Many consulting firms (especially management consulting firms) rely on prior consultants in terms of selling work. Why? Mostly it is because people are the product. In consulting sales, you are selling yourself and your team. More specifically, you are affirming the problem statement, the problem-solving approach, and your team’s experience with solving similar (or comparable) problems in comparable situations. It is hard for external, non-consultant salespeople to do this.
Suppose the problem statement is to develop a new product. People who have experience in the relevant consulting area will know how to refine unstructured problem statements like this, design an engagement to solve the problem, and get the right people staffed on the project. Hiring people from the outside to sell unstructured consulting work (say professional salespeople who do not have consulting experience) may not work very well, although success of this type of approach usually depends on the type of work. For example, some large professional services firms do have more dedicated business development people in cases when the realm of consulting is more focused (e.g., HR consulting, accounting) and solutions are more regular, common, or repeatable.
In summary, to sell many types of consulting services (not all), one often needs to know how to actually do consulting work. That tends to be the primary reason why consultants sell work and not salespeople brought in from the outside. A corollary to this is that partners in consulting firm will often have to do some minimum amount of consulting work and not just sell services; consultants need some continuing involvement with field work to stay fresh and be able to sell.
I’ve often been asked by new consultants to provide insights on structuring a proposal. Here’s a conceptual, high-level summary of a typical proposal:
Executive Summary and Overview – often articulates background relevant to the proposal, such as current issues and the specific problem statement that the consultant will be addressing for the client. This section may also list key goals of the client for the project.
Roles and Responsibilities – articulates the consulting delivery team players (named individuals) or types of players (e.g., anonymous job-level descriptions), key roles expected to be filled by the client (e.g., project lead, owner, sponsor, core team, stakeholders, steering committee), and other site access and logistical items.
Appendix – might include key case study summaries, CVs for consultants, and other schedules.
Often the proposal is incorporated by reference or as an appendix into a master services agreement which contains umbrella legal terms. Other methods are possible, such as just having a letter agreement (depending on context and conventions of the situation, e.g., certain countries).
Processwise, proposals are usually invited. It is generally a waste of time to create these proposals until the client prospect and consultant have had enough discussions to clarify the problem statement and scope of work at a high-level. Once draft proposals are submitted, the proposals are revised upon further discussions with the client.
The balancing act is tricky, and I think context and desired outcomes matter. For example:
A thirty-year old might have problems saving for retirement because they think of savings as being for stranger. The solution might be to increase emotional connection between the thirty-year old and their future self so that the right behavior of saving can be achieved.
A person might be emotionally attached to their home and as a result, they might try to sell their home at too high of a price. It might be better if they can loosen their emotional attachment and feelings of endowment. Getting 3rd party perspectives might be helpful to the seller in terms of distancing themselves so they can set a reasonable market price.
Sometimes it’s hard to control emotions and desire, and people may try to precommit to a state so that proper decisions are more likely to be made in spite of the situation. I have heard of behavioral economists pouring salt over desserts at dinner (after they’ve had a few bites to get the taste) so they are less inclined to eat the whole thing.
The main takeaways are that there are essentially “two minds” at work, and they work in concert in different ways. Sometimes you need emotion. Sometimes you want less of it. Sometimes you can’t really change your emotions so you need self-control devices and external perspectives. Other times you need to try to slow down thinking. There are many different approaches.
Inside Nudging is written for management professionals and scientists to feed their thinking and discussions about implementing behavioral science initiatives (which includes behavioral economics and finance) in business settings. Situations include the incubation of innovation centers, behavioral science overlay capabilities, and advancement of existing organizations. Companies need to develop grit – the ability and fortitude to succeed. The book introduces the Behavioral GRIT™ framework and covers key takeaways in leading an organization that implements behavioral science. Behavioral GRIT™ stands for the business functions related to Goals, Research, Innovation, and Testing.
The chapters are complemented by an appendix which covers ideas to introduce behavioral science initiatives. I argue that first a company needs to identify its goals and identify what type of predominant organization model it wants to pursue. There are five predominant organizational models I’ve seen. I also offer that a company should consider a number of implementation elements that may play a role during execution. Example elements include an advisory board and a behavioral science officer.
Note that the purpose of this book is not to teach people about behavioral science; there are many other books out there for those purposes. That said, Inside Nudging introduces some behavioral science concepts to provide context and help develop a common language between management professionals and scientists.
I see the application of behavioral science as still being in the early adoption phase. Many companies will benefit if they take time to develop the right approach. I hope Inside Nudging helps you with your journey.
The concept of nudging and more specifically the behavioral science phrase of “no neutral design” has strong historical ties to social and public sector issues. The motivation for the phrase goes something like this. We have to provide people with information and choices, such as part of governing a country and during driver’s license application processes, social security claiming processes, and hundreds (possibly even thousands) of other processes. During those processes, we present information and choices as part of designs, and there is some nudging which may influence people’s perceptions and choices in predictable ways. For example, when presenting a set of choice options in list format, a cognitive bias known as the primacy effect may be observed where people tend to be influenced more by the first option in the list. But some option has to be first in the list. So in this case we cannot totally avoid the risk of primacy effect biases. And more generally, we cannot avoid many other types of biases and influences studied in behavioral science. All forms of structure and designs affect behavior. Hence, there is no neutral design, and we need to be deliberate about the behavioral architecture surrounding the way things are designed.
These considerations also play a role in the private sector. And I see a lot of cases where companies may not be conscious about how behavioral science influences come into play simply because they weren’t thinking about them. And that’s the problem. It is a corollary to no neutral design. Because we design things in the private sector, we influence behavior. We can either be diligent to consider behavioral science considerations or not. In other words, we need to avoid accidental behavioral architecture in our designs. We need to navigate toward deliberate behavioral architecture.
Now we can’t predict how everything will turn out for a design through understanding behavioral science. However, we can get a lot smarter about things and about how to manage companies that can better implement and navigate behavioral science. That’s why I’m writing the book, Inside Nudging: Navigating Behavioral Science Applications. The book is not intended to explore detailed behavioral science principals as covered in other great books like Thinking, Fast and Slow (Kahneman 2013) or The Last Mile (Soman 2015). My real focus is to shed light on how behavioral science concepts are implemented in companies and how to get an organization further along the maturity curve in terms of implementation. These management considerations sometimes require a more detailed appreciation of behavioral science. For example, it is hard to really explore management considerations of behavioral science and ethics without delving into areas like System 1 versus System 2 thinking, nudge controllability, moral psychology, and the like. To implement behavioral science more effectively, companies need grit – the ability and fortitude to succeed. Behavioral GRIT™ is a key framework that I refer to in Inside Nudging, and it represents orchestrating companies relative to Goals, Research, Innovation, and Testing.
Inside Nudging: The Excerpts is available in paperback form for talks, workshops, and academic inquiries. The excerpt version of the book includes:
Chapter 1: Behavioral Science Centered Design in the New Black – This chapter both sets the foundation for deliberate behavioral architecture and the lenses that we need to examine company efforts through.
Chapter 2: Organizations Can Package Behavioral Science for Good – This chapter describes a case of using behavioral finance in the retirement plan design space.
Chapter 8: Nudges Refined, Ethics Examined, Acceptability Explored – This chapter introduces Nudge Psyche, a checklist of things to think about so that you can be deliberate about how you approach nudge design and ethics.
Appendix A: Ideas to Introduce Behavioral Science Initiatives – This appendix explores predominant organization models (such as an innovation center) and a number of implementation elements that may play a role during execution (such as an advisory board and a behavioral science officer position).
Thanks for reading. I welcome your companionship on this journey and your feedback. Visit www.InsideNudging.com for more info.
