I’m going to walk way out on a limb and assume you want to grow—financially, professionally, and personally. Okay, it wasn’t much of a limb. More like lounging in a lawn chair while looking at the tree. Regardless, the gifts discussed below apply to any endeavor. From building your firm to concocting tastier dinners.
Let’s throw a couple of ideas in the blender and see what happens. The first idea: To improve (a.k.a. grow) you need to know what to do and you have to be able to do it. Second idea: Good is the enemy of great; i.e., if you settle for good-enough you’ll never achieve audacious goals.** Push the ice-crush button and we come up with the following:
Most quadrant charts encourage you to migrate from “bad” boxes to the best box. But in this case there’s a crazy Danger Zone lurking in the middle. The excerpt below from a recent proposal I submitted illustrates the peril.
“For your purposes bad data would be worse than no data. Lacking any data you will proceed cautiously, test your way into decisions, and find errors in execution fairly inexpensively. However, with bad data you may proceed full steam ahead in the wrong direction, leading to very expensive errors.”
The Danger Zone is when you think you know what to do, but you actually don’t or, worse, your limited knowledge is pointing you in the wrong direction. The other component of the Danger Zone is when you think you can do something well (or well enough) but you actually can’t (or shouldn’t).** For example, most consultants should not squander precious time on bookkeeping, routine analysis, or posting social media.
What you need are the two gifts that will eject you from the Danger Zone: Perspective and Reliable Information. Sounds easy and obvious. So why don’t we, as consultants, have perspective and reliable information?
- It’s difficult to gain perspective when you’re constantly ping-ponging between delivering projects and scrambling for new business. Where in that mad dash for projects or delivery is stepping back to build long-term growth?
- You can’t see your own blind spots. The old bromide is true: “You can’t see your label from the inside of the bottle.”
- Reliable information is scarce when data is non-existent. If you don’t track anything, you won’t know where you are. Since most consulting companies track little beyond their revenue it’s no surprise there’s a paucity of reliable information.
- Information is of little value unless you have benchmarks or experience. Let’s say 50% of prospects you reach out to call you back to learn more. Is that good? Without benchmarks, you’re living in the Danger Zone.
Fortunately, obtaining the gifts of Perspective and Reliable Information is pretty simple: enlist outside viewpoints, track your results and access benchmarks.
For instance, mastermind groups are a useful source of perspective, as are experts, advisers and mentors. The right adviser(s) will also be able to tell you what to track and will have benchmark data.
Are you inhabiting the Danger Zone on your business? Probably. The most insidious aspect of this condition is that we rarely realize we’re in it. We think we’re lounging in the lawn chair when we’re actually teetering on a high limb.
Take an honest look at your consulting practice. Where do you think you’re adroit but, in reality you lack reliable information and haven’t been soliciting perspective? Please post below one Danger Zone you see for your business. (Don’t worry, we’re all supportive in this community.)
Text and images are © 2023 David A. Fields, all rights reserved.
The danger zone is insidious and not having a good grasp on income projections or project amounts makes planning (and living comfortably) next to impossible. I wish I had more certainty and confidence in my ability to improve things.
Karen, thanks for being willing to share this. You’ve brought up an interesting take on this. Usually folks in the Danger Zone are oblivious and living in ignorant bliss. What you’ve pointed out, though, is that living in the Danger Zone increases uncertainty and that, in turn is darn stressful.
Consulting tends to be an unpredictable business and that’s especially true for solo consultants like you. What I’ve seen is that when a consultant KNOWS her offering hits a urgent, pervasive, expensive market need, then confidence surges. After that it’s merely a question of executing on good client acquisition process. If you’re struggling, go back to your offering and make sure it’s strong.
Let me know how it goes.
Well, as the CFO of an accounting company I can definitely say that we track a LOT beyond our revenue, and we make great use of that data. But I’m not sure where I haven’t been soliciting perspective. Marketing, sales, HR, vision, operations, finance, customer service – we’re working hard on those areas but I have no doubt we are missing some things that experts in those areas would identify. We’ve been soliciting perspective, but we could always solicit more perspective.
We started a post-project QA process recently and I had another such conversation yesterday – got AMAZING feedback, plus trends are starting to emerge regarding what our clients adore the most when working with us.
Jaime, you’re a paragon of information and perspective collection! What data are proving to be most helpful in growing your practice and what data are just “nice to know?” Excellent job with the post-project QA. You could extend that by having a QA process that runs throughout the project. (On my corporate site and in The Executive’s Guide to Consultants there’s a Project Health Checklist that you might find helpful.)
The data that has proven must useful to us includes:
* Top Sources of Business (we were started to learn the reality of 2 out of our top 3!)
* Team Perks-to-Earnings Ratio (we make sure to set aside a certain % of their gross earnings and offer certain perks)
* Gift Recipients vs. Gross Revenue by Client (we make sure our top clients receive thank-you gifts and make sure the gift spending is commensurate)
* Client Acquisition Report (at what rate are we earning new business, how is that changing over time, and are we happy with that or do we need to take action?)
We’ll be tracking Pipedrive stats as soon as we use it more consistently in real-time.
As for “just to know:
* We monitor our Current Ratio but no changes are needed; we have a plan to improve it which we are following
* I created a client-by-client earnings summary report for one of our employees. She was asking some questions recently and I thought she’d like to know how much she has earned for each engagement on which she has been deployed.
I hadn’t thought of mid-project QA. I wonder what to ask. Hm!
OH MY GOSH this set of worksheets & checklists is AWWWWWWESOME! I recognize a lot of these from the book. Here they are larger and interactive. And I found the checklist you mentioned. THANK YOU!!!
Glad you like the worksheets, Jaime! Yes, they are drawn from The Executive’s Guide to Consultants, but are in a much more usable form. Let me know which worksheets and checklists work best for you and how you are adapt them for your practice.
Oops, that’s “startled” in the first bullet point.