The Business Behind Consulting ◾ 107
to your doctor that you will pay him if the prescription works out. You
should always get paid for the services you render and the value you deliver.
The Odyssey consultant leverages two kinds of inventory: time and
expertise. The primary reason the majority of consultants undercharge is
that they fail to relate their fees to the quantifiable value proposition they
represent to the client. Their focus is too much on time and on activities
rather than on the value provided to the client.
Results-Based Consulting
Results-based consulting is a systems-thinking approach in managing the
critical first part of the Odyssey process: creating the right kind of relation-
ship with the right kind of client. Results-based consulting has three overlap-
ping elements, as outlined in the three circle model in Figure 5.2.
The degree to which you balance these three essentials will go a long way
in determining your success as an Odyssey consultant. Let’s look at each in turn.
The Economic Buyer
Returning again to my colleague who had submitted the time-based pro-
posal, I asked him who was his point of contact in the client organization.
He told me he was dealing with the senior vice president.
I asked, “Well, who’s making the decision with respect to this project?”
“The board,” he said.
Form a
professional
consultative
relationship
Identify the
economic buyer
in the client
organization
Determine
the agenda to
position your
value/fees/talent
proposition
Figure 5.2 The three essentials of results-based consulting.
108 ◾ Odyssey—The Business of Consulting
Straightaway, we can see that he was disconnected from the economic buyer
and that he would have to network to the board if he wanted to see his proj-
ect go ahead. It is always vital to determine whose agenda positions the fees
within the client organization. Although my colleague had done some of the
work here, he had jumped the gun and stated his numbers before he had really
put the value proposition in place. He had presented a time-based rather than a
value-based proposal to someone who could not make a decision on it.
A key question here is, was he forming a professional consultant relation-
ship? My view is that he had not taken enough time to build that relation-
ship with the senior vice president so that he could bring this project to the
board, position it with them, and perhaps even make the vice president look
like the hero in the process.
Finding the right buyer in the client organization is the absolute prereq-
uisite for a results-based assignment to take place, and the right buyer is the
economic buyer.
This means that you must clarify—in your own mind—your value propo-
sition to the client in outcome terms, not in terms of what you do. This
means understanding that only certain people will appreciate your offering
and the talent that comes with it. To find a decision maker, you must be a
decision maker. Make a decision to get to the right person in every client
organization. This, you will find, is a learned competency once the decision
is made to do so.
The Consultative Relationship
How you conceptually and strategically contract with the ultimate buyer,
who is your Ideal Client, is essential. When you are with senior decision
makers, always move the discussion to the picture in their head, not the
need or solution that you have. When you talk about macro objectives and
outcomes, you create the environment to have that conceptual connection.
From early on in your relationship, you must discuss, debate, and ask prob-
ing questions. This kind of dialogue, where you set out to understand how
and what they are thinking, forms the foundation for the relationship of trust
and peer level respect from which everything else flows.
The Value/Fees Proposition
Odyssey consultants do not talk about commodity-based solutions; they talk
about creating value added through profit and performance improvement.
The Business Behind Consulting ◾ 109
Clarifying the value in achieving macro objectives keeps the discussion away
from fees and leads you ultimately to the position where you deliver value
vastly in excess of any fee you might charge.
Keep in mind that most organizations are full of waste. Quality gurus
estimate that as much as 30% of company revenue generation is wasted.In
other words, if a company is generating revenue of more than $20 million,
the waste associated with that activity could be as high as $6 million.
Making a saving of just $1 million on this figure goes straight to the bottom
line.
Making Your Talent Work for You
Value-based consulting is about putting a value on your work and your
talent. If you position yourself as a profit improvement specialist, that is,
a Level 3 or 4 player, rather than somebody who brings generic solutions
to the table, you give your client clear reasons for proceeding with you.
Moreover, reasons are more powerful than the features or benefits of any
methodology you may have.
When you can demonstrate that your solution is an investment rather
than a cold cost, and one with a high return at that, resistance is lowered,
and it is easier to move forward. Remember too that most other consultants
do not operate in this way. The best Odyssey deals will be larger and have
no competitors at the table.
Managers and consultants alike are frequently confused about the term
“adding value.” In a small assignment, “value” means that your product or
service will meet the client’s requirements at a fair price. Adding value there-
fore is exceeding the client’s requirements. In the consulting world, there are
all sorts of opportunities to add value to your offering, such as the following:
◾ Being the expert on call for six months after the assignment is
completed
◾ Conducting a teleconference to reinvigorate or challenge the client team
◾ Sending an e-zine or a valuable e-mail
◾ Being a sounding board for a client over lunch
◾ Doing your own mystery shopping research and providing feedback
Although these examples may help to exceed client expectations, they
are operational value additives and should not be confused with the big
110 ◾ Odyssey—The Business of Consulting
question of need in the mind of the economic buyer or the key value propo-
sition that you represent.
Levels 3 and 4 economic buyers see value as ROI and wealth creation.
To help the client improve the bottom line, you must talk about financial
performance, profit drivers, and the big picture. In a major assignment, it is
imperative that you talk savings, costs, ROI, and metrics.
In his book Good to Great (2001), Jim Collins points out how impor-
tant it is to identify the correct “economic denominator.” This is the critical
number that determines the ongoing success or failure of a business. In a
mainstream business, a top manager will have three or four critical numbers
in their head all the time. Your engagement must relate to the client’s key
numbers, and your dialogue must then be linked to an investment proposi-
tion to achieve these targets.
If you are dealing with functional Level 2 managers on a major contract,
it is important that you help them position and sell the proposition upstairs.
Middle-range functional managers may be good at selling operational per-
formance to their boss but may not have the skills to sell financial ROI
performance. This is why you must work shoulder to shoulder with them if
your proposition is one that has to be signed off at CEO or board level.
Making the Client a Hero
I had worked for quite some time with the HR manager in a retail company.
She was happy with the work I had done and was very comfortable in the
relationship. So, I had what I call “the leveraging conversation.” I knew that
the company had done some strategic planning, so I asked her if there was
anything coming out of that process that was going to challenge her as the
HR manager. She talked at length about an onboarding process that was in
the pipeline and the challenges it would create within the ranks. Although
she had done some work on it, she really needed help to bring it to the next
level.
She told me, “I’d like to see the CEO take this on, but I’m not really that
good at influencing those guys …”
I suggested we both make a presentation to the CEO. She loved the idea.
In the weeks that followed, I spent a lot of time coaching her on the presen-
tation, and when it came time to face the CEO, I put her front and center.
It went really well. The CEO said, “I really like what you’re doing here. You
need to come back to me with a full-blown plan.”
The Business Behind Consulting ◾ 111
He eventually commissioned a $70,000 project, although it ended up
closer to $100,000 with additional consulting elements.
Things do not always work out quite as well as they did in this scenario.
It really helped that the HR manager in question was highly motivated and
saw herself as occupying a strategic role in the organization. If you are deal-
ing with a function head who does not see beyond their own bailiwick and
is in effect just an administrator, that approach will not always bear fruit.
On another occasion, one of our Odyssey consultants was working with
the vice president of HR in a client organization and secured a $150,000
leadership development program. This was to be a pilot, leading to a corpo-
rate rollout, which would be worth an additional $1 million. The consultant
assumed that senior management was being kept abreast of the program,
but this turned out not to be the case. The pilot was rolled out and deemed
successful within HR. However, the consultant was shocked when the full
corporate program was mothballed. It turned out that the CEO and the COO
felt that the program would be disruptive to the culture of the organization.
Despite assurances from the vice president of HR that all was well, neither
the CEO nor the COO had been part of the early discussion on the program
model and methodology.
Keep in mind that in a major assignment, there may be multiple influenc-
ers, some of whom will be behind your project and others who will play
politics and do everything in their power to sabotage the intervention. Each
of these people must be identified, their actions analyzed, and a strategy
to win them over devised and put in place. This could take months, even
years. Keep asking yourself, who are the key players? Who has the respect
of top management?
Sometimes, it is not possible to meet the ultimate decision maker, the
economic buyer in the first instance. Working with buyers who have differ-
ent roles is part and parcel of a major, complex consulting case. If circum-
stances dictate, you can gather information from the owner of the problem,
functional managers, and even user–buyers, long before you get the oppor-
tunity to meet the CEO and the board.
There are of course exceptions to every rule, but you will be dealing with
and selling into teams nine out of ten times. Every CEO and economic buyer
has a support system around, below, and often above them. They rely on
these people to help them steer the business. Remember too that influence
tends to be less visible than authority; sometimes the people with influence
on the back channels of the organization have a great deal more personal
and positional power than the formal organizational structure might suggest.
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