Every Consultant must Engage

“Understand the business strategy” is frequently one of the first tasks on my project workplans, usually undertaken in the first week or weeks of an engagement.   But this essential exercise can also be one item that generates push-back from clients, who see it as something a consultant should undertake on their own.  Obviously, embarking on a consulting project without an understanding of the business you are engaged to help is unprofessional and displays disinterest (both of which are justifications for dismissal in my view).  However, no amount of a consultant’s second- and third-party research can substitute for first-hand insight (on business challenges and strategies) from senior members of the management team.  These inputs are critical to the development of a baseline understanding of the business, which is often one of my first deliverables and also serves to record clearly what management told the consultant.

Depending on the scope of the engagement, it may only take two or three days during the engagement’s first week to conduct senior management team interviews, review strategy documents and other proprietary materials.  But I’ve also conducted engagements where almost the entire project scope consisted of examining the business strategy and its relationship with business execution and took several months to complete.

This first phase also yields other benefits that will inform the rest of the project.  (At PriceWaterhouseCoopers (PWC), this phase of our methodology was termed ‘Engage’ for obvious reasons and I logged many hours with new consultants as a certified instructor in the PWC project management methodology).   As a consultant, you will have researched the business before delivering your proposal and that research will give rise to a set of initial questions for the senior team.  During these interviews, you will have the opportunity to validate your research and note any changes and/or differences.  You will also have a chance to ‘test’ your next stage interview questions and assess if you are focusing on the right issues and business drivers.  Compiling a set of relevant questions for the detailed interviews you will undertake in the next phase is (obviously) critical to the eventual success of the project. 

Most importantly, during these meetings with the senior management team, you will have the opportunity to define the ‘success criteria’ for the project on which you are about to embark.  I have often found that the objectives of one or two executive team members are opposed to or prioritized differently from other executive members which, as a consultant, you need to manage from the early interview stages to the final report.  It can also be the case that the CEO may be unaware of some of these project priorities and/or differences of opinion, which is why I try to arrange the CEO meeting last.  During that meeting, it is important to address these conflicts head on to avoid any future project problems.   As an aside, if you are told you do not need to speak to the CEO (or business unit head) at this stage it is wise to push back on this ‘advice’ to get that meeting.

While it is incumbent on the consultant to do their company research and digest what they hear during the proposal process, there is no substitute for detailed discussions with management about the business strategy and project objectives.  Without exception, this team will be more receptive to you (and more open one-on-one) once you are officially retained and their input will inform how you organize the rest of the project.  Ultimately, the creation of the interview guide and/or the workshop program(s) for the detailed interview phase can sabotage the whole project if it’s not on point.  That’s why I tell every client that the initial ‘engage’ phase should not be eliminated or truncated because it’s an investment in the success of the project.  And it’s also an opportunity for the CEO to understand how effectively he or she has communicated the project priorities to the team: The consultant represents a ‘trusted third-party’ who often has the ability gather intelligence often not shared with the CEO.

However you term it, the initial stage of a project can frequently define the success or failure of an engagement.  Economizing here can prove detrimental to the later phases of a consulting project and my advice is to push back hard if your project sponsor believes this activity to be unnecessary.  As they say, penny wise and pound foolish.

Michael Cairns is a business strategy consultant and executive.  He can be reached at michael.cairns@infomediapartners.com for project work or executive roles.  See here for examples of recent work.

Update on Consulting and Recent Projects

For those of you who may have missed my quarterly newsletter sent out this week here is a link to it.  In this issue, I note some of the consulting projects I've undertaken over the past six months and also some of the more popular blog articles I've written.  

With respect to my consulting activities, I continue to pursue engagements where the client focus is either on growth or efficiency (and some times both).   Typically, the CEO and/or the board are seeking help to make a step change in their growth of revenue.  Sometimes the opportunity has been identified but the implementation and execution planning for that opportunity is unclear.  

My most recent project has been to conduct a technology assessment, vendor selection and review for a $600mm educational publisher which is looking to replace core technology solutions in its back office.   This work came as a result of my Publishing Technology report I completed last year.


I have undertaken strategy projects both as a consultant and operations executive where the execution of a defined strategy has been very successfully implemented and I enjoy the success of these projects.  In other instances, the opportunities are unclear in which case exploratory work (including market research and internal staff focus groups) is undertaken over 4-6 weeks (typically) where the deliverable is a facilitated workshop with key staff and stakeholders to develop proof of concept ideas.  The next phase is a longer product development and proof of concept effort which can last several months.

Following is a partial list of some of the consulting work I've undertaken.  Please reach out to me to discuss any particular problems, issues or opportunities you are dealing with and we will see if we can work up a solution.  (908) 938 4889

• AARP – Market assessment, financial modeling and market definition for new membership service offering
• Membership association – Business process reengineering to support new education and assessment delivery
• Private equity client – Due diligence review, staffing and operational efficiency planning for prospective deals
• Hewlett-Packard – Subject matter expert and market entry and development strategy
• InterPublic Group – WW technology assessment, capabilities audit and technology planning
• Klopotek AG – Sales effectiveness review.  Sales refocus and market entry planning.  Corporate development
• Book Industry Study Group – Supply chain efficiency review focused on eBook identification and standards

Newsletter link:  Information Media Partners Spring Newsletter: Blockchain, Artificial Intelligence, SSP Conference Panel.

Segmenting Publishing Strategy

A re-post originally from November 9, 2009:

There is a self-publishing conference in NYC this weekend which reminded me of a project I worked on several years ago. After reading an interesting article in the Harvard Business Review about defining a company's corporate strategy, I decided to use the ideas in the article to spur discussion about my client's strategy. The HBS article Charting Your Company's Future is available from the HBS site and is summarized as follows:

Few companies have a clear strategic vision. The problem, say the authors, stems from the strategic-planning process itself, which usually involves preparing a large document, culled from a mishmash of data provided by people with conflicting agendas. That kind of process almost guarantees an unfocused strategy. Instead, companies should design the strategic-planning process by drawing a picture: a strategy canvas. A strategy canvas shows the strategic profile of your industry by depicting the various factors that affect competition. And it shows the strategic profiles of your current and potential competitors as well as your own company's strategic profile--how it invests in the factors of competition and how it might in the future. The basic component of a strategy canvas--the value curve--is a tool the authors created in their consulting work and have written about in previous HBR articles. This article introduces a four-step process for actually drawing and discussing a strategy canvas. Readers will learn how one European financial services company used this process to create a distinct and easily communicable strategy.

The process begins with a visual awakening. Managers compare their business's value curve with competitors' to discover where their strategy needs to change. In the next step--visual exploration--managers do field research on customers and alternative products. At the visual strategy fair, the third step, managers draw new strategic profiles based on field observations and get feedback from customers and peers about these new proposals. Once the best strategy is created from that feedback, it's time for the last step--visual communication. Executives distribute "before" and "after" strategic profiles to the whole company, and only projects that will help move the company closer to the "after" profile are supported.

My client was a medium-sized publishing company in a rapidly growing market and we met to brainstorm about redefining the organization's business strategy. Using the HBR article as a guide, we constructed a set of 'straw-man' profiles describing our client base and key characteristics. Firstly, we constructed the following customer type segmentation as follows:

Publishing Segmentation

Professional nave either a track record of selling titles and/or have commercial interests, such as a seminar business, where the book is a component (but not the main source) of revenue. In the latter case, the author/publisher may be less concerned with the commercial success of the title but retain a strong desire to produce a quality published product in the traditional sense. This group is likely to understand the publishing business.

Amateurs may have significant misconceptions about the industry and their capacity to be successful. They will require significant education and (possibly) even motivation to complete their “product.” They may develop a personal relationship with the publisher rather than a business relationship and will become more demanding of time and effort than the Professional.

Non-Commercial versus Commercial could be a choice of the publisher as well as a representation of the commercial potential of the product. For example, to a "pragmatist", a book could be a 'give-away' that supports some other aspect of their business and is thus 'non-commercial' but to an amateur the book may be 'non-commercial' because it doesn't have a market. My client's customer base had expectations about the commercial merits of their products, which often, did not match reality and this was important for my client's management to recognize.

Most of our customers in the lower-left quadrant would place themselves much further to the right on the commercial spectrum than reality would dictate. We also recognized that placing customers into the lower right quadrant could not be planned with a degree of accuracy and depended on the willingness of the client to promote and market their title aggressively. Realistically, we felt it was next to impossible to anticipate success in this quadrant.

In the upper-right quadrant, we would most likely find established authors, professional speakers and back-in-print titles. (We didn't look at profitability in this exercise but that would be an obvious additional task).

We then selected a spectrum of key attributes that we believed the publisher's customers valued: Price, speed, contact, quality, control, product sales, community, education, ease of use, reputation. Using these attributes (which would be confirmed by research later), we attempted to plot how our customers in each quadrant valued each attribute. Importantly, we understood these drivers to be 'valued' differently by the customers in each quadrant.

The resulting chart for Pragmatists plotted for the client and one of their competitors looked like this:

The Pragmatist

Pragmatists: This draft profile suggests key areas of differentiation from one player to the other. The competitor (black line) operates at the top of the chart for the drivers that their customers view as critical and give low consideration (limit time and effort) on those that do not and which don't support their strategy. In my clients case, we believed customers valued education highly but we also knew this aspect of the business cost a lot to deliver.

The Dreamers

Dreamers:

We also looked at the 'dreamer' segment and chose a different competitor which had made a conscious decision to build sales volume with clients in that quadrant.

To support this strategy their revenue model was partially driven by unit sales (of the finished book), and they determined that many of their authors did not care about quality in the same way a traditional publisher/ author would. The competitor believed that ‘Dreamers’ were interested in receiving the end product as soon as possible.

In contrast, my client publisher sought to actively engage with the ‘dreamer’ to produce a better end product. Paradoxically, in the case of the competitor the ‘dreamer’ may remain blissfully ignorant but happy, while in the case of my client the customer may be dissatisfied because the process took longer, the interactions with staff were frustrating and the choices overwhelming. Same type of customer - "Dreamer" - but different approaches produce different customer experiences and expectations.

Strategy: As we discussed these 'straw-man' profiles we recognized that, for our business, there was a lot of revenue in delivering services to the lower left quadrant if we could get the business driver mix just right. Our challenge was to understand how to produce that revenue profitably. One obvious solution was to withdraw/eliminate costly services the author/customer is uninterested in. Over-delivering to this segment is pointless (which is a philosophy that one of our competitors practiced.)

We also recognized that classic business strategy suggests that companies endeavor to move their customers in the direction of the upper right quadrant. In the self-publishing market it would be virtually impossible to turn ‘Dreamers’ into ‘Moneyed’; however, it may be possible to move a small number into ‘lotto winners.’ The assumption would be that these authors have a product with a ‘hook’ that is somehow unique, and they are willing to work actively on the book to improve it and support it in the market. An added bonus would be one if the author was willing/able to publish additional titles. Rather than expend effort building marketing, promotion and editorial services (add-ons) for clients in the lower left, one potential strategy would be to expend this effort on the select titles/authors that showed promise in moving these titles/authors to the right along the commercial spectrum.

Using the framework we hashed out over an afternoon, our next step was to confirm the key customer drivers by segment (Professionals, Amateurs), to plot our position and our competitor's, and then identify our ideal profile. Once we defined this ideal profile, we would build a strategy focused on moving the company from the 'old' curve to the 'new' one.

In implementing this approach it is important to recognize that customers dictate and research is likely to identify a new driver and confirm that one or more suggested drivers are not important at all. Substitutions could occur and research should be tailored to uncovering these ‘unknown’ drivers not just confirming the ones the staff identifies.

Lastly, communicating the strategy internally is important and using a visual tool like this strategy map makes this easier. Once the ‘big-picture’ strategy is defined, then other tactical aspects of the strategy should be easier to define. This can be both a fun exercise and one critical to the future success of an organization.