It's funny how some ideas, when looked at from a new angle, stick with us. Tom Critchlow is an independent consultant and author that I admire. He wrote a piece titled "The Consultant's Grain" - please read it here - highlighting the importance of understanding a client's culture before proposing or implementing solutions.
I think about that blog post, honestly, at least once a week. The role of reading a client's culture is so central to strategic consulting, and sadly so underestimated. Why is this so?
I have a few hypotheses on why this is so, but my main theory comes down to this:
- The game most consultants choose to play is a finite one.
- Role models and social changes lead them to optimize their business for individual values such as discretionary time and location independence.
- Since there's no way for consultants to understand our clients' culture "efficiently", we tend to neglect it - consciously or unconsciously.
- The consequence of this is an overall lack of capabilities for any high-level strategic work, and a popularization of productized consulting services.
Here I'll try to explore some of these ideas.
The Purpose Of The Game
One of my all-time favorite books is James P. Carse's "Finite and Infinite Games":
"There are at least two kinds of games: finite and infinite. A finite game is played for the purpose of winning, an infinite game for the purpose of continuing the play. Finite games are those instrumental activities - from sports to politics to wars - in which the participants obey rules, recognize boundaries and announce winners and losers. The infinite game - there is only one - includes any authentic interaction, from touching to culture, that changes rules, plays with boundaries and exists solely for the purpose of continuing the game."
Chances are you see your consulting business as a means to an end. This might be achieving financial independence, or funding your preferred lifestyle and interests. It can also be related to social status, such as being recognized as an expert, leaving a legacy, building a respected reputation.
If that's you, you're playing a finite game. Your mind uses some kind of indicator to measure success: Your revenue or monthly income, the number of published books or media appearances, the famous logos on your client's portfolio.
What many forget is that your success indicators end up shaping your life and business. It will drive your thinking, and consequently your actions and business results.
Here's what most independent consultants I know correlate success with:
- Profitability: Many people see their profit as a good metric for the value their work adds to society, despite the unintended consequences. Building a profitable consulting business is usually seen as a successful accomplishment.
- Discretionary time: The less time you have committed to specific tasks or activities, the more you can control and structure your working hours. Consultants who can "choose" to work only 10 hours a week (or anything that fits their preferred lifestyle) are seen as successful.
- Autonomy: I often hear that choosing which projects to work on and getting rid of "internal politics" play a large role in the decision of starting an independent practice. Having the ability to make decisions and lead with less interference or need of approval from third parties is what many seek.
- Location independence: Management consulting is famously associated with a heavy travel routine, but flexibility was always valued. Most recently, however, with the rise of remote work the ability to deliver engagements from whatever you want became more and more desired and celebrated.
- Impact: This is the final result of your work with clients. While it's always rewarding to improve a clients' condition - no matter how small of a change you make - making a bigger impact usually requires you to solve bigger and more complex problems. Many consultants use impact to measure their success.
Those success indicators affect the vision, goals, and initiatives of independent consultants. The problem is, you can't optimize for everything. When those indicators move in opposite directions, you are forced to pick priorities.
How Do You Measure Your Score?
Looking at those five indicators, it's easy to see that some of them usually go together while others can be tricky to pursue simultaneously. Let's take a quick look at how they're connected.
Profitability is the only one that doesn't require any trade-off. You can make money by both selling your time or selling value, working on the client site or remotely, solving bigger or smaller problems. These decisions certainly affect your margins and how your business will function, but they won't stop you from building a profitable consulting practice.
Discretionary time, autonomy, and location independence go hand-in-hand. You might have one without the others, but they move in the same direction. Internal consultants are usually physically present and end up adopting the working hours of their client counterparts. Those who lead engagements and work remotely tend to adopt fixed or value pricing and can design their working schedule.
Finally, there's impact. When you come back to our list, you'll see that impact is the only one of the five indicators that's client-oriented. It's not a coincidence that this is where most trade-offs exist.
To illustrate this, I propose you a thought exercise.
The Perfect Consulting Business?
Imagine you are starting a new consulting business. You want to adopt all of the measures of success previously mentioned, except impact.
Your objective is to build a business that:
- Is profitable.
- Allows you to work from anywhere, and choose your schedule / working hours.
- Consists of selling your advice in such a way that creates no possibility for your clients to request changes, or interfere in the way you get the job done.
How would your consulting business look like?
The answer is simple: It would look like a product. Your clients can't ask for changes, and you can sell it whenever you want, from anywhere in the world.
It's no surprise that in the last decade or so we saw exponential growth in the number of solo consultants betting all their chips on info-products, such as ebooks and pre-recorded online courses. This game benefits from leverage - getting more results with less work.
But what can we say about impact, the component we left out from this example?
There's no doubt that, except for those from loud self-proclaimed experts, most info-products and productized services deliver some impact. A book that breaks down complex ideas in a simple way or a video course that teaches technical skills can deliver a huge ROI for clients. But they are unlikely to deliver any transformation to your clients' businesses.
That doesn't mean your work will have a smaller impact on the world. The more you productize your consulting business, the smaller will be the impact you cause on any one of your clients - but the bigger is the number of clients you can work with. The net impact of your work can be actually bigger.
Many extremely successful consultants never really delivered bespoke work, focusing on writing or public speaking instead. Their impact is big due to the reach and popularity of their ideas. They simply chose a different strategy to play the same game.
I've heard from several "old-school" consultants that serious professionals shouldn't productize their expertise. This is nonsense. One thing doesn't exclude the other.
I believe info-products and paid deliveries should be part of the offering mix of any consultant - they are just another way to sell your expertise, and a great way to consistently solve simple problems or restrict your scope of work.
The problem is not productizing your expertise. But selling transformation and high-level strategy while adopting productized tools and approaches.
Promising a transformation on your clients' businesses will require you to not only acquire new capabilities but also to make those trade-offs you've been avoiding so far. Delivering a bigger impact usually forces you to give up some of your discretionary time, autonomy, and location independence.
High-Impact Work Doesn't Scale
When I first started consulting, I used to think only large companies hired for strategy and transformation. "The bigger the company, the more complex their problems will be, right?" Later I found out that's only partially true.
Both smaller and larger companies have both complex and simple problems. But the value of those problems is also proportional to the size of the companies.
Designing a website page for a new product, for example, is a simple problem that any company may have - regardless of their size. It can be solved:
- For free: Anyone can learn how to build a website using free online resources.
- Inexpensively: The company can hire an hourly freelancer to do design it.
- Quickly: The company can buy an online template and customize it.
- Branded: The company can hire a specialized agency to build it.
- Repeatedly: If this is a recurring problem, the company can hire a website developer internally or build an in-house team.
The reason why smaller companies will often choose the first options and bigger companies might choose one of the last ones is value and risk. The difference between 5/10 and 8/10 websites are small to a local company. But for a large ecommerce store, it can translate into millions of dollars in lost revenue.
The key point here, however, is that simple problems can be solved with clear instructions. Both a templated website and a completely customized one will deliver on the main goal of communicating detailed info on the product and allowing visitors to buy it or contact the company.
This is not the case for a complex problem.
Choosing which market segment or niche to focus on (or making a change to your positioning strategy) is an example of a complex problem. Just like with the website, it's a universal problem. Both smaller and larger companies need to choose which business they're in.
There are some important differences though:
- The problem involves many people with different values and priorities. The partners or founders of a company may have contrasting visions for the business in the future. Some are more ambitious and risk-adverse, others more conservative and pragmatic. Each stakeholder have a different idea of what the final outcome should be.
- The problem's roots are complex and interconnected. Changing your target audience will affect what you sell, how you communicate it, how you deliver it, how you price it. How well do you know the different niches being considered? Do you have the capabilities to create products or services that look attractive to them? How does the current brand and relationships impact this decision? The problem spans the entire organization.
- The challenge was never faced before. Shifting the positioning of a company is a long and complicated process. It might mean making changes to a brand image or reputation that took decades to be built. Or ending commercial relationships with long-time partners that are now irrelevant. There's no formula or clear manual to get this done.
- There’s nothing to indicate the right answer to the problem. A company can go upmarket to increase margins, but it will need to create relationships with larger or wealthier clients. You can narrow your focus to a niche where you already have existing connections and advocates. Or you might even choose the challenging road of creating a new market segment. It's impossible to predict what the best strategy is.
These are some of the reasons why high-level strategic or cultural problems are difficult or impossible to solve, and can never be successfully productized. There's a clear lack of clarity in both your goals and solutions. You need to deeply understand your client - as Tom puts it, learn "which way the grain goes."
This is also why most strategy or transformation projects are hired by larger companies. The high impact + lack of productized solutions lead to costs that are impeditive for most SMBs.
Defining Your Priorities
Moving upstream to solving complex problems (and maximizing the impact of your work on each client) will almost always force you to give up some of your discretionary time, autonomy, and location independence.
"Reading" culture is a challenge on its own. There's no recipe to do it efficiently. It requires a long process of listening and challenging people, observing how they behave in their day-to-day, understanding context and how different groups interact in different environments.
That's why strategy consultants will continue to travel to a client's office, despite the growing popularity of remote work. That's why they'll never adopt a 100% asynchronous communication practice. That's why they know existing methodologies are not always applicable, and can create new ones on the go.
If you don't like that, prioritize problems that have standardized solutions.
I believe the culture of productivity and scalability is pushing many consultants to this path. Success is associated more with your number of clients than with your average client impact. And that's ok.
Just don't promise to deliver transformation through productized practices and tools. It never worked in the past, doesn't work now, and will never work in the future. Looking down on culture is a sign of a lack of experience in tackling complex problems, and will inevitably lead to failure in solving them.
You're not forced to play any specific game. But recognizing the role and importance of your clients' culture will help you be a better consultant, no matter how you choose to build and grow your business.