peripheral and secondary value do you see accruing to this project?11 What will you be proudest of at the conclusion of the project?
12 What will be the legacy of this project?
13 What will it mean to be on the leading edge, the thought leader in the field?
You can create another bunch of questions if you like. My point is that you have to be prepared to discuss value with the buyer very early, prior to discussing methodology, options, timing, or, heaven forfend, fees.
Another fascinating aspect of MBS is that buyers have egos, which can greatly affect the buying process if you allow them to (and you want to allow them to, believe me). No buyer in my experience has ever said, “Okay, we've managed to secure the cheapest consultant we can find for our sales development. He was sitting at home with nothing to do, waiting to go to his normal day job, but I've persuaded him to work with us for $250 a day. We can afford that much, so let's use him as best we can.”
Alanism: About 20 years ago there might have been a dozen cars commonly available in the U.S. that cost in excess of $100,000. As you read this there are over 30. Don’t use the wrong metric or an old metric to judge success.
Buyers are much more apt to say this to the troops: “Listen up. I've hired the finest consultant in the country on sales development. She graciously agreed to postpone a vacation to be with us. She's very expensive but worth every cent if we use her right. Now pay close attention, and plan to work with her closely.”
When a CEO is in trouble, that person will call either someone who has clearly helped in the past or, if no one comes to mind, a “name” or a “brand” such as McKinsey or Andersen. No CEO wants to appear before the board and introduce a consulting firm without a track record or without a recognizable name. The executive ego will not permit it (“This person is taking advice from someone I've never heard of?”). The same holds true for every buyer. People believe they get what they pay for—and with their careers and businesses, they want the best.
Consequently, does your image fit the MBS? Do your materials bespeak a successful consultant? Are you proud of your web site? Is your appearance professional and that of a peer to the buyer's? Intellectually, are you able to interact and even “push back” to demonstrate value in the earliest meetings? Are you building a brand and cementing your position as an expert? You can't start this too early, and you can never stop doing it.
Value is often a function of not agreeing, not being supportive, and not being a “yes person.” How willing are you to disagree, question basic premises, and refuse impossible expectations?
Finally, the MBS creates rising expectations, which means that the buyer is prone to improve his or her condition through perceived high-value assistance. Why purchase a less expensive model when the (perceived) better one is only a few hundred dollars more per month on the lease payment? Why take a basic consulting approach when a more sophisticated one is available?
That presupposes that a more sophisticated one is available, meaning that higher fees will always depend on the buyer's seeing a set of options. The ultimate consultant always provides options for the client's review so that the buyer can determine just how much value is available in terms of differing investments.
Offering options—a choices of yeses—moves the buyer psychologically from “Should I do this?” to “How should I do this?” You've just increased your odds of a high-fee sale by at least 50 percent.
A consultant once asked me, “Aren't we ethically compelled to provide every possible assistance to meet the client's objectives?” Unequivocally no. We must meet the client's objectives. But if the client's objective is, say, “increasing sales closing rates,” then conducting industry-wide benchmarking studies or longitudinal analyses for two years or 360-degree feedback on four levels of management represents value above and beyond merely meeting the objective of “increasing sales closing rates,” for example.
Offer a client various “value packages” that help the buyer ascend the MBS ladder. Over the course of my career, buyers have chosen my least expensive option less than 10 percent of the time and my most expensive option over 35 percent of the time.
How much money are you leaving on the table? If it's $50,000 a year, in 10 years that's half a million dollars that can never be recovered. If it's $100,000 annually, just $10,000 on 10 projects a year, you are going to lose millions.
CHAPTER ROI
Supply and demand is for commodities, not consultants. Your supply will always exceed demand, and that tells you something about the inherent stupidity of this bromide.
There are legitimate and obvious ethical reasons not to use time units for billing bases.
Profitability should not be arbitrarily delimited by finite measures of time, materials, deliverables, or costs.
Other professions do it incorrectly. Why would you want to emulate them?
The buyer is educable, and you are the teacher. Don't abdicate that huge responsibility.
The average attorney's income is barely above $100,000 annually. Successful people drive cars that cost more than that. What model are you using as your income paradigm, and what model car are you driving?
NOTES
1 1. McGraw Hill, 6th edition, 2021.
2 2. The first management consultant was probably Frederick Winslow Taylor, the founder of time and motion studies and the author of Principles of Scientific Management (which wasn't so scientific at all). He worked in the early part of the twentieth century, his oeuvre being published in 1911. The first management conference was held in 1882 by the German Post Office. No one showed up.
3 3. I know there are many of you saying, “Yes, but honorable people wouldn't do that.” Maybe, but honorable people regularly cheat on their taxes, cross the street against the light, and rip off the phone company simply because an opportunity presents itself and the incorrect action is only a brief rationalization away (what's the government done for me lately, there's no traffic that I can see or can't outrun). We need to eliminate temptations that lead to unethical behavior, not expect that everyone will act honorably.
4 4. Of course, major organizations need business plans to show the shareholders that management is fiscally responsible, but they also put out beautiful annual reports that have nothing whatsoever to do with the actual business. No one should manage against a business plan for fear of hitting it and missing untold opportunities.
5 5. https://www1.salary.com/Lawyer-Salary.html
6 6. The American Institute of Architects was a client of mine for several years, and this was perhaps the major concern of the association and the
