The Key to a Sustainable Competitive Advantage in Your Career

Earlier in the year we published two important posts about ethics. It is worth building on them today because Firmsconsulting is built around the principle of strong values. And we should be discussing this concept more frequently as it is widely misunderstood. In the first post, entitled Ethical Standards are No Small Matter for McKinsey, we looked at how to make ethical decisions, we also discussed the trade-offs and addressed 3 myths about ethics. In the second post, entitled Ethics is Shaped by Your Social Network, we pointed out that ethics is about judgment and we addressed what is one aspect of your life that has a considerable impact on your judgement and determines how ethical or unethical you choose to be, or even could be. We also discussed what you should consider doing to influence that impact. Ethics as a sustainable competitive advantage We discuss ethics today not because it is a nice thing to do, but because being ethical gives you a sustainable competitive advantage. Values and ethics are not feel good concepts that should be taught at the end of an MBA program, as it is currently often done. Values is a material competitive advantage that is difficult to replicate and has a tangible financial impact.…

Industry Analysis on a Consulting Engagement

Listeners following our Strategy Skills podcast channel know that the skill to run a strategy workshop is an essential one, especially when you become a senior strategy person either in a consulting firm or within a corporate. Strategy EVPs and partners within consulting firms frequently have to run this type of workshops and they have teams doing the input analysis that goes into this. The input, like industry analysis, is important, but not as important as an executive's ability to tie it all together in this type of workshop. That is why we spend so much time discussing how to conduct strategy workshops, also called visioning workshops. In this article, and related podcast, we are focusing on industry analysis, one input into a strategy workshop.   And there are two stories here. One is an example of how not to conduct industry analysis and the danger of coasting after leaving a major consulting firm. And the other is about how to complete industry analysis the right way. What not to do when conducting an industry analysis Lets start from looking at an example of how an industry analysis should not be done. On a recent study I led, a person leading the industry analysis was an ex McKinsey associate. Being…

How benchmarking best practice can hurt you

How benchmarking best practice can hurt you In this article and related podcast, we discuss the problem of benchmarking best practice, which is also sometimes referred to as benchmarking analysis or benchmarking best practices. We previously discussed case studies, value chain analysis and industry analysis on a consulting study. And for most consultants and executives looking at case studies, the inherent idea is that they want to look at best practices within the case studies. You do all those things above to extract best practices. And you will notice in the Corporate Strategy & Transformation study there is no stream, there is no piece of work, there is nowhere on the huge 887-step map for this study where we talk about best practices. And there is a reason for that. It is deliberate. What do we mean by benchmarking best practice? If you really think about best practices, they are by their very nature, by their very definition, methods, techniques, ideas, tools and/or processes that are used by other companies. That is what it means. It is really taking the best from someone else. A company learning best practices is taking what is the best or what they think is the best of other companies and when they do that they are automatically assuming that they are not so…

How to deal with hard questions from a client

How to deal with hard questions from a client A lot of times when you want advice on how to handle hard questions from clients, you would usually talk to someone that you think knows what they are doing. And they will tell you to do x, y and z. And you may think, “Ok, right, I will do x, y and z. I am going to run with it.” And here is the problem, and I am going to explain this in a lot more detail below. Depending on your philosophy of how you show value, how you view yourself, how you build confidence, the advice that you have been recommended to follow may be worthless. It may not even be useful, given your philosophy. This sounds like such a cryptic comment. What did I mean by that? Your philosophy has the single greatest impact on your ability to handle a client's hard questions Well, think about it this way. Imagine you believe that as a consultant, as someone who is supposed to know everything, you should never ever be challenged publicly. You believe it will simply destroy your worth. If that is your philosophy in life, then when you are openly challenged,…

Inner circle member? How to resign without burning bridges

Inner circle member? How to resign without burning bridges In this article, I want to talk to you about how to resign the right way, especially if you are a part of the inner circle. I think it is important you read this post because at some point in your life you will likely want to leave an organization. And you will want to leave an organization in a way whereby they don’t feel that you were selfish when you resigned, in a way so you don't damage the relationship with people who may have very well gone above and beyond in helping you and grooming you. Being a part of the Inner circle When you are a consultant, or an executive, you are either a part of the inner circle of key people that the organization relies on or not. This distinction matters.   Now, what defines the inner circle? Are you a part of the inner circle if you have a specialized skill the organization needs? Are you a part of the inner circle if you have some unique knowledge or connections that the organization requires? No. That does not make you a part of the inner circle. What makes you a…

What is scenario planning and how to use it

What is scenario planning and how to use it In today’s post we are going to talk about scenario planning, the last technical input that went into the visioning workshop /strategy workshop as part of the Corporate Strategy & Transformation study. We will discuss what is scenario planning, some reasons why the scenario planning tool is insufficient to make decisions and steps in scenario planning. We will also offer an example of how to use this tool in visioning workshops with clients. What is scenario planning Before we discuss how to conduct scenario planning let's look at what is scenario planning. So what is scenario planning? Scenario planning is a planning tool used to make flexible long-term plans to deal with major, uncertain shifts in the organization’s environment. It is also a tool that allows companies to develop a resilient strategy or test the flexibility of the existing company strategy against various possible future alternatives. In other words, scenario planning is a structured way for an organization to identify and gain a deeper understanding of the underlying major drivers of change, think about how those potential changes may impact an organization, determine what is required for the organization to succeed if potential changes occur and develop…

How the need for external validation can compromise your performance

Effective Practice for Building Client Relationships and Driving Sales

Effective Practice for Building Client Relationships and Driving Sales In this article and related podcast, we discuss an effective practice for building client relationships and driving sales. This is a critical article if you run a smaller boutique consulting firm or running a weaker consulting practice and trying to conduct more impactful studies. The issue I want to discuss today is related to what consulting firms would call sales but also related to building client relationships. Sales is not a common term at the elite firms, but ultimately that is what is done. A very common strategy for a consulting firm to displace an incumbent consulting firm and serve a client is to show an insight/problem/opportunity that the client has not seen before. Yet, this does not work that well in building client relationships and driving sales. This is because the new consulting firm makes one critical mistake. In fact, the mistake may lead to the incumbent consulting firm securing the work the new consulting firm pointed out! New insights help in building client relationships and driving sales, but only under certain conditions Many consulting firms try building client relationships and driving sales by presenting an insight or presenting an issue, or presenting an…

Why Value-Based Consulting is Seldom a Good Idea

Every consulting firm talks about value-based fees and they usually want to price themselves in this way since the value-based fees model offers a very high margin. Sometimes they succeed. Yet, they usually fail. This post and related podcast address why value-based fees are widely misunderstood and rarely work in consulting. The key insight is about the forces of supply and demand. You often find people trying to implement a value-based consulting approach as a cost savings measure, without realizing that they would get more value out of a different approach. So, what’s the goal behind value-based pricing? Why does value pricing not work as a pricing strategy in many instances? Let’s look at the economic value, how value-based pricing consulting fits in the consulting business, and what you should know if you’re considering it with a prospective client.  Value-based fees can only work if certain supply and demand conditions in the market are met, or if your client is naïve. If a firm understands this concept, they have a higher probability of securing higher-margin value-based fees. What are value-based fees So let us take a look at what value-based fees are. Let’s assume you go to a client and…