The Consultant’s Consultant

Sometimes, even the best business consultants need their own consultant.

By Dave Bayless

I had the opportunity recently to speak with Joe O’Mahoney. Joe is a Professor of Consulting at Cardiff University and is the author of a leading college textbook on consulting. Prior to his academic career, Joe was a strategy consultant. Now, he applies evidence-based lessons from his research to help small consultancies navigate the often treacherous transition from early growth to effective scaling of their firms. Recently, Joe co-founded Consulting Mastered, which offers an online, mini-MBA for independent consultants, founders of growing consultancies, and recent college graduates who aspire to a career in consulting.

The Consultant’s Consultant

In addition to his full-time academic gig, Joe O’Mahoney is a consultant to small consultancies that want to grow to £5 million to £10 million in annual revenue. His smallest client has two employees and his largest 30. They share several attributes:

  • Innovation is a priority
  • Culture, values, and work-life balance are important
  • Growth and the delivery of value to clients are imperatives

Although “99% of the research on consultancy is on large firms,” small firms, nevertheless, represent about half of employment in the industry and are an increasingly important source of creativity and innovation.

The Advantages of Being Small

Joe believes, “large consultancies are struggling, and that’s primarily because they’ve commodified their services.” Standardized and inflexible service offerings allow for efficiencies in the form of high labor utilization rates. Other factors held constant, higher efficiency translates into higher profits. There are a couple of problems with that happy story, though:

  • An overriding emphasis on efficiency can inhibit innovation.
  • Other factors tend not to stay constant—and haven’t.

When clients are looking for creativity and innovation and high-value projects, they’re increasingly turning to small consultancies…I think that’s a trend that’s going to accelerate.

Furthermore, the cost of technology has plummeted. Opportunities that used to be limited to large firms are now addressable by small firms.

There’s a huge amount of opportunity for small consultancies to develop online courses or write apps or create software…that sometimes reduces their own costs, but sometimes increases the value of the client.

Another reason small firms are flourishing is that being financially successful in consulting is no longer predicated on becoming a partner at a big firm.

Growing your consultancy to sell or to get investment is a lot easier that it was even 10 years ago.

Three Deadly Sins

Even with the prevailing winds at the back of small consultancies, navigating the waters of growth can be treacherous.

Lots of people who start their consultancies are really good consultants…so, they think that’s going to make them a good [independent] consultant. Of course it doesn’t because they’ve always had someone to sell for them. They’ve had someone to do the back-office. They’ve had someone to do their finances.

Joe’s research and experience reveals three common failure modes:

  • Inconsistent marketing
  • Letting your past work determine your marketing niche
  • Failure to work on the business to identify and mitigate weaknesses

When we first hang out our shingle as independent consultants, it’s natural for us to turn to past clients who respect our work and trust us. Furthermore, it’s natural for us to want to under-promise and over-deliver to those early clients, in particular. The problem comes when we don’t make time to engage in systematic marketing in anticipation of the future.

What typically happens with a new consultancy is that they will sell to friends and family and ex-colleagues for the first couple of years. When those contracts dry up or the work has been done…they start marketing. But for marketing to work—any form of marketing to work—especially in consulting where you need to build relationships and familiarity and to have a certain visibility and trust…you’re talking six months to a year. A lot of firms collapse in that period.

In Joe’s experience, inconsistent marketing isn’t the only problem. Marketing positioning is also often suboptimal.

Joe advises doing your research. Sometimes, relabeling rather than reinventing is the appropriate course of action. Above all, get out in the wild and talk to prospective clients.

You can’t do consulting strategy behind closed doors. It needs to be done with your clients, and they need to be clients who aren’t friends of yours and possibly event clients who’ve turned you down in the past.

It’s very unlikely that any one of us can master the delivery of consulting, marketing, business development, and finance. We need to come to grips with our relative weaknesses.

Address your weak points, or outsource your weak points to someone that can do them better. Partner with someone who compliments your weak points, or simply learn to do better.

Grow and Scale

Joe identifies two phases in the development of small consultancies.

  • In the growing phase, “You’re really just trying to sort out what you’re doing, what makes money, what your message is, what you stand for. That can take you a few years.”
  • The scaling phase is where “You’ve got a very clear value proposition. You’ve got good clients. You’ve got a good reputation. How do you systemize that?”

As the consultant’s consultant, Joe has positioned himself and his colleagues to provide evidence-based advice for consultancies making their way through the growing phase into the scaling phase.