This is part five in a five part series this week, Moving into Consulting 101.
In the business consulting system, the clients are served by two separate yet equally important groups. The sales who pursue opportunities, and the consultants who prosecute the projects. Dun dun...
Today's topics help you navigate the classic internal consultancy tension between people who sell consulting services and people who deliver consulting services.
The Tensions of a Consultancy
Sales vs Ops
The people who sell consulting services will have various buzzy names, like program/business development/client/excellence/vice president/partner/manager/executive. The people who operate/deliver services are the practitioners of whatever is being sold. That's probably you.
Obviously, what is being sold and what can be delivered — and when — need to line up. This is an eternal conflict. Sales and delivery are co-equally important. We cannot stay in business if we don't sell, and we cannot stay in business if we don't deliver.
As a consultant, do what you can to make sure that sales and delivery are communicating effectively. This tension always exists and communication is really the only treatment. When both sides are on the same page, everyone wins.
Aligning the sales pipeline (and projects starts) with the resource availability pipeline (and project endings) is a difficult task that requires coordination and collaboration by managers. This becomes even more difficult when sales unwisely promises specific, named consultant(s) for a project. Good consulting companies maintain a staff of consultant options for a project type, not a set of hyper-specialized unicorns, and do not sell specific people, but specific services.
Running too lean as a consultancy will lead to obvious staffing constraints, as Ops pushes project start dates back or loses projects because they cannot be staffed. Staffing too many consultants will cause the consultancy to carry too much burden as those consultants sit on the bench, unbillable.
In the end, sometimes Sales and Ops try to resolve staffing conflicts by asking consultants to work more than 40 hours or double-bill two different clients at the same time. This is untenable, unethical, and potentially self-destructive.
"Land and expand"
Sales: "Look, if we do a really good job on this project, they'll give us a bigger one."
PM: "Look, we've got a lot of work coming down the road if this goes well."
Client: "Look, we want to see some investment on your part to get this project done, then we'll work together more in the future."
Without formal Request For Proposal (RFP) processes, many project contracts are signed by individual decision-makers. A consultancy's sales staff will work directly with them, and many of the projects I worked on for companies large and small had some "promise of future work" implicit to the deal. It's not a scam, it's not a ruse, but more often than not those promises prove ephemeral. Consultancies will face pressure by customers to risk razor-thin margins and below-cost resources with the promise of bigger work in the future.
It is nevertheless part of a consultancy's strategy to win projects that lead to bigger ones. The slang lingo is "land and expand." If you're not already familiar with this term, you will be inside of 15 minutes in your first sales-delivery meeting. Listen up when a salesperson tries to sell a prospective deal as more important than its face-value dollar amount would indicate.
In consulting, you may also hear jargon similar to "everyone's job is to sell," even those who are consultants in the field. That's because a key to "land and expand" is identification of opportunities from the inside. A project on x exposes a need for y, which creates demand for z. It's true, on your way to delivering a project, keep an eye out for other opportunities as they arise:
- Perhaps a health check has exposed a significant gap in the client's disaster recovery strategy.
- Perhaps a performance tuning exercise has revealed flaws in custom applications.
- Perhaps an incident has exposed a policy vs practice gap that should be addressed.
Keep these type of opportunities on your consultant's radar. Without being disingenuous, your honest assessments, tactfully delivered, of client environments should be appreciated. Your business development colleagues love to talk about them, and your clients might be willing to use a now-trusted consulting resource to solve them. You may even be compensated for identifying follow-up sales leads.
Become familiar with the sales process
We talked earlier about becoming familiar with the project management process. As you progress in consulting, you'll become more involved in the process of selling rather than delivering, because your expertise is valued and an asset in client conversations.
You should understand the basics of the project life cycle, from scoping, sales, execution, and follow-ups. If this isn't transparent to you, ask. Become familiar with your company's project sales process, sales assets and tools. You should have or ask for access to your project's original Statement of Work, which lays out the client project's deliverables and schedule. You should know who to talk to if the client requests work outside of the scope, and you should know to stop working when they do. You should introduce yourself to your project's project managers and sales people.
If you have a project manager, keep them up to date and use them as defense against out-of-scope requests. Don't say "no, that's out of scope" to the client. Instead: "Well, that may be out of scope, but no worries, we can get the change order process going while we talk about it." In fact, a good consultant will never turn down out-of-scope requests, but rather turn them into more signed Change Orders Statements of Work.
It's just like improv comedy, say "Yes, and - let's get the project manager going on that."
If you're new to consulting, go out of your way to ask to see this type of documentation. Understanding how your consulting services are scoped, structured, and billed is important to understanding your work. It will help your advancement and efficiency.
Common project sales concepts
Statement of Work (SOW) = The project management document that is signed by both parties to execute the work. It's a binding contract and should include details and limitations about deliverables, explicitly including what is out of scope. It is preceded by a Level of Effort (LOE) which the client agrees to. It operates under the framework of the Master Services Agreement (MSA). You should have access to the SOW and know the deliverables we've promised.
Level of Effort (LOE) = An estimate only, to make sure that your anticipated costs are in line with the client's budget. It's usually prepared by senior staff who have experience estimating similar projects. It is not a binding contract, just used to set the stage for an SOW. It follows a discovery project or at least some form of pre-sales discovery that allows for proper estimation.
Discovery = Here we want to use our standardized tools and checklists to perform a thorough evaluation. This is beneficial to both sides. The consultancy gets to explore the turf and find opportunities. The client gets a thorough evaluation and some explanation for what could be. Often, clients come to consultants thinking they know exactly what they need. A discovery session will determine what they actually need. You may sign a small SOW with the client just to do discovery as a fixed-fee project. Or, discovery may just be the first part of a project. I prefer to have the Discovery project be a small, separate precursor project. The deliverables of a Discovery project are usually an LOE for a larger, detailed, well-scoped project.
Request For Proposal (RFP) = Large organizations and governmental agencies will likely follow an RFP (or RFQ, request for quote) process when putting projects out to bid. Usually there is a minimum threshold of cost for a project to require a RFP process, but cost is only part of a final formula that awards a winner. RFP's are usually quite large and detailed, usually have a public Q&A period, and may require consultancies to submit an LOE and SOW based on only that public information. Competition for RFP's from consulting companies far and wide is usually difficult, and it may be time-consuming to submit a qualified bid, often including the resumes of resources.
Master Services Agreement (MSA) = A precursor legal contract between the client and the consultancy, allowing for the signing of further contracts for individual projects, billing, terms of invoices, contacts. It also likely contains prohibitions of the client hiring away consultants, or in the event of a hire, terms of damages to pay the consultancy. Such "non-compete" clauses of MSA contracts have dubious success for enforcement, but it could be a non-starter for some employers who don't want the entanglement of dealing with a non-compete. Non-compete clauses may also be enforced in your hiring agreement from the consultancy.
Previous topics in this series:
Got comments, questions, or guide for your fellow consultants? Comments are welcome below.