To achieve the next level of success with your consulting firm, you have to know what inflection point is next on your route (or, where you want to stop and optimize). Let’s briefly walk through the common stages on your consulting firm’s growth journey.
Transitions are hard. When you think about a typical, personal life journey it’s easy to remember (or imagine), the pain and setbacks, missteps and do-overs at each defining inflection point:
You live with your parents → You live on your own → You (successfully) live with a partner → You have kids in the household → You’re an empty nester → Oh no, your kids live at home again?!
Some gateways to a new stage of life are inevitable. None are easy. You shed a fair number of tears during the lead-up to each inflection point.
A consulting firm’s path to success differs from a personal journey in (at least) three ways:
- The typical stages of a consulting firm’s progress are less widely known
- Consulting firms’ inflection points are more predictable
- You can stop at almost any point, optimize your consulting firm’s current life stage, and say, “That’s good enough for me.”
10 Stages of Consulting Firm Growth
All but the last of the consulting firm inflection points are optional. However, the order of them is important, and if you try skipping a stage you’ll inevitably suffer painful setbacks.
- Do anything for anyone who will pay
- Established a consistent, target market*
- Established a consistent offering*
- Developed a reliable, revenue-generation approach that works for the founder(s)/owner(s)
- Offload delivery of projects*
- Offload management of projects*
- Offload revenue generation*
- Distribute management of parts of the firm (e.g., offices or service lines)
- Fully offload management of the firm
- Step out of the firm
Each stage represents a sticking point that’s surprisingly difficult to escape. Doing more of what you’re doing now or incrementally improving performance won’t lift your consulting firm off its plateau.
To break the grip of your consulting firm’s current stage you have to change what you do and how you do it. And you have to walk away from some of what’s made you successful historically.
For instance, early on you’ll find you have to forego projects with banks, hospitals and lumber yards in order to become the go-to consulting firm for patisseries (i.e., to focus in on your sweet spot).
Later in the game you may find that you, personally, have become exceptional at delivering certain projects, yet you must offload delivery to other contributors for your consulting firm to continue to grow.
There are proven strategies to push past each sticking point. Some involve organic growth, others accelerate progress by acquiring or divesting assets and capabilities
There are also proven strategies to optimize your consulting firm at each stage of growth.
What doesn’t work is flailing around blindly, without a good sense of what’s next in your journey.
Another predictably fruitless approach is trying to jump ahead and skip stages. For example, adding offices before you have effectively offloaded project management is a surefire way to submarine your consulting firm.
As a consulting firm leader, your responsibilities are to know where your consulting firm is and what’s next, and to remember that every inflection point represents a challenging hurdle. Missteps and setbacks are common.
What’s your consulting firm’s current sticking point?
Since you kickstart progress by acknowledging your next step and publicly committing to it, post a comment sharing where you are and what’s next for you.
Text and images are © 2021 David A. Fields, all rights reserved.