Protect Your Consulting Practice - Proactively!

This piece appeared in C2M (Consulting to Management), Vol 14 No 2.  It was written for the column that Harvey and I were then writing for C2M titled "The Smaller Practice."

The February 2003 issue of Harvard Business Review offers a case study titled "A Consultant's Comeuppance." We'll use a synopsis of that case study - and the essence of the advice proffered by its reviewers - to offer a little advice of our own. After all, isn't that what consultants do?

The consultant in the case, Jeff Patterson, is the head of his firm's financial services practice area. Jeff's client, Bill Holland, is head of the retail banking unit at GloBank, a giant in financial services. Jeff and Bill have been friends for 10 years, and Jeff's firm, Flynn Fuller Consulting, has billed GloBank more than $80 million in that time. The case study opens with Jeff and Bill at a ballgame, where Bill mentions some upcoming work for Flynn Fuller Consulting.

But GloBank has a new CEO, H. Frank Maloney III, who has spent his first two months closeted with GloBank's CFO. During a meeting with the division presidents, he reveals that the bank has lost hundreds of millions of dollars in bad loans and that more bad news is to come. The CFO mentions that $14 million has been spent on consultants, and Maloney promptly wants to know why. He orders that all major consulting projects be justified to him. The consulting firms involved will each have one hour in which to make a presentation justifying their presence at GloBank. Bill Holland so informs Jeff Patterson.

The balance of the case study describes Jeff's predictable fretting, his client's fears, and some preliminary thinking at Flynn Fuller to prepare for the presentation. The case study closes with this question: "How should Flynn Fuller resell its value to GloBank?"

The advice offered by the four reviewers is about what you would expect (except for one reviewer who chose to bash consultants instead of addressing the question):

• Flynn Fuller should "pitch" GloBank as if it is a new client, raising its sights from a divisional to a corporate perspective.

• Review Flynn Fuller's decade of projects and demonstrate the value they created for GloBank (in six slides).

• Flynn Fuller should start thinking about replacing Jeff Patterson with a less "tainted" advisor to the new CEO.

• Prepare a strategic framework that will be responsive to the new CEO (and the CFO's) likely issues (in three columns: facts and assumption, reasons, and replies).

• Focus on the financial returns; that is, the ROI of past projects.

• Focus on a few key messages (in 10 slides).

• Practice the presentation.

With one exception that we'll touch on later, we'll not attempt to second guess the case study reviewers in this column. Whether or not, and how, Jeff Patterson can pull Flynn Fuller's chestnuts from the GloBank fire is of less interest to us than the issue that went begging in the case study and the reviews of it; namely, a failure to protect the practice. In this regard, we have some questions of our own:

• Why was Jeff Patterson taken by surprise? Nothing signals the likelihood of major change any more than the arrival of a new CEO.

• Why was Flynn Fuller "scrambling" to figure out how to respond? Where were their contingency plans? Where were their regular client update meetings all along?

• Why, after 10 years, was Bill Holland Jeff Patterson's only client at GloBank, and why was the retail banking division the only division in which Flynn Fuller was working?

• How could Flynn Fuller have worked with GloBank for 10 years in major ways and not be abreast of the situation at GloBank?

 Protect and Expand the Base

In previous columns we have written about the three basic requirements for successfully operating a consulting practice: technical competence, consulting skills, and business management. It looks to us as though Jeff Patterson forgot that in addition to running a practice area (technical competence), he was also running a business. He failed first to grow the business (that is, penetration up, down, and across organizational lines via referrals; and services expansion) at GloBank and he failed secondly to protect it ("build the moat and keep it well stocked"). Rule 1 in any going business: "Protect the base; expand the base." How, then, might Jeff Patterson have done a better job of protecting his practice and growing his business at GloBank?

• Periodically report - formally - on tangible end results accomplished and value received. Document these on paper for handoff to and discussion with the client.

• Actively generate referrals inside large client organizations to penetrate multiple levels and different groups, and to diversify the services provided ("entanglement strategy"). You will never be indispensable - no one is - but you will have many more supporters throughout when the inevitable challenge comes from a new executive - and it always comes.

• Don't get chummy with client contacts. Even when such relationships are truly innocent, they won't seem so to others. "Beyond reproach" is where all your relationships must reside.

• Stay organized. When a question arises, we should not have to be sweating and digging for past reports, invoices, and presentations. If you're the type who just fills up the shoe-box for the IRS each year and then tries to sort it out on April 14, this will bite you when the client challenge comes.

• Focus on the future. If called on to "make your value case," either in a group or one-to-one, be brief about the past - it has already been paid for. Spend more time on defining the near-term value to be had by continuing the relationship. The key here is to understand the new exec's priorities and to then describe how your skills and services will facilitate the execution of his agenda.

(By the way, this last point gets at the one area where we would second guess the four reviewers' counsel: they all looked in the rear-view mirror, intent on justifying Fuller's presence at GloBank based on past projects. A better focus in such a situation is on the future.)

The main lesson here, we think, is that to properly protect your practice, you must work at it on a persistent and consistent basis - and not wait until the firehouse bell rings. This means never ending an engagement without defining the tangible benefits, on paper, and recapping them to the client. It means periodic summary reviews of results achieved - financial returns or otherwise. And it means staying organized, so responding to changing client circumstances represents a wonderful opening for new work rather than the impetus for a panic attack.

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This page last updated on July 26, 2019