Plenty of athletes earn fame and recognition for their brilliant, first year (a.k.a., their rookie year). They’re showered with champagne, praise and confetti… which sticks to the champagne—that part wasn’t well planned out.
Far, far fewer of those phenoms are known for their extraordinary, enduring career. Why? Because they make a rookie mistake. The same mistake your consulting firm may be making.
The rookie mistake is believing that the core asset or capability that carried them to success in one year will be enough to guarantee success in future years.
Your consulting firm has one, overarching, invaluable asset that determines your success from the start. It’s not your IP, or your offering, or your process, your profiteroles or even your people.
Your consulting firm’s single, most important asset is your network of deep, trusting relationships with decision makers.
And, just like the rookie, if you expect the relationships that carried your consulting firm in prior years will continue to sustain you in the future, you’re likely to run into an unpleasant dry spell.
During your consulting firm’s formative years, your connections with a few well-funded executives in need of your offering are all you need to quickly gain traction. Business development can look downright easy if you launch your firm with a handful of clients strongly connected to your leadership team.
In fact, I have worked with consulting firms that built very substantial practices from only one or two clients. For a few years.
Alas, all commercial relationships end at some point. Some may flicker on and off for years, and a precious few may last over a decade; however, most consulting relationships produce revenue for a limited time.
As a result, most small consulting firms exhaust their initial relationships within seven years of opening. Then the firm hits a hard wall, and it’s far less pleasant than peeling off sticky confetti.
You can avoid this rookie mistake by following a fundamental rule of consulting firm management:
The Rule of Replenishment
You must add at least 15% new contacts to your consulting firm’s Network Core every year.
Your Network Core consists of influencers and decision makers with whom you have a strong relationship.
Athletes whose careers last decades are constantly improving their most fundamental skills. Likewise, to create a profitable consulting practice for the long term, tirelessly build your consulting firm’s Network Core.
If you always meet or exceed the Rule of Replenishment, your consulting firm will enjoy perennial all-star status.
What are you doing to follow the Rule of Replenishment?
Text and images are © 2023 David A. Fields, all rights reserved.
This is a good reminder – especially when busy having won a couple of pieces of work, and head down delivering joy to my clients – need to set aside time each work for pro-active networking, making new friends, and topping up the pipeline for future relatonships
You’re right, Ben. When you’re fully occupied with work is when you need to push yourself to continue extending your network.
Plus, during busy times, you know you’re not selling (in fact, you may even resist winning more business), which means your outreach can be selfless–as it should be all the time, of course.
I appreciate you sharing your reaction, Ben. It means a lot!
I have found out(the hard way!) that not only is it important to add clients to your core, it is equally important to cultivate additional contacts within these client companies. In the past, I had focused primarily on one person in the client company only to have them exit the company, leaving me scrambling to reconnect with someone else. I lost a few key clients this way until I wised up!
You’re not alone in learning that lesson the hard way, Dan. The number of firms that have told me they hit a wall at around 5 years is almost alarming. The good news, of course, is that you’ve learned the lesson and you won’t be caught out again.
Thank you for sharing your experience. It’s an excellent case study, Dan.
I started to feel the effects of this during this year which is my third year of independent consulting. I then bought your book and realized how I needed a disciplined outreach approach and to understand my network core. I am now starting to grow contacts (and secured a client from a contact I never thought would be a source of one).
Question for you…if you add 15% each year and there’s only the same bandwidth for outbound contact how do you choose which 15% to drop? If I had chosen only by how often I’ve actually had a conversation (rather than just outreach) with a contact, I would’ve dropped the one contact who was the source of my current engagement. I’m finding it really hard to cut names from the network core list.
Good on you for taking a disciplined approach to growing your Network Core, Rick.
As your Network Core expands, you’ll focus more on more on A1s. The Bs you’ll reach out to are “High Bs” that you’ll transform into As. The 2s you’ll reach out to are super-influencers who can connect you to excellent 1s or many, many 1s.
As you focus more narrowly on A1s (and you continue to add A1s), will you potentially miss conversations with peripheral people who could have sent you business? Absolutely. Does that matter? Not particularly, because your A1s drive so much business, so efficiently, that the occasional piece of “lost” business just isn’t a worry.
Great example and question, Rick.
Very helpful! Thanks. I’ve only done the “Define your network core” exercise once so far. What I’m reading is that it needs to be a periodic step to “re-determine” the ABC/123 ratings. Then I’ll use that instead of contact frequency to define my network core and outbound contact plan.
Exactly, Rick. Your relationships change over time. Influencers become decision-makers, and your conversations ebb and flow. The best way to keep your Network Core updated is to regularly work through it as part of your outreach process.
This article is a great reminder of my weakness! While my business is growing, I realize that after all these years, I do not have a clear networking strategy and in all honesty, I have no clue on where to start!
Alyson, you start by recognizing that you need a clear networking strategy, and you’ve done that! The best place to start is to create an easy outreach ritual for yourself that you’ll follow. Maybe that’s a couple of calls a day to people you know.
You’ll find that segmenting your contact list is also a very valuable exercise, albeit a challenging one.
I’m glad you told me what’s in your way, Alyson. That’s very helpful!
David, can you clarify the 15% metric? 15% of what? Take 15% of the core network and add that many new core? or Take 15% of your entire network and add that number to the core?
Fair question, Debbie. As a rough guideline, you’re shooting to eventually have 300 A1s–that will easily support an 8-figure consulting firm. Even 100 A1s will drive a very healthy business. With that in mind, you should be constantly adding to your Network Core and building your Bs into As, and leveraging your 2s to meet 1s.
As far as the metric goes, 300 in your Network Core is a pretty good benchmark, and if you can add 45 each year to replace the 45 who drift off, you’ll be doing your consulting firm a great favor.
Thanks for the question, Debbie.
Basic question: What is your definition of an influencer?
Excellent question, Don. An influencer is someone who can introduce you to a decision-maker. Some influencers can create a direct connection between you and the decision-maker. Other influencers may expose you to decision-makers (e.g., via their podcast or recommendations).