How do consultants generally measure the success of their business? If we were interested in just making money we could just track consulting income, but there are a lot of other reasons to be in this profession.
There is an inherent conflict in your question. Our goal is to create lasting value for our clients but such value is not necessarily fully valued by the marketplace. Measuring our worth by our revenues falsely assumes that the client's business, and the increment of performance we provide, is fairly reflected by market capitalization, revenues, profits, etc. Consider a Navy Seal and an investment banker. Seal s are drawn from a far more selective group, they are better educated, trained and equipped, yet receive far less compensation than bankers. The latter may even receive a financial bonus with no downside risk for "exceptional" performance, while a Seal puts his life and reputation at risk and is paid the same regardless of performance. The market is not a true measure of your intrinsic value or contributions.
A second aspect is that your client may benefit tremendously from your counsel but is not in a position to pay you what you would be worth in more financially advantaged markets. Consultants who advise educational, public sector, nonprofit, government or market-depressed private sector clients know this well. We all know colleagues who are paid far more or less for the same work. We also know that fees can increase or decrease in certain markets even if the value of our services do not.
Do you know how you know when you deliver value? Your client sponsor tells you. Client staff commend your services. You see your recommendations implemented and have the intended effect. Your clients thrive. You get unsolicited referrals. You gain the respect of those colleagues who know your work. You are sought out by others in your client's industry. You are asked to speak to professional and civic or industry groups. You recognize growth your own consulting competencies. "That's all well and good," you say, "but it doesn't pay the bills." It is true that you need to generate an income to stay in business, but don't let compensation substitute as a measure of your value.Tip:
Michelangelo said, "The greater danger for most of us is not that our aim is too high and we miss it, but that it is too low and we reach it." When setting your goals, consider setting some for those indicators of value above, and set them high. Revenue is fungible; it is the impact on your client that is the true measure of value delivered and something that you uniquely provide. © 2011 Institute of Management Consultants USA