When I was a partner at a major consulting firm, I worked hard to "make my numbers" for my group every quarter. Now that I have started my own firm, many of the performance measures are not as relevant. What "numbers" are appropriate for a solo practitioner?
This is a common question, whether one has left a large firm or is a new consultant as an independent. The short answer is that the performance objectives are largely the same but how they are characterized may differ slightly. They may also differ as a function of what you plan to accomplish with your new firm as compared to your old one. At a minimum, the "numbers" you make at your new firm are based on your individual values, not the collective values of your fellow partners at your old firm.
Without being presumptuous to suggest which specific measures are "best," here are some that you should consider. Think in terms of balanced scorecard categories: customer, process, assets (innovation and learning), and financial. Customer measures should address the health of your pipeline, such as how many prospects are at each stage and the alignment of each prospect with your firm development objectives. Process measures should address the use and improvement of processes and protocols to market and sell, deliver services, and run your practice. Asset measures (called innovation and learning in the balanced scorecard methodology) should address how you are growing as an individual and a firm, specifically in terms of what new skills, data, and capabilities you have created over the last period of time that you can monetize as higher valued services to clients. Finally, financial measures should address the revenue and profit targets you have established for this quarter/year as part of your multiyear business plan. Tip:
Although you presumably manage what you measure, small firm management should work with a vital few metrics. It is reasonable to set a target and track only one or two in each of the above categories. If you are not meeting these targets, you can drill deeper. P.S.
A common reason consultants leave larger firms to be independent is to have more control over consulting service delivery and their personal lives. Given that independent consulting can consume a lot of time, consider including a metric of how much leisure time you are making available for you and your family. Making your consulting numbers should not come at the expense of these other important "non-business" considerations. © 2009 Institute of Management Consultants USA