David A. Fields Consulting Group The Secret Sauce: What Makes Some Consulting Firms Flourish While Others Flounder?
Two consulting firm owners reached out to my firm. You’ll find the difference between them enlightening.
Clarissa has a clipped, lilting voice that quickly reveals a sharp mind and passion for consulting. Over five years, Clarissa’s firm grew from a handful of people to a bustling beehive of projects that boasts 70 employees
We discussed how to continue her firm’s growth over the next five years.
Thad reached out too. He attended my alma mater (go Tartans!) and, like Clarissa, he’s a sharp cookie. His little firm consists of three people scattered across three East Coast cities, and he has struggled to maintain the practice for five years.
Rapid growth feels like a pipedream to Thad, and we discussed creating a more stable base that generates consistent, high income with less stress.
Is your firm more like Clarissa’s or more like Thad’s: growing at 400% per year, or stalled at the same level?
Why do some firms burst out of the gates at the speed of sound and accelerate year after year, while other firms stumble and muddle along? Clarissa’s and Thad are both smart and hard-working, so are there identifiable differences between their firms?
Yes.
Consulting is a simple, four-part business.
Your consulting firm’s growth and profitability is constrained by your weakest link in the four-part model. Clarissa’s firm rocks all four parts of the consulting firm model. Thad’s firm doesn’t.
But that’s not particularly illuminating, is it? So, let’s drill down into the model a bit, differentiating what supports growth vs. what drives the growth of consulting firms.
Profitably Create Value
Your ability to Profitably Create Value for clients supports growth.
Outstanding delivery is critical because your reputation precedes you. At least it should. Some consulting gurus believe that if the quality of your work is high enough, your deliverables are the only marketing you need.
Nonsense.
Without powerful delivery, your prospects are limited; however, creating value in and of itself will not transform Bob’s Consulting and Tire Emporium into McKinsey & Company.
Infrastructure
Infrastructure also supports growth, with one exception that I’ll note in a moment.
Your consulting firm’s future depends on solid infrastructure elements such as systems, organization design, culture, IT, partner management, compensation approach, and so forth.
Clarissa’s firm successfully traversed the infrastructure hurdles between solo shop and 50-person firm. Thad’s team has struggled with adding partners and never connected the vision to the organizational details.
The exception: Infrastructure drives growth in consulting firms simultaneously facing overwhelming market demand and a very limited pool of qualified consultants. For firms in that situation, talent management, including hiring, becomes a growth driver.
Strategy
Strategic Health drives growth, particularly one element that bridges Strategy and Winning Clients: Impact.
Impact—approaching the Right People with the Right Solution to the Right Problem at the Right Time—is the single biggest driver of rapid growth in consulting firms.
Nailing your firm’s Impact is like hitting a vein of precious ore when you’re mining. All of a sudden, your hard work produces outsized rewards.
Clarissa’s Impact is excellent. Thad’s Impact is woefully lacking.
Winning Engagements
Winning Engagements, unsurprisingly, drives growth. However, if you look at the Six Steps to Unlimited Clients (a well-proven approach to business development, outlined in this book), you’re led right back to Impact.
Without Impact, your investments into marketing, visibility-building, and outstanding delivery will produce modest growth at best. Even top-notch relationship building will run out of steam without Impact.
Net: what’s the secret sauce; the most common, most obvious difference between consulting firms that flourish and consulting firms that flounder?
Impact.
If your firm is currently stalled or struggling to achieve your desired growth rate, addressing your Impact will take discipline and courage. You may have to walk away from your current target, focus area or offerings, and that can be a scary, bitter pill to swallow.
On a 1-10 scale, how strong do you think your firm’s Impact is? Do you agree that improving your Impact will help you grow, or are you facing a different constraint?
Text and images are © 2024 David A. Fields, all rights reserved.
Thad and I can share a coffee, I’m a 5 with my timing my focus to be at the right time with the right people. Time to refocus (pass the creamer will you please?)
Thad’s a good guy, Bill, and you’re in excellent company. Impact is one of those concepts that’s very easy in theory and very difficult in practice. It truly takes persistence and a dogged willingness to stay Right-Side Up (or a sizeable heaping of good fortune) to create a firm with high Impact if you didn’t stumble into it from the outset.
I appreciate your candor and willingness to share, Bill!
Great thought provoker!
Thank you for telling me your reaction, Doc! Always appreciated.
What a great article that so succinctly boils everything I’m working on with Maria Isabel on the DAFCG team down to the 3-minute read!
Brandon, you and Maria Isabel are up to great work! Thank you for the reaction and the feedback, which are very much appreciated.