In this session, Danilo discussed:
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All right. Welcome, everyone. There are still a few people joining. I will admit you to the chat here as we go. But if you're here watching this for the first time, BCC Bites are those quick chats we run every two weeks where we talk about a specific topic, almost always suggested by our members. And today, we're going to talk about mindset traps for boutique consulting founders. And the most common behaviors that hold founders back, some ideas to help you change them if that's something you can relate to. If you have any questions, please put them in the chat and we'll have a quick Q&A at the end. OK?
I want to quickly share a real story. A while ago, there was an experiment I did during some group workshops. So I would show a piece of paper folded in half. And say, I have one word here, which is one answer for the question I'm about to show you. If someone guesses the word, I'll pay that person 100 bucks. And I then asked partners, "What are the big topics and ideas that first come up to your mind when you think about business in a generic sense?" This was the question that I always asked. "What about doing business?" "And leading a business?" So think about the words. 100% of the time people shared a very specific set of words. So think about one word, if you can, let's see if you can guess what the word I picked was.
Most of the time people shared those words here. So money, revenue, profit. Strategy, markets, competition. Clients, customers, users. Services, products, prices. Employees, salaries, culture. These are some of the words that came up when I asked people what intuitively came up when they think about their business. And I might have asked this to something like 80, 100... between 80 and 100 partners. And I never lost that bet. And there's a reason for this. These things here, these words that you are seeing in the presentation, they are the things that most of the media and the consulting industry focus on. This is our language, the language that we use. They are the topics of the business books we read, the HBR articles you read.
Now, this is one way to look at business, but not the only one. Instead of taking this data-driven action, for example, we can choose to follow observations and stories. Instead of lecturing clients on how they should act or behave. We can accept different people may have different personal interests and ambitions, for example. Instead of using best practices, we can look for creative solutions. So what I want to get here is: Economic models and data analysis have their place in business, but so do psychology and sociology. This is why the word I wrote in my piece of paper was always the same: "Mindset".
Right, the word was mindset. That's without doubt the biggest internal reason for business failure among boutique consultancies, the founder's mindset. It's the source of most of our growth limits. It's not the market, it's not the service offering, the resources. So today I want to explore three common mindset traps here. And ideas you can use to adopt a more healthy and growth-oriented founder's mindset. So let's start.
The first one, we can start with the abstraction trap. And here... It's interesting because consulting, it mainly consists of solving problems for clients. I think very few of you would disagree with this statement. We solve problems. Sometimes we look for new problems to solve. But this is what leads some founders to fall into this trap. They get obsessed with complex and abstract problems instead of doing the simple, concrete, boring things that you need to grow your consulting practice. That's the abstraction trap.
And here's a comic. Some of you may have heard this. They call it the streetlight effect. If you imagine someone who lost their keys in a dark street, but insists on searching for them under the streetlight, because that's where the light is better, right? That's exactly what many founders do. So they follow their interests or intellectual curiosity, which is the light, to look at what activities they need to focus on, they need to engage on.
Last week, for example, I spoke with a consultant who is now in a not so good financial situation. And he spent months developing a new methodology for his data mining service. He created this incredible methodology, shining, named it. He loved it. He loved the process, but that was exactly the problem. The only reason he spent so much time creating methodologies was because this was stimulating for him. What he ignored during those months was the boring part. So business development, keeping a healthy pipeline. And he paid the price for this later. He did not spend enough time listening to his clients. And if he did, he would know they don't care much about his methodology. It was not a priority. It's good. There's a place, there's a time and place for creating methodologies. But in his case, they were happy with the service. There were a few operational problems, but creating a new methodology was not a priority.
So actually, the problem behind the abstraction trap is not working on complex problems, but wasting time on complex problems that make no meaningful impact on your work. So you're working on things that don't move the needle. Now, what's the idea or what's the mindset we can adopt to avoid getting distracted by new and shiny problems?
One idea I want to highlight here is being outcome-informed. Our work consists of a series of tasks and activities, right? I know all of you have a very long to-do list. But what partners often forget is to ask themselves what these activities are for. And here there's an image I added. I don't know how many of you read "The Little Prince". There's this character here, he's in the book, and he's called the Lamplighter. He lived in the smallest planet the Little Prince visited. There was just enough room for him and the street lamp. And his job was to light the lamp every night, and put it out in the morning. But since the planet was so small, it had one sunset every minute. So of course the guy was completely miserable, burned out.
Some founders look like lamp lighters to me. This is an image that always comes to mind, because they work 50, 60 hours a week to get things done. But many of those activities are not worth their time. So if you're leading your consultancy, you need to stop thinking like this. You're not an employee who needs to get a list of tasks done. It's up to you to protect your time. It's up to you to say, "that's not worth me doing it". One exercise here I recommend is ask yourself these two questions here for every task. "How does this get us closer to our goals?" "How will I know if this is working?" If the answer is, "we will never know if it's working or not", it's not worth doing.
For example, this morning, again, I read someone posted on LinkedIn: "You need to publish a post every day." "You need to publish a LinkedIn post every day, five times a week." This is the idea. So if you're the partner, if you're the founder reading this advice, ask: "How will I know if this is working?" The consultant in case, he wrote there: "Well, what you want is to start getting brand impressions, engagement, inbound inquiries." Okay, but that's too vague. How much engagement? If I get three likes and one comment, is it working? Is it worth posting every day? Or if I get 20, 000 impressions, people see my posts, but not a single inbound inquire, not a single message from a potential client. Is this helping me reach my specific goals? This is what you should be asking yourself for everything that you do. If you're posting five times a week and you don't get the results you're looking for, you have two options. You invest time in trying to improve your effectiveness or you stop doing it. But most consultants I know, they don't even track the results. They waste time posting content every day just because someone told them to. Because it's a distraction from the work that they really need to... they really need to do.
That's how you avoid the abstraction trap, by being outcome-informed. We're not saying you should be outcome-oriented, and ignore the process or the journey you're in, but being informed, understand what you want to achieve with that activity, and whether it really needs to be done by you or not.
Now, let's get to the second trap, which is the security trap. We all feel fear, it's natural, It's a built-in feature of every person. And this is the source of the security trap. It's nothing more than, this trap is nothing more than a disproportionately high risk aversion. You can find it in consulting partners whose practice seem to be stuck in time for a few years. So they lack new ideas and insights. There's no service innovation. Few new clients. These founders, they simply refuse to invest in the business and take sufficient... enough risks to grow the business.
Now, of course, being prudent is a virtue, it's important. But in consulting, and especially if you're a solo or micro consultancy founder, the business risk is low. I'm here to remind you of this. It's a cash-rich business. You need little to no capital to start a consulting practice. There's a strong market growth. If we look at the last decade, the consulting market grew more than 8% a year. More than 80% of boutique consultancies grew revenue last year. Many of them grew by more than 25, 30% a year. So after a few years in consulting, we forget all of these advantages. But we do operate in a low-risk environment when compared to other industries. And I think that taking a step back and recognizing this fact is a great way to avoid the security threat. Yes, you can't have return without any risk. That's the maxim.
Now, another way to spot founders who fall for this trap is by looking at their content marketing. Many still hesitate to share their expertise. So they think prospects will take the ideas and do it themselves, or that other consultants will copy the methodology. But at the end of the day, if you don't produce helpful and distinct content today, it will be very difficult to differentiate. It will be very difficult to market your service. It will be very difficult to support higher fees. Right?
A large part of leading and growing a consulting practice consists of taking risks. So avoiding the trap requires adopting an entrepreneurial mindset. And this is the idea we propose here, thinking like an athlete. That was the best analogy I found to describe the entrepreneurial mindset, at least among consultancy founders. And it's the image of an athlete. The reason is, if you think about it, athletes, they are not known for being creative or innovative. Their strengths, the biggest virtues are persistence and hard work, right?
And this tweet here, by James Clear, I think it puts together this idea. The idea of an athlete mindset. To achieve exceptional results you need four things. So one, quantity, take a lot of shots. Quality, take thoughtful shots. Consistency, you keep shooting for a long time. And luck, you get a few favorite bounces. I think that focusing on those four things is, is the key to improve your performance and really learn any kind of skill. And let me think about an example here.
For example, let's say referrals and personal introductions were very important for you to build the practice that you have now. But then you fell into the security trap and you don't do it anymore. How can you apply this?
So first, an athlete takes lots of shots. They force action. And this means instead of setting standards that are ridiculously high, you start small and you get something done. In this example, referrals and personal introductions. You don't overcomplicate, or you set a goal of asking three introductions every day. No, you have a client's call today, you ask your contact for an intro. They ignore negative self-talk. You don't keep imagining 10 different scenarios: "No, the client is going to get annoyed, is going to get offended if I ask for introductions." No, you go and you ask, right? This is quantity.
Quality. An athlete they improve their shots with deliberate practice. And this means just doing the numbers, just working a lot is not enough. You need to work well, right? In our example, asking for introductions. Yes, you're frequently asking for introductions, but you also spend a portion of the time reviewing the results and learning how to ask them better. How to be polite and respectful. How to give your contacts an out in case they don't want or can't make the introduction. How to be specific and make it as easy as possible for your contacts to introduce you to those who you want to reach. All of these needs to be part of your practice routine.
Consistency. Of course, athletes, they add consistency. And they do that to the training by turning it into a habit. They understand that habits beats motivation every time, because you don't have to spend energy deciding whether you do it or not. You just do it. You just shoot those balls every day. And here, let me just add a quick plug. Because on the 10th of August, we're running another group workshop on business development habits. I'll put the link in the chat if you're interested. Registration closes by the end of next week. And we only have two or three spots left. So it's all about helping you create a process and a system to develop and nurture relationships, to manage your sales opportunities, and adopt positive habits that will allow you to never miss a week of business development and keep your pipeline full. That's the idea. But let's finish here.
Luck. Finally... yes, a lot of you forget that you can create your own luck. But no one gets lucky sitting down in their locked room every day. Someone, someday might introduce you to a wealthy or influential person who can completely transform your consulting practice for good. But that will never happen if you never talk to anyone. Or remind them, remind people that you're open to referrals or introductions, right? And this, I see this among consultants who are just starting their practices. They want to spend the whole day doing strategy or branding and making things pretty. And then I ask them, "What was the last time you went out and talked to clients?" They get mad at me, but of course, everything needs a balance.
Most consultancy founders, they need to invest more time in strategy, not less. And you will need to build processes and systems to just sustain growth. But to avoid this trap, the security trap, you need to get your reps down. You need to take those shots every day. You need to think like an athlete and you need to design a practice routine that works for you. And then you practice every day, every week, every month. So that's the question, "What's your practice routine?" What are you practicing like an athlete? Now let's get to the third and then we open for questions.
The third mindset trap is the control trap. And I'll get to questions once we close here. So yes, the control trap, it happens when partners believe they must be actively involved in every task. If a consultancy is completely dependent on the founder, on the brand of the founder, or the expertise, or the relationships of the founder, then there is a single point of failure, right? If something happens to the founder, the entire business crumbles. So when you get sick, client work doesn't get done. When you don't find time to sit and write a blog post, they don't get published. So it's all on you. And if you think like this, partners with this kind of controlling mindset, they will always sooner or later become the bottleneck of the consultancy. They don't share information with the team. They spend too much time on tasks and decisions that other people could handle. They don't communicate well. So even if you do have a team, people are not sure what they can do without your approval.
Some of you worry about losing control as your practice grows, especially when you're bringing in the first or the first couple of team members of assistants. But you forget that, as long as you're withholding responsibilities, your growth and flexibility will always be capped, right? Because there are certain things, there's a significant number of things that depend only on you. How to solve this? And here is a nice comic. "I've allocated the tasks based on who I trust to deliver." Management is me, operations is me, it's all me.
So, what's one idea that's helpful here? That is the idea of the "human router". This is the absolute opposite of what a hyper controlling partner would look like. Chances are that you have one of these at home. It's a network router. And the job here, the main goal of this equipment is to connect and forward information from one network to the other. Why is this analogy helpful for partners?
Most of you are like me, in the sense that, when I get stressed at work, it's usually because I have failed to build a system and I have tasks that I can't route to someone else. I have too much to do. I have too much to execute. Or I'm doing something I know could be done faster and better by someone else for less than what my time is worth. So my list, my to-do list is too big. Or my to-do list includes things I don't know how to do well, and this stress me, this causes stress. Now, if you see yourself as a human router, your goal as a consultancy founder or partner is to hire yourself out of every job, of every responsibility that you have, and go after opportunities. This means asking those questions here. "Which activities am I doing that someone in my team can take care of? Which activities am I doing that are recurring and can easily be automated? Which activities am I doing that someone else can perform better for less than my aspirational hourly rate?"
Chances are your ego is holding you back. The value you create and how much you bill your clients for, it's not correlated with working hours, but with the outcomes you deliver to clients, right? So what you want is better judgment, is more leverage, not adding more things to your to-do list. You don't want to be doing more. You want to be working on the right things and making sure value is delivered no matter who delivers it. So this is a suggestion. Start looking at yourself as a human router. You will quickly find out much of what you do can also be performed by other people, or tools, or even robots. There's a specific process that we go through to assess time management and structure roles and responsibilities, automate, delegate. We don't have enough time to go into it, But that was it. These are the three traps with three ideas.
Now let's take a look at some questions here, shall we? So and I see here that there are a couple of people who, there are a couple of people who were stuck in the waiting room. I'm sorry for that. I'll send the recording to every one of you. Right, so let's get Tim here:
Can you expand on deliberate practice and how to adopt it?
Yes. So if you just give me 30 seconds, I will find a great example for you to visualize it. It's in another presentation. But in the meantime, while I'm looking here, let me just tell you that the best read I found about deliberate practice, it's a book by Anders Ericsson. I think that's called "Peak". I'll put the link in the chat, or I'll share the link after for you to check it out. So Ericsson, his research looked at how people develop expertise through deliberate practice. And it's basically... if I had to explain it really quickly, it consists on... you take a complex skill or a complex activity, you break it down into individual parts, you practice those parts, You improve each part with high focus and consistency. And then you put it all back together. Yes, here it is.
Imagine these two basketball players practicing free throws for one hour. So player A here, he shoots 200 shots, practice shots. Player B shoots 50. The player B, he wastes time getting back the balls after shooting, spends some time dribbling, and he also takes several breaks to talk to friends. Player A here, he has a friend who gets him the ball after each attempt. The friend also keeps track of his shots, how many he made, if it was in, if it was out. Whenever he missed, he writes the reasons. So, it was too short, too long, it was left, right. And the shooter reviews these results after 10 minutes or so, or every 15 minutes of practice, the shooter makes a quick pause to review these results. Now, In this example, both players, A and B, they could say they had a 60-minute practice, shooting practice. But look at the question here. After 100 hours of practice, can you predict who should better? And of course, it's the one who is practicing deliberately.
That's also how partners, how consultancy founders and partners, they need to act as well. Just working a lot, it's not enough. You need to deliberately attack the difficult components one by one and improve them. Maybe it's, as I said, asking for referrals. Maybe that's creating content. Maybe it's networking. Maybe it's delegating better. Maybe it's having better clients meetings. Maybe it's nurturing relationships and staying in touch with people.
The key here... it can be many things. The key here is find what you really need to work on to take you closer to your specific goals and invest time and focus on consistently improving it. Of course, finding the right things to work on is the tricky part, This is something that we do in our growth assessments for boutique consultancies. So if you're interested in this, If you want to learn more, feel free to drop a line. Some of you have already hired the assessment.
But that's it. I think we went over time. I want to thank you for joining. The next BCC Bites will be in two weeks time, so on the 3rd of August. And we're going to talk about planning and measurement cadence. What and how often should you measure KPIs in your consultancy. We will discuss common KPIs that are used by micro consultancies. What's the ideal frequency for their planning and measurement for most practices. So I'll share the link for all of you, together with the recording of this chat. And I'll also share that with those who couldn't join here. But that's it. Thank you all, stay safe. Until the next one.
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