Research & Development

Consulting firms are in the business of selling services, and their greatest resources, the biggest component of these services, are the people. However, too many consulting firms fail to grasp the importance of advance preparation and management of client expectations. A little research and development ("R&D"), like at any company that sells something, pays many times the initial investment. But consulting firms often prohibit off-the-job training because it takes away from billable time at a client's, and most companies argue the on-the-job training is more cost-effective and powerful anyway.

Research
Recently, one of my fellow consultants walked into a client's office for a highly specialized engagement. Within the first hour, he admitted something: He had never even reviewed the new client's web site, because he was so busy at his last client. He further explained that he knew nothing about the client's industry, products, history, or current business needs. He said he had actually signed up for training but could not attend, because he was already at a client where his time was more valuable. He disclosed this ignorance to the client in a valiant (but inappropriate) effort to be honest. Understandably, the client was not impressed by the consultant's attempt.

Understanding client needs
The situation actually goes beyond the consultant's first arrival on-site. The client interviewed the consultant prior to his starting on this engagement, in accordance with his firm's policies and procedures. The client made it clear to the engagement relationship manager that the consultant was too inexperienced for the position. The relationship manager told the client that he had no other options but to take this consultant. The manager also insisted the consultant was competent and talented. Despite his reservations, the client agreed out of desperation.

The relationship manager failed to comprehend the client's needs and demonstrated no desire to understand. Since the relationship manager chose not to investigate her client's needs, right from the start the client felt under-valued and doubted the service he was going to receive. The consultant has been working on the project for almost three months now, and the relationship with the firm has yet to improve. It looks like the firm will lose this client's future business. ~ Development
Through this client's eyes, the firm failed to measure up to the advertising hype. The firm failed to live up to its mission statement, which clearly states that clients' needs are their greatest priorities. Had the relationship manager listened to this client, she could have saved this relationship by:

• Explaining why this consultant was the only one available and what the client could expect from the consultant
• Ensuring that the consultant took time to research this client's industry, business history and history with the firm, and current business practices and products
• Ensuring that the consultant received training on this type of engagement
• Following up with the client before and during the consultant's time on-site to reassure the client of the consultant's abilities and assuage any concerns
• Following up with the consultant to make sure he felt comfortable with his role and his relationship with the client
• Understanding the project herself to gauge future requirements better and to indicate that the firm cares about the client's needs and expectations

We can be so much better
Consultancies blast the public with advertisements. We vie for market share and our sketches and quotes in the Wall Street Journal. We boast about our positions on Fortune Magazine's "100 Best Companies to Work For" list. ~ If we want to live up to our advertising and be placed on the Fortune lists, we need to substantiate our claims. I believe most consulting firms under-perform because they lack R&D. Manufacturing companies and high tech companies invest heavily in R&D, which allows them a competitive edge. I wish consulting firms also invested more in what I call "back-end research." Instead, consulting firms pour a lot of money in "front-end" research like marketing.

Many companies think they are succeeding because the bottom line shows so much black ink. However, I believe even these companies are under-performing, because their numbers could substantially increase if they invested more in their staff and allowed their staff to invest in their clients. This is what I mean by "back-end" research.

We offer our clients every service under the sun. "Whatever the clients want, we can do it." This was repeated to me over and over again at my first company. No one ever answered my question: "But what if we can't?" And there were times when we had to return to the client and offer an alternative solution, which we used to spin as a "better solution." At another company, my management kept repeating "under-promise, over-deliver." The first statement puts forth too much confidence, and the second statement needs more.

If we invested in R&D, we could state clearly and confidently what we can offer without having to spin our inabilities to deliver; there would be no need to under-promise services we know we can provide profitably. We would also gain greater insight into how we can provide more value, and consequently, sell more services. R&D pays a large return on investment. We must look beyond our shortsighted billability quotas. It is the only way to measure up to and exceed the media hype we create.