My good friend Stéphane (and sometimes partner in crime) has made a remarkable two-part blog about his “post-mortem” of four years of consulting. This is only in French though, but hurry up and Google-translate it. I don’t think we would change a word to it. Of course, if ‘post-mortem’ is probably not the right term when you have had such success at launching a new consultancy as he had, the idea was challenging enough that we decided to follow-up.
This is an interesting timing for us because we moved from the south of France to sunny Amsterdam a few months ago. And, since we had no obvious reason to run a French company while paying our taxes in another country, we officially closed MERKAPT that I started in 2007 and incorporated in 2009 with Stéphanie. Meanwhile, we opened INNOVATION COPILOTS a classical Dutch ‘Besloten Vennootschap’ private company.
There’s nothing much to say about this move, we love our new city of residence, and it suits our lifestyle much better (yeah! for getting rid of our cars).
So let’s try to play the game of looking back at what we’ve learned in 10 years of consulting. And, just be aware that I might go a bit Miyazaki on you OK?
1. You don’t need a personal network to start consulting
But you need to have something in store really interesting.
If you have a strong network that’s cool too, just beware that it might hold you back in a specific comfort zone and that the friendly opportunities coming from your connections will eventually dry out. In hindsight, my first year of work involving my past connections was very reassuring but didn’t help much in building a proper position in the market. Eventually, you might have had a strong head-start but never really assessed how good you were, or just what is that you’re good at. Jumping in the deep end of the pool is scary, but has its virtues. Consider it.
2. Most networking events are a waste of time anyway
In building your network, you might want to be literal and attend networking events; don’t.
After rapidly admitting that most of these things really blow hard, what we’ve been doing for years is a) to entirely skip them and b) when we feel we somehow have to go, apply the 15Min Rule. The 15Min Rule is: be nice and smile, if no one comes and talks to you within 15 min, go away. Our rationale is that networks tend to be of two sorts: the ones where people see opportunities in engaging with new faces, and the ones that just want to protect what they consider as their turf. You don’t need the latter ones. Fenced networks nest people insulated from reality if they are customers hiding around, they’re not rocking the boat anytime soon. Be confident that you’re not missing on anything.
3. Only toxic customers offer free gigs
As a corollary to your networking strategy don’t do keynotes for conferences that won’t pay you.
If they consider you’re a commodity, it’s your choice to accept the label or not. (Make sure to just ignore this advice when the conference is of TED-like magnitude, in which case you should wash and massage the feet of anyone offering you the opportunity of being the center of the known universe for 18 minutes.) Furthermore, don’t ever take a mission with a customer for free because they will then “open up opportunities” (see networking above). They might have dozens or sensible reasons not to pay you; the reality is that they are toxic. Consulting is a very streamlined business model: your price amounts to a percentage of the ROI your customer will get. The more you get paid, the more your ROI is visible for the customer.
4. Share everything you can
Your net value is what you bring to the market, if no one knows you won’t be working.
This is your experience, your mindset, effective and differentiated tools, methodologies, know-hows, soft-skills, and contacts. You might feel like you should keep your secret sauce a secret so that competitors don’t steal it. Are you serious? If you have something remotely interesting to offer, make it public as soon as possible. Spread it. Plaster it everywhere. The upside of having customers precisely understanding what you can deliver, far more outweighs any possibilities that people will copy what you say or write. I would also say that if anyone can copy and paste what you deliver to your customers by just duplicating your slides or your blog posts, you probably don’t have much in store regarding consulting. Just consider a copycat as a badge of honor, smile, move on, broadcast some more.
5. Dissensus is your friend
If anything, consulting is about having a clear vision on your market; worry when everyone agrees with you.
The clearer it is, the more people will be biased against it. If everyone agrees with you, you’re just saying “Startups are good.” No one cares about that. Consider that dissensus is how to pinpoint where you diverge from business common sense and why your perspective matters. Just try not to be a jerk. Part of not being a jerk is that you might be very blunt about your perspective, but the way you formulate it should always be actionable. We call that ‘weaponizing’ our content. The goal is that your audience can put something to the test and already use your perspective in their business. Anyone who disagrees with you at first but actively tests what you say and sees it working is a future recurring customer.
6. Volume is not your friend
The number of leads you manage to make is very deceptive, you’re not in a volume business.
I see many discussions on the volume of contacts, social media followers, or blog readers required to activate recurring business as a consultant. As far as we concerned we switched our blog to full English in June 2015. Since then our traffic pretty much went down 50%. Meanwhile, we got better and better connections and more and more focused business inquiries. Which is even more satisfying somehow when we don’t have pre-packaged offers with call-to-action buttons everywhere, and this is purely content-based. You just have to remember from time to time that you’re not selling shoes or yogurt online.
7. Prune customers and push on
Complacency will eventually hit you as hard as any old-fashioned industry.
After a while, you’ll feel like a fat cat, with an agenda full of missions and secured cash-flows. There are many ways to boost yourself before customers start to tell you that you suck. For the last five years, Stéphanie and I have been pruning every year the bottom 20% of our revenue base while seeking out new missions with rates above our current top 20%. This is simple logic: the customers that pay you the less don’t value you enough. Inform them that you’ll raise your rates and if they don’t follow, prune them gently. This will make space for customers that you choose to engage at price points above your current highest one. Now you feel insecure and have unavoidable incentives to be better than last year. As a side effect, you will double your revenues within five years. This also works whenever you want to refuse a mission: say yes, but double your historically highest rate ever. If the client agrees, you might be doing a boring mission, or deal with an unpleasant company, but you’ve learned that you’ve been way behind the pricing curve.
8. Work less and upcycle further
As a narrow volume (if not niche) business, your only way up is through pricing.
Following this empirical rule, you might choose to work less (remember, your rates increase every year). The goal is rather to decrease your face-to-face production time with customers. This will create more space for you to think, to attend conferences, to meet people broadcasting weak signals in our field, explore unexpected paths, read, write, hell… podcast if you want to. Better revenues translate in more time; more time translates into being better in your field; which eventually translates into better revenues.
9. Educate customers
Customers will be enthusiastic about what you do, but they will be misguided most of the time.
In our consulting work, customers may come to us for a specific need or a specific idea based on what they read about us, without completely understanding the real issues, the stakes or the overall impact on the business. It is our role to ensure that we orient them towards the “right” path even though it may mean working with partners and not us directly or not working with us at all. This all comes back to knowing who you are and understanding where you add value. It is common for us to be approached by a potential or recurring customer and advising them to work differently than they anticipated: for example, they contact me for some business strategy, but I reorient them towards Stéphanie for some executive team cohesion. The important point is to ensure the client will get better at understanding themselves and their issues.
10. A happy customer doesn’t need you in the end
Always thinking about what you’ll do next for a given customer for recurrent revenue’s sake is a rookie mistake.
We always thought that the end goal is that customers won’t need you as soon as possible. It might seem counter-intuitive because then you miss opportunities for recurring business. No you don’t. It might be the opposite: clients will respect you for not making them dependent on you and for helping them grow. You’re just a copilot after all. Keep that in mind and new opportunities will come to create more added value and build in coherence with previous work. This is especially true for our line of work in terms of culture transformation to support a truly sustainable innovation mindset in the business.
11. Invest in a dynamic personal balance
After your vision and know-hows, your energy level is the key bottleneck in this business.
In the end, your mileage will vary but staying relevant for many years in an ever-changing playfield means you have to invest in yourself. These last three years for instance, Stéphanie made sure not to work on Fridays anymore. I’m more about sprinting for two weeks and have a semi-off week where I research, do administrative work and get coffee with people. But we always make sure to try to be in sync when we have to deal with abroad missions that involve jet-lag, so that we plug a few days vacation after such mission. Understand that unlike most professions, a day of work with clients is a continuous stimulation and a continuous challenge; even when you’re just pausing for lunch. This is part of the attractiveness of the job. It also makes dealing with burnout a very serious process to implement after three to five years.
12. And most importantly…
Wax on. Wax off…