What's the starting point of every strategy work? Let's review what we've discussed so far:
- In this older post, I defined strategy as a plan of action to achieve a set of goals.
- To make it more practical, we narrowed it to a particular type of strategy that every consultancy can adopt: Bringing new value to the market.
- Finally, we saw that you can have a good strategy and still fail. In addition to poor implementation and the fact that any plan is somehow speculative, the biggest hidden danger is delegating it to a single function. Every marketing strategy professional can create a brand strategy, but the vast majority won't fully understand how the rest of the business is affected.
You as the founder or partner need to own the strategy work. You can do it yourself, or bring in support from an external and fiduciary advisor. The key here is that you need to be able to look at the whole of your business, not only a few selected parts of it.
And that takes us to the first step of the work: Looking at your consultancy.
Before we derive a plan to go from A to B, we need to know where A is located on the map. If we want to bring new value to the market, we must understand what value we're delivering now. We need to create a clear picture of our current situation.
It's ironic how many founders do this as part of their client engagements, but completely neglect it when it comes to managing their own consulting business.
Based on my experience, there's not a single reason for this. Sometimes we get so absorbed in serving others we put ourselves last. But more often than not, partners avoid (consciously or not) performing a serious assessment of their consultancy because they know they will find costly mistakes and several sources of risk. And shining a light on those would force them to deal with internal and personal struggles.
Ultimately, there is no other option though. If we start with a distorted picture of what your consultancy is today, chances are our plan of action won't work. You can claim to have a strategy, but the result for your business will be a waste of time, money, and energy.
I will not get into details of how to get that picture clear. Depending on your industry and service specialization, you might use different frameworks or approaches. We created a specialized one for boutique consulting firms with 1-15 FTEs, for example, and it works well since we know exactly what questions to ask to uncover their situation and critical business issues.
Just like any assessment or audit you perform for your clients, the diagnosis of your consultancy will start with data. And I bet your data is a mess.
To produce a decent strategy you might need to:
- Select data: Measuring everything will give you more data, but what you want is the right one. You know what it's like if you ever received a list of thousands of data points from a client looking for explanations. Most of them are a distraction. We want a visible picture of your business, not one in 365 Gigapixels.
- Find new data: Sometimes you might need to create new data to get your picture clear. Maybe you've never measured important things. Or maybe what you need to find out can only be uncovered through conversations.
- Turn it into information: You might need to clear, sort, or standardize the data you have to turn it into information, and be able to analyze it.
You need the right information and data, not too much or too little, to feel confident in making strategic choices and decisions. This is one of the reasons why it can be tricky to do strategy by yourself. You often don't know what you need to know.
Tomorrow I'll briefly talk about what comes next, and explain a powerful idea most consultancy founders don't understand: It's impossible to create a great strategy.