Planning And Measurement Cadence

So, welcome everyone. If you're new here, this is our BCC Bites. These are quick chats we run every other week and are open for everyone to participate. We talk about a specific topic, which is usually something that members suggest. And by the end of this, we have a quick Q&A about it. And today, we're going to talk about the planning and measurement cadence. That's the topic. So why, what, and how to set the right operational cadence for your boutique consultancy. If you have any questions, please put them in the chat. We'll go through them at the end. But let's start.

To start this, I want you to imagine all of the tasks and activities that are required for your consultancy to exist. Delivering results to clients, finding those clients in the first place. So marketing and selling your services, managing your time, tasks, team, if you have one. Many of these are happening at the same time. And to use this comic here, if every responsibility, if every activity was an instrument, what we would hear is just a mix of uncoordinated sound. The piano and the violin playing different keys. You have an acoustic guitar that sounds slowly and softly, and the drums are hitting fast like a heavy metal song. Some instruments are on stage, but no one plays them... which are the things that you need to do, but no one does. So chances are this is how your consultancy is operating.

Now how do you solve this? How do you make all of these activities, all of this sound like a well-tuned orchestra with different sections playing harmony, let's say. There are a few solutions here.

One solution is for you to become this guy here, the conductor. This means you're coordinating and managing each instrument in this analogy. The problem is you will need to stay the whole day running around from one instrument to the other to make sure that they are all in tune. I don't think you have the time or energy to do this consistently. Some partners think they have, but I still need to find one that manages to do this consistently on a long time frame.

Now, the other option is for you to hire a conductor. So depending on the size of your consultancy, one manager would do. But this also has some disadvantages there, also some disadvantages here. First, this adds a fixed cost to your business. And second, it also adds work to you because you will need to vet, you will need to hire and manage the manager, right? So maybe there's a better way and there is, and this is today's topic.

The third alternative is to set the right cadence, is to set and adopt operational cadences. It's about creating a rhythm that feels natural, as natural as, let's say, breathing. You don't need to remind yourself to breathe. You just breathe in and out, in and out, it's natural. This is how ideally you want your consultancy to function. This is what allows you and your team to run a consultancy in an effective and efficient way without adding extra layers of management. So that's what we're going to talk about today. Your consultancy, with the help of cadences, can be at the same time lean and well-managed. And, and I want to explore this today. And also, we can look at some questions at the end, right?

Here, I quickly listed here what you win and what it costs to adopt an operational cadence before anything else. Why does it matter? And what's the cost of implementing this in your business, right? In your consultancy.

What you get, the benefits here, they're quite clear. When you put the business on a regular beat, you introduce structure, you introduce predictability. We often say that the best performing consulting firms, they work like a metronome, which is this object here. They are doing the same things on a regular time interval. And that generates all of these benefits.

Efficiency, people know what, when and how to do things. So they get them, so they get those things done better and on time.
Predictability, doing the same things on a recurring basis will help you estimate, control, predict better in your consultancy as a whole.
Responsiveness, if you include the right activities on your cadence, you will make decisions faster, you adapt to changes in the market faster.
Cost effectiveness, as I mentioned, if you have management systems, you reduce the need of management people.
And team satisfaction. Many of you are solo advisors who don't have or are just starting to build a team, a clear rhythm and structure on what and when things happen, it reduces stress, it reduces confusion. Most people don't like to work on a place where they don't know what's happening or what they will need to work on the next day.

Now, what does it cost to do that? And here I added the three main points here.

Flexibility, You lose flexibility if you do it wrong. We'll talk about this in a bit. But the more rigid your cadence is, the less time you will have to respond to unexpected opportunities or challenges.
Implementation challenges, every time you set up a cadence, a new cadence, you might need to do some initial investing in training. That's the price of creating new or better processes that you will use again and again and again.
This typically involves some kind of training and personal resistance, you or the people you work with, maybe use to a more free-form working style, where everyone is free to choose when to do what, especially if you're a solo consultant. You might have an aversion to kind of structured tasks or a fixed schedule. If that's your case, you will need to overcome this resistance to implement the cadence, there's no way out. Luckily, the benefits more than compensate this initial resistance.

Now, I don't think this is new for everyone, for anyone. If there's no planning, if you don't plan, or you plan, or you do it wrong, you have a poor planning process, What happens is you will waste energy and resources on the wrong activities. If there is no measurement in place, you can't understand what needs to be changed and what needs to be improved in the first place to get your desired outcomes.

What I want to show here is that it's easy to blame execution. Yes, execution is hard. Doing the work. But no matter how much time, energy, and discipline you put into getting things done here. If this whole loop doesn't work, you will not get the results that you expect. I'm leaving execution out of today's chat because I think it deserves more time for discussion. So we're talking about these two planning and management. And then close by looking at why exactly most micro consultancies, boutique consultancies struggle to establish, to adopt a cadence for them.

Let's start with why: Why do consultancies plan and measure initiatives?

The answer to this, 99% of the time, is that we do that to improve the financial performance and/or security of our consultancy, of our business. Yes, there might be a few very specific situations where we plan and measure things knowing that it might not bring any benefit to our business. This usually happens when we come across some kind of ethical dilemma, and we need to leave money on the table, or we feel the need to leave money on the table. But in the vast majority of time, 99% of the time, we plan and measure things in the hope that they will make our consultancy more profitable and robust.

Planning and measuring things improve alignment and goal-setting. Consultancies with clear goals and direction are more profitable and resilient than those without them. Also, the more you plan and the more you measure, the easier it is to find new ideas and opportunities, right? So doing it often will make you more innovative and less susceptible to commoditization.

For example, measuring client satisfaction and doing customer experience planning. What does it do for you? It helps you understand your clients' problems and how they buy it. What does this do to you? Well, this allows you to better tailor your offerings, deliver more value, retain, upsell, and get referrals from them, from those offerings. All of these obviously will improve the financial performance and security of your business. So this is the whole point behind these activities.

Now let's see the "what". And here I want to talk about two "whats". The first one is: What does financial performance and security look like?

And here I'm listing some of the KPIs that can be used to measure that. Performance, we evaluate by looking at things like revenue, margins, your net compensation. My favorite KPI here, if you're not a solo consultant or a solo advisor is fee billings per FTE, per full-time employee. It says a lot about your practice, but this is a topic for another chat.

And security... In terms of financial security, there are three main KPIs we recommend for micro consultancies. How many months of cash you have in the bank? How much does your largest clients contribute to your revenue? And whether you have any debts, which are quite rare in consulting because it's a cash-rich business.
So that is quite rare. But client concentration and a few months of cash is something that can be concerning.

Now, how do you improve these things? How do you improve those KPIs here? And this is the second "what": What exactly should you plan and measure to impact your financial performance and security?

And here I think it's helpful to look at what are the key processes that any consultancy has. And for those of you who are familiar with the Boutique Consulting Canvas, which is a framework we created for business model review and analysis, the key processes every firm has are those four.

So business development In a broad sense, it refers to higher consultancy markets and sells its offerings. The main goal here is simple is to sustainably generate revenue, right? And here we include things such as your offering mix and pricing strategy - your ability to develop new products and services and price them professionally. Your marketing capability. So your ability to earn visibility, to earn interest and trust from your target market. Your sales capabilities, so your ability to convert that interest and trust into more projects and revenue. So this is actually a set of processes. Business development here should be looked at in a broader sense. This is where I focus most in my work with solo and micro consultancy founders. Those of you who work with us know that.
Now, the second set of processes, key processes every consultancy has is offering delivery. This is actually how you get the work done, right? Delivering what you sold to clients. It also includes operational processes.
Then we have team alignment. And this refers to how you improve the value of your team members. So both in terms of their motivation and in alignment with the business, but also in terms of quality of their work. And here, I think it's important to say, this might be relevant even for solo consultants, solo advisors. If you often work with associates or subcontractors to deliver projects, for example, you rely on their talent. And you rely on the willingness of those people to work with you. So it's important that you show your care, and that you actually invest time and money into helping these people develop.
And finally, we have IP management. And what we call IP management here refers to how your consultancy codifies, stores, and shares knowledge. We're talking about SOPs, methodologies, templates, checklists, questionnaires, process maps. As your consultancy grows, all of these will need to be updated. So you need a process to organize and make sure you're leveraging IP in any way you can. 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. So this includes IP development. I place this below these other three processes because depending on your consultancy it is more closely related to one or two of them. If you want to learn more about it, we've had a BCC Bites chat about that a couple of months ago. It was called "The three categories of IP for micro consultancies". I'll put the link in the chat. We talked more about the nuances of this, what kind of IP you should prioritize, you should focus on depending on your specific context.

So if you want to impact your financial performance and security, looking at those four processes here is usually a good starting point. Now, since a few of you asked, I've also added a couple, more than a couple, of common KPIs for each process.

So for business development, we have performance KPIs related to pipeline, new clients, cost of acquisition. Client relationship KPIs: Size or strength of your network, the number of partnerships.

In terms of delivery, we have client value. So NPS, client satisfaction, how much, what's the perceived value your clients are receiving. And we have efficiency KPIs, which are mostly related to utilization rate and profitability.

And I also added some KPIs here for team alignment. So attrition rates, time to hire, consultant mix.

And IP management. So we have new IP created, the IP utilization rate, offload tasks or time saved.

And here really, I'm not going to expand on this. It goes without saying, but I need to remind you all. These are a collection of KPIs that are often used by micro consultancies. Now, which of those you should pick will depend on your specific context, your industry, your specialization, your positioning, your business model. If you'd like support to do this right reach out we're happy to help. What you measure is usually what you focus on, So you do want to get this right.

With that said, we talked about the "why" behind the planning and measurement, and what exactly consultancies often plan and measure. Now let's get to the point of this chat here: How? And for the "how", I mean how often to plan and measure. We're talking about cadence. I will not get into details on the planning and implementation process. We don't have enough time for this here, really. Let's concentrate on cadence. So how often you need to look at those things.

Let's start with planning. As I mentioned, you need to plan. If you don't plan, you waste energy and resources on the wrong activities. If you plan too much, you have no time left to actually implement the things that you plan for. So here the goal is really to find a balance.

There are, and many of you know, there are hundreds of frameworks you can use to inform how often you should plan. So agile, OKRs, you name it. If we zoom out and look at all of them, we can identify that there are a few key elements that inform the frequency of your planning process. And I listed them here.

Strategic alignment: Is it related to long-term goals or short-term goals?
Complexity, people required: Is it a multidisciplinary process? How many people need to be involved in the planning? Are we planning something that a lot of people need to help execute? Are we planning something that is going to affect a lot of people, or different areas of the business?
Market and tech volatility: How quickly the market conditions and the technology change. Do we have every month... as we're seeing with some AI technologies right now, do we have every month opportunities of improvement on how to do this task better, or faster, or more accurately?
Available resources: How much time and money you have for strategic work.
Also important, regulatory compliance needs: Do you need to comply with legal or industry regulations? So for example, if there's a number of processes, a number of documents, paperwork that I need to fill every six months for my specific industry, for my specific vertical. Well it might be interesting to link the cadence of this activity to my planning process.

All of these things will determine what's the acceptable frequency you want to plan things out. Here I added some examples on how it might look like for a small consultancy.

So for example, daily. You don't plan every day. You're focused on doing, on implementing. If there's one thing you might plan is client meetings. So, okay, I'm preparing, I'm reviewing for client interactions a couple of hours before the meeting, for example.

Weekly, you might review your last week's tasks. You prioritize the activities for the week to come. If you have a team, you might allocate tasks for the week to come. CRM review: You take a look at who are the key people you need to engage with, and how you're going to do that during the next week. These are some activities that you might do weekly.

Quarterly, on a quarterly basis, so KPIs. Review and update your strategic goals and initiatives. BD / marketing. This may include, for example, your content marketing plan. Okay, what's the content you're going to publish, how you will promote it on the next quarter. Outreach plan: How you're going to connect with new people and companies in the next quarter. These are things that go well on a quarterly cadence because it gives you enough time to execute on 12 weeks, it gives you enough time to to focus on execution and see what works and what doesn't. But at the same time, it's not long enough as a year. So you can spot problems and challenges and you can quickly adapt. You can quickly make changes to your plan. Operational plans also fit here. So if you're struggling with the delivery of your service, for example, you might want to review client feedback and plan for changes to increase client satisfaction. Or if you notice that you or your team are wasting a significant time on low-value tasks. You can plan for the adoption of new tech, new tech solutions. The planning activities here, it will really depend on your goals and your challenges, right?

And on a yearly basis, here I mentioned long-term strategic plan. So updating your long-term goals. Revisiting your business model, your value propositions, brand messaging. These are things that you're not tweaking every month or every quarter. You take a look at this once a year and that's enough. Account planning, which is focused on client retention. A block of time where we can create a plan to sell more and larger projects to existing clients during the year. Again, how this will look like for you will depend on your context. This is an example.

Another thing here is that the smaller you are, the more focused you need to be to avoid under investing or over investing time in planning. If you're a solo advisor who needs to do all of this planning by yourself, for example, or even if you have a small team of three, four people, I added here how much time consultancy partners typically invest in planning. So daily, 10 to 15 minutes. Weekly, 30 to 60 minutes. And here, just a clarification.

These are the numbers for partners who have created and adopted clear processes. If you never do weekly reviews of your work, if you never did before... The first time you try, you might take, let's say three hours to do your first weekly review. You need to understand how it works, where to get the data, how to think things through. The second week you do it, it will take you half the time. And so on. The more often you block time for strategy and the better structured you are to do that - so with clear processes, tools, templates, etc. - the easier and the quicker it gets. Now let's get to measurement.

Measurement cadences are not the same as planning cadences. And the reason for this is simple. Remember I said the goal is to find a balance, right? If you don't plan, you're doing the wrong things. If you plan too much, you have no time to do the things you planned. And the same thing applies to measurement. You don't want to spend all your time measuring things. However, since measuring things takes a fraction of the time you invest in planning those things, we can usually afford to adopt a much faster cadence.

When we look at those things here, It will take a few minutes to manually track most of your KPIs. And for the vast majority of them, you can easily automate the data gathering and recording. So there are certain activities you might want to measure often, but keep a less frequent planning cadence to avoid overwhelming the business with strategy meetings. And again, here are some examples of what it might look like for a micro consultancy.

So daily, I'm monitoring billable hours if you have a team. Tracking daily client interactions or lead interactions, adding them to the CRM, adding responses, conversations, updating the CRM.

Weekly, you might look at task completion. Review pipeline, super important. So the number and value of your leads, conversations, opportunities, proposals. Cash flow here. It might be invoices, payments, just checking your bank balance. All of these, all of this data, it can be gathered and accessed with a click of a button if you have a task management tool or a CRM system.

Monthly we have... What you might measure is financial performance: Revenue, expenses, profitability by clients, project. Marketing performance. Here take a look at your marketing campaigns, website traffic, lead generation, content marketing. People. So utilization, for example, which is the proportion of billable hours from your full-time employees if you have them. Or your consultant mix, which is how much you rely on in-house staff versus external contractors or associates. These are things that you can measure monthly.

Quarterly, you have the KPIs report, so your key initiatives for the quarter. Client satisfaction. You can ask for feedback from clients. You're not asking every week, right? So the goal here is really to take a look at the cadence that works for both of for you and for them. That is not too intrusive. Capability building, IP management. So the creation and adoption of SOPs, process maps, new tools, templates.

And annually here, a comprehensive audit. I think it's hugely important, at least once a year, for you to benchmark how you're doing against other consultancies. Because you will use this to inform strategy. And client concentration. If a large part of your revenue comes from one or two clients, then you might also measure that and take a look at this on an annual basis to plan, to create a credible plan on how to address that.

You can see how the amount of time you save and the difficulty in creating measurement systems, it varies here. So for me, it's quite obvious that if you're thinking about adopting cadencies, you should aim at having the data collection for all of these lower time frames here streamlined. That's where most of the benefit will come from.

Now, before we open to questions, I want to close the chat with one statistic. One in four consulting firms don't measure business development and marketing KPIs. And this statistic, I mentioned that in the latest newsletter, "Adding Value". This statistic includes larger firms. So based on my experience, if we look at consultancies doing less than one million a year, this number can easily, easily get to 50 to 60%. And if they don't measure, they can't do any serious planning as well. That's the important thing. Without data, planning becomes a guessing game. How are you going to plan if you don't have the data?

So the question here is why? The question I would like to pose to you. Why do so many service firms, consultancies fail to establish cadences? It's not for lack of ambition. Partners that I speak to know and want to measure and plan better and more often. They know how important this is.

I believe the main reason for this is they overestimate the role of personal discipline and underestimate the importance of management systems. And here, I will, since we're short on time, I will already transition to our Q&A because I saw Chris asked a question that is related to this point. He asked here:

"Do you recommend automating all of the measuring / reporting?

And I will answer as a true advisor would, it depends. What I really recommend though is for every consultancy founder or partner to take some time to better understand the role of data and management systems.

As I said, people overestimate the role of personal discipline. They think, "Ok, I'll put it in the calendar and I'll get it done." But they underestimated the importance of management systems. And Chris, he asked about automation, so that's good. He probably understands that doing the same thing in a consistent frequency is important, but that there's a limit to how many activities we can be disciplined to perform. So, So let me stop sharing here.

So Chris, I think that the starting point here, if you want to adopt a healthy cadence without overloading your calendar and working even more, is to ask yourself what comes first: the data or systems? Who wants to answer this? What comes first, data or systems?

Right. And the answer is, of course, data. Data comes first. Systems come in to manage the data. So they come later. So before automating everything, I suggest you to explore and really put it into paper. What is the data that I really need?

Not the data that I have. Not the data that I could easily access. But the data you need. This will depend on your specific situation, but you need to do this before thinking about systems. Because if you skip this step, you will invest time and energy automating the measurement of 100 KPIs that do absolutely nothing for your consultancy. So you will have a bunch of numbers and graphics and trending lines, but you end up as overwhelmed as if you had nothing because you don't know what matters and what doesn't, right? And here, let me just take a slide from a different workshop, from another workshop that might be useful. Just a sec.

So I think just understanding that this. Data has those three components. Scope. You want to measure things from for each of those five areas. Financial performance and security, and your four key process groups. Level. So ideally, of course, ideally we would need each KPI to be drilled down to an individual level. It's not a problem for most of you because you have... you're either solo advisors or have small teams. So you might have an individual KPI and a "whole consultancy" KPI. Or a project KPI at the maximum. And type. You want to have both leading indicators and lagging indicators. Also important to to remember.

Once you have defined the data, you identify which systems you need to capture and manage the data. So it might be a CRM, it might be a PSA, It might be a simple online form linked to a spreadsheet. We then get into the discussion of pros and cons, your available budget, etc. But having a crystal clear list of data points you need is what I recommend before anything else.

I think we went over time. So that was it folks. Thank you all for joining. The next BCC Bites will be in two weeks time, on the 17th of August. And we're going to talk about the seven levers of marketing planning. Since we discussed planning here, we're going to talk specifically about marketing planning. I expect it to be very useful for any of you who want to improve your marketing, I will provide some real life examples on how to improve each of those seven levers in your consulting practice. I'll share a link for all of you. So stay safe. Thank you.

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