Track Record

For more than a year, Tom was on the road raising money for an inaugural private equity fund. He and his partner, Phil Collins, called on all manner of affluent individuals and family offices, jetting from New York to San Francisco and from Dallas to Chicago.

“It's great to meet you,” Phil would say. “Maybe it makes sense for us to give you a little background on us and then walk you through our investment thesis.”

Tom would give a ten-sentence summary of his experience, and then Phil would give his. Tom emphasized his background with operating companies. Phil would follow making the case that he was the investor, that he had apprenticed with a respected self-made billionaire, gone to Harvard Business School, worked at McKinsey, and then became the youngest partner in a large, established private equity firm.

In giving these short bios, they were setting out their credentials—establishing who they were in the very specific sense of establishing their right to be in the room.

Are You Legit?

The history of modern diplomacy starts in the thirteenth century when the commander of Milan's private army, Francesco Sforza, grabbed the reins of power and named himself the Duke of Milan. He quickly established relations across what would become northern Italy; opening permanent embassies in each of the city-states and sending out ambassadors with letters authorizing them to speak on behalf of Milan. Soon all of the European states were establishing missions in other countries, and the modern diplomatic corps and the conventions we know today were born, including the ritual of presenting and accepting of ambassadorial credentials.

That was Phil and Tom, submitting their bona fides in front of potential investors. “Here's our background. We're the kind of partnership in which you might imagine investing. We belong here.”

After presenting their credentials, Tom and Phil would pivot to their thesis, giving examples of the companies in which they planned to invest. There would be questions and answers, and then came the only question that mattered.

“Tell me about your investment track record.”

“Track record” is everything in investing, and it is that way with potential consulting and professional service clients as well: potential clients want to hear about your track record or what you have done successfully for others.

“Tell me about your experience doing digital transformations for other companies.”

“Have you ever worked with a company of our size?”

“Will you be working on the project or will it be a more junior person?”

“What kind of return on investment can we expect?”

“Do you have case studies?”

“May I speak with references?”

All of these questions are focused on gauging the likelihood that you can do what you say you can do. That's because in a consulting or professional services sale, the past is prologue. What you have done for past clients is the only fact-based way to evaluate you as a partner. Everything else is words—assertions and promises without evidence.

Adam Waytz, working at Northwestern's Kellogg School of Business's Trust Project, studies trust from the perspective of psychology, neuroscience, and psycho-physiology. Waytz offers this definition of trust: “Does this person behave in a way I can consistently predict?”

Paul Bloom shares this perspective in Effective Marketing for Professional Services, his seminal 1984 article in Harvard Business Review:

Because buyers of professional services are often uncertain about the criteria to use in selecting a professional, they tend to focus on one question: Have you done it before? People prefer to use accountants and management consultants who have worked in their industry previously, lawyers who have litigated cases just like theirs, architects who have designed buildings like the one they want to build, and surgeons who have performed the needed surgical procedure hundreds of times. Using an experienced professional makes a risky purchase seem less risky. Among other things, if anything goes wrong, a buyer may avoid being blamed by superiors or family members for carelessly choosing an unproven professional.

Establishing Credibility

Part of a client's reaction might be in response to the size of your firm. If you're a five hundred-person firm with offices in ten cities in the United States and you're talking to ExxonMobil about implementing a global ERP system that will require two hundred and fifty people in a dozen countries, the client might reasonably conclude you're not big enough to do the job. As good as your pitch is, ExxonMobil is likely to hire an Accenture or IBM.

As with most things in life, there's a pecking order among consulting and professional services firms. Some are more prestigious than others. McKinsey, Bain, and BCG are perceived by many to be in the top tier of strategy consulting firms. If you work for one of these three, your firm's reputation will have a halo effect on your own reputation. Conversely, if you are a partner in a twenty-person boutique strategy shop, you may have to work a bit harder to prove your credibility.

It is not that working with a small firm doesn't have its advantages. Not every company can afford to hire a large firm. Additionally, not every client wants to hire a large firm. Some prefer working with smaller firms because they believe they'll get more attention and better service. The point is that, despite this, your firm's relative prestige is the coat you wear as you brave the storms of the marketplace.

Your personal credentials are also important. It may mean “Do you have the proper degrees or certifications?” in professions like law, accounting, engineering, and architecture. But certifications aren't always professional gates; they can also be accessories that signal your knowledge of a field and commitment to it. For example, Certified Financial Analyst (CFA) or Certified Financial Planner (CFP) in the financial services industry communicates competence.

For some people, the caliber of school makes a difference. Each professional services field has its own pecking order of educational status. Did you go to a top-tier school like Yale Law, Harvard Business School, or Stanford's School of Engineering? If so, you're assumed to be capable. If you didn't go to one of the elite schools, it doesn't mean you're not smart, it just means that you don't benefit from the school's reputation. It means you have a little further to walk to show clients your intelligence and ability.

To some, credibility may be “Do you look and act the part?” For every profession, there's a way professionals dress and carry themselves. For investment banking, it may be a bespoke suit or Jimmy Choo shoes. In advertising and tech, jeans and more casual footwear are the norm. How you look helps form would-be clients' first impressions and works to build up or tear down your credibility.

When Doug was at business school on the East Coast, it was the investment banks, management consulting firms, and Fortune 100 companies that recruited graduates most heavily. Students were expected to arrive at interviews wearing their very best suits. You were quickly sized up by these companies based upon whether you “looked the part.” If you arrived inappropriately dressed, you probably didn't get a call back for a second interview.

One of the companies recruiting during his second year was a large West Coast software company. It was the cool company at the time, and students were drooling over the chance to work for the company. Every student wore their nicest suit to this tech company's interview except for one. Paul had lived on the West Coast before graduate school and knew a bit more about the tech industry's culture. Instead of wearing a Brooks Brothers suit to the interview, he wore jeans and a polo shirt. Paul got the only job offer. Was it because of the jeans? Maybe not. Was it because he understood the tech industry's culture? Maybe. Was it because he stood out from the other students and signaled that he was original? Perhaps. Was he the best candidate from the school? Hard to say. The point of the story is that what you wear and how you act matter in establishing your initial credibility.

Can a Client Rely on You to Get the Job Done?

Clients ask themselves a simple question: Do they think you and your team can do the job? The answer is binary. If yes, proceed. If no, do not pass “Go.”

Potential clients might know a firm (they are aware of you), know you are active in a specific vertical (they understand what you do), and have a problem they are eager to solve (they are interested), but at some point, they need to be assured that you can do the work. They look at you and, using their head, they weigh the benefits versus the costs of engaging your firm. The scales tip in your direction when a prospective client:

• Believes you can add significant value to their projects
• Believes that the economic, strategic, political, and emotional benefits of what you do outweigh the financial, career, emotional, and time investments and risks
• Believes you can actually do what you say you can do
• Believes that your team is the best option among other choices

The scales tip when they look at the sum of who you are and what you have done and conclude that there is a high likelihood you will be able to deliver value to their firms just like you have always done.

Tactics—What Works

Here's how clients evaluate your track record and what that means for you.

• Are You Relevant? Prospective clients clients ask themselves: Have you done this sort of work before for other clients who are of similar size, operate in the same geography, and/or play in a certain industry? There is a temptation when speaking with would-be clients to use the same story or case study. You get good at telling it, and others have found it compelling. But it's lazy. Better to tailor your story or case study to the potential client with whom you are hoping to work. Yes, they want to hear about your high-profile prestige engagement, but they are more interested in learning about work you have done for firms who are in their nearly exact situation.

  Say you own a coffee shop chain with one hundred and twenty-six locations in six states. You are interested in doing a merchandising reset and are interviewing merchandising consultants. Everyone shows up with examples of their work. One firm did a reset for a hardware chain in the Southeast, a fast-casual restaurant design in the UK, and a merchandising plan for a 13,000-unit international convenience store chain. The second firm spun out of the Starbucks internal merchandising team and has done merchandising sets for more than twenty coffee shop chains as well as a dozen juice and smoothie operations. Who do you think is more compelling to the client? The relevant experience of the ex-Starbucks team probably wins the day. Remember how niching helps prospective clients remember you? Your concentrated experience also helps win the deal.

• Are You Reputable? Potential clients don't just ask if you have done the work before, but have you done a good job? What do others say about you?

  Old timers like to say that “delivery sells,” where the quality of your work is the table on which your reputation sits.

All of my work has come from referrals and repeat business. That's it. So, doing good work is the key because if you do good work, you'll get repeat business and referrals. I think it's both pretty simple and pretty complex at the same time. When you get an opportunity, do a darn good job with it, don't burn any bridges, and be very pleasant when you are referred to someone and have a conversation. Always try and be helpful even if you don't take an assignment.

—Graham Anthony, founder/principal, Anthony Advisors

Good work is the ether through which word-of-mouth travels. You do good work for a client, and then when one of their friends likes what they see or expresses a need, your client says, “I should put you in touch with the firm I used. I'd highly recommend them.”

Over and over you hear about the need to be clear about impact. What difference did you make for clients? Hard figures always outweigh soft contribution statements. Think of the investors judging Phil and Tom. How much money have you made for people in the past? Track record is the best predictor of future results.