By November 24, 2010 4 Comments Read More →

Consultant’s Goals, Risks, and Constraints – Part I

Flawless Consulting If you’d ask me what are the three most important things in consulting I’d probably tell you it is Goals, Risks, and Constraints.

It took me awhile to realize what main business goals are in consulting practice. It took me even longer to realize how those business goals map to my own goals. It took me even longer to realize constraints that get in a way in reaching those seemingly easy to achieve goals. Once I realized the constraints it was easy to model the risks behind it so I can get better prepared in maximizing the constraints and getting close to the goals with much less efforts. This post discusses Goals.

Utilization. Utilization is the time invested in billable work. Utilization means money. The higher utilization, the more money consultant brings. Usually there is required minimum amount of hours that consultant must bill to justify his employment. To encourage consultants to invest in more billable hours there are incentives. The flip side is that investing only in billable work would pose the risk of knowledge lag or burn out. Another big risk here is failure to grow your network. The trick is planning billable time ahead as far as possible, preferably a year ahead, then stick to the plan. What could limit the execution is the pipeline – the forecast salesmen do for their sales. Another limiting factor here is a backlog – actual billable work that was sold and needs to be delivered and billed. Backlog is a subset of the pipeline since not all what was forecasted gets realized into actual sale of service. Questions related to utilization:

  1. What’s the minimum annual utilization I am required to attain?
  2. What’s the minimum utilization, beyond the minimal, I must attain to keep the job?
  3. What’re the incentives for higher utilization?
  4. Are the incentive linear?
  5. What’s the annual utilization I need to attain to get highest incentive?
  6. How much time I am willing to invest monthly for billable utilization?

Customer Satisfaction. Customer satisfaction is another business goal. Keeping customer happy is job security for consultant and for the whole business. Neglecting this goal would pose the risk of sitting on the bench and missing utilization goal. It also could cause loss of trust and even project failure. What could limit a consultant is setting unachievable goals in first place, knowledge lag, inability to influence, inability to respond quickly, and inadequate time management. Questions related to Customer Satisfaction.

  1. Who’s the customer and who’s not?
  2. Who’s the real customer?
  3. Who’s the decision maker?
  4. What’s customer’s objective?
  5. What’s the goal behind the customer’s objective?
  6. What’s customer’s communications style?
  7. What’s customer’s story?
  8. What customer values the most?
  9. What’re the customer’s top tasks?
  10. Am I the right guy for the job?

Growth. You either grow or become irrelevant or eaten by competition. You must set growth as a goal. Growth can come in several forms:

  • Deepen current skills and become most skilful and undisputed professional in your niche. The risk here is getting yourself into a pigeon hole which could lead to boredom and unsatisfying job. Another risk is just loosing job if the niche becomes irrelevant altogether.
  • Widen your skills to get exposed to more business opportunities and making work more colorful. The risk here is knowledge lag due to the wideness. As Gerald M. Weinberg puts in his book Secrets of Consulting: A Guide to Giving and Getting Advice Successfully: “The wider your spread the thinner it gets.”
  • Climb up the stack. Think of becoming a hands-on architect. A highly valuable and rare skill. This is actually a good path that pays well too. Remember, that the “architect”niche is very narrow and too crowded. It is highly visible too. You stumble once and you run the risk of loosing trust of the niche as a whole.

Questions related to Growth:

    1. What’s my niche I want to excel?
    2. Does the niche resonate with my values and passion?
    3. What’s the foreseen future of the niche?
    4. Can I use the niche’s skills for other disciplines?
    5. What’re technical skills I need to grow?
    6. What’re “soft” skills I need to grow?
    7. How do I test my growth?
    8. Who are the models I can model from? secrets of consulting

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4 Comments on "Consultant’s Goals, Risks, and Constraints – Part I"

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  1. J.D. Meier says:

    In project management, I’ve found myself focusing heavily on goals, risks, and constraints. In fact, I’ve gone as far as actually driving a constraint-driven approach … and it’s helped me respond to changing times.

    I like that you’ve dug down deep and bubbled up some insightful know-how from the trenches.

    How do you plan a year ahead of billable time? Most folks I know are happy and opportunistic with whatever billable time they can get.

  2. alik levin says:

    J.D.
    Theory of Constraints seems to work, eh?
    Here is how I planned my billable time year ahead:
    http://practicethis.com/2008/09/06/time-is-not-money-time-is-budget/
    and this is how I use Outlook to control I am on track
    http://practicethis.com/2009/07/16/free-ebook-effective-time-management-with-ms-outlook-2007/

  3. Justin Dupre says:

    Very informative and useful article about consulting. I love how you put bold to emphasize some parts that make it easier to see and the tips you provided us in the list of questions. Thanks!

  4. alik levin says:

    Justin,
    Thank you, happy you liked it.

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