Moving up the Value Chain
Moving up the Value Chain
a) A summary of why value is hidden - even when we do a superb job. Conversation habits to cultivate ... and habits to avoid
b) Ways to move up the hierarchy: from middle-managers to senior decision-makers, and also to identify cross-selling opportunities
c) Making it easy to have that "referral conversation" ... that many consultants avoid
d) Moving from one-off assignments to regular, retained business
This paper is intended as background to a good discussion, and is certainly not the last word on these subjects. A few questions are inserted here to stimulate thinking, you may use them for internal brainstorming or we may debate them on the call. In our teleconference, the focus will be on "sharing the experience of success", and hearing what works best for the participants.
1. Why value gets hidden
We start with a brief reflection on value, as this is fundamental to the other objectives.
There are many reasons why value is hidden, but the following should serve as a brief summary:
The value of any solution is at its highest before the solution is known. When a problem gets solved - or when the customer knows the solution (or even the approach to find the solution) - the value of the solution tends to wane. The problem is no longer as scary as it was. Or seeing the simplicity of the solution, the customer imagines its just common sense, that the consultant has merely confirmed their thinking.
Everyone is assumed to be promoting something, whether a company, an approach, or a career. So there is a tendency to discount success-stories and testimonials ... almost to switch off from the messages being broadcast by the consultant or supplier. This also can make the consultant a bit shy of the value-conversation, so as not to be seen to be selling.
As we all live in a world of information-overload, there is little time to reflect on value. When a problem gets solved or a target gets achieved, we simply move on the next issue, the next gap to be closed.
Everyone sees value differently. A consultant may be most proud of the numbers, but some of the management may be more appreciative of the effect on morale. Or the consultant may point to the technical brilliance of the solution, while the director is trying to assimilate this into the strategy.
Q. What forces may be obscuring the value you provide to your clients?
2. Conversation habits to change
Much of our mentoring work with consultants is about re-forming their conversation habits in role-play, so as to make value more evident. In theory, most of us know about these habits ... but that's just theory! If in any doubt about how habitual our conversations can become, record a few client calls, and play them back ...armed with a stiff drink!
(Q. For example, how do you tend to open review meetings?)
Here is a few of the common shifts that accelerate trust with clients:
Habits to avoid: Habits to cultivate:
Opening a meeting with a presentation of what we have done, either on this project or with other clients
Outlining a few suggested areas to cover, then asking the client what they would most want to get from the meeting
Seizing on the first familiar issue that comes up
Asking questions like "Why is that particularly important (right now)?" and "What would new thinking look like?"
Demonstrating what we know, putting forward suggested solution that we hope will impress
Exploring the context fully, before going into content of any issue
Getting stuck in to the analysis. (We're secretly longing to do so ... many want the commercial phase over as quickly as possible!)
Asking who else we should be talking to, in order to find answers to our (insightful) context-questions. (A great way up the hierarchy)
Not asking for feedback at all
Making feedback a regular part of every meeting
Asking how we could improve ... or what they did not like about the service
Asking what they found most valuable
Going for a clean finish
Leaving strands of communication open so that we will never again have to start from cold, on the outside
There are lots more, but the regular practice of these will almost be enough to create a process of continuing self-awareness for the consultant.
3. Moving up the hierarchy
Many client organisations are now wise to the fact that consultants tend to be great relationship-builders, and managers are more adept than ever at keeping strict control of who the consultant speaks to. I know of one case where a 250K p.a. was lost when a disgruntled middle-manager became offended that one of the consultancy team tried to go "over his head".
So the first guideline has to be "tread carefully" and win support when moving up.
(Q. When might "treading softly" not be so appropriate?)
One of the easiest ways to move up the hierarchy is to create questions regarding the future that the middle-manager cannot answer. For example, "what other channels-to-market will be significant in three years time?". If we have a cluster of these questions, we might have a case to go (together) to multiple senior people, in order to get the answer.
A second approach centres on "Whose support will be vital to the success of this project?" In a sales situation, this is an elegant way of finding out who is the budget holder. When we know the response, we need a swift injection of creativity (e.g. questions that only the senior can answer) and so find reasons to involve them.
If an event is being planned (e.g. a conference or team meeting that will include the senior decision-makers), we can offer to do some random briefing-calls with the participants. Needless to say, we make sure we prioritise the key stakeholders. A second advantage of this approach is that we can often charge for it.
In all cases, we are seeking to move from content to context:
Content being the work to be done, the scope, the analysis, the deliverables, the methodology, the project plan ... the "internal workings" of the assignment, and
Context being the changes in the business, the organisation, the marketplace etc. that make the content important (now), from which the content derives its value, and which is often only known to senior decision-makers
We can nearly always legitimise moving up the hierarchy in terms of context, more readily than in terms of content. All we need to do is to be clear about why we need to do so.
The more passionate the consultant is about his subject area, the greater the "gravitational pull" of content, and the greater the risk that context gets ignored. IT experts start asking technical questions, lawyers start exposing legal risk, coaches start coaching and cost-reduction experts start asking questions about the mechanics of reducing cost. We all have an appetite for our specialist areas ... we just need to keep talking until we are clear who is paying for dinner.
(Q. If your business were to develop it's own "Top Ten" questions to move up the value-chain - from content to context - what would those be?)
4. Easier referral conversations
Most professionals would agree that the best time to get referrals is when we are on the job. Most would also agree that the best source of new business is our existing clients.
Yet the truth is that most opportunities for asking for referrals (and cross-selling) are missed. This is true for a number of reasons:
a) are all very busy on content, i.e. delivery challenging assignments by the next deadline
b) huge sensitivity and awkwardness when moving from consultant-style conversations to commercial-style conversations. Fear of spoiling a trusted relationship. Not knowing how to broach the subject.
c) Professionals just forget ... or it becomes another dreaded "should" on the task-list
The situation is not helped by some of the language advocated in other professionals or on general purpose sales courses. Who can blame a consultant for not wishing to ever sound like an insurance salesman, trying to tap into the client's family and friends?
This is why the distinction between content and context so powerful: it provides a respectful framework in which a consultant can broaden the conversation, in a way that uncovers opportunity without ever risking trust. In fact, when I'm coaching those who want to get more referrals, I sometimes ask them to stop trying to do so, and instead change the focus on becoming "masters of context-setting".
Good questions include:
Why is that important?
What impact did that have?
What difference would that make?
Who else is / was affected?
What other changes were going on around you at the time?
With some support (and not a little nagging!), most consultants will readily play the context-setting game ... to a degree that for some becomes a veritable art-form, from which the opportunities quite naturally fall as ripe fruit from a tree. Even for the commercially shy, it's then easy to ask "If we could help you with that, would you be interested? OK ... who do we need to include in that conversation?"
5. More advanced referral conversations
I used to use a longer form of dialogue with consultants, but some years ago I noticed that even with perfect support and nagging, too many consultants were still avoiding the conversation. Hence, I now coach using the easier structure in the previous section. Nevertheless, I thought it worthwhile to include the original (now called the "advanced") dialogue in this paper, as it's being used by a more experienced audience.
As we have seen in the previous section, it is important that we position the referral conversation correctly - otherwise the subject may be dismissed with "let me think about it, and I will get back to you". Take for example someone you have been working with for a few months and have now got to know well. Here are some good questions to ask over lunch:
How did we first meet? (This prompts a discussion on why you "connected" and also serves as a reminder of how important referrals are to you. Particularly useful if you plan to ask for referrals later.)
I am conducting some informal research; would you be willing to participate? (Allows you to use the rest of the lunch for some honest questions and answers, rather than some irrelevant chit-chat. Also makes it easy to ask if it's OK to make notes.)
If you were introducing us to someone else, who knows nothing about us, how would you describe what we do? (Provides some insights into how recognisable your clients are: see previous section.)
What difference did our work together make? And what difference did that make? (Keep going until they run out of answers. No rush. This is the value we add - not always what we think it is! Listen and learn.)
I would like to work with more people like you? Where else do (finance directors / property owners... insert niche here) go?
Take for example that (institute meeting / golf club ... insert the answer to q.5 here), who else can you picture there who also need (benefits ... insert answer from q.4 here)? This gets them thinking specifically - about specific people and specific benefits.
If there was only one thing you could change right now, what would that be? (Give them time to think ...and resist the temptation to interrupt a long silence. There might be more business here for you too.)
If we could help you with that, would you be interested? (Your lunch is a business expense, isn't it? You are entitled to ask!)
Would you like to meet (Johann Smith) who specialises in this area? (An opportunity to open the door for someone else, e.g. your alliance partners, particularly if their attention is not on your services right now.)
What journals do you read? Which industry meetings do you attend? Would they appreciate a (speaker / author / committee-member)? (Useful information on how you can reach more people like them. It's easier to live at the core of the client world - where they already go - than to search the highways and byways for prospects.)
If there was something we should be doing to add value in your market sector now, what might that be? (Valuable research for the future.)
In the meantime, may we stay in touch via (newsletter / event-invitations / socially etc)? (It may be several years before they need you. If you stay in touch, they may remember you; otherwise they probably won't.)
Finally, we must not forget to thank them. You may be paying the lunch bill, but they have given you a slice of their most finite (and irreplaceable) asset: their time.
6. From assignments to retainers
Most consultants want to cultivate "trusted advisor" status. When it works well, this is a win-win; the client has access to the best possible advice on an as-needed basis and does not have to go through briefing and procurement every time, and the consultancy does not have the high cost of sale associated with "transaction" business.
So how do we move from one to the other?
Firstly, it helps to separate the project work from the ongoing sounding-board (or consultancy / coaching / support) role. It is temping to maximise the amount of retained business, and therefore to include as many elements as possible. But if the budgets get cut, the entire arrangement can come to an end. It may be better to maintain a slim long-term high-value service (one that ideally maintains contact with senior decision makers), so that you can avail of preferred-supplier project work as it comes up.
(Q. When might this be not so appropriate?)
One of the big wins for clients is ease of budgeting. A regular monthly payment is easier to administer than big chunky sporadic bills that require a lot of explanation with peers.
When you ask "would it be easier to organise our relationship around an agreed monthly budget?" and they say "Yes, probably" ... the next question is "How would that be helpful?" If it's likely to happen, they should be able to sell it to themselves. And if not, the relationship is probably not as warm as we thought, and they still feel the need to police our timesheets.
Retainers should really be freeing you up from the tyranny of the timesheet, and therefore should never be tied into being accountable for your hours. If a relationship is ripe for retainer, it should also be ripe for value-billing: i.e. your value as a consultant is not tied into how many hours you are spending with them, but in linked to tangible value that they can realise as a result of your intervention. This is one of the key multipliers that yields "more fees in less time".
There is always a tendency for a consultant-client relationship to get cosy i.e. too comfortable. One day, the client feels they are not getting as much value as they thought, but rather than confront their friendly consultant with that, thet start thinking about working with someone else. The first the consultant knows is when the tough conversation about termination takes place. This is where the "hidden value" conversation is vital all the time: i.e.
"Of all the things we have covered today, what for you was most valuable?"
"Why was that important?"
"What difference will that make?"
"How can we support you further with that?"
7. Parting Shot
Client-management is an art as well as a science. Like any art, practice is the key to mastery. But it is equally possible to practice bad habits, which can restrict an individual's "game" for years.
Feedback is therefore "the breakfast of champions". The practice of building feedback into every conversation supports fee-earners to raise their game. Coaching can also help, as long as it develops business acumen alongside personal aspiration. The key to success lies in becoming enthusiastic students of our own value. As Edgar Friedenberg said:
"What is important is HOW we are valuable ...
... rather than how valuable we are."
Further information
For more assistance with this topic, a sample coaching-session, or ideas for a team-training session or workshop, you are welcome to contact the author by emailing john@success121.com
© John Niland, Success 121, May 2008. May be reproduced on condition that the "Further Information" section above is included.
Moving up the Value Chain - To learn more about this author, visit John Niland's Website.
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This paper addresses:
a) A summary of why value is hidden - even when we do a superb job. Conversation habits to cultivate ... and habits to avoid
b) Ways to move up the hierarchy: from middle-managers to senior decision-makers, and also to identify cross-selling opportunities
c) Making it easy to have that "referral conversation" ... that many consultants avoid
d) Moving from one-off assignments to regular, retained business
This paper is intended as background to a good discussion, and is certainly not the last word on these subjects. A few questions are inserted here to stimulate thinking, you may use them for internal brainstorming or we may debate them on the call. In our teleconference, the focus will be on "sharing the experience of success", and hearing what works best for the participants.
1. Why value gets hidden
We start with a brief reflection on value, as this is fundamental to the other objectives.
There are many reasons why value is hidden, but the following should serve as a brief summary:
The value of any solution is at its highest before the solution is known. When a problem gets solved - or when the customer knows the solution (or even the approach to find the solution) - the value of the solution tends to wane. The problem is no longer as scary as it was. Or seeing the simplicity of the solution, the customer imagines its just common sense, that the consultant has merely confirmed their thinking.
Everyone is assumed to be promoting something, whether a company, an approach, or a career. So there is a tendency to discount success-stories and testimonials ... almost to switch off from the messages being broadcast by the consultant or supplier. This also can make the consultant a bit shy of the value-conversation, so as not to be seen to be selling.
As we all live in a world of information-overload, there is little time to reflect on value. When a problem gets solved or a target gets achieved, we simply move on the next issue, the next gap to be closed.
Everyone sees value differently. A consultant may be most proud of the numbers, but some of the management may be more appreciative of the effect on morale. Or the consultant may point to the technical brilliance of the solution, while the director is trying to assimilate this into the strategy.
Q. What forces may be obscuring the value you provide to your clients?
2. Conversation habits to change
Much of our mentoring work with consultants is about re-forming their conversation habits in role-play, so as to make value more evident. In theory, most of us know about these habits ... but that's just theory! If in any doubt about how habitual our conversations can become, record a few client calls, and play them back ...armed with a stiff drink!
(Q. For example, how do you tend to open review meetings?)
Here is a few of the common shifts that accelerate trust with clients:
Habits to avoid: Habits to cultivate:
Opening a meeting with a presentation of what we have done, either on this project or with other clients
Outlining a few suggested areas to cover, then asking the client what they would most want to get from the meeting
Seizing on the first familiar issue that comes up
Asking questions like "Why is that particularly important (right now)?" and "What would new thinking look like?"
Demonstrating what we know, putting forward suggested solution that we hope will impress
Exploring the context fully, before going into content of any issue
Getting stuck in to the analysis. (We're secretly longing to do so ... many want the commercial phase over as quickly as possible!)
Asking who else we should be talking to, in order to find answers to our (insightful) context-questions. (A great way up the hierarchy)
Not asking for feedback at all
Making feedback a regular part of every meeting
Asking how we could improve ... or what they did not like about the service
Asking what they found most valuable
Going for a clean finish
Leaving strands of communication open so that we will never again have to start from cold, on the outside
There are lots more, but the regular practice of these will almost be enough to create a process of continuing self-awareness for the consultant.
3. Moving up the hierarchy
Many client organisations are now wise to the fact that consultants tend to be great relationship-builders, and managers are more adept than ever at keeping strict control of who the consultant speaks to. I know of one case where a 250K p.a. was lost when a disgruntled middle-manager became offended that one of the consultancy team tried to go "over his head".
So the first guideline has to be "tread carefully" and win support when moving up.
(Q. When might "treading softly" not be so appropriate?)
One of the easiest ways to move up the hierarchy is to create questions regarding the future that the middle-manager cannot answer. For example, "what other channels-to-market will be significant in three years time?". If we have a cluster of these questions, we might have a case to go (together) to multiple senior people, in order to get the answer.
A second approach centres on "Whose support will be vital to the success of this project?" In a sales situation, this is an elegant way of finding out who is the budget holder. When we know the response, we need a swift injection of creativity (e.g. questions that only the senior can answer) and so find reasons to involve them.
If an event is being planned (e.g. a conference or team meeting that will include the senior decision-makers), we can offer to do some random briefing-calls with the participants. Needless to say, we make sure we prioritise the key stakeholders. A second advantage of this approach is that we can often charge for it.
In all cases, we are seeking to move from content to context:
Content being the work to be done, the scope, the analysis, the deliverables, the methodology, the project plan ... the "internal workings" of the assignment, and
Context being the changes in the business, the organisation, the marketplace etc. that make the content important (now), from which the content derives its value, and which is often only known to senior decision-makers
We can nearly always legitimise moving up the hierarchy in terms of context, more readily than in terms of content. All we need to do is to be clear about why we need to do so.
The more passionate the consultant is about his subject area, the greater the "gravitational pull" of content, and the greater the risk that context gets ignored. IT experts start asking technical questions, lawyers start exposing legal risk, coaches start coaching and cost-reduction experts start asking questions about the mechanics of reducing cost. We all have an appetite for our specialist areas ... we just need to keep talking until we are clear who is paying for dinner.
(Q. If your business were to develop it's own "Top Ten" questions to move up the value-chain - from content to context - what would those be?)
4. Easier referral conversations
Most professionals would agree that the best time to get referrals is when we are on the job. Most would also agree that the best source of new business is our existing clients.
Yet the truth is that most opportunities for asking for referrals (and cross-selling) are missed. This is true for a number of reasons:
a) are all very busy on content, i.e. delivery challenging assignments by the next deadline
b) huge sensitivity and awkwardness when moving from consultant-style conversations to commercial-style conversations. Fear of spoiling a trusted relationship. Not knowing how to broach the subject.
c) Professionals just forget ... or it becomes another dreaded "should" on the task-list
The situation is not helped by some of the language advocated in other professionals or on general purpose sales courses. Who can blame a consultant for not wishing to ever sound like an insurance salesman, trying to tap into the client's family and friends?
This is why the distinction between content and context so powerful: it provides a respectful framework in which a consultant can broaden the conversation, in a way that uncovers opportunity without ever risking trust. In fact, when I'm coaching those who want to get more referrals, I sometimes ask them to stop trying to do so, and instead change the focus on becoming "masters of context-setting".
Good questions include:
Why is that important?
What impact did that have?
What difference would that make?
Who else is / was affected?
What other changes were going on around you at the time?
With some support (and not a little nagging!), most consultants will readily play the context-setting game ... to a degree that for some becomes a veritable art-form, from which the opportunities quite naturally fall as ripe fruit from a tree. Even for the commercially shy, it's then easy to ask "If we could help you with that, would you be interested? OK ... who do we need to include in that conversation?"
5. More advanced referral conversations
I used to use a longer form of dialogue with consultants, but some years ago I noticed that even with perfect support and nagging, too many consultants were still avoiding the conversation. Hence, I now coach using the easier structure in the previous section. Nevertheless, I thought it worthwhile to include the original (now called the "advanced") dialogue in this paper, as it's being used by a more experienced audience.
As we have seen in the previous section, it is important that we position the referral conversation correctly - otherwise the subject may be dismissed with "let me think about it, and I will get back to you". Take for example someone you have been working with for a few months and have now got to know well. Here are some good questions to ask over lunch:
How did we first meet? (This prompts a discussion on why you "connected" and also serves as a reminder of how important referrals are to you. Particularly useful if you plan to ask for referrals later.)
I am conducting some informal research; would you be willing to participate? (Allows you to use the rest of the lunch for some honest questions and answers, rather than some irrelevant chit-chat. Also makes it easy to ask if it's OK to make notes.)
If you were introducing us to someone else, who knows nothing about us, how would you describe what we do? (Provides some insights into how recognisable your clients are: see previous section.)
What difference did our work together make? And what difference did that make? (Keep going until they run out of answers. No rush. This is the value we add - not always what we think it is! Listen and learn.)
I would like to work with more people like you? Where else do (finance directors / property owners... insert niche here) go?
Take for example that (institute meeting / golf club ... insert the answer to q.5 here), who else can you picture there who also need (benefits ... insert answer from q.4 here)? This gets them thinking specifically - about specific people and specific benefits.
If there was only one thing you could change right now, what would that be? (Give them time to think ...and resist the temptation to interrupt a long silence. There might be more business here for you too.)
If we could help you with that, would you be interested? (Your lunch is a business expense, isn't it?
Would you like to meet (Johann Smith) who specialises in this area? (An opportunity to open the door for someone else, e.g. your alliance partners, particularly if their attention is not on your services right now.)
What journals do you read? Which industry meetings do you attend? Would they appreciate a (speaker / author / committee-member)? (Useful information on how you can reach more people like them. It's easier to live at the core of the client world - where they already go - than to search the highways and byways for prospects.)
If there was something we should be doing to add value in your market sector now, what might that be? (Valuable research for the future.)
In the meantime, may we stay in touch via (newsletter / event-invitations / socially etc)? (It may be several years before they need you. If you stay in touch, they may remember you; otherwise they probably won't.)
Finally, we must not forget to thank them. You may be paying the lunch bill, but they have given you a slice of their most finite (and irreplaceable) asset: their time.
6. From assignments to retainers
Most consultants want to cultivate "trusted advisor" status. When it works well, this is a win-win; the client has access to the best possible advice on an as-needed basis and does not have to go through briefing and procurement every time, and the consultancy does not have the high cost of sale associated with "transaction" business.
So how do we move from one to the other?
Firstly, it helps to separate the project work from the ongoing sounding-board (or consultancy / coaching / support) role. It is temping to maximise the amount of retained business, and therefore to include as many elements as possible. But if the budgets get cut, the entire arrangement can come to an end. It may be better to maintain a slim long-term high-value service (one that ideally maintains contact with senior decision makers), so that you can avail of preferred-supplier project work as it comes up.
(Q. When might this be not so appropriate?)
One of the big wins for clients is ease of budgeting. A regular monthly payment is easier to administer than big chunky sporadic bills that require a lot of explanation with peers.
When you ask "would it be easier to organise our relationship around an agreed monthly budget?" and they say "Yes, probably" ... the next question is "How would that be helpful?" If it's likely to happen, they should be able to sell it to themselves. And if not, the relationship is probably not as warm as we thought, and they still feel the need to police our timesheets.
Retainers should really be freeing you up from the tyranny of the timesheet, and therefore should never be tied into being accountable for your hours. If a relationship is ripe for retainer, it should also be ripe for value-billing: i.e. your value as a consultant is not tied into how many hours you are spending with them, but in linked to tangible value that they can realise as a result of your intervention. This is one of the key multipliers that yields "more fees in less time".
There is always a tendency for a consultant-client relationship to get cosy i.e. too comfortable. One day, the client feels they are not getting as much value as they thought, but rather than confront their friendly consultant with that, thet start thinking about working with someone else. The first the consultant knows is when the tough conversation about termination takes place. This is where the "hidden value" conversation is vital all the time: i.e.
"Of all the things we have covered today, what for you was most valuable?"
"Why was that important?"
"What difference will that make?"
"How can we support you further with that?"
7. Parting Shot
Client-management is an art as well as a science. Like any art, practice is the key to mastery. But it is equally possible to practice bad habits, which can restrict an individual's "game" for years.
Feedback is therefore "the breakfast of champions". The practice of building feedback into every conversation supports fee-earners to raise their game. Coaching can also help, as long as it develops business acumen alongside personal aspiration. The key to success lies in becoming enthusiastic students of our own value. As Edgar Friedenberg said:
"What is important is HOW we are valuable ...
... rather than how valuable we are."
Further information
For more assistance with this topic, a sample coaching-session, or ideas for a team-training session or workshop, you are welcome to contact the author by emailing john@success121.com
© John Niland, Success 121, May 2008. May be reproduced on condition that the "Further Information" section above is included.
Moving up the Value Chain - To learn more about this author, visit John Niland's Website.
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