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Where Should Your Consulting Firm Invest for Growth? The Answer is…

If you want your consulting firm to win more clients and deliver higher profit with less labor intensity on your part, where should you invest in the coming year? Popular candidates include development of virtual offerings, lead generation programs, and dark-chocolate covered espresso beans.*

There’s likely a more valuable investment.

Before you read my recommendation, shoo your inner skeptic out the door and prepare to fend off plentiful excuses.

And to help you mentally prop your mind open, remind yourself of the two most important activities your consulting firm performs; i.e., the Consulting Cycle:

Your consulting firm completes other tasks, of course, that keep your firm’s Consulting Cycle spinning. All those other tasks comprise your Infrastructure.

Strong infrastructure frees your most important assets (i.e., you, other leaders and consultants) to spin the Consulting Cycle to new heights like a fireworks girandole.

Your goal is to equip your consulting firm with a massive bias for action.

You achieve that goal by removing any friction that impedes your consultants’ power to win engagements and provide massive, referral-worthy value.

That’s why, if your consulting firm is like most small practices (i.e., under $100m), you should invest much more in your infrastructure.

More specifically, you should invest in low-level staff whose responsibilities wander the border between administrative and consulting tasks.

Small consulting firms consistently under invest in administrative support for their consultants. Perhaps because many consulting firm leaders take (misplaced) pride in announcing, “We operate a very lean organization. We minimize our overhead costs.”

Yes, many of your corporate clients are bloated with administrative overhead. Your consulting firm is not.

A decent rule of thumb is to support every dollar of consulting revenue with 10-15 cents of direct support staff.

In other words, a consultant in your firm who delivers $500k in consulting revenue should receive a $50k-75k support resource.

(Direct support staff excludes other infrastructure costs such as your bookkeeper, legal counsel, etc.)

You’ll find the 10-15% ratio is difficult to maintain—not because the cost is high, but because your consulting firm’s productivity will expand so quickly.

Your well-supported consultant will become 30-50% more productive. Meaning, she can deliver (or sell) $750k in revenue.

Very small consulting firms often resist investing in low-level support. Larger consulting firms forget to backfill as their low-level resources mature into full-fledged, value-producing consultants.

Low-level staff works particularly well in small consulting firms for three reasons, only one of which is obvious:

  1. You offload the many, many non-productive activities from your most valuable resource(s).
  2. You onload many new, creative, value-producing activities. It’s amazing the possibilities and opportunities an extra pair of hands creates.
  3. You enjoy the sidekick effect (explained in this article), which generates much greater discipline, resilience and stick-to-itness.
  4. (Bonus reason – the low-level support can monitor essential supplies and keep you hopped up on cocoa products.)

In the U.S. you can find excellent people with the right skill sets for $50-75k/year. Often less. You can also split a full-time person between two consultants who collectively deliver $500k.

Bottom line: if you want breakthroughs in the coming months, invest in support for your consulting staff and yourself!

What has your experience with support staff been for your consulting business?

  1. Natalie
    December 23, 2020 at 6:36 am Reply

    I couldn’t agree more! I started my career as a lawyer in a big firm and we were trained to focus on money generating work (legal work). But now I really get it – for example, if I’m spending 4-6 hours a week scheduling or drafting retainer agreements that’s 4-6 hours of business development that didn’t get done.

    So I spent a significant amount of time on strategic planning to, in part, identify an ideal support structure. I’m claiming an explosion of amazing work for my firm in 2021!

    Thanks for your easy to digest approach…your book really helped me get my business off the ground last year!

    • David A. Fields
      December 23, 2020 at 6:57 am Reply

      Congratulations on your business taking flight, Natalie, and thank you for the inspiring case study. The explosion of work sounds exciting–particularly if it’s not accompanied by an explosion of your time delivering the work!

      Please keep me and the rest of the community up to date on your progress in the coming year.

  2. Buyan Thyagarajan
    December 23, 2020 at 7:58 am Reply

    Hi David, I agree with the support staff but we are not clear on task delegation. We have a small team of 50 consultants who continue to do crm consulting work. We also have folks on finance but struggle with follow ups and content creation work. Is that an area a support staff can add value?

    • David A. Fields
      December 23, 2020 at 8:08 am Reply

      Support staff can absolutely help with follow-up activity and with content creation. Your support staff can, for instance, remind you to follow up, tell you what to follow up about, draft follow-up communication and even, in some cases, take care of the follow-up completely.

      Similarly, support staff can conduct research for content creation, draft content, edit content, post content, find and coordinate distribution channels for your content and more. There are content agencies, which demonstrates that you can outsource content creation completely.

      Thank you for the excellent questions, Buyan, and for your willingness to share them here!

      • Derek F.
        December 23, 2020 at 10:41 am Reply

        Buyan – There are three legs to an organizational stool: People, Process, and Tools. David is absolutely spot-on about the need to have the right people at the right levels doing the right work. Consultants should be generating income. Lower-level staff should be supporting that income generation. It sounds like you are struggling with process and tools. Process is the way you accomplish your tasks. Tools are what enable your processes to work. I would suggest that if you have the right people assigned to the right processes but your aren’t getting the right results, that you look at whether you have the right processes in place and whether your tools are supporting those processes and the people to be successful.

        • David A. Fields
          December 23, 2020 at 10:55 am

          You go, Derek! Right on. The one nuance I’ll throw in is this: many consulting firms start with processes and tools, when they’d be better off starting with people. When you have the right people, those people can help develop/fine-tune the processes and tools.

          Thank you for a very insightful addition to the conversation, Derek.

  3. Bob Brown
    December 23, 2020 at 8:51 am Reply

    Interesting perspective. Our organization just decided that the consultants/business developers would take over the input and data entry duties, and run reports, in our CRM platform since they are closer to the customers. “A time saver.” A lot of training on the new CRM, and then time spent inputting data.

    • David A. Fields
      December 23, 2020 at 8:59 am Reply

      Bob, one of the three keys to success for a consulting firm CRM is using an administrator to maintain the CRM. If maintaining the CRM is assigned to the consultants, the system will quickly become out of date or it will be “gamed” rather than used well. A CRM is supposed to help those who sell, not be a burden.

      Two realities my team knows from our work: 1) it’s surprisingly difficult to convince most firms to use administrators to maintain their CRM; 2) firms that use well-trained administrative support to maintain the CRM enjoy massive benefits compared to firms that push CRM maintenance onto the consultants. (There are a few reasons for the increased success… fodder for another article!)

      Thank you for sharing where your firm is, Bob. It’s extremely helpful perspective for me and other readers.

      • Julie-ann Pina
        December 23, 2020 at 11:38 am Reply

        David, I’d love to hear more about the how of an admin maintaining the CRM. Specifically I think I need to improve how I share the info for the admin to use, because it does feel like it takes about as long to tell her as it would to just do it.

        • David A. Fields
          December 23, 2020 at 12:07 pm

          Julie-ann, I’ve emailed you separately about more in-depth information on the CRM. That said, the fact that it may take as long for you to convey information as to “just do it” is somewhat irrelevant. Most consultants won’t just do it.

          There’s a person I know who won’t buy certain things from the grocery store because, as he says, “I could just make that at home.” Yeah, but he doesn’t make those items at home and is too busy to try. So just buy them at the store! Same thing with getting help on your CRM. Offloading the maintenance ensures the CRM is maintained.

          Great questions, Julie-ann, and I’m glad you asked.

        • Cheryl
          January 1, 2021 at 11:35 am

          I also think this is great fodder for an upcoming article. It’s something I’m trying to convince clients of as well, with their sales team. They’re investing in a system I fear no one will use, knowing their company culture.

        • David A. Fields
          January 3, 2021 at 11:16 am

          Many business leaders have become so enamored of technology and systems, that they mistakenly believe every problem can be solved with more tech and fancier systems. Ultimately, many businesses (and certainly consulting) comes down to people taking actions. It’s those people we need to support–often with other people rather than more systems. (We are, after all, a social species and we react to other people’s expectations.)

          It’s good to hear from you, Cheryl.

  4. Jodie Macariola
    January 4, 2021 at 6:01 pm Reply

    Hi David,
    Very interesting article. Which roles do you count in the 15%? I lead one of our consulting teams within a larger organization. We are a value added reseller of software. My team is comprised of consultants in varying roles (application, technical, and project management). I would not consider any of them ‘low level’. There is a separate team of sales and account managers (think existing customer relationships and sales – they also maintain our CRM system) responsible for selling a portion of the work completed by my team and one other team. Then our company has shared services for marketing, accounting, and IT. Thank you!

    • David A. Fields
      January 4, 2021 at 7:12 pm Reply

      Your great question highlights the wide variety of consulting firms. VARs who sell consulting services are very different from management consulting firms. It also sounds like you’re part of a decent-sized organization since you have separate sales and account management teams. (Dedicated sales teams generally do not work well for management consulting firms under $25m; however, they can work for IT-oriented consulting firms.)

      The roles in the 15% are typically administrative support and, perhaps, one level above administrative support. More importantly, you want to focus your high-paid assets on what they do best and what creates the most value for your clients. Everything else should be offloaded. That, plus the concept of Walking the Dog Backward should point you in the right direction.

      If you want more direction, feel free to email me or my team. Thanks for the excellent query, Jodie!

  5. GyaanMart
    January 6, 2021 at 4:29 am Reply

    Very helpful!!!
    After reading this I have got lot more things to learn. Good to know all these suggestions for growing my startup business

    • David A. Fields
      January 6, 2021 at 7:26 am Reply

      We all have a lot to learn! Fortunately, there are plenty of good resources and generous people in the consulting community.

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