What the heck is a consultant anyway???

28 replies
Consultants,

I've picked up this book: "The Firm: The Story of McKinsey and Its Secret Influence on American Business"

I found myself a bit confused as to what a consultant is at it's core, and this case study helped a lot.

Large corporations are outsourcing talent to "consulting firms" to avoid the expenses associated with providing employee benefits. I have a friend who is in banking who identifies himself as a consultant, though his role and responsibilities are basically that of an employee.

I also asked myself a question... If a guy walks down the block, meets with a business owner and sells him a mobile website, is he a consultant? Contractor? Service Provider? Salesman?

Some consultants actually labor on specific projects where they perform very specific tasks; set up IT, conduct an executive search, etc. Whereas other consultants sell a roadmap, or a game plan and help their clients identify the pieces necessary to make the plan work.

It seems like the definition of what a consultant is, is constantly evolving.

I'd like to get you guy's views on this stuff, but I also want to share with you some of the most commonly highlighted portions of this book.

"First, the consultant must his clients' interests ahead of the firm's interests. If a McKinsey consultant thinks a study is not in the interests of a client - a waste of money, or a misguided investigation - he must tell the client so. Second, he must adhere to the highest standards of truthfulness, integrity, and trustworthiness. Third, he must keep to himself the client's private and proprietary information. Fourth, he must maintain an independent position and tell the client the truth as he sees it. And fifth, he must provide only services that have real value."

Takeaway for me: The book is informative yet vague at the same time. The first principle jumped out at me because it seems as if McKinsey is ranking in billions by simply conducting and selling research...

"They sell what their clients are buying, and where the clients are buying it."

Takeaway for me: Obvious.

"Association with a failing firm was toxic for a consultancy's business. From this point forth, McKinsey & Company strove to stay well behind the scenes. It henceforth refused to reveal its client list and at the same time insisted that their clients show similar discretion."

Takeaway for me: This protects you from a client inevitably short cutting your advice, failing to take your advice, or mis appropriating your advice, then turning around and blaming you for it.

"The consultant would comport himself as a lawyer, with discretion and integrity; he would bring scientific, fact based rigor and precision to the task, like an engineer or accountant. Like a doctor, he would dispense advice to unhealthy companies on how to get better, and to healthy companies on how to stay that way. And, like a priest, he would serve his clients."

Takeway for me: Everyone knows you should dress professionally when the situation warrants. What amazed me about this, is the part that I have in bold. Consultants can essentially get paid well by clients who really don't need them.

"McKinsey insisted that it would work only for the chief executives of firms and not be shunted off to their underlings... This had the added advantage of freeing McKinsey from having to offer specialized technical advice... Narrow expertise is for chumps, we do vision."

Takeaway for me: Selling "vision" gives you more bandwidth. If you have to do all the nitty gritty, you have less of it. When you have more bandwidth you have more room to bring in more clients, thus more money.

"Consultants will carry information in and information out. The client has to decide which of those flows is worth more."

Takeaway for me: Listen to everyone, especially the ones who have something to brag about. Ever prospect and come across a business owner who declines your offer but goes on to tell you how and why he's great? There may be something in his success you can sell to the next guy.
#consultant #heck
  • Profile picture of the author ewenmack
    Yes there is a lot of confusion and myths
    around what a consultant is.

    I'm one because people pay me for my knowledge,
    not to implement it.

    People around here call themselves consultants
    when they implement SEO, web design, and all sorts of
    other services. However they aren't paid for their knowledge
    separate.

    Would someone be willing to pay for what you know but don't buy your
    SEO or what ever main service you offer?
    If not, then you aren't. The true test is whether
    you get paid for it.
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    • Profile picture of the author TheBigBee
      Originally Posted by ewenmack View Post

      Yes there is a lot of confusion and myths
      around what a consultant is.

      I'm one because people pay me for my knowledge,
      not to implement it.

      People around here call themselves consultants
      when they implement SEO, web design, and all sorts of
      other services. However they aren't paid for their knowledge
      separate.

      Would someone be willing to pay for what you know but don't buy your
      SEO or what ever main service you offer?
      If not, then you aren't. The true test is whether
      you get paid for it.

      How do you handle offering your expertise to competing clients? McKinsey was all about it and made it very clear up front. Bain on the other hand would only take one client per vertical.
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      • Profile picture of the author ewenmack
        Originally Posted by TheBigBee View Post

        How do you handle offering your expertise to competing clients? McKinsey was all about it and made it very clear up front. Bain on the other hand would only take one client per vertical.
        On the surface companies may seem as competing,
        but in fact are not due to location or markets
        they are going after.

        Best,
        Ewen
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        • Profile picture of the author TheBigBee
          Originally Posted by ewenmack View Post

          On the surface companies may seem as competing,
          but in fact are not due to location or markets
          they are going after.

          Best,
          Ewen
          But there are cases when firms do compete.

          Have you never come across a situation where there was an oppty to consult firms who are in direct competition with one another?
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          • Profile picture of the author ewenmack
            Originally Posted by TheBigBee View Post

            But there are cases when firms do compete.

            Have you never come across a situation where there was an oppty to consult firms who are in direct competition with one another?
            No again because we can subdivide markets in many different ways
            and go out of markets and become the only one
            who does X.

            Best,
            Ewen
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    • Profile picture of the author Mr Bill
      Originally Posted by ewenmack View Post

      Yes there is a lot of confusion and myths around what a consultant is. I'm one because people pay me for my knowledge, not to implement it...
      Thanks Ewan, I've never heard it put quite like that. Powerful post.
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  • Profile picture of the author Arzak
    I've asked this question myself! I guess you could be several of them. You could call yourself a service provider since you're providing a service, and you could say you're a salesman because you're trying to sell your service.

    But a contractor usually works under supervision, whereas a consultant does their own thing because the hiring business needs help because they don't have the knowledge. They're consulting.

    Consultants can offer only knowledge or both knowledge and implementation. I don't think there's any strict terms. It could be, for example, "strategy consulting" (e.g. McKinsey) vs. "operations consulting" (e.g. Deloitte). Deloitte does implementation whereas McKinsey often only identifies & recommends.
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  • Profile picture of the author digichik
    What the heck is a consultant anyway???

    I could be, Consultant is a euphemism for unemployed.
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    • Profile picture of the author Claude Whitacre
      I think of myself far more as a Salesman than a Consultant.

      My purpose is to qualify and sell. Of course, the prospect must be able to benefit from what I sell, or it's a form of fraud (at least from my perspective)

      To me, a Consultant is an advice giver that works exclusively for the client's benefit. To me, a consultant will argue a case, regardless of what the client thinks. A consultant sells their experience and expertise, regardless of implementation, or whether the client buys anything else from the consultant.

      Doctors are consultants. Their obligation is to tell you the best course of action, regardless of how it affects their profits.

      So, I guess outsourcing tasks is hiring consultants. But not on the high end.

      Me? I'm just selling a high dollar service. It has aspects of "consulting", but not the intention.


      Originally Posted by TheBigBee View Post

      But there are cases when firms do compete.

      Have you never come across a situation where there was an oppty to consult firms who are in direct competition with one another?
      I have. I would certainly consult with both of them. But I wouldn't sell my service to both of them, if they are in the same area. That would hurt the results each of them get from what I sell.
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  • Profile picture of the author Peter Lessard
    A very interesting post and some great points by everyone. I am asked frequently to define what I am by business owners and I will be using many of the points in this post as they are well stated.

    Some things that are specifically interesting to me.

    1. I do get paid for advice so I consider myself a consultant. When possible I advise clients on how to do things themselves such as Facebook posting etc...

    2. Over a decade I have built a streamlined service delivery system to be able to provide when needed the elements that most business owners end up not wanting to do themselves. The advantages of using me as a provider is that I am the quarterback that sits at the top and makes sure all the individual services play nicely with each other so I end up being both a consultant and service provider at the same time. Of course this could present a conflict since as a consultant I may recommend Facebook ads, seo, new web sites etc.. all carrying a price tag and all putting money in my pocket. To make things as fair as possible I offer great leverage for a buck due to my systems and outsourcing and I refuse to sell anything that I feel would not profit the business owner but I still get how this can be a tricky situation.

    3. I found this very interesting! " Consultants can essentially get paid well by clients who really don't need them." Here is my take on this. 99% of my clients come to me AFTER some sort of disaster or failure seeking my guidance. Often it is as simple as they had no idea how hard it would be to market their offer and they are going to zero fast. At other times its things like huge losses in ranks and therefore leads or new competitors doing it better than them on the marketing front etc....

    In most cases had they been paying me when it SEEMED they did not need me the disaster would of never of occurred. In fact I think it would be fair to say for everyone that has chimed in on this thread so far that if you were retained by a company to keep an eye out and handle some areas that their increased profits and insurance against pulling a major screw up would easily have paid for themselves.

    As an example 99% of companies do not use a great copy guy yet they communicate constantly and those communications have certain rates of conversion that could easily be increased if every bit of copy first had to be vetted by someone with a clue.

    Same goes with web site conversions. Sure I visit with business owners that are making good money via their site. They are not in trouble. But in just a few minutes I pretty much always find ways to increase conversions such that my fee to keep an eye on things would easily be covered.

    Anyway great thread and I look forward to others opinions.
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    • Profile picture of the author Jeff Schuman
      I know how to do something you do not know how to do that will save you time and money. Will you pay me to learn it?

      I know how to do something that you do not know how to do that will save you time and money, and I will do it for you. Will you pay me to do that?

      I read a book the other day from Frank Kern where he said consulting is a $100 Billion Dollar a year business and will grow 83% by 2018. He says he is earning $175,000 a month with his consulting business.

      That beats the heck out of $20 clickbank ebook commissions.
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      • Profile picture of the author Peter Lessard
        Originally Posted by Jeff Schuman View Post

        I know how to do something you do not know how to do that will save you time and money. Will you pay me to learn it?

        I know how to do something that you do not know how to do that will save you time and money, and I will do it for you. Will you pay me to do that?

        I read a book the other day from Frank Kern where he said consulting is a $100 Billion Dollar a year business and will grow 83% by 2018. He says he is earning $175,000 a month with his consulting business.

        That beats the heck out of $20 clickbank ebook commissions.
        Jeff great simple summary. For some reason it reminded me how I always end up being both consultant and then provider.

        In the past I would consult. They would get providers or do it themselves and totally screw it up because marketing, seo etc.. changes so quickly and there are so many nuances. Once they screwed it up suddenly my advice was bad. I would do it myself and it would work and suddenly I was a hero.
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        • Profile picture of the author Jeff Schuman
          Originally Posted by plessard View Post

          Jeff great simple summary. For some reason it reminded me how I always end up being both consultant and then provider.

          In the past I would consult. They would get providers or do it themselves and totally screw it up because marketing, seo etc.. changes so quickly and there are so many nuances. Once they screwed it up suddenly my advice was bad. I would do it myself and it would work and suddenly I was a hero.
          That is a good point. 30 years ago I worked for an HVAC that started a parts dept with the idea they would make money selling the parts and when the customer screwed up they would get to go out and make money again fixing the problem.

          Similar analogy I guess.
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      • Profile picture of the author ewenmack
        Originally Posted by Jeff Schuman View Post


        I read a book the other day from Frank Kern where he said consulting is a $100 Billion Dollar a year business and will grow 83% by 2018. He says he is earning $175,000 a month with his consulting business.
        Yep, got the book.

        In it says he even had myths as to what a consultant was.

        His mental image was the McKinsey, Bain and co's.

        Being able to show somebody how to do something
        faster and cheaper than they could do it themselves
        became his mental aha moment.

        Best,
        Ewen
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        • Profile picture of the author Jeff Schuman
          Originally Posted by ewenmack View Post

          Yep, got the book.

          In it says he even had myths as to what a consultant was.

          His mental image was the McKinsey, Bain and co's.

          Being able to show somebody how to do something
          faster and cheaper than they could do it themselves
          became his mental aha moment.

          Best,
          Ewen
          My problem is I do not know that much about anything other then how to extend your life by getting a really good power nap in every afternoon. Not sure I could make a consulting business out of it. Maybe it will come to me in my dreams tomorrow afternoon.
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          • Profile picture of the author ewenmack
            Originally Posted by Jeff Schuman View Post

            My problem is I do not know that much about anything other then how to extend your life by getting a really good power nap in every afternoon. Not sure I could make a consulting business out of it. Maybe it will come to me in my dreams tomorrow afternoon.
            Hey there are paid consultants on raw food.

            The food is either raw or cooked, so people are making an interesting twist to it
            and finding people who want to know...something about the subject that they can't get in a book.

            Best,
            Ewen
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            • Profile picture of the author Jeff Schuman
              Originally Posted by ewenmack View Post

              Hey there are paid consultants on raw food.

              The food is either raw or cooked, so people are making an interesting twist to it
              and finding people who want to know...something about the subject that they can't get in a book.

              Best,
              Ewen
              You make a good point. I have a list of over 4000 how to things and 2500 tips ideas that is really full of potential consulting business ideas. I was thinking of ways to do a JV with someone who wants to consult, but does not want to do the marketing. A person could make a full time living just doing join ventures that way as well.

              Thanks.
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  • Profile picture of the author sdentrepreneur
    I feel there is a big difference in Consulting and Fulfillment. When I charge for consulting, that is when I am meeting with the business owner or their marketing department and they are doing all the work. I am mainly consulting them on what to do.
    Fulfillment is more when I manage and handle the data entry and content on the account. I was doing more consulting in 2013.
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  • Profile picture of the author socialentry
    Hey. Hey guys I have a joke

    A tourist walks into a pet shop in Silicon Valley, and is browsing around the cages on display.

    While he's there, another customer walks in and says to the shopkeeper, "I'll have a C monkey, please". The shopkeeper nods, goes over to a cage at the side of the shop and takes out a monkey. He fits a collar and leash and hands it to the customer, saying "That'll be $5000". The customer pays and walks out with his monkey. Startled, the tourist goes over to the shopkeeper. "That was a very expensive monkey - most of them are only a few hundred dollars. Why did it cost so much?" "Ah, that monkey can program in C - very fast, tight code, no bugs, well worth the money". The tourist looks at the monkeys in that cage. "That one's even more expensive - $10,000 dollars! What does it do?". "Oh, that one's a C++ monkey; it can manage object oriented programming, Visual C++, even some Java, all the really useful stuff". The tourist looks around for a little longer and sees a third monkey in a cage on its own. The price tag around its neck says $50,000. He gasps to the shopkeeper, "That one costs more than all the others put together! What on earth does it do?"

    "Well, I don't know if it does anything, but it says it's a consultant."
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  • Profile picture of the author vndnbrgj
    I have debated over the consultant thing as well....

    For me it was a consultant vs. a coach.

    I go with consultant, although I am changing that as well... due to the fact that every body and their brother is now a "consultant". I will still provide consulting services, just under a different title.

    Anyway, I thought a consultant was someone who advises and implements, and a coach was just someone who advises. A coach tells you what to do, and a consultant tells you and then does it with you.... Thoughts?
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  • Profile picture of the author focusedlife
    Its the same conundrum as always.

    For me, at least, consultants, advisors, and any new age titles that come about...the rules are always changing, as they might possibly should.

    Ambiguity is a key ingredient and ever present part of seductive prowess.

    The vanilla bland square peg person lacks long term appeal, so the people that understand how to shift when it matters seem to maintain the allure and esteem of those that "don't get it."

    Its something I hear underlying talks from all the folks that seem to be at the top...the gurus.

    There is power in being elusive, but not evasive.

    I tend to think of this stuff in terms of those 3D pictures that you stare at for a bit to see the hidden image (you know what I'm talking about)...

    Its hard to explain it, but for some...it just...clicks.

    That's my stance on this anyway.

    Everyone else shared some great stuff....hope mine was at least a helpful perspective.

    Regards

    Los
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  • Profile picture of the author mjbmedia
    A consultant shows the client what to do, then doesn't take the responsibility when it fails as it's always 'you didn't implement it as I told you to' escape line

    eg HR consultant advises a business how to quell some of its staff turnover and behavioural issues , all goes well then one staff members kicks up a bigger fuss of a kind that hasn't been covered in the consulting advice and ..... well who's fault/responsibility is that? The consultant would say if they'd followed my advices that scenario would never have occurred, the business would say we were following advices but the advice did not cover such a scenario.

    If the same business has the 'consultant' actually working for them as in delivering the HR service on an on going basis , then that HR consultant has to deal with the issue and sort it out.
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  • Profile picture of the author hayfj2
    "First, the consultant must his clients' interests ahead of the firm's interests. If a McKinsey consultant thinks a study is not in the interests of a client - a waste of money, or a misguided investigation - he must tell the client so. Second, he must adhere to the highest standards of truthfulness, integrity, and trustworthiness. Third, he must keep to himself the client's private and proprietary information. Fourth, he must maintain an independent position and tell the client the truth as he sees it. And fifth, he must provide only services that have real value."

    (1-5) The same could be said to define a "coach", but a coach IS NOT a consultant
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  • Profile picture of the author NewParadigm
    Many consultants in verticals are just information hubs. They have a basic skill set then learn various tips/tricks/strategies from clients, then spread the information to the rest of the vertical.

    IT consultants are more implementation oriented. A couple friends of mine do ecommerce strategy for high 6 figures for medium to large companies.

    Bigger companies w/ budgets use them as mostly for CYA reasons. Hey i hired XXX consultants and they said do this! The employee will take credit for successes and blame consultants for failure.

    My experience with McKinsey was a large multibillion customer hired them to squeeze suppliers. Everything reduced to an SKU and a price in a spreadsheet. No consideration of quality, service level, sales support, marketing. (my category was food which is more subjective and less substitutable. In SKU rationalization, I plugged one of my products in every SKU description they had in my category. It was an idiotic wasted expensive exercise for them and for me. It was a CYA 'sounds good' idea but a waste.

    Another experience is kind of a cool biz idea for someone in a vertical niche. Do surveys of a vertical/industry. Do marketing announcing an informational survey to your target participants/customers where they can benchmark against others in their business. Participants get a discount on a the finished survey. They end up selling for several hundred$$ to a couple grand. there is a ton of good information in these.
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  • Profile picture of the author NewParadigm
    I think I'll develop and sell a "Survey Bux" program. Holy Camoly! Little 'ol Me! who once scored 4 touchdowns in a single John Madden football game 30 years ago!

    Act now and I'll send you a floppy disk with details....wait...there's more....I'll even throw in a CD!
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  • Profile picture of the author shane_k
    Originally Posted by TheBigBee View Post


    "The consultant would comport himself as a lawyer, with discretion and integrity; he would bring scientific, fact based rigor and precision to the task, like an engineer or accountant. Like a doctor, he would dispense advice to unhealthy companies on how to get better, and to healthy companies on how to stay that way. And, like a priest, he would serve his clients."

    Takeway for me: What amazed me about this, is the part that I have in bold. Consultants can essentially get paid well by clients who really don't need them.
    I am curious why does what you put in bold make you assume that the client doesn't need the consultant?

    Sometimes companies do things right and succeed. But they do not know how they created that success and need to hire someone to come in and tell them how they created that success and how to repeat it.

    So just because they are successful doesn't mean they don't need you and what you have to offer.

    I remember one warrior mentioned that he targeted some local companies who were ranked number 1 in Google. His pitch to them was that he could improve their success so they dominated not just number 1 but also 2, 3, and 4th positions.
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    • Profile picture of the author TheBigBee
      Originally Posted by shane_k View Post

      I am curious why does what you put in bold make you assume that the client doesn't need the consultant?

      Sometimes companies do things right and succeed. But they do not know how they created that success and need to hire someone to come in and tell them how they created that success and how to repeat it.

      So just because they are successful doesn't mean they don't need you and what you have to offer.

      I remember one warrior mentioned that he targeted some local companies who were ranked number 1 in Google. His pitch to them was that he could improve their success so they dominated not just number 1 but also 2, 3, and 4th positions.
      I should have put a bunch of $$$$ next to the comment instead of bolding it. Everything about that dynamic is $$$$.

      I read the entire book so I was ecstatic to find out that there are managers who will

      1. Pay you for political reasons. In other words, they will have an idea and hedge against failure by being able to "blame the consultant."

      2. CEOs are human and can be fragile / insecure so they use consultants as "business therapists."

      This stuff isn't applicable to offline marketing. These arrangenments do not happen on Main Street.

      So Warriors. Want some B2B clients? Mail letters to middle managers saying "wanna do a big project but don't want the blame if it goes bust, but all the credit if it works? Hire me as your consultant!"

      I'm joking but I'm dead serious.
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      • Profile picture of the author socialentry
        Corporate culture is a different beast altogether.

        Managers have the mentality of 'if we don't spend it, it's going to go to the HR department'.
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