The Myths of Consulting … and other factual errors

The Myths of Consulting … and other factual errors

I always loved reading the legendary Peter Drucker, because he used opinion and fact interchangeably, never seeing reason to discriminate between the two. My kind of guy!

Consulting is about a single issue: Improving the client’s condition. The physician’s admonishment to “first, do no harm” is simply not good enough. You don’t deserve to be paid for simply not screwing up. You should only be paid if your client is demonstrably better off after you leave than the client was before you got there.

When I ask candidates for my Mentor Program how their clients are better off after they leave, many can’t answer the question! That’s the starting point. And, that’s your value proposition.

A client is improved solely when output improves. That is, results and outcomes are better according to agreed-upon indices, whether scientific or anecdotal. You can measure sales improvements, but you can also readily observe whether meetings are shorter or questions are handled better in a presentation. If it’s not observable, it’s not important in a business improvement initiative.

The degree of that improvement justifies a fee. Hourly billing (and all time-based billing) is inherently unethical because the consultant is paid best when present the longest, yet the client is served best when the issue is reconciled most rapidly. Think about it. Is a client better served when an opportunity is exploited in 10 days or in 90 days? Consequently, which approach is more valuable, the one which produces the outcome in 10 days or 90 days? Yet, with time-based billing, the consultant who lingers and obfuscates for three months is rewarded for the lethargy.

The reason so much resistance occurs over “fee” and “price” is that consultants don’t focus on value. They focus on methodology and time. The only issue of importance to a client, however, is result. (I’m talking about true clients, not human resource people or trainers, who are consumed with methodology, boxes of materials, head count, and faddism. They are to organizational development what a stegosaurus is to agility and nimbleness.)

Consultants are either solving problems and restoring performance to a prior norm (problem solving: low value) or raising the standard of performance to new heights (innovation: high value). In either case, the outcomes are clearly visible and measurable, scientifically or anecdotally. A training program, focus group, outdoor experience, audit, redesign, ad nauseum, simply represent methodologies and inputs. They are, in themselves, not of value. Only the results they generate are of value. Yet most consultants create a fee based on the degree, duration, and frequency of the delivery mechanism and methodology.

A “strategy retreat” may be priced at $15,000 by a facilitator or “strategist,” yet the result of the new strategy that presumably flows from the retreat is probably worth millions to the client. How can the fee for this be less than six figures? (Because the consultant is considering what can be charged for the weekend, not the result.) “Recommendations” and “clarity” and “consensus” are worth nothing, unless higher profit, greater market share, enhanced repute, and less stress, to name just a few results, emanate from them.

A consultant is a partner with a client (someone who can sign a check for the consultant’s value) to achieve predetermined business improvements, which can be observed and measured in the environment. If that’s not what you’re doing or intend, then I don’t know what you’re doing, but you’re not consulting.

And that’s a fact.

© Alan Weiss 2007 All rights reserved.