Monthly Archives: June 2010

IBM’s recent Global Chief Executive Officer Study, a biennial survey claimed to be of more than 1,500 CEOs (cited in Consultants News, Kennedy Information, Peterborough, NH: subscribe@kennedyinfo.com) reveals that these people have three primary “imperatives” on their minds:

1. Embody creative leadership (take prudent risk, invite disruptive innovation)
2. Reinvent customer relationships (set priority of customer intimacy)
3. Operating dexterity (flexible cost structures and opportunistic capabilities)

I once had to yell at 20 very powerful newspaper publishers in a strategy retreat organized by the American Press Institute that the Holy Grail of the First Amendment did NOT forgive them for sloppy and stupid management. Defending and representing freedom of speech does not, concomitantly, give you leave to abuse your employees or take advantage of your advertisers.

Similarly, I’ve seen irrelevant defenses among professionals akin to the non sequitur of “If the economy is rebounding, why didn’t the Cleveland Cavaliers make the finals?”

One person told me that his extraordinarily annoying propensity to turn a simple question into a verbose and prolix hour’s debate was “who he was,” and represented his uniqueness in life. No, not really, it represents a self-absorbed aberration. These statements are often accompanied by the pseudo-relativism of, “It’s all in the eye of the beholder.” Not quite true, because the habit of picking up your steak with your fingers is an abomination, in anyone’s eyes in any restaurant, unless you have only four fingers and you bark. There are empirical slobs.

“There is more than one way to do this” is another rubric, which is true about getting cross-town in New York, but not about extracting a tooth or wearing a seat belt. “There is often not more than one correct or effective way to do this” might be a more accurate statement. You can say “form’ id a ble,” or you can say “for mid’ a ble.” Of course, you can say the second if you prefer to be incorrect, so there is more than one way, just not the right way. (You imply when you speak, infer when you listen; prone is on your stomach, supine is on you back. You can interchange them, but you wouldn’t be correct.)

“There is more than one way to bill a client,” said a pompous consultant at a pretentious meeting, “and I can earn more billing by the hour than by charging for value.” Well, yes you can, IF you extend the hours way beyond what the client actually needs and/or you simply don’t understand value based billing and do it incorrectly. But, hey, I’m not responsible for your retirement fund, so keep those six-minute billing increments coming.

In a social media age, we can often live under the delusion that anything anyone says is a valid point. But the art and science of educating yourself involves judiciously deciding to whom to listen, and not pompously proclaiming that you’re as smart as the next person, despite the other’s higher levels of expertise, experience, and education.

To be a thought leader, you need more than thoughts.

© Alan Weiss 2010. All rights reserved.

I received this email earlier today:

Hi Alan,

Thought you would like to know that you have been quoted in a response by
Michael Wyland on an ASAE list serve (posted below if you are interested).
Michael did an excellent job about why comparing proposals based on hourly
rates isn’t the right way to evaluate a proposal.

Cheryl L. Wild, Ph.D.
Wild & Associates, Inc.
218 Garfield Ave.
Avon-by-the-Sea, NJ 07717

Sent: Thursday, June 10, 2010 12:00 AM
To: consultantmembers digest recipients
Subject: consultantmembers digest: June 09, 2010

CONSULTANTMEMBERS Digest for Wednesday, June 09, 2010.

1. Consulting thread on ASAE’s EXECSEC
2. Re: Consulting thread on ASAE’s EXECSEC

———————————————————————-

Subject: Consulting thread on ASAE’s EXECSEC
From: “Michael L. Wyland”
Date: Wed, 09 Jun 2010 15:39:15 -0500
X-Message-Number: 1

To all:

The following thread appeared on EXECSEC today. Thought it might be
of interest here. I have reproduced it in chronological order,
beginning with the initial post.

Michael

===============================

Would any of you be willing to share thoughts on how you evaluate
fixed-price cost proposals from consultants? One approach I take is to
estimate the hours I think a project will take and apply what I think is
a reasonable hourly rate, but this is very subjective and has not worked
well for us. I’d welcome any thoughts on how you approach negotiating a
fair price.

Thanks

Bob Thomson, CAE
AUVSI Director of Operations

=================================

Hi Bob -

One good way to create the transparency you need is to ask the
consultant themselves to provide the basis for the amount they are
proposing. In short, imagine a short chart or spreadsheet, driven
either by the names of the participating individuals at the consultancy,
or the project phases. There should be an estimated time amount in
hours or days for each, along with a charge out rate. In this fashion
you are not shooting in the dark trying to presume resource allocations.

This is good for the sake of comparisons – gives you an apples-to-apples
basis for evaluation in terms of pricing, which in and of itself is
valuable, as well as the time commitment, which is useful to see more
deeply into expectations.

While you may have some consultants resist this, that would also tell
you something.

Good luck,

Bill Murray, CAE
President and Chief Operating Officer
Public Relations Society of America
33 Maiden Lane, 11th Floor
New York, NY 10038-5150

======================================

Bob, Bill, and all:

I am an association ED as well as a consultant. My “take” on this is
probably not what you want to hear, but here goes!

I understand the desire to spend as little as possible for any
contracted services, including consulting services. However, trying
to reduce a fixed-price quote to an hourly fee does little to guide
the decision-making process. That may be why such efforts in your
past have not been very successful.

With a nod to Alan Weiss (“Million Dollar Consulting,” et. al.),
let’s assume that we’re talking about consulting – adding value to a
client’s organization, rather than contracting – providing alternate
labor resources to a client’s organization. Contracting for labor is
much more quantifiable and measurable in terms of “deliverables,”
hours, and other inputs. It’s a commodity that can be selected,
generally, based on price with little effect on quality and,
therefore, client mission.

Let’s also assume that the client’s goal is to maximize value – get
the most “bang for the buck” from engaging a consultant. If the
client’s interest is in minimizing expense without significant regard
to outcomes, then quality becomes irrelevant and we’re back to a
contracting/commodity scenario. [BTW, many consultants, including my
firm, have walked away from prospective clients *willing to engage
us* when this inattention to outcomes becomes apparent. More on this
in a moment.]

A consultant’s “stock in trade” is their expertise, their experience,
and, often, their ability to extrapolate and see connections (leading
to solutions) where others do not. Their value in the marketplace is
their ability to use these gifts, among others, to add value to their
clients’ organizations.

Since the barrier to entry for consulting is very low, there are
consultants of all quality and effectiveness levels in
practice. Some work for large firms, some work alone; some have been
in practice a long time as a full-time occupation, while others
“moonlight” from full-time paid employment or as “fill-in work”
between employment opportunities.

There’s a John Ruskin quote that used to hang in every Baskin-Robbins
ice cream parlor: “There is hardly anything in the world that some
man cannot make a little worse and sell a little cheaper, and the
people who consider price only are this man’s lawful prey.”

Unit price is a very poor indicator of quality or effectiveness,
especially in a largely unregulated, difficult to measure
(qualitative, not quantitative) market. So how does one assess
successful negotiation?

Focus on value rather than on price. Select consultants based on
their reputation and body of work. Assess their willingness to work
*with* you rather than either for you or above you – neither high
priests nor sycophants make effective partners. Do they understand
and identify with your organization, its challenges and
opportunities? Do they seem able to deal with the people – not just
the issues – involved in the process and solution? Do they represent
fair value for the money, time, and personnel you can afford to
devote to the project? Do you have a sufficiently high comfort level
to believe the consultant can deliver value to your organization —
in other words, is there a good “fit” between you?

As I said earlier, a consultant’s “stock in trade” is intimately
involved in their “body of work” and resulting reputation in the
marketplace. Successful consultants know better than to risk their
reputation for quality work in order to secure a fee from a client
who does not share that priority.

In my firm, we seek to be neither the low-price resource now the
high-price resource. We seek to be the high-value resource for our
clients, and we seek only clients who share that goal. After twenty
years, we have almost never had a client engagement where cost was as
major concern, either to the client or to our firm. Where cost was a
concern, we either worked on the value proposition or adjusted the
scope of work to meet the client’s limitations. In a very few cases,
we recommended they seek help elsewhere and wished them the best of success.

Michael L. Wyland
Sumption & Wyland
818 South Hawthorne Avenue
Sioux Falls, SD 57104-4537