Alan Patrick has posted a thoughtful response to the discussion started by Jevon McDonald, and joined by Euan Semple, about a new model for consulting, which Jevon (gasp) dares to call Consulting 2.0.
I reprint Jevon’s Seven Tenets, to set context:
[from Jevon’s comments on this blog]
1. Own your ideas
2. Own your work
3. Freedom to decide
4. Personal space
5. The New World demands change
6. Get Paid More
7. Beaten up by the best
Given the inherent jitter in consulting — there may not be a single model that works for every person or sector — I grant much that Alan has to say, but I disagree with several points he tries to score on Euan and Jevon:
[from It had to happen…..Consulting 2.0 - broadstuff by Alan Patrick]
[from Euan’s response to Jevon’s post]
The big consulting firms are circling this stuff at the moment but as I said to someone on IM recently they would need personality transplants. I don’t mean that rudely but most of them just don’t get this stuff.
We would demur a whit….while the big houses may not be “getting this stuff”, it hasn’t stopped any of them using big marketing machines and PR’ ing about it and trying to make a market in it - and in our experience that, plus “you can’t get fired for buying X” mindset of senior managers, takes them a long way - the issue is that consulting is an asymmetric market (of which more below) so how do you tell the truly competent from the media maestros.
Also, though we hate to admit it, some of those Big Consultancies have some very capable people in them - the issue is more can they structurally deliver the best value to a client today.
I agree that the big consulting firms will move into this market niche, and that they are unlikely to change their way of working, at least right away.
On the other hand, if independents can actually craft a better model of client engagement — one that can’t be emulated by the big firms — then their attempts to market themselves will fail. At least they will fail to the extent that the idea of this new sort of client engagement catches fire.
On that side, I disagree with another point made by Alan, since it runs counter to my beliefs about ‘the new consulting’, where he counter’s Jevon’s tenet 6:
Get paid More - heck, if only :-)….the truth is that small consulting companies suffer the sell / do issue - i.e. if you are selling, you are not doing and vice versa. Over time you start to get repeat work it is true, but for any of you thinking you’ll jump into niche consulting and people will instantly hand you the same per diem as you get with BigCo, you have a rude shock coming. It…takes…time - and a hell of a lot of effort. The good news of course is that what you do make goes into your own pocket, so that to earn a similar net you can charge less.
Our own view though is that the optimal is to combine consulting with product / service development, as hours - at the end of the day - are just not scalable.
I think that making more money has to be an element of the new consulting model. Why?
- If new consultants have some special expertise, or a unique depth of understanding in the area in question (like rolling out new social technologies into large enterprises), then their compensation has to be greater than that afforded to those with less competence. In the case where something else besides cash is involved, such as a great learning opportunity or equity, then the independent consultant can opt to take a discount, but the value of the whole still should be greater than those with less skills, in particular, employees of the company. The idea than independence is its own reward is true in some senses, but the independent does not have to pay for that out of revenue.
- To remain relevant as an independent, its critical to remain on top of what is happening. That’s why in general I argue that independents should sell no more than half of their time, applying the rest to marketing, networking, and research. [I am breaking my own guidelines at this specific moment in time, because of my commitments to a number of new startups, but the principle still holds in general.] Therefore the independent — even factoring in the economies of lower overhead and so on — should command a day rate higher than they would gain as an employee. That’s in a sense a condemnation of the lack of personal research allowed in the corporate setting, but also perhaps a statement about the psychological make-up of those that will thrive as independents.
- I wonder whether repeat work — making it up in scale — is really the answer for independents. My sense is that our work should not be discounted based on selling it in larger and larger blocks. That path leads to a sort of wage slavery. We should be getting paid to do something needed occasionally, a rare skill, a unique sort of competence. If we start to trend toward discounted, day-to-day offloading of certain sorts of work, it starts to look more like outsourcing of non-critical work. In essence, I am arguing that the ‘new consulting’ has to be based on having extremely rare and deep skills that are occasionally extremely critical and strategic, and which the enterprise simply cannot afford to retain in general. As soon as it slips into something that smells like maintenance or ‘yet another roll-out’ of now-relatively well-understood tools and techniques, you are becoming a bodyshop.
Much of the sentiment in Alan’s rebuttal of Jevon and Euan boils down — in my mind — to a difference between some unsaid points about marketing and/or prominence. Given a perception of unique and extremely valuable skills in the market niche, an independent has a lot more latitude in determining what work to take, what price to charge, and so on.
The encroachment of more work on an independent’s time take him/her away from networking, research, and marketing. Time away from conferences and blogging, in my case. This is another slippery slope in disguise, where your own success in lining up exciting and demanding projects decreases your broad inquiry into the things that matter to you as a practitioner. Yes, you learn on the job, too, but you don’t necessarily have the time to synthesize it, and position yourself as a leading thinker in the area.
And it is this thought leadership that lurks behind everything in this discussion. The most successful independents — the ones that will have the largest impact on their clients and their markets, and the ones that will gain the largest personal rewards — will be those that have developed reputations as thought leaders.
This is an enormous investment of time and effort. But ultimately, given other factors, the other puzzle pieces don’t come together without this key.
Partly this is due to the expectations of clients. “World class thought leaders,” they say, “will of course demand high compensation. They have unique expertise, critical to our project, and we will bring them in for short engagement of maximal impact, with occasional follow-up.”
Because of the thought leadership, the successful independent has a constant stream of new leads: new clients who believe that they need the unique mojo of the thought leader.
I don’t mean to disparage these expectations: they may well be true. (As in the case of my work with my clients, where I believe that all these factors are at play, including my unique understanding of the social application space which makes it all work.) But what I am getting at is that the successful independent must construct a work ethic, a business model, and a business persona around these dynamics.
Sure, other characteristics are still relevant: working hard, timely delivery or results, good collaboration and communication skills, and the like. But to the degree that these characteristics are also needed by successful employees they are not an end in themselves: they are not characteristics that an independent can use to differentiate themselves. They actually make you look more like a hireling than a saviour.
In such a model, very little time is spent selling: the clients are ‘sold’ before they contact you. But a lot of time is spent ‘marketing’, developing a reputation as a thought leader.
Don’t get me wrong: this is a trajectory that can take years to acheive. But until it is, the other parts of Jevon’s seven part puzzle won’t fall into place.
