for the customer to buy them is after they have just agreed to the main part of your offer. The momentum favors the client saying “yes” again. But it’s even more likely if you ask the right way.

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Tom Sant is a consultant and the author of Persuasive Business Proposals and the forthcoming The Giants of Sales. His firm, Hyde Park Partners, offers expertise in proposal writing, persuasive communication, tactical marketing, and sales process improvement. Find out more at www.hydeparkpartnerscal.com.

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Who's Winning the War for Talent?

McKinsey & Company has a strategic advantage in the war for new consulting talent. According to WetFeet’s Student Recruitment Report: Management Consulting Edition, two-thirds of all students seeking jobs in management consulting identified McKinsey & Company as their first, second, or third choice employer.

The annual survey of more than 2,600 candidates from top-tier undergraduate business and MBA programs provides an inside look at what it takes to attract the top people to management consulting firms.

This year’s report shows that about one-third of all MBA students are interested in careers in consulting and they have their favorite firms lined up:

McKinsey & Company
Boston Consulting Group
Bain & Company
Booz Allen Hamilton
Deloitte Consulting

As for typical MBA candidates seeking a career in consulting, 81% are male, 61% are Caucasian, and the average age is 29.

MBA students said that prestige, culture, and the job itself are the three most compelling factors in selecting a firm. And only 14% of respondents included starting salary as one of the top three factors in deciding which consulting firm to join.

The report shows that while the average starting offers of management consulting firms still lead the pack, the compensation differential between management consulting, financial services and other industries is not as great as it once was.

“Candidates are becoming much more savvy and selective about where they apply and ultimately choose to work,” said Steve Pollock, president of WetFeet and author of the report. “As student confidence rises, employers need to get a much better understanding of the competition and do a better job differentiating their own firms’ strengths and weaknesses—especially in an industry as competitive as management consulting.”

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Top Ten MCNews Downloads

In no particular order, here are Management Consulting News readers’ choices for the ten most downloaded articles of 2005. Because some of these articles have been on the site longer than others, it’s impossible to conclude that one article is more popular than another.

How to Make Your Competition Irrelevant: An interview with W. Chan Kim and Renée Mauborgne

The Power of Impossible Thinking: An interview with Jerry Wind

Marketing Professional Services: An interview with Philip Kotler

10 Really Good Reasons to Quit Your Job and Start Your Own Business, by Michael J. Katz

Michael Gerber Unravels the Myth of the Entrepreneur: An interview with Michael Gerber

Beyond Bullet Points: An interview with Cliff Atkinson

What's the Brain Got To Do With Business?: An interview with Tony Buzan

Common Sense Web Design: An interview with Steve Krug

Insurance Tips and Traps for Consultants, by Scott Simmonds

One Thing You Need to Know: An interview with Marcus Buckingham

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E-mail Sabotage: Killing Your Brand Softly, by Lewis Green

Would you intentionally ignore your clients or send messages saying you don’t care about them or their businesses? That is exactly what you do when you ignore e-mail or respond slowly or inaccurately.

In today’s marketplace, mismanaging e-mail could shorten the lifespan of your business by killing your brand image.

Brand image is built from the inside out. Every communication that takes place between a company and a client, potential client, vendor, consultant, and even a competitor results in a positive or a negative impression. When those impressions are added together, they make up your brand image.

As consultants, our brand images are our lifeblood. They must reflect near perfection—if we expect clients to trust us and ask for our help. Furthermore, we need to ensure that our clients understand how careless e-mail communications endanger their brands.

Researchers at eMarketer report that 2.7 trillion e-mail messages will be sent in the year 2007. Businesses cannot afford to ignore those numbers, but many are doing just that. A study by analysts at Benchmark Portal indicates that most businesses are in a lot of trouble when it comes to their “customer e-service.” Of retailers surveyed, 26 percent failed to respond to e-mail inquiries from customers seeking to make a purchase.

A report by Internet Retail points to even worse news: 51 percent of small- to mid-sized companies and 41 percent of large businesses do not respond to customer e-mails at all.

For companies that do respond to e-mail, speed apparently isn’t a priority. For example, 47 percent of retailers fail to respond to customer e-mails within 24 hours. When other industries are included, the number of respondents who take more than 24 hours to respond to e-mail jumps to 61 percent.

Business managers may not understand the risks of mishandling e-mail. And it’s important to remember that a relevant and accurate response to an e-mail inquiry is as important as a timely one. In the Benchmark Portal study, only 35 percent of retailers sent e-mails rated as "good" at answering customers’ questions, while the cross-industry rate of “good” responses is a sad 17 percent.

How businesses manage e-mail can be a looming crisis or a golden opportunity. In our pervasively online age, more and more people choose e-mail as their preferred method of communication. When businesses treat e-mailers badly, they risk responses of anger, rejection, frustration, and even revenge. In addition, ignoring e-mailers generates harmful word of mouth, which can lead to a slow and painful death for a business.

Embracing e-mail, on the other hand, can open new opportunities for businesses. One study suggests that businesses may miss up to two-thirds of their potential audiences by excluding e-mail from their marketing tool kits.

As consultants we must take an active role in solving communication problems that may damage either our brands or those of our clients. Here are a few tips for turning e-mail into a business growth tool rather than a weapon for business suicide:

Respond accurately to all e-mails within 24 hours.
Embrace e-mail as a marketing tool.
Use SPAM filters, if necessary, to block e-mails originating from spammers, but do so cautiously. Blocking e-mails from legitimate clients and others will hurt your business in the long run.
For best results and greatest return on investment, customize outgoing e-mail messages by employing a consolidated client and prospect database that allows you to specifically identify client groups’ needs and desires.
Communicate customized messages that meet the needs and desires of those client groups.

When they use it correctly, businesses bask in results-oriented e-mail marketing and brand building. Home Depot, for example, has grown its client e-mail database from 500,000 to 5 million contacts in just the last two years. Each one of these 5 million e-mails represents solid future sales.

First and foremost, customers and clients count. They measure your value and develop perceptions based on that value. By ignoring or bungling e-mail, you may miss or destroy opportunities for positive perceptions. Treating e-mail like the winning tool it can be, however, holds the potential to extend your business's lifespan (and profits) indefinitely.

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Lewis Green is the founder and managing principal of L&G Business Solutions, a full-service business consultancy focusing on marketing and sales. He is the author of four books and hundreds of articles in magazines and newspapers. For more information, go to www.l-gsolutions.com.

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Additional Articles

Methods of Measuring Marketing ROI
http://www.marketplacemasters.com/newsletter/issue18-october2005.html

The Hiring Dilemma for High-tech Firms: 'Make vs. Buy'
http://knowledge.wharton.upenn.edu/article/1304.cfm

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Coming Attractions

“Not finance. Not strategy. Not technology. It is teamwork that remains the ultimate competitive advantage, both because it is so powerful and so rare.”– Patrick Lencioni

Next month, consultant and bestselling author Patrick Lencioni joins us to talk about an issue all consultants face: forming and managing productive teams. Lencioni is the founder and president of The Table Group, Inc., a specialized management consulting firm focused on organizational health.

He is the author of four business books including The Five Dysfunctions of a Team, which continues to be highlighted on The New York Times, BusinessWeek, Wall Street Journal and USA Today bestseller lists.

Lencioni’s other books, Death by Meeting, The Four Obsessions of an Extraordinary Executive and The Five Temptations of a CEO, have helped his clients define a new model for organizational health and productivity.

Look for the interview with Lencioni in the next issue of Management Consulting News on December 6, 2005.

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Management Consulting News ISSN 1539-2481, Washington, DC, USA