I would like to share a recent insight I took from dozens of conversations, and propose you a thought exercise: to think of yourself and your consulting business as a driver of innovation.
There are a few well-known reasons why companies hire consultants:
- To acquire capabilities: You're often hired to help clients solve a problem, for which your specialized expertise is needed (and the client doesn't have).
- For outside perspective: You as an independent consultant can give clients an objective perspective on the challenges their organization struggles with.
- To financial reasons: Bringing in a consulting firm can also, in some cases, be more cost-effective than hiring experts internally.
In most cases, clients will choose to hire you for more than one of the above. However, what I've been noticing in recent months is a strong trend towards the second point: looking at consultants as a source of ideas and outside perspective.
This is very clear when we look at mid-size companies, and in particular startups, with 50-200 employees. What many are doing is insourcing their team and outsourcing innovation.
Consultants are not being hired to solve specific problems, but to find new strategies, initiatives, and benchmarks that work. Let's illustrate this with an analogy I heard from the always sharp Chris Walker.
Where Does Information Come From?
Imagine a cannon, with the ability to shoot all kinds of things from a long distance.
This cannon shoots information, that lands inside of your company. There are many of those, shooting from all different directions. Someone in your company receives information, it spreads, and eventually it becomes part of your strategy.
That's what happens inside companies, and dictates a large part of their innovation initiatives. And it makes you wonder: where is the information coming from?
- It could come from the leadership's closer contacts.
- It could come from a software vendor, telling you how you should do marketing.
- It could come from someone on LinkedIn with no real experience or proof of expertise to back up their advice.
- It could come from a friend.
- It could come from a blogger.
Somehow the information is coming in and becoming a strategy for the company.
Your Role As Consultant
When you think of all those different cannons, it becomes clear that there's a huge amount of misinformation that's coming in, directing strategy, and being adopted by companies. But most of them never think about that.
Until someone opens their eyes. That's what some of my clients and friends in consulting are doing, and what I suggest you consider doing as well.
Use your consultative conversations to shine a light on the idea of outsourcing innovation. Feel free to use the cannon analogy to illustrate it. Ask your prospects:
"Wouldn't it be interesting to identify a source of information that you trust, who you know have worked with a bunch of other companies like yours, know what works and how to make it work, and make use of it to direct strategy?"
It's expensive and time-consuming to test and iterate tactics. If you can reduce risk and accelerate changes, companies will gladly pay for your advice. But don't forget to highlight you are also a continuous (and scarce) source of value that can be hired on retainer.
By Danilo Kreimer
November 10, 2021