20,99 €
Mehr erfahren.
- Herausgeber: John Wiley & Sons
- Kategorie: Fachliteratur
- Sprache: Englisch
The real-world guide to selling your services and bringing in business How Clients Buy is the much-needed guide to selling your services. If you're one of the millions of people whose skills are the 'product,' you know that you cannot be successful unless you bring in clients. The problem is, you're trained to do your job--not sell it. No matter how great you may be at your actual role, you likely feel a bit lost, hesitant, or 'behind' when it comes to courting clients, an unfamiliar territory where you're never quite sure of the line between under- and over-selling. This book comes to the rescue with real, practical advice for selling what you do. You'll have to unlearn everything you know about sales, but then you'll learn new skills that will help you make connections, develop rapport, create interest, earn trust, and turn prospects into clients. Business development is critical to your personal success, and your skills in this area will dictate the course of your career. This invaluable guide gives you a set of real-world best practices that can help you become the rainmaker you want to be. * Get the word out and make productive connections * Drop the fear of self-promotion and advertise your accomplishments * Earn potential clients' trust to build a lasting relationship * Scrap the sales pitch in favor of honesty, positivity, and value Working in the consulting and professional services fields comes with difficulties not encountered by those who sell tangible products. Services are often under-valued, and become among the first things to go when budgets get tight. It is now harder than ever to sell professional services, so your game must be on-point if you hope to out-compete the field. How Clients Buy shows you how to level up and start winning the client list of your dreams.
Sie lesen das E-Book in den Legimi-Apps auf:
Seitenzahl: 321
Veröffentlichungsjahr: 2018
Ähnliche
CONTENTS
Cover
Title Page
Copyright
Dedication
The Problem
Chapter 1: A Curious Problem
Rainmaking
The Promise of How Clients Buy
The Breakthrough
Our Method
Onward
Chapter 2: Finders, Minders, and Grinders
Consulting
I'm Not Even in That Universe
The Ladder
Up or Out
The Three-Legged Stool
The Commercial Imperative
The Rest of Us
Okay, I Need to Sell; How Do I Do That?
Obstacles
Chapter 3: Beyond Pixels
Selling Consulting and Professional Services Is Hard Because Our Clients Have to Trust Us Before They Buy from Us
The Three R's
How Services Are Different
Systemic Hurdles
Chapter 4: Obstacle #1: What They Didn't Teach You in B-School
Universities
Why Business Schools Do Not Teach How to Sell Professional Services
Chapter 5: Obstacle #2: But I Don't Want to Sell
Why We Can Never Imagine Being Salespeople
The Birth of Management Consulting
We Are the Product
Chapter 6: Obstacle #3: Things Aren't What They Once Were
A Changing Landscape
The End of the Ban on Advertising
The World is Flat
Firefly Ideas
More Players
Chapter 7: Obstacle #4: A Blizzard of Bad Advice
Traditional Sales Training
The Science of Yield
The Myth of the Perfect Pitch
Better Personality
Why This Model Doesn't Work for Consulting and Professional Services
How Clients Buy
Chapter 8: The Secret to Selling
Never Say Sell
Design Thinking Meets Business Development
Chapter 9: Element 1: I Am Aware of You
To a Land Where You Are Not Known
Introducing Yourself
The Awareness Trap
200 People You Need to Know
Tactics—What Works
Chapter 10: Element 2: I Understand What You Do
Lessons from 55 BC
How Clients Remember You
Clients Have to Understand Who You Are
Shrink the Pond
The Bottom Line
Hone Your Elevator Pitch
Tactics—What Works
Chapter 11: Element 3: I Am Interested
Driving in the Right Direction
Making a Meaningful Difference
Tactics—What Works
Chapter 12: Element 4: I Respect Your Work
Track Record
Are You Legit?
Establishing Credibility
Can a Client Rely on You to Get the Job Done?
Tactics—What Works
Chapter 13: Element 5: I Trust You
Trust
Trust Is the Whole Ball of Wax
Tactics—What Works
Chapter 14: Element 6: I Am Able
Ability
A Miscalculation
The Magic Formula
Return on Investment
The Right Level
Tactics—What Works
Chapter 15: Element 7: I Am Ready
Frustration
Bumps in the Road
Tactics—What Works
Putting the Seven Elements to Work
Chapter 16: A Chain Is as Strong as Its Weakest Link
The Right Measure: Three Types of Service Firms
Using the Seven Elements as a Diagnostic Tool
Focus on Where You Need to Improve
Chapter 17: Getting to Work
Do Great Work
Become Your Own Chief Revenue Officer
Build Your Network
Develop Your Own Style
Dedicate Time for Business Development
Stay Persistent and Positive in the Face of So Many “No's”
Whatever You Do, Don't Call It “Selling”
Chapter 18: All Business Is Local
Making Sense of the Global-Local Paradox
The Future of Decision Making
Chapter 19: Our Vision of the Future
A Life Worth Living
Important Work
Three Imperatives for a Better Future
Imperative 1: You
Imperative 2: The Organization
Imperative 3: The University
How Clients Buy
Notes and References
Acknowledgments
About the Authors
Index
End User License Agreement
List of Illustrations
Figure 8.1
Guide
Cover
Table of Contents
Part 1
Chapter 1
Pages
i
ii
iii
iv
v
vi
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
26
27
28
29
30
31
32
33
34
35
36
37
38
39
40
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
57
58
59
60
61
62
63
64
65
66
67
68
69
70
71
72
73
74
75
76
77
78
79
80
81
82
83
84
85
86
87
88
89
90
91
92
93
94
95
96
97
98
99
100
101
102
103
104
105
106
107
108
109
110
111
112
113
114
115
116
117
118
119
120
121
122
123
124
125
126
127
128
129
130
131
132
133
134
135
136
137
138
139
140
141
142
143
144
145
146
147
148
149
150
151
152
153
154
155
156
157
158
159
160
161
162
163
164
165
166
167
168
169
170
171
172
173
174
175
176
177
178
179
180
181
182
183
184
185
186
187
188
189
190
191
192
193
194
195
196
197
198
199
200
201
202
203
204
205
206
207
208
209
210
211
212
213
214
215
216
217
218
219
220
221
222
223
224
225
226
227
228
229
230
231
232
233
234
235
236
237
238
239
240
241
242
243
244
245
246
247
248
249
250
251
252
253
254
255
256
257
258
259
260
261
262
How Clients Buy
A Practical Guide to Business Development for Consulting and Professional Services
Tom McMakin
Doug Fletcher
Cover design: Wiley
Copyright © 2018 by Thomas McMakin and Wade D. Fletcher, Jr. All rights reserved.
Published by John Wiley & Sons, Inc., Hoboken, New Jersey.
Published simultaneously in Canada.
No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the Publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, (978) 750–8400, fax (978) 646–8600, or on the Web at www.copyright.com. Requests to the Publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, (201) 748–6011, fax (201) 748–6008, or online at www.wiley.com/go/permissions.
Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages.
For general information on our other products and services or for technical support, please contact our Customer Care Department within the United States at (800) 762–2974, outside the United States at (317) 572–3993, or fax (317) 572–4002.
Wiley publishes in a variety of print and electronic formats and by print-on-demand. Some material included with standard print versions of this book may not be included in e-books or in print-on-demand. If this book refers to media such as a CD or DVD that is not included in the version you purchased, you may download this material at http://booksupport.wiley.com. For more information about Wiley products, visit www.wiley.com.
Library of Congress Cataloging-in-Publication Data:
Names: McMakin, Tom, author. | Fletcher, Doug, author.Title: How clients buy : a practical guide to business development for consulting and professional services / by Tom McMakin, Doug Fletcher.Description: Hoboken, New Jersey : John Wiley & Sons, Inc., [2018] | Includes bibliographical references and index. | Identifiers: LCCN 2017057356 (print) | LCCN 2017058946 (ebook) | ISBN 9781119434726 (pdf) | ISBN 9781119434757 (epub) | ISBN 9781119434702 (cloth)Subjects: LCSH: Consultants--Marketing. | Professions--Marketing. | Customer relations.Classification: LCC HD69.C6 (ebook) | LCC HD69.C6 M3975 2018 (print) | DDC 001--dc23LC record available at https://lccn.loc.gov/2017057356
Tom dedicates this book to Harry Wallace and the crew at PIE for their fellowship and inspiration.
Doug dedicates this book to his parents, Wade and Mary Lutie, for introducing him to the world of books.
The Problem
Chapter 1A Curious Problem
Was that you we saw last Friday night at the Seattle airport?
We would've said “Hi,” but you were on the phone.
We were the guys in blue blazers dragging our roller boards over to Ivar's for a plate of oysters and a Pyramid IPA. You might have seen us pounding out thank-you notes on our phones before the late flight home.
Allow us to introduce ourselves.
Doug leads a business development consulting firm and sits on the board of a midsized consulting firm. Before that, he cofounded a technology-enabled consulting firm that specialized in global web survey projects. He got his start as a management consultant at A. T. Kearney, and before that was trained on GE's leadership development program.
Tom also runs a consulting firm that helps the biggest names in professional services grow their businesses—a kind of consultant to consultants. He was in private equity before that, and in his first big gig served as the chief operating officer of Great Harvest Bread Co.
This is all to say we've spent two lifetimes offering clients consulting and professional services. We've scoped projects, delivered outcomes, wined and dined clients, written white papers, presented at conferences, and relentlessly followed up.
The proof? When people ask our kids what we do, the kids don't know.
“They travel a lot,” they say.
We've written this book to describe how clients buy consulting and professional services because we think if more people in our industry could get smarter about how expertise meets the opportunity to help, the world would be a better place. We look around and see lots of thorny problems that need solving. We also see lots of smart people ready to help. The challenge facing them both is to connect with each other more efficiently.
Maybe you're an accountant, a lawyer, or an Internet security specialist. Maybe you consult on strategy, human resources, finance, marketing, operations, or procurement. Or you're a freelance designer or marketing expert. You might be part of a large organization, working for the big consultant Bain, the consulting and accounting firm KPMG, or the human resources specialist AON. You might work out of a handsome glass and steel tower in downtown Boston or Chicago. Or you might be just starting out or recently retired, offering procurement, organizational or training advice, working out of your newly converted guest bedroom.
Either way, this book is for you.
Rainmaking
As a consultant or a person working in professional services, all of us know we have to become rainmakers—the people at the top who bring client business into their firms. In most large firms, you have to be successful bringing in new business to be considered for promotion to partner. And, if you're a founder or cofounder in a small to midsized firm, you live and die by the work you bring in to feed your troops.
It's the harsh imperative of consulting and professional services: being smart about something is not enough. You have to know how to engage with potential clients, understand their unique challenges, and scope business. You have to figure out a way to build a bridge from your expertise to those it can most help. You have to make it rain, or you will die in the desert of commerce.
The problem is that selling consulting and professional services is hard. Some would say really, really hard.
It's hard because selling consulting and professional services is different from selling shoes. The former is sold on relationships, referrals, and reputation, while the latter is sold on attributes like size, weight, color, style, and performance. It's the difference between an intangible and tangible sale.
Further, despite the importance of becoming an effective rainmaker, we're never taught how to sell the work we do. We're trained as lawyers, accountants, web developers, financial analysts, engineers, or architects, how to do the work, but not in how to bring in new clients.
Then, there's the inconvenient fact that in our line of work, sales is a dirty word. While researching for this book, we interviewed dozens of rainmaking pros and were struck by how many of them said, “Never say ‘sell.’” In fact, they reported that they don't even think about selling. To them, it's counterproductive. Dominic Barton, Global Managing Partner of McKinsey & Co., one of the world's premier strategy consulting firms, put it this way: “If I mentioned sales in our firm, I'd be hauled up in front of our professional ethics board. It's just not the way we think.”
On top of that, our consulting niches are becoming more specific as they become more global. A client today is just as likely to be in Singapore as San Francisco. A generation or two ago, golf on Saturday was a good way to meet new clients. In the twenty-first century, methods like these are outdated.
Finally, much of what we think we know about selling—the need to generate leads, prequalify them, then pitch and close prospects—is wholly inappropriate to consulting and professional services. What really matters is your relationship with a would-be client, which is formed and nurtured over a lifetime.
Call it the rainmaker conundrum: we need to do business development or we die, and yet we're hobbled by obstacles that keep us from effectively developing this very same business.
There must be a better way.
Chuck McDonald, a senior attorney practicing in Columbia, South Carolina, puts it this way:
The one thing they don't teach you in law school is that the most important thing in private practice is how to get clients. You find out fairly early whether you are going to be able to do that which enables you to climb the ladder within a firm structure. If you're not, you're a fungible good. There are what we call “worker bees,” but they just don't get the same, frankly, respect within the firm or the same compensation. So, it is a very important component.
And so, it's strange to us that more isn't written about business development in the consulting and professional services trades. A quick Amazon search of books on the topic of leadership generates a staggering 191,348 listings. Yet you can count on one hand the number of books that have been written on becoming an effective rainmaker in the expert services professions.
Consulting and professional services is a $1.7 trillion global industry, with 6.1 million of us in the United States working as consultants or in professional services. As the U.S. economy has shifted from manufacturing to a more knowledge-intensive economy, the consulting and professional services sector has expanded, enjoying growth that outpaces the wider economy. While gross domestic product grew on average 2.2% over the last two years, the consulting and professional services sector grew on average an astonishing 11.5%. That's five times as fast.
It is high time we got smart about how to connect with those we can best serve.
The Promise of How Clients Buy
We will help you understand how clients buy consulting and professional services. This knowledge will increase the number of clients you have and earn you more money. More importantly, it will cause your expertise to find its home, solve more problems, and make the world a better place.
To be clear, this is not a book on the sales funnel, selling techniques, better prospecting, persuasion, closing, or negotiation tactics. Instead we describe the client's buying decision journey, knowing that it is this perspective that can give rise to a business development approach based on service and not manipulation.
Qualities You Do Not Need to Benefit from This Book
A certain size:
You can work for a 400,000-person global IT services firm or have recently spun out on your own into a sole proprietorship. The principles of empathy for the customer, which are the foundation upon which increased engagement is built, are the same regardless of scale.
A particular kind of expertise:
You grow an HR consulting practice the same way you grow security consulting. Business development for law looks strikingly similar to business development for a strategy consultancy.
A sales personality:
It's a myth that only outgoing personalities succeed at building the kind of relationships that produce more engagements. In fact, many of the pros we interviewed reported the opposite.
A big budget:
When clients buy services, they do so in similar ways. Those patterns are largely uninfluenced by the size of your business development budget. That's because cash buys you reach and yet services are sold on relationships, which are created one person at a time. While there are useful ways to spend money if you have it, supporting clients as they move through their decision-making journey does not require a lot of cash.
A growing industry:
High-growth sectors have challenges where outside expertise is required, but so do more stable industries. Ask any bankruptcy attorney or restructuring consultant if work is slow, and they will disabuse you of the idea that only growing companies hire consultants.
A hot product set:
If you bring a product-sales sensibility to services sales, you will be tempted by the idea that new is better, that it is easier to sell the latest generation of phone than one built a decade ago. However, buyers of consulting and professional services are skeptical when expertise is packaged as a “new offering.” For them, a trusted advisor who solves problems alongside them is more important than something “new.”
Level of experience:
The fundamental business development challenges that face young professionals hoping to show off their commercial chops and make partner and those confronting an old hand seeking to broaden their influence are the same.
A willingness to live on the road:
Visiting would-be clients is a tried-and-true approach to business development, but there is a raft of technology-based and phone-based approaches that are equally effective at engaging and establishing relationships with potential clients.
Marketing expertise:
You're a designer or an accountant, a technologist or an engineer. You didn't spend a ton of your time in school taking marketing courses. No worries. Most marketing focuses on how to sell products, and as we will learn, clients buy services differently.
The Breakthrough
For us, the breakthrough in understanding how to best sell professional services was when we realized that those who successfully build their consulting and professional services practices are students of how clients buy and work to support that buying journey using very specific strategies and techniques. They aren't focused on sales at all.
These pros tell us there are very specific requirements that must be satisfied before a client pulls a trigger and decides to buy our services, preconditions we call the Seven Elements of How Clients Buy.
Prospective clients become
aware
of your existence. This might be from an introduction from a friend, an article you wrote, or because they met you at a conference.
They come to
understand
what you do and how you are unique. They can articulate what you do clearly to others.
They develop an
interest
in you and your firm. They have goals, set by themselves or others, and they can see how what you do might be useful in their efforts to realize those goals. What you do is relevant.
They
respect
your work and are filled with confidence that you can help. They look to your track record, to their peers, and to a variety of social clues to determine if you are credible and likely to move the needle on their goals.
They
trust
you, confident you will have their best interests at heart.
They have the
ability
to pull the trigger, meaning they are in a position to corral the money and organizational support needed to buy from you.
They are
ready
to do something. The timing is right inside their organizations, and they have the headspace to manage you.
The Seven Elements of the Client's Decision Journey
Our Method
The advice that we offer in this book around each of these elements comes from three primary sources:
Interviews conducted with over two dozen senior professionals working in a wide range of consulting and professional services, including law, accounting, investment banking, commercial real estate, and management consulting (strategy, advertising, and HR). While most of those we interviewed were seasoned “rainmakers” in their field, we did speak with a handful of individuals at the beginning and midway points of their careers. We spoke with individuals at some of the largest firms in their industry and also with professionals at midsized, boutique, and solo firms. Finally, we spoke with professionals who bought professional services.
A review of the existing literature, both academic and popular, on the subject of business development for consulting and professional services. There are some strong materials out there. Three of our favorites are Ford Harding's
Rain Making
, Arthur Gensler's
Art's Principles
, and Mike Schultz and John Doerr's
Professional Services Marketing
. Our hope is that what we have written here builds on their work and contributes to the ongoing conversation about what works and what doesn't.
Attention Scholars
This book is not intended to be an academic publication. It's a book for and by practitioners. The breadth and depth of our research is not statistically weighty enough to be included in a peer-reviewed academic journal, nor are either of us PhD scientists, economists, or psychologists. That said, to the world of academia, we would say, “Jump in. The water's warm.” The subject of how those with expertise engage with those they can most help in a highly distributed global world is ripe for further study.
Our collective experience working in management consulting and business services for fifty years. We looked to our own personal experiences in our consulting practices to capture what we had learned and share it. It was encouraging to us that much of what we feel is true was echoed in what we heard from those we interviewed.
Onward
Your expertise deserves to find an audience—the exact right audience where what you know and what you've seen (and you've seen some stuff) will find a home where it can create value, not just for you, but more importantly, for the people whom you most want to serve.
The world needs your expertise. Let's dig in and learn how to build a better bridge to those that could use it.
Chapter 2Finders, Minders, and GrindersThe Business Development Imperative
When Russell Davis first heard the news, he flew home from Switzerland early. Word had come to him from all directions—the foreign edition of CNN, urgent phone calls from home, and emotional email bursts from friends on campus.
In a convulsion of violence, a mentally disturbed student shot and killed thirty-two students in the Norris and West Ambler Johnston halls at Virginia Tech. It was mid-April of 2007 and Russell was studying abroad, but he was also class president and a dyed-in-the-wool Hokie.
“I felt I needed to go home and be with everyone.”
The next few weeks were filled with emotions for Russell and for his fellow students, a complicated stew of anger at the shooter, grief over the lost promise of those who had been slain, and relief and guilt over having not been a target. Russell remembers trying to frame the right words for his address to the graduating class in May.
“I wanted to be careful; it was a commencement, not a funeral,” he said. In the end, standing in front of five thousand graduates at Worsham Field, he spoke from the heart, “You only live once. Never waste a moment.”
Russell showed leadership in the way he chose to be with those whom he had decided to serve. It wasn't like Mel Gibson on a stallion, rallying of the Scottish tribes in Braveheart, but a quieter call to duty, which becomes the standard against which the rest of us measure ourselves.
At Virginia's Darden School of Business, where Russell earned an MBA after Virginia Tech, roughly half of the students apply for jobs at the big consulting firms. Of those, half get interviews, and then half of them get offers. It is the same at all the leading business schools.
Boston Consulting Group (BCG), one of the country's premier strategy consulting firms, has a mission to “go deep to unlock insight and have the courage to act.” For that, they need leaders and strong thinkers who have the courage of their convictions. When they first met Russell on the campus of the University of Virginia, they must have known they'd found a real leader, recruiting him to be a summer intern in between years at business school. Later, when he graduated, BCG asked him to sign on, full-time, as a consultant.
Getting hired by one of the big consulting firms is, for many, like winning the lottery. “BCG and the others would come in and make presentations to the students and talk about the cool strategy work they did for clients. I knew I would learn a lot in consulting and that it would open doors. Those of us who got offers were pretty excited. BCG, McKinsey, and Bain have a line out the door to get in. They get the best and brightest.”
Consulting
Consulting draws some of the best business school students because consultants are called in to do challenging and essential work. “Since working at BCG,” reports Russell, “I've worked on growth strategy, cost reduction, and operations projects in consumer products, transportation, and industrial goods. I've learned a lot in two years. I travel a fair bit, but the firm treats me well and I make good money.”
Really good money.
The average starting salary for a post-MBA graduate like Russell at BCG is $147,000 with another $50,000 to $70,000 piled on top in bonuses and 401(k) contributions. This wage is not the exception but the rule at the most prestigious firms like Bain, McKinsey, Oliver Wyman, L.E.K., and A. T. Kearney. It's the same with the Big Four professional services firms, where KPMG, Deloitte, E&Y, and PWC all pay total compensation north of $150,000 for recent MBA graduates, as do the big IT consulting firms like Accenture and IBM.
I'm Not Even in That Universe
If you are a sole proprietor, work for a small CPA firm, or have just hung up your shingle as an attorney, Russell's world may seem distant and vaguely exotic, like GN-z11, the galaxy Hubble just discovered at the far reaches of space. Interesting but not really relevant. You hear about hundreds of thousands of dollars in pay,and you think to yourself, “hundreds of thousands of dollars of revenue would be good.”
We understand. Both of us have been sole proprietors. Tom remembers launching a private equity firm and wondering if the deals would come in. “I'd lie awake at night thinking about the kids and the next mortgage payment and see blood dripping from the ceiling.” Doug remembers flying out to New York to make a big client pitch and wondering if he had made some sort of tragic mistake leaving the security of a job at General Electric to launch his fledgling consultancy.
Stick with us. We're digging into the world of high-end consultants for a reason. It turns out their problems are the same as ours, and in their experience, there are clues as to how clients buy.
The Ladder
Russell learned a few things about consulting while working at BCG. “There's a distinct ladder. As a new consultant, there's an expectation that you get up to speed quickly, and that you contribute quickly. If you join BCG right out of undergrad, they call you an associate. If you get promoted from that or join post-MBA, you're a consultant. After consultant, you become a project leader where you manage a team and probably have a couple of consultants and maybe an associate working with you. Two years after being a project leader, you might get promoted to principal and have two project leaders working under you. If you work as a principal for between three and five years, you'd be eligible to stand for election to the partnership. Then as a partner, you might be promoted to senior partner and possibly to the firm's leadership.”
While the titles might be different if you are in an architecture or law firm, the idea is the same. First you toil with the rest of the recent grads, and if you are good, you advance one rung on the ladder at a time. And the firm makes it worth your time. Partners at BCG make seven figures with bonuses and profit sharing. If you're a kid from Staunton, Virginia, like Russell, that has your full attention and absolute dedication.
Up or Out
The second lesson Russell learned at BCG was harsher. “It's up or out here. The messaging starts as soon as you get here. ‘Look around you,’ they say, ‘there are not as many partners as there are consultants. Do the math: not everyone can be partner.’ Everyone talks about it,” he says.
“You know you'll either be promoted or you'll get the boot, though no one ever really gets fired. Instead you hear someone left the firm to take on an ‘opportunity in industry.’ What you don't hear is that it wasn't 100% their choice. And it happens on every step on the ladder. There is constant pruning.”
Everyone who enters into BCG is taught this basic lesson and so begins to ask the natural question, “What do I need to do to succeed here?” It is a Darwinian meritocracy in which only the best survive. Everyone else is “counseled out.” It's all very polite, but large consulting firms are built to be unforgiving pyramids in which not everyone can succeed.
The Cravath System
Paul Cravath was born in Ohio in the summer of 1861. A graduate of the Oberlin College and Columbia Law, he would tell fellow New York attorneys that Cravath was derived from the Czech word for “tailor,” which itself came from the word for “cut.” It would always get a chuckle because his friends knew him to be a fan of managing his law firm by cutting underperforming professionals.
Cravath towered over his colleagues at 6′4″. A name partner in the firm now known as Cravath, Swaine & Moore, he served clients like Chemical Bank, Bethlehem Steel, and the Studebaker Corporation and was known as one of the most respected attorneys in the country. He had very clear ideas about how a law firm should be run, ideas which were not commonplace. His approach became known as the “Cravath System.”
Hire the best attorneys from the best law schools. Look to grades as a way of predicting success in the law.
Pay them well. Up until Cravath, young attorneys apprenticed themselves, trading their time for training. To pay young attorneys was revolutionary.
Train them extensively by rotating them between assignments. Cravath did not believe in silos. He thought broadly experienced attorneys brought the most value to clients.
Reward merit. Cravath believed in running his firm as a meritocracy. Young attorneys were promoted for being successful, or if they did not make the cut, they were dismissed.
Today, nearly all consulting and professional services firms are managed this way. Cravath's system has become ubiquitous for three important reasons:
Leverage:
Partners can get paid more if they do not just bill out at their hourly rate but also take a slice of what their junior associates bill out for. If you just bill out at your rate, there is a cap on what you can make, but if you act like a value-added reseller of other people's time, there's no limit to what you can make. Your pay is only a function of the size of the assignments you find and the number of people required to do the work. It's the business model.
Motivation:
Young associates will work longer hours, grinding away with enthusiasm, if they feel one day their reward might be millions of dollars and a membership at the Greenwich Country Club. Also, they know if they don't, they'll be fired. Call it the carrot and cudgel approach.
Quality:
It's hard to hire well. Using top law schools as an initial screen on who is good and who is not saves time.
The Three-Legged Stool
Over beers on the weekend, Russell and his newly minted colleagues would talk about what it takes to get ahead at BCG.
The first leg, and everyone agrees on this point, is you must be good at the work. This goes for every kind of professional service: law or IT consulting as well as the more rarified world of strategy consulting. No one gets from the first to the second rung without doing a good job at delivering the service that is embedded in the promise of their firm. Accenture is the largest IT consultant in the world. If Accenture says it will produce actionable data from multiple sources in and outside of a business, you must be able to do that for clients, or Accenture (and you) will get fired.
The second leg is team leadership. You must be able to rodeo others on a team who are delivering the work. If a Seattle-based CPA firm sends a group of professionals to audit the books at a cannery in Alaska, they'll send a team leader to keep everyone driving in the same direction. She'll also get to pick where everyone has drinks after work.
Both of these skills—doing the work and leading others in the delivery of work—have beginning, intermediate, advanced, and master versions. Fixing the e-commerce site of a $30 million dollar retailer of sporting goods is hard. Our friends at Accenture tell us that fixing HealthCare.gov was harder. The first job was a blue square groomer, the second a black diamond pitch off the backside.
The third leg of the stool is the ability to generate new business. It's one thing to be able to do the work well and to lead successful engagement, but someone in the firm has to be the one who spoke with the client in the first place, inking the deal that got the work.
Art Gensler, author of Art's Principles and founder of Gensler—the premier design and architecture firm that designed the Apple Store—says, “Business rarely falls into your lap. You must go out, explore, and find clients.”
The Commercial Imperative
They say in consulting and professional services that there are “finders, minders, and grinders.” Grinders do the work. Minders supervise the grinders. Finders bring in the work on which everyone else delivers.
Russell is clear on this rainmaker imperative. “By the time you are a partner, you need to have a commercial focus. You need to come across as credible and be able to sell a multimillion-dollar transformation to a company.”
But to know what to do is not to know how to do it. “If I had one question for a senior partner at the firm,” says Russell, “it would be ‘How did they find their best clients?’ Most of the work at a big firm like BCG comes from repeat business and from referrals, but I would be interested in knowing what the partner did, especially in the early years, to find those big clients that hire us over and over.”
We find this question interesting as well.
The Rest of Us
This question of how to find new work is not limited to the big firms. It's common to all consultants or professional service providers. While website designers or freelance cybersecurity specialists might not be working in the Cravath salt mines at a 10,000-person professional services firm, they experience their own version of “up or out.” They either bring in new work or they fail.
“If I don't sell, I am out of business,” says Megan Armstrong, the owner of a three-person marketing communications company. “Without clients, there's no work.”
