Learnings in leading a Consulting Practice – Part I

I’ve been publishing a few posts around leadership and my thoughts on it. This time, I thought I’d take a bit of a turn and focus on the industry Assurity is in – Professional Services. I believe that the PS industry is ripe for disruption, and we’ve been working to try and stay ahead of this disruption curve over the past year and a half.

This is my small contribution of what we’ve tried in Auckland at Assurity, and over the next few weeks, I’ll be sharing on the following four lessons/experiments we’ve tried:

  1. Value Based Engagements over Time and Materials
  2. Climbing Wall over Climbing Ladder – Rewarding multi-skilled careers
  3. Impact over Scale – How we select our work and where we aspire to grow
  4. People over More Profit – What guides our decision making

This week’s article focuses on the first;

Value based engagements over Time and Materials

Being a new-comer to the PS industry, I found the challenge of balancing time that the team spends on billable engagements vs time they have off-tools to develop themselves, connect with the organisation, and meet with fellow colleagues to be a difficult tension to manage. This tension is probably caused by my strong belief in creating a work environment where people are growing and getting opportunities that they wouldn’t have elsewhere – and this is something very difficult to create if staff are only working on client engagements for eight hours a day.

The other predicament that I faced was the fact that as individuals progressed through an organisation, they’re “allowed” to have more un-billable time, or worse, they have to complete additional leadership duties on-top of their billable time. Whilst I understand the drivers behind this, I couldn’t help but think there has to be a better way. There is huge value in the ability to develop yourself, meet with colleagues (often to discuss and solve complex challenges on your current engagement), as well as take time away to think about a client engagement.

For the past 2  years, we’ve been trailing a couple of different models, that focused on freeing our consultants from being tied to an eight hour billable day, whilst increasing the value the the client gets from an engagement. At first it seemed impossible, but over time, through lots of testing and experiments, I can say that over 70% of our current engagements with our clients are value based, not tied to time, and our customer net promoter score in Auckland has fluctuated between 50 – 100 over the last 2 years.

The general principles we have adopted that make value based engagements successful are:

  • Focus on the value delivered
    • To do that, you need to spend more time shaping up the engagement before it happens. T&M often makes it easier to body shop someone, simply satisfying the transaction of a need with a person’s skill set, then leaving the individual to figure out how to add value. We’re spending more and more time up-front with a client, running discovery workshops without charge, and understanding their vision, strategy and goals for the engagement before starting.
  • Deliver work in a transparent and iterative way
    • Probably the biggest reason why value based works for us, is that we structure our delivery in monthly sprints. Each month the consultant and the engagement owner meets with our client, plan and review goals for the month just like a sprint planning meeting, and then do a review and re-plan at the end of the month. This provides transparency, and allows us to work in a much more trusting and flexible way – if something goes wrong we adjust, it also means we don’t spend loads of time up-front locking in the deliverables before we start!
  • Mutual trust
    • Making this work requires the leadership of the consulting firm to look at things with a growth mindset. Often, we’ll come up with really innovative ways of solving a particular hurdle in an engagement, and at first these ideas don’t always look commercially favourable for us. However, being able to put aside commercials and focus on ensuring the client is recieving value, takes bravery and guts. We have definately found this pays off in the long run. As we’ve taken more of this approach, we’ll often have clients try and advocate on our behalf on our need to charge a certain amount to make sure it’s fair for us! It’s been very enlightening, and I would really call these types of engagements a true partnership.

Is this something your organization has faced, and what have you tried? I’d love to hear your thoughts.

 

Comments

  1. Aldo Rall says:

    Hi Dan

    I would also add the following:
    –> Stay abreast with the evolving Context:
    Contexts evolve daily and if you skip a day away from that relevant context, it is easy to fall behind and miss out of how the context has moved on. Even the definition of value according to the customer/ stakeholder can change overnight! Finding ways to keep up to date with the evolved context can be difficult in managing a professional services organisation. Reports used to do the trick, but in many cases (and increasingly so), there are very little value in having them. Sometime even the Big Visible Charts (BVC’s) does not give you the full picture of understanding the change in context. In many cases, it helped me to have regular check-in conversations with the client/ team/ consultant on site. The frequency and formality will be dependent on various factors in the relevant context, but that is something that will work out in the wash.

    • Thanks Aldo – Yes totally agree. This is where it’s so important to have the right engagement structures set up, because context changes not only at the level in which our consultants are delivering the work, but also at the levels above with regards to what the ultimate sponsor is looking for vs what he/she was expecting a month ago.

  2. Value-based definitely resonates with me. You talk about monthly sprint-like engagements – do you fix price for this period after negotiating the value the proposed scope with your clients? When do you decide whether or not it’s worthwhile continuing for another month?

    • Dan Teo says:

      Hi Eduard – Thanks for the comment. Yeah generally when we do the commercials, it is for a period of time for commitment. Say 3 – 6 months. We might have general outcomes for the first 3 months, but beyond that things always change.

      Were flexible in that the client can give a months notice (one sprint) to flag theyve decided to stop or recieved enough value.

      Each month is a fixed fee, and generally in the fortnightly catch up with the client we will get a feel if theyd like to continue or pause.

      Hope that makes sense!

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