In the early days of growing your consulting business, you almost certainly personally sold and then delivered all the work. Indeed, you may still be doing that now.
But running a one-man consultancy will always limit your growth. While you’re delivering, you’re not selling – so when the project finishes you have no billable work to jump into next. The obvious solution is to start sharing sales and operational duties across your team. But as soon as you spread the load, a number of issues are likely to arise.
You bring other people in to deliver the project, which frees you up to go and win the next client. However, if you don’t stay connected to the original client then you run the risk of not winning any follow-on work. And do not assume the consultant will identify and follow through on opportunities to upsell or cross-sell additional work. They’re not as focused on business growth as you are. As a consequence, over time, your average client value declines. You find yourself either being drawn back into client work, or needing to win more and more new clients to maintain growth.
The simple fact is that people buy one of two things: people, or insight and it’s usually both. Put a sales person in a room with a senior decision maker to sell non-productised consulting services and you are asking for trouble. The fact is that the best people to sell consulting services are those who do the work. The trouble is that so many consultants see sales as a dirty word.
You may well end up with a separate sales team and delivery team. There are positives and negatives to this structure. Some of the positives include:
However, these strengths are often counter balanced with a number of pitfalls:
Once your business has reached a certain size – typically £1.5m to £2m – then the ideal operating structure looks like a pyramid. You should have an Account Director (AD) sitting at the top, who is then supported by a consulting team tiered by experience.
The AD should be one of your most senior people, someone with both sales and operational experience. They are responsible for the on-going client relationship – but not the delivery of the project. Their responsibilities include understanding the findings of the delivery team, making senior connections within the client, and exploring additional opportunities to add value to the client – selling, in other words.
Before a deal is closed, the AD engages the most senior operational consultant who will be leading on the project to sign off on the deal. This safeguards the profit of the project. It also heads off the problem of your operational team claiming that the work was under-sold and can’t be delivered at the target margin.
For each new sector your business grows into, you create a new pyramid, with a new AD at the helm. Ideally, the AD will have P&L responsibility and a reward structure to reflect the level of autonomy you are giving them.
But the key to sales and operations success isn’t just about structure. Coaching and mentoring your AD is essential if they are to lead an effective team and deliver results for your clients. So spend some time understanding the behaviours and mind-sets you want your AD to display. Then polish up your own coaching skills and get to work.
Get it right, and you’ll free up time to do the one thing you need most for your business to continue growing: leadership.
Whilst you may not be considering a sale at this time, it is highly likely that you will be approached by a potential acquirer. This webinar will cover the key “Dos” and “Don’ts”.