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#479: Start Creating Your Consulting Assets

Posted By Mark Haas CMC FIMC, Thursday, January 13, 2011
Updated: Thursday, January 13, 2011
After a dozen years in business, our consulting firm is well regarded and we are considering our long term exit strategy. We do have a good client list but are not sure how we can create value if we decide to merge or sell the business.

Intangible capital is what professional service providers have to offer but few recognize how to turn that into an asset they could sell directly or parlay into something of value. Think about what you have to offer a client. Is it your winning smile or is it the possibly unique and probably proven approach you bring to solve their problems? Is it the good feelings your clients have when you have completed your work or is it the lasting value you created through your methodologies?

What you bring of value is the ways you use knowledge, judgment and technique to turn problems into solutions, and to create value out of potential. But keeping these only in your head creates three problems. First is your inability to explain or pass them along to others to leverage your time (you do want to scale your business don't you?). Second is your inability to improve their effectiveness through testing and validation (you do want to improve your service to clients, don't you?). Third is your inability to present your intellectual property in a format that someone is capable of understanding and willing to buy (you do want to show the full value of your efforts, don't you?).

Tip: You have intellectual property that you don't realize. Start writing down the scope, sequence and content of your methodologies. Start with your current or a recent project. Flowchart the steps in the engagement and draft one-page descriptions of the challenge, approach, resources, required, solution deployment, risks and mitigation, solution, and sustainability steps. Each time you start en engagement, review these methodology descriptions to plan your work. Each time you finish an engagement, evaluate and refine your methodologies. Over time, you will produce a tangible asset you have been creating throughout your consulting career.

© 2011 Institute of Management Consultants USA

Tags:  consulting process  intellectual property  knowledge assets  learning  product development  your consulting practice 

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Mary Adams CMC says...
Posted Friday, January 14, 2011
You're right Mark--most consultants don't understand their own intangible capital. The classic definition of IC can be helpful here:

Human capital: what you know, your competencies and experience

Relationship capital: who you know, your shared knowledge with outside organizations and partners (including IMC), and your brand

Structural capital: knowledge that has been turned into re-usable forms. This can be a process, a methodology, writings, data or tools. (some of this can be protected as intellectual property)

Creating lasting value in a consulting business requires a few things:

1-Always maintaining high standards for human and relationship capital--your organization is as smart as your people and partners (you can make this more tangible through certifications like the CMC)

2-Having a consistent pattern and process to capture re-usable human and relationship capital so that it becomes institutionalized as structural capital

3-Being able to describe and display these intangibles in a compelling way. Making intangibles tangible is an important precondition for maximizing their value.

Here's a set of exercises that describe how to identify, measure and manage your IC:

Here's how we describe our firm's IC on our website:

(By the way, these are skills that will help you help your clients too!)
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Raymond W. Suarez CMC says...
Posted Friday, January 14, 2011
Nice job, Mark, and great input, Mary! For those who dont know, Mary Adams and Mike Oleksak authored "Intangible Capital" that addresses well this topic in detail.
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