Category Archives: Management Consulting

Expert vs Generalist

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My recent blog on the importance of experts prompted one reader to comment that he preferred the term “specialist” (in a non-medical sense) to “expert”. This got me thinking about the notion of “experts” as distinct from “generalists”, and whether we need to re-evaluate our assessment of skill, competence and aptitude when assessing someone’s suitability for a task, project or role. (And these days, is “generalist” itself something of a pejorative term?)

A few days later, I was having coffee with a strategic consultant who is known as a future thinker. He describes himself as an “extreme generalist” (with no hint of irony), because he has wide-ranging and multiple interests, some of which, of course, he has deep domain knowledge and experience. But because his work and his curiosity take him into different realms, he maintains a broad perspective which also allows for the cross-pollination of ideas and concepts. (I think we all recognize the value of analogy when problem solving – taking the learning from one discipline and applying it to a new scenario.)

Separately, but in a similar vein, I was discussing career options with a senior banking executive, who did not want to be pigeon-holed as a banker, because her core skills and professional experience would lend themselves to many industries, not just financial services. So in her case, this expertise would best be applied in a particular type of role, not in a specific domain, or a specialist capability.

And during an earlier discussion on leadership with yet another futurist, I found myself debating the notion of situational styles, as opposed to structural models – both of which require skill and expertise for CEOs and managers to be successful. But broad experience will be just as important as formal methodologies, and general business knowledge just as valuable as technical specialisation. (On reflection, as with so many constructs, it’s not a case of either/or – more a question of adaptation and dynamics.)

As a result of this ongoing dialogue, I was challenged to develop what I might describe as a 3-D model, comprising the following axes:

“Generalist”/”Specialist”: In product management terms, for example, the generalist understands the full end-to-end customer life cycle and the production process. Whereas, a specialist might know their particular part of the process extremely well, but has little to no awareness or understanding of what might come before or after. (Think of those frustrating customer calls to utility, telco and insurance companies – in fact, any business with highly siloed operations – where you get passed from one “specialist” to another, often revealing contradictory information along the way.) At the extremes, this dimension might be described as the difference between knowing a subject “a mile wide and an inch deep”, and knowing it “a mile deep and an inch wide”.

“Novice”/”Veteran”: This is probably obvious, but I don’t necessarily mean seniority, age or tenure in a specific role. When it comes to new technology, for example, someone who is new to the role, but who has just been trained on the latest software and equipment, may have better technical ability than someone who has been doing the same role for several years (and thus, has more knowledge and experience), but has not refreshed their skills. Although I concede that in many situations the incumbent veteran may have better developed problem-solving, trouble-shooting and decision-making capabilities. This axis is also really important to consider when transitioning older employees to new roles within the same organisation or team – if they were younger, they would probably be given more time to adjust, adapt and grow into the role. Whereas, an older employee may simply be expected to “pick it up” much more quickly, with less leeway for learning on the job, because of assumed expertise.

“Broad”/Narrow”: Here I am thinking about aptitude, rather than the degree of specialisation. Drawing on the idea of using analogies, someone with wide experience and a broad perspective (sees the big picture, displays both critical and design thinking) will have quite different qualities to someone with a very narrow focus (especially within a very specific domain or area of practice). Based on the particular context, do you need an all-rounder, or a placekicker? This axis also relates to the age-old issue of organisations only wanting to hire square pegs for square holes – it might make sense in the short-term, but risks stagnation and lack of fresh thinking over the long-term.

Assessed along these three dimensions, we might see that an “expert” could be qualified according to how highly they rate based on their overall “depth”, measured by criteria such as experience, knowledge and reputation, as well as formal qualifications.

Next week: Making an Impact at Startup Victoria’s Pitch Night

 

Putting a Price on Value

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In the course of my consulting work, I often work with clients (who are themselves consultants and service providers) to review their pricing models. The goal is to help my clients clarify what they are charging for, to ensure that both they and their own customers are comfortable with the price. What often emerges is that on its own, “time-based” pricing is becoming harder to justify, unless there is a clear understanding of the resulting value created and transferred.

adding-valueAmong some of the major consulting and professional service firms, there is a growing awareness that pricing based on billable hours alone is no longer sustainable. This in turn is forcing firms to review how they put a price on their work. They recognise the need to shift from billing clients for “time and materials”, to generating license fees and royalties for the use of proprietary IP, and to offering “XaaS” models that comprise a blend of “always on” retainer and actual service delivery, neither of which is wholly based on time or effort spent.

At the same time, many input costs are actually decreasing:

  • Reduced staff overheads via offshoring and outsourcing
  • Cheaper technology (although we consume more of it)
  • More open source tools and freeware available
  • Ubiquity of BYOD
  • Greater use of remote working, telecommuting and hot desks

What this means for the clients I work with is that they need to have a better grasp of the amount of effort applied and the level of expertise they deliver to their customers. If there are significant parts of the project costs that have to be measured by actual time spent, then it is important to make sure that the customer understands the effort required.

How else can consultants and professional service firms demonstrate value, other than by billable hours alone?

To begin with, clarify exactly what the customer thinks they are paying for. There can be nothing worse than consultants spending most of their time and effort on tasks or activities where the customer does not see a material benefit, or which the customer does not value.

Clearly, if there are measurable and quantifiable outcomes for the customer, then that is a good basis for demonstrating value. For example, direct cost savings to the customer, or reduced opportunity costs in terms of time to market or other factors. However, it may be harder to demonstrate the direct benefit of some qualitative outcomes, at least in the short term.

Some pricing models include a consultant “success fee” coupled to a share of revenue, profit or costs savings (which can be high-risk for consultants if they have no control over the implementation and execution). Other consultants are working with their clients to co-create products and services, which can generate standalone revenue streams from the shared IP. Others are adopting more collaborative approaches to consulting which build long-term value through the quality and nature of the relationships which are more like partnerships than transactions. This can remove the customer’s anxiety that the “meter is always running”, although such arrangements still require expectations to be managed through agreed boundaries and clear rules of engagement.

One model I use with clients is to figure out the nature (as well as the amount) of the value they are being asked to deliver, based on why the customer is buying, as much as what they are paying for. Some of the factors to consider include:

  • Risk mitigation – is the customer in effect buying an insurance policy, transferring their own risk, or reducing their exposure to risk?
  • Must have – is the customer having to meet a regulatory or compliance obligation?
  • Best practice – does the customer aspire to be among the best in their industry?
  • Competitive advantage – is the customer getting something unique or hard to replicate?
  • Peer pressure – does the customer need to meet a recognised standard or level of competence?
  • Situational – does the customer need to build or acquire appropriate skills and capabilities?
  • Urgency – is the customer willing to pay more for a speedier service? (This is one area where time-based pricing can still be relevant!)

It’s also important to understand how customers are funding their purchase. For example:

  • which cost centre is paying for the service?
  • what is the purchasing criteria?
  • what cost/benefit analysis has been done?
  • is there a specific budget allocation, or is it coming out of existing operating costs?

Of course, consultants are frequently hired to bring an alternative (and sometimes critical) perspective to their clients’ problems. In which case, getting an external opinion has value in itself, and the customer should accept there is a cost associated with having access to someone else’s brain – even if it is only for a few hours.

Finally, for an alternative perspective, I would refer to recent comments made by Ash Maurya (author of “Running Lean”, and creator of Lean Canvas) when he was in Melbourne. Talking about how to scale startups, he made the observation that, “selling time [as a consultant] is not scalable … There’s only 24 hours in a day.”

Next week: Food for thought at #StartupVic’s #pitch night

“I’m old, not obsolete”

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In the recent “Terminator” sequel, Arnold Schwarzenegger coins a new catchphrase: “I’m old, but I’m not obsolete”. He may not be the latest android, but he has learned to adapt, he is still relevant and his purpose remains consistent. A bit like older workers, then: not ready to be consigned to the scrap-heap, consistent and reliable, and even capable of being upgraded (as Arnie is towards the end of the film).

Terminator Genisys

Remaining relevant is tough, even for a Terminator….  (Copyright 2015 Paramount Pictures)

A great deal of the discussion on employee engagement, business productivity, workplace flexibility and career transition talks about what we do with older employees, particularly those in their 50’s, who often struggle to find comparable work when they are retrenched or “restructured”.

Many 50-somethings can vouch for the fact that making a career transition into another full-time role can be extremely difficult. In my own case, I left my last corporate position just after I turned 50, and I soon realised it would be virtually impossible to find the exact same or similar permanent role elsewhere. So I embarked on a portfolio of interests (non-executive board positions, consulting work, contract roles and entrepreneurship) in order to remain “economically active”.

Over the past four years, in order to remain active, retrain and build my professional networks, I have:

  • completed the AICD Company Director course
  • served on a number of advisory and pop-up boards
  • launched this weekly blog, and written for 3rd party sites
  • coached business owners and entrepreneurs
  • competed in a FinTech hackathon and a MedTech startup competition
  • consulted in the education, public, NFP, publishing, manufacturing, technology and professional services sectors
  • joined numerous MeetUp and networking groups
  • participated in the Lightning Conference on Victoria’s StartUp Future
  • developed a new app for employee performance management,
  • trained as a presenter on community radio, and
  • become a participant and adviser at the Slow School of Business.

As part of my plan to become familiar with new technology, I have also built a side-project to record and release my own music via Bandcamp and Soundcloud, incorporating many iOS apps for which I am a beta-tester.

Not all of this activity is remunerated, yet the people I work with all tell me how much they value my unique input and original insight, and so I keep on doing it. Given the need/expectation to work longer, and the continued tinkering with tax, super and income rules and policies, I’m not sure many of us can ever think about full-time “retirement” (whatever that now means).

I’m aware that there are some ad hoc initiatives to engage older workers as mentors for new entrants to the workplace. While such projects are well-meaning, and may have some desirable benefits, they are not yet financially sustainable, and don’t address the core issue that the expectation of full-time, permanent, lifelong employment is no longer realistic, and we will all have to adapt to these new circumstances.

On the few occasions I have considered full-time roles, I am staggered that so many prospective employers seem incapable of thinking outside the box: on the one hand, they say they want diversity and fresh thinking; but on the other, they resort to the habit of appointing square pegs for square holes.

There is a real sense among many of my peers that their age counts against them, because either employers don’t believe they can learn new technology or processes, or that their previous seniority means they are only interested in roles where they can wait out their retirement, or simply “direct traffic”, rather than getting their hands dirty. Which is both insulting and demoralising. I recall one early discussion where the recruitment consultant said, “despite what the ad says, the business just wants a safe pair of hands – someone who has done the exact same role in a similar organisation for the past 20 years”. How does that support diversity, in particular, cognitive diversity?

So, my question to employers, hiring managers, industry bodies and policy-makers is: when will you truly embrace the challenge of (and opportunity for) change in your hiring and employment practices, and how do older age workers fit into your thinking (if at all)?

Next week: Startups, VC’s and Entrepreneurs

Getting Stuck – and how to deal with it

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We’ve all witnessed (or even experienced) those moments when a speaker or presenter gets stuck. They stumble over their material, they offer an inappropriate response to a tricky question, or they simply go off topic and stray into verbal quicksand. And although they realise they are in difficulty, they carry on regardless, only to wade deeper and deeper into the mire. Some of our current political leaders know exactly how that feels…

Photo by Mark Roy - Licensed under Creative Commons

Photo by Mark Roy – Licensed under Creative Commons

In my experience, many small business owners do the same thing when they get stuck. They carry on doing the same as they’ve always done, even though they know they need to change course, take another approach, or try a different tactic. Which is where someone like me comes to the rescue. As a consultant, I can bring an objective, external and independent perspective that can help clients navigate away from the problem, and steer them back onto the right track.

The Inflexion Point

The typical scenario is that the business is faltering. Most often it’s about sales and business development – either not enough new customers, or too few of the “right” customers (and too many of the “wrong” ones). Sometimes it’s about an aspect of their strategy that isn’t working. It could be a problem with their operations, such as workflow, resourcing or IT systems. Or it might be that they have lost their way and are facing some sort of external challenge. Or maybe there is a disconnect between the products and services that they offer, and what their customers actually need. Or it could be a need to recast their financial information to get a better idea of how the business is really tracking.

Whatever the issue, the common feature is a point of inflexion – the business is either stuck, has hit a plateau, or come to a fork in the road.

So, how do they get help?

The 3-Step Recovery Program

First, the client has to realise that doing the same thing won’t work, doing nothing is not an option, and they have to be open to the idea of change. They recognise that bringing in some external help will relieve the log jam (even though at this stage, they don’t know what form that help will take, or where it will come from).

Second, they do some basic research, or get a referral from their networks, on where they can get help. Much of my work comes via word-of-mouth and personal contacts, and in large part this is due to the need for trust in any consulting relationship. Sometimes, a prospective client has liked something they read in my blog, or heard something in our conversation that has clicked with their own needs. There has to be a connection or match with what the business needs, and what someone like me can offer. It’s a bit like finding a GP, financial planner or personal trainer – there has to be a fit.

Third, they are able to define a specific problem that needs addressing, or at least prioritize the issues. This requires some reflection, self-awareness, and willingness to have their assumptions challenged. There is a need for honesty, and even vulnerability, if the intervention is going to succeed.

Helping clients get back on track

I will say upfront that my services are not suited to everyone. If your business is running like a well-oiled machine, I probably can’t add much value, unless you are looking to improve an area of your operations, or embark on a new initiative where you need help in getting it off the ground. Alternatively, I may be able to help if you simply want to tap into some external perspectives to challenge your current thinking, or if you require some specific expertise that draws on my knowledge and experience. Otherwise, my role is to help clients get free of what is bogging them down.

One of my clients recently said that working with me felt like “keyhole” surgery, rather than undergoing open heart surgery. I think I know what he means, and that he meant it as a compliment….. In my experience tackling “the whole” is not always practical. Rather, zooming in on a particular aspect of the business allows for incremental change, that if applied appropriately, can have a multiplier effect. Such an approach is hopefully less disruptive, and therefore less threatening, to the existing business.

As part of my consulting work, I tend to break the business down into its component parts, look at the business model, review the revenue streams, and analyse the workflow, both internal operations and customer-facing services. For example, clients often have a slightly misplaced perception of where/how they add customer value – so, if they spend a lot of time on a particular task or activity, they naturally assume that this should form the greater part of what their customers pay for. Whereas in reality, the customers may value something else the business does, but the business has not realised that value.

It’s always important to encourage clients to develop an action plan, with specific goals, responsibilities and timelines. I’m not talking about a 50-page business plan, but a more manageable working document for the next 6, 12 or 18 months (depending on their circumstances). A key outcome of this is a list of priorities, plus agreement on which activities to wind-down or discontinue. Despite limited resources, businesses often make the mistake of trying to continue doing everything they’ve always done, plus all the new stuff – the law of physics suggests that something has to give, so they need to stop doing things that are no longer relevant, or are no longer working.

Making a Difference

When it comes to more direct business coaching, I know from the client feedback I receive that the insights I offer and the way I reframe their situation are as valuable as a re-engineered business plan. By analysing the problem, taking it apart and putting it back together again, it allows me to share my observations and offer fresh thinking – which is sometimes all the client may need to get back on track.

If you feel your own business could use some external assistance in getting back on track, or if you think you may be stuck as to what to do next, please get in touch via this blog.

Next week: The David and Goliath of #Startup #Pitching