Consulting – Page 2 – Stephen Shu, PhD

January 29, 2010

What Are Your Thoughts On Hiring Two Consulting Firms At The Same Time?

In the past year I ran into a situation (mid-project in the capacity as an independent consultant) where the client was incorporating materials from my deliverables plus information from one of the major, worldwide strategy consulting firms that was also working in the same area as I was. In this case, I think it was beneficial because it is a high-stakes strategy area which requires mutiple perspectives, innovation, and cross-checking.

Yet it made me recall some other situations where other consulting firms had been used in closely-related or overlapping areas. Highlight memories include:

Bringing in a partner consulting firm to round out industry-specific knowledge to complement our functional knowledge expertise
Having an internal consulting group monitoring the progress of a larger, external consulting firm
Having an adjacent room on the client site to a "competing" consulting firm
Getting the consulting firms to work out and remove overlapping work areas by request of the CEO
Having the consulting groups to exchange, provide feedback, and critique the other firm's deliverables and engagement progress
Setting up the upstream consulting firm (e.g., strategy) to complement that downstream consulting firm (e.g., IT implementation)

Although there are many trends by companies to try reduce the number of suppliers (even in the professional services area), there are benefits of using multiple consultants. Some tradeoffs and considerations:

Getting the consultants to cooperate
Inefficiency created by overlapping work
Benefits by factoring in best perspectives from each firm (similar to the way some of the most innovative firms use a larger network design architects to feed ideas)
Keeping each of the consulting teams on their toes

What are your experiences and thoughts about using multiple, management consultants and/or consulting firms?

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September 15, 2009

Consulting and Management Method: Finding And Relieving The Bottleneck

When thrust into a situation where either resources are constrained, there are competing management choices, and paths forward are unclear, I often find a consulting method of "finding and relieving the bottleneck" useful.

For example, suppose a startup is trying to figure out how to ramp up sales from its first (non-repeatable) deals. Or suppose a company cannot determine whether sales or operations processes are the primary lever for stabilizing revenues. Yet another case might be that there is an incubator unit within a larger company that is underperforming – how might you approach the problem of fixing the situation?

At its core, "finding and relieving the bottleneck" is an analytical method used in production and operations. There are a couple of predominant ways that I look at operations by default, the former being a more quantitative method involving system & process flows and things like Little's Law, and the latter (which I strongly recommend) method using visual inspection and interviews with client management. Here I'll address the latter.

So back to the case of ramping up sales for a startup, where its first deals are largely non-repeatable because they were unique and early in the learning curve. Suppose you have 1-hour with client management. How might you help to tease out how where to start looking for improvements?

In a nutshell, the bottleneck method approach might simply be organized around finding where one gets the biggest bang for the buck in terms of making a change. I might ask the client if they had another resource or an additional day in the workweek, which of the following would ultimately result in more sales:

Refining Strategy – this might involve breaking the customer base into segments based on type and prospect awareness profile. Where's the lowest hanging fruit? What kind of marketing and sales material is each segment getting? If you had a choice to improve the marketing collateral or sales processes for the higher priority segment, which would you choose? Are there backlogs in the system (e.g., uncalled sales lead prospects), which would indicate bottlenecks? If you made the change, would it really address the end goal, e.g., getting more sales?
Changing Management Approach - in many situations, entrepreneurs may make the first sales, but they often have problems transferring knowledge on how those sales are made. Alternatively, they may have problems letting go of other areas that could be delegated or outsourced (e.g., finance and accounting, inside sales, meeting scheduling, and/or field sales). Would it be helpful to have someone shadow key executives to distill the sales processes and real value propositions that various customers are buying? If we could clone key people to offload some of the burden, would there be enough prospects and deal flow to make things worthwhile?
Adjusting Technology or Product - if the product were made less complex or if we simplified choices, would we get better yield and flow from the awareness to interest phase of the customer purchase process? Is there a way that we could get people to sample or experience the product before purchase to skip people past bottlenecks of overanalyzing things too much up-front?
Obtaining Financing for Expansion– if you focus time on more sales versus financing for expansion (presuming company has sufficient sales), what would you do and why? What if choosing one path doomed the other? Would the chosen path still be worthwhile? What kind of results could we expect by financing a new online versus a physical market for services delivery?

Optimal diagnosis clearly involves a mixture of tools and approaches, but the bottleneck method is an important method to learn in consulting because it can be increasingly used in facilitative situations where a client has substantial implicit knowledge (and such knowledge must be better formulated explicitly and transferred for company operations to scale).

I've also used this method in management situations (as opposed to in consulting situations only). The method can be particularly good when troubleshooting a problem that cuts across functional areas.

What are your thoughts? Have you ever used this type of approach? If so, how effective was it for you?

Update (9/19/09): Readers may also be interested in post by Seth Godin on the priority list.

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August 5, 2009

Interview On The Ethics Of Consulting

I was recently asked to do an interview at the consultant website, "Think Like A Consultant" on ethics & consulting. The full interview is posted here.

One question particularly of note was "What are the best ways to handle a client who appears to have unethical practices?" For that question, I responded as follows:

Fortunately, I have not been posed with many situations that are obviously troublesome. One area that comes to mind, however, is when a client asks a consultant to perform competitive intelligence, especially when soliciting for primary market information. Let’s say that a client has asked you to masquerade as customer and try to obtain information on a competitor (e.g., on pricing). Some company codes of ethics would strictly disallow this, as would many people’s personal ethical value system.

What I would try to do in these circumstances is to rework the problem statement and methods with the client. For example, perhaps the problem statement may be more about getting higher confidence in prospective pricing levels that the client is looking to put in the market as opposed to getting the exact pricing levels from the competitor. With the problem statement refined, you may find opportunities to solve the client’s problem in a more palatable way, such as through running focus groups with customers or industry distributors, conducting benchmarking studies, and other approaches.

Articulating and rearticulating problem statements are something fundamental to consulting and something which I've addressed before. For example, see here.

In any case, I'd be interested in feedback on the interview from folks. It is my third or fourth serious post in the blogpshere related to ethics, and I don't expect it to be my last.

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July 24, 2009

Some Of My Scattered Notes On Pro-bono Consulting Via Taproot Foundation

For those interested in nonprofit and pro-bono consulting, I have started to dip my toes in with the Taproot Foundation to do a greater good for the community. The economy is tough, and I should put myself to good use. Have not started any projects yet, but I am going through director training. I have some scattered thoughts and notes here and here, and these thoughts and perspectives are mainly in the context of a person who has spent most time in commercial consulting.

As a digression, I encourage those that follow this blog to do so via email subscription or RSS feed. The updates on this blog are somewhat infrequent, primarily because I try to include limited scope & more substantive information here pertaining to management, consulting, and leadership.

If you want more frequent information on a broader range of business topics, you can consider seeing my teaching thoughts and multimedia exhibits for my marketing course at my marketing posterous site. If you'd like to view diverse links (sometimes 1-6 per day) on business, social media, entrepreneurship, consulting, and random interests, you can see my Twitter page or look at the rolling list on the homepage of my main blog.

I plan to have two upcoming posts that I have not really seen discussed elsewhere, one on ethics in consulting and one on something to the effect of what an entrepreneur and an MBA taught one another. Either the links or complete postings for those will be provided on this blog.

Thanks for your readership!

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June 15, 2009

Perspectives On Providing Feedback On Client Staff To Client Management As A Consultant

Dustin Thostenson raises an interesting (and dicey) question in his Twitter log as to "how honest should your feedback be of full-timers to their mgr when it is requested?"

My general rule of thumb on this topic is to:

tread very carefully
try to avoid commenting on staff, but
if you must comment, be *clinical* and precise on the context and the limitations of your observation or interaction with staff (make sure you think through both positives and negatives of client staff performance)

Here's are some reasons for my thinking:

a consultant is usually an outsider and does not have to live with the implications of giving positive or negative feedback
observation periods are often short (since limited to a subset of the engagement period, which may be days or weeks)
consultants are often hired to address a particular problem statement for the client, and unless the charter was to evaluate employees (which in most cases it is not except for niche practices or statements of work) then your perspectives may not be grounded enough
consulting engagements often require working up and down the chain of organizational structure, and your reputation and effectiveness as a consultant could be damaged if people think that you are talking about them or evaluating them "behind their backs"
you must be extra careful that you have not been unduly biased (e.g., prior to the evaluation request) by either the client sponsor or other significant players in the client organization.

That said, a fear may be that the client sponsor will not look to you as a trusted adviser if you do not provide your perspectives. Many consultants would argue that the client is paying you good money and that you need to provide your perspectives. The ground can be tough here. Be clinical, think through pros and cons, and couch your caveats. Above all, act responsibly and ethically.

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June 3, 2009

Candid Interview With Will Weider On Consulting (From A Customer Point Of View)

This past week, I had the opportunity to speak with Will Weider, CIO of Ministry Health Care and Affinity Health System, about using consultants. His perspectives are interesting because they are from a customer’s vantage point – not from a consultant’s viewpoint. Will Weider is author of the one of the earliest CIO blogs on the Internet, the famed “Candid CIO” blog.

Steve: Will, thanks for talking with me. As a management consultant myself, I’ve approached you for a “candid” view on using consultants. I am interested in constantly improving the practice of consulting and management. Hopefully this interview will shed light for both consultants to improve their practices and peer organizations of yours to improve their selection and use of consultants. To that end, when do you look to consultants, and what do you look for in consultants?

Will: There has to be a specific reason for using a consultant, and my philosophy is to use consultants as little as possible. A couple of thoughts immediately come to mind. The first is that consultant costs can give me heartburn (e.g., when comparing loaded hourly rates of internal staff against the consultant). Now as context, it is infrequent that my organization does not have the skillset to either get a project done or solve a particular problem. A second perspective is that I have had some disappointing consulting engagements where the results have fallen short of my expectations. Part of the blame may fall on the consulting firm which may oversell themselves in order to get a deal done. Some of the missed expectations may be in part that the buyer has elevated expectations when using a consultant.

Steve: Do you have any thoughts on aligning an organization and its expectations when using consultants?

Will: I’ve found that the worst time to use consultants is when my organization is saturated. A client organization needs capacity to bring the consultant on board, ramp them up, manage them, provide feedback, etc. As an example, if I have estimated a project at requiring 100 hours to do internally, then I may need to allocate 125 hours when accounting for budget and overhead of managing the consultant. As far as aligning expectations, I have mostly seen consultants provide incremental value as opposed to exponential value and miraculous benefits as marketed. Consultants can get oversold on their value proposition too easily. I also wanted to note that some consultant agreements have unacceptable terms, rivaling those of my software vendors. These include such terms as up-front payment, termination clauses and advance notice requirements, etc. Where these terms go in the new environment we are in is still to be determined, but they have to be more client-favorable.

Steve: What kind of advice can you provide on using consultants?

Will: For me, the best time to use a consultant is when you need a 3^rd party advisor. For example, suppose there is a big, multimillion dollar project going off course. A consultant with the right background can provide an independent project audit. Our needs are aligned when using the consultant in this manner. We need a specific skillset (perhaps not a scarce resource), we don’t have time (e.g., because we have 60-70 projects going on), we need a fresh look, and we need an independent view. This is the perfect type of situation for a consultant because the scope is well-defined, the scope is narrow and the timetable is short.

Steve: Great insights, thank you. Changing gears bit, I think readers may be interested in your views on the federal stimulus package and its impacts on consultants.

Will: The package has clear intent, but everyone is still waiting for the clinical IT requirements to be defined on both the medical group and hospital/ambulatory side. Less than 2% of hospitals have real Computer Physician Order Entry (CPOE), so once the requirements are defined, there may be a flood of work for implementation consultants with CPOE and specific Hospital Information Systems (HIS) expertise. I’ve estimated tens of millions of dollars of eligibility for our provider organizations (medical groups and hospitals). We are working with a number of vendors and suppliers to plan for various scenarios so we qualify for these funds and deliver on the President’s vision for a more efficient and effective health care system. It’s all a new process – I’m not sure that anyone has an “inside track” as to how to get these funds.

Steve: Terrific info. Let’s change gears again and cover social media. How have things changed since 2005 when we first met via the blogging world?

Will: These days I use both Twitter and blogging, although there has been some shift towards using Twitter. I will say that consultants that I use have connected with me via social media. Some of these consultants demonstrate their expertise to me for free before I use them. These consultants may be those that are helping me with technology, preparing for swine flu impacts on my organization, or other dynamic areas. Consultants that are confident in their abilities to provide value are not afraid to pursue either risk-free or non-traditional models for engaging me.

Steve: Will, this has been a great dialogue, and I appreciate your candor for the benefit of the business community. Thanks for your time.

Will: Steve, thanks for the opportunity to be interviewed.

Will Weider is CIO of Ministry Health Care and Affinity Health System, and his blog is at the Candid CIO at http://candidcio.com.

Steve Shu is a management consultant focusing on organizations that use technology, and his blog is at http://steveshu.typepad.com.

May 1, 2009

Blog Interview On Consulting For Chicago Booth Corporate Strategy and Management Group

I did a blog interview for the Chicago Booth Corporate Strategy and Management Group (student-run organization for part-time and evening program). The interview (link here) covers areas such as typical week in the life of an independent consultant, common problems currently facing clients, and the most helpful MBA training I received at Chicago.

Aside from the fund raising item I mentioned in the interview section on current client issues, I also shared the following (which characterizes one current client philosophy on approaching prospective consulting projects):

… The other theme I have been seeing more of is in the operational process improvement area. The themes here, however, have not been so much around improving profits as they have been about weathering the economic storm and making improvements that increase either customer satisfaction or quality of services and products. Clients, on the balance, are more conservative right now. Whereas the smart executives and managers may have been going for broke before and taking bigger chances, they now see making continuous improvements as a must-do (not necessarily demonstrating immediate margin or revenue improvement until after the storm lifts). As additional light, some executives are missing their revenue numbers in the current (bad) market climate, but they are making their net profit numbers. These companies are using the stable net profits as their bulletproof vest with their Boards while using consultants in very targeted ways or in controlled “entrepreneurial experiments” to help build for the future.

As an independent consultant, I increasingly need to use my network to read the market (as opposed to having information flow to me from "The Firm". Don't know whether others are seeing similar things or not. Please feel free to share your thoughts.

April 9, 2009May 30, 2015

Crash Course Consulting Reading List

Readers of this post may be interested in The Consulting Apprenticeship (update May 30, 2015).

Situation: You are stuck on a desert island with no lifeline access. What are the essential books and tools you need for management consulting?

Well, I can’t say that I have a complete list compiled, but here is a crash course consulting reading list (PDF doc) that I have provided in the past to new consultants (including experienced professionals new to consultative methods) as bread-and-butter references and knowledge areas. May provide ~80% coverage of a core foundation for general management consulting. Perhaps it is of use to new consultants and/or those looking to develop their consulting practices. I know that this list could probably use expansion and updating – I tried to create a list that was based on pre-packaged, ready-to-go stuff, and there are some limitations with that method.

Please feel free to post in the comments section any other sources you think others may find useful.

Update (8/3/09): Updated the reading list a little. For example, I included some blogs from traditional management consultants that shed light on the practice and industry.

Update (8/21/09): Updated the list to include some strategy books and other books recommended by consultants.

Update (9/1/09): Updated the list to include the latest versions of two of the best professional services sales books ever (by Ford Harding). If you are a professional services or consulting organization and could use help and/or an introduction to Ford, feel free to let me know, and I can broker a connection.

Update (2/3/2010): Got some great feedback from Florian Hollender at Killer Consultant. Based on his feedback and some other things on my mind, I updated the consulting reading list. Includes more updated blog and book references to Michael McLaughlin‘s material, some links on client facilitation, and books on negotiations and innovation. The reading list also includes some more consulting blogs.