I see other consulting firms list a series of "affiliates" on their websites. What is this all about?

There are two strategies a firm can do to increase their service revenue, regardless of size. One is to add capacity in their main line of business and the other is to extend their service lines, either through new product/service development or cross selling through a partner.

A small firm or solo practitioner rarely has the opportunity or resources to add a lot of capacity unless they choose to grow in size. For many small firms, this is exactly what they do not want to do, particularly because they would give up valuable flexibility, speed and independence available to them as a small firm. Similarly, line extensions more than the natural introduction of evolved services or an occasional new product are also difficult.

A strategy increasingly used by small firms to build breadth of offered services is to create a network of complementary service providers. These are the "affiliates" you see listed on many small firm websites. An affiliate could provide functional expertise, added personnel capacity, geographic coverage, disciplinary extensions, stage of service extensions (e.g., planning, implementation, management may be different skill sets in some industries), or financial capacity. Your affiliate strategy depends on (a) what you need to strengthen or complete your business offerings, and (b) what you think might increase the confidence of your clients that you are capable of providing the next level of service.

Tip: List the three things that you are pretty confident are responsible for your not getting business recently. Was it lack of personnel? A missing area of expertise? Lack of financial capacity? Make a list of other small firms in your network that have these capabilities and identify what you might provide to them in return if you were to affiliate? Pick one firm to talk to this week to begin the process of a formal affiliation. As your discussions proceed, you will better appreciate what you might do together to strengthen both firms (i.e., the relationship could range from "looking out for each other" to a formal, vigorously pursued strategic alliance).

© 2011 Institute of Management Consultants USA