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Between 2005 and 2011, IMC published Daily Tips every weekday on consulting ethics, marketing, service delivery and practice management. You may search more than 800 tips on this website using keywords in "Search all posts" or clicking on a tag in the Top Tags list to return all tips with that specific tag. Comment on individual tips (members and registered guests) or use the Contact Us form above to contact Mark Haas CMC, FIMC, Daily Tips author/editor. Daily Tips are being compiled into several volumes and will be available through IMC USA and Mark Haas.

 

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#686: Don't Pitch a Prospect Until You Know You Are Ready

Posted By Mark Haas CMC FIMC, Monday, October 31, 2011
Updated: Monday, October 31, 2011
My track record of getting appointments with prospects is pretty good but there are times the pitch just doesn't go over very well. I always do my research and have a lot of ideas ready to pitch but, more often than not, they just don't seem to connect.

Experienced consultants develop protocols for much of what they do. After many years of delivering similar services, they have honed efficient setup and processes for delivering most of their services. They have the AIDA down pat. They have a storyboard. They conenct emotionally with the prospect's pain, not just their aspirations. For some consultants, however, this need for well-defined processes seems not to apply for prospect meetings.

You say you do your research on the prospect ahead of time but you also say you arrive with lots of potential ideas. This may be where you run astray. Think of it from the client's perspective. They have lots of issues to deal with but probably only a very few they are prepared to talk to you about. To a prospect, your talking about a lot of things you could do for them sounds like you are selling yourself, not solving their problem. If you really have done enough research, you will know the top three issues the prospect needs to address. If you are the right person for the job, then you will have a very tightly scripted pitch to get right to the point of pain. Doing that will keep prospects focused on what you can do for them, not what they need to do for you.

Tip: If you can't identify 1-3 issues the prospect has a passion for, has a need to fix, and lacks the capability in house to solve, then you don't know enough. It may be that you could meet with the prospect to listen and gather more information, but it is better to understand the issue well enough to be able to craft your rather robust process to solve it. Finally, it is worth the effort to dry run your pitch. Don't consider practicing your pitch as something only a novice consultant does. The confidence you gain from a perfectly practiced pitch wears off onto the prospect.

© 2011 Institute of Management Consultants USA

Tags:  consulting process  customer understanding  market research  marketing  meeting preparation  proposals  sales 

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#685: Consultants Need to Understand Type I and Type II Errors

Posted By Mark Haas CMC FIMC, Friday, October 28, 2011
Updated: Friday, October 28, 2011
I always hear about Type I and Type II errors in business and how important it is that consultants understand these concepts. Why should I care about this?

People are referring to a statistical concept where a Type I error is a false positive and Type II error is a false negative. For the statistician, a Type I error is rejecting the null hypothesis when it should have been accepted. For a businessperson or consultant, a Type I error is seeing something that is not really there. Type II errors are missing something that is really there (and potentially company making or breaking).

A Type II error (false negative) can be serious when looking at competitive markets or human resource issues such as culture or employee opinions. Inadequate surveys or incomplete analysis may lead a consultant to conclude that there are not serious competitors or impending revolts among employees when, in fact, there are. Depending on the situation, a Type II error may result in serious losses for a company or put it out of business.

False positives are of most interest to consultants engaging in diagnostic or investigative activities, in two ways. As a consultant whose job it is to find problems to solve or opportunities to capture, we are looking for something on which to act. Maybe a process is "broken" or a market is "large and available" to your client. In either case, you may identify something that is not really significant enough to expend resources on. Alternatively, as a result of your activities, you conclude that your impact is significant when it really is not. In both cases, you have overstated the significance, or even existence, of your role to the client. Understanding Type I and Type II errors gives you good perspective on your role and significance to a client.

Tip: Think in terms of medical testing when you consider how you are going to control for Type I and Type II errors. The worst outcome when looking for a serious disease is to conclude it is not present when it is (Type II). To accommodate that, we use screening procedures that are relatively fast, cheap and for which we can tolerate a Type I (false positive) error. As a consultant, you may want to develop protocols that let you quickly tease out potential problem areas and for which you recognize there may be Type I errors. Those items that show up may be real or, more likely, false positives. Then you can proceed with more focused and rigorous protocols to look more closely at an issue, recognizing that what you want to avoid is a Type II error (false negative). You don't have to be a statistician to understand the concept and how your ability to mitigate risk on behalf of your client is a significant value added.

© 2011 Institute of Management Consultants USA

Tags:  analysis  assessment  assumptions  consulting terminology  consulting tools  diagnosis  information management  recommendations  risk analysis  statistics 

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#684: How Has Consultant Compensation Changed in the Recession?

Posted By Mark Haas CMC FIMC, Thursday, October 27, 2011
Updated: Thursday, October 27, 2011
A lot of consultant left the profession, even large firms trimmed staff, and rates took a significant hit during the recent economic downturn. What are the prospects for rates returning to former levels any time soon?

Remember that consulting lags the general market by about six months. However, this economy is not a typical recession; it is a credit crisis, with a significantly different profile. However, it does appear that consulting employment and fees are strengthening. Large consulting firms are hiring again in response to deferred work at their longer term clients. Also, many of those consultants laid off during the downturn are either being rehired or starting their own firms.

Logic might indicate that consulting fees would remain low with growing supply of consultants and still soft financial health of business in the US and Europe. Top-Consultant, in its Salary Benchmarking Report 2011/12, reports that compensation in 2011 is still lower than in 2009 for most people in most consulting specialties. However, this is in part due to hiring of many junior consultants who are more than offsetting departure of senior employees. In Australia, Europe and the US, the number of consultants receiving no pay raise in 2011 was about 45% and for those who did receive a raise, it was about 6%. (The data vary by specialty, geography, and seniority so see the report for greater insight).

Tip: We are not out of the downturn yet. Although strategy and business transformation specialties command the highest compensation, one conclusion is interesting. Compensation for the highest performers, particularly from bonuses, is strong. For those who are at the bottom of the performance scale, raises and bonuses remain either missing or small.

© 2011 Institute of Management Consultants USA

Tags:  competition  consulting  fees  trends 

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#683: Don't Assume the Client Recognizes the Value of Your Work

Posted By Mark Haas CMC FIMC, Wednesday, October 26, 2011
Updated: Wednesday, October 26, 2011
As part of the disengagement process, my firm goes through a formal exit interview, a review of contract terms and deliverables, and asks for referrals and/or testimonials. However, in some engagements for which we did a great job and exceeded all expectaitons, the client was reluctant to provide testimonials. What gives?

There are two issues likely at work here. First, checking on the status of your performance should not wait until the end of an engagement. Set up a fairly clear and deep set of performance expectations at the beginning of the engagement. Then confirm that you have met those expectations periodically throughout the engagement. The client may be forming a negative opinion of your work without you knowing it, one that is hard to reverse at the end even if you delivered all requirements. Don't let any bad opinions take root.

Second, don't assume that a client recognizes the full value your advice, services and work products. What you may see as an elegant, sustainable and powerful solution to a serious long-standing problem may appear to the client as just another piece of consultant work. If the problem you are solving is not specifically owned by your client sponsor, the perceived value may be low. Beyond noting that the work product was completed on time and budget, clarify and have the client affirm that the deliverable solved a significant problem or captured a significant opportunity. Don't let your work inadvertantly be undervalued.

Tip: Your job as a consultant is to improve the client's condition. Don't leave it to chance that they fully realize that you created real value. If you don't manage their expectations and conclusions, you run the risk of them thinking that you just "delivered work."

© 2011 Institute of Management Consultants USA

Tags:  client relations  client service  customer understanding  disengagement  engagement management  interpretation  referrals 

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#682: Make Assumptions Carefully

Posted By Mark Haas CMC FIMC, Tuesday, October 25, 2011
Updated: Tuesday, October 25, 2011
Part of being a good consultant is being able to get through the diagnosis and to a solution as quickly as possible (but getting it right). To do that we must make assumptions, but where are assumptions potentially erroneous short cuts and where are they appropriate?

You know what they say about assumptions. We can't realistically base our diagnostic conclusions entirely on our empirical research done at the beginning of an engagement. We make what we consider to be reasonable assumptions based on discussions with the client and staff, market or technical research, our own analysis and any other information we collect - including years of our own experience with analogous or similar cases. It is a judicious combination of facts, intuition and experience that is the hallmark of a consultant's detective like skills.

However, professionalism compels us to be on watch for assuming too much, too fast. It is all too easy, after years of experience, to be impressed with our knowledge and comfortable with believing we "have seen this case a thousand times before." To keep this in check, a professional has processes in place, maybe even formal ones, to challenge and verify all assumptions made on the way to a diagnosis. What are the ways you make sure you are not assuming too much without knowing it?

Tip: Write out the steps you take in your normal process (or more than one) of scoping a project, collecting data, completing a diagnosis, and presenting findings and recommendations. Note the type and criticality of your assumptions at each stage. Finally, describe the implications on this diagnostic chain of each of your assumptions and what you could do to mitigate the risks of wrong assumptions. Now, when people talk about your assumptions, they will have only good things to say.

© 2011 Institute of Management Consultants USA

Tags:  analysis  assessment  assumptions  methodology  recommendations 

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