Key Business Processes For Boutique Consultancies
Here's how your key resources are used to create value.
Let's continue to explore the components behind the Boutique Consulting Canvas. Today, it's time to look at the second component responsible for value creation in consultancies: Processes.
As I shared in yesterday's post, value creation here refers to how your consultancy delivers value to clients. And to do that, you need both resources and processes. The key resources are people, intellectual property (IP), market assets, and your relationships and partnerships.
Now, let's take a quick look at the four main processes you must consider when analyzing or rethinking your consulting business model: Business development, offering delivery, IP management, and team alignment.
Business development, in a broad sense, refers to how your consultancy markets and sells its offerings. If we had to elect one main goal for this set of processes, it would be to sustainably generate revenue. Business development includes:
- Offering Mix & Pricing Strategy: Your ability to develop new products and services, and price them professionally.
- Marketing Capabilities: Your ability to earn visibility, interest, and trust from your target market.
- Sales Capabilities: Your ability to convert interest into more projects and revenue.
- Systems: The key tools and practices that support business development.
This is where I focus the most in my work with solo or micro consultancy founders. When we're reviewing their business model, however, it's important to zoom out and avoid getting into the nitty-gritty of each of those business functions.
What you want is to identify a high-level approach to bringing in a surplus of market demand to your consultancy. Are you going to tap into existing demand, replying to RFPs and bidding on competitive projects? Will you proactively create new demand, with laser-focused marketing initiatives and consultative selling?
Your offering delivery process is how you actually get the work done, delivering what you've sold to clients. There are two key questions you want to answer during a business model discussion here: Where will the delivery be, and what role will you and your team have in the engagement?
The location seems trivial, but it impacts the rest of your business model. You can deliver your services in person, with consultants being physically present at the client's site. You can do it remotely, with consultants delivering the entire project or engagement online without any physical interaction. Or you can adopt a hybrid model, with consultants sporadically going to the client and supported by online tools, processes, and databases.
The role you and your team will have in the project also matters:
- Are you advising or selling strategy? Here the goal is to provide insights, make a diagnosis, and/or make expert recommendations based on the diagnosis.
- Are you doing hands-on consulting, with you and your team also being responsible for assisting with the implementation of recommended solutions (either by doing or overseeing execution)?
- Are you selling change management and permanent improvement of organizational effectiveness? In this case, consultants can also take the role of coaches, trainers, and interim managers.
Each one of those roles consists of different ways to solve client problems and deliver on your value proposition. Your choice, of course, will need to be aligned with your current resources - especially your people and IP.
We talked about IP in yesterday's post since it is a key resource for any consultancy. But it also comes with a process. What we call IP management here refers to how your firm codifies, stores, and shares knowledge.
As your consultancy grows your codified knowledge will need to be updated. At some point, you need a process to organize and make sure you're leveraging IP in any way you can. As a best practice, it's important to make someone responsible to clean and review your IP system.
Of course, it makes no sense to have a great IP management process if your consultancy doesn't create any new IP in the first place. While your team can help, the initiatives here should be at least led and supervised by you or a partner. During your business model discussions, however, I recommend you focus on which available resources can support your IP creation, and how that process should look to fully support your value proposition.
The last key process refers to how your consultancy improves the value of its team members - both in terms of their own motivation and alignment with the firm, but also in terms of the quality of their work.
This is not relevant for solo consultants but is essential for boutique firms that rely on the talent and willingness of people to deliver results to clients. When you show you care and actually invest time and money into developing your team, three things happen:
- You improve the quality of your delivery and add more value to clients;
- It sends a strong message to the market that you walk your talk; and
- It helps you attract and hire better talent.
The last point should not be underestimated for small consultancies. You will never have the budget to compete with large firms for stellar talent by paying more. This means creating a healthy workplace and investing in internal training is a necessity for most people-based consultancies.