Britain's big management consultancies have topped the billion-pound fee mark for the first year in their history. You can be sure that big customers coughed up the billion. But what advice would a top consultant give to smaller firms - if they could afford the fees?
First, forget the familiar gibe about the consultants' credentials. It's a version of the old crack, if you're so smart, why aren't you rich? If consultants are so brilliant at business management, all the way from the shop floor to top strategy, why aren't they doing it - instead of merely advising?
First, good advice isn't mere. Second, they are running businesses, often very successfully. Many consultancies are start-ups, whose trials and tribulations differ little from any other. Cold-calling to get clients is no easier for having an MBA or experience at consultancies like McKinsey and Bain. You still need to establish credibility.
Many starters fondly imagine that their professional or commercial ability and hungry willingness to work harder will outweigh their lack of established reputation. One top consultant, however, warns that it isn't that simple. Many potential customers want the comfort of a known brand - which lands infant businesses in a Catch-22 situation.
It's like the job ad that demands two years' experience, which you can't get because nobody will give you a job. There's no alternative to building the brand. One method is to form a small board of top business advisers to provide counsel, contacts and increasing credibility. Another good strategy is to take in an established partner, with an equity stake, for similar reasons.
The money will also help to ease the growing pains. Hanging on to all the equity may slow growth, cause cash problems and prevent essential long-term development. Note the importance of the long term. The consultant's advice is that some things, like it or not, have to be taken slowly. Be enthusiastic, by all means, but don't also be impatient.
As a general rule, breakthroughs require a patience that entrepreneurs lack. The consultant's advice is to target the key business you want to win, say, every year - a list of desired clients, for example. But you must learn, when nothing happens immediately, to stick with these targets. Don't get so disappointed that you abandon them for others.
Even if you're turned down, find a way of getting and staying in touch; never give up. Whatever the lack of results, persist with dinners, lunches or breakfasts, mailshots, other kinds of communication - anything that fits your business and its potential clientele. Keep sowing seeds, says the consultant, and you will eventually get some sort of harvest.
Self-belief in what you're doing and genuine commitment to a long-term future demand nothing less. Yet the large firms for whom thelarge consultants work often make the short-termist mistake: they start something, throw money at it, and if it doesn't work, move on. There are other big-time traps to avoid. Consultants see how big companies work and don't work - and their prescription:is easy to follow:
1. Stay free of hierarchy
2. Keep communication flowing easily - across, upwards and downwards.
3. Ensure that everybody knows what's happening.
4. Decide and respond at speed.
Incidentally, open-plan offices greatly help in achieving all four aims. Another principle is to add overhead (including new members of staff) behind revenue. That means imposing some extra stretch on the business - but having no spare resources is better for a growing firm than sustaining a costly surplus.
Achieving credibility will enhance the success rate with potential customers. But growth doesn't remove the vital burden of winning new business from the principals in any firm. You need to spend perhaps 30 to 50% of your time seeking new clients, however much you prefer working on existing business - another lesson that smaller companies often neglect, and at their peril.
Credibility also has its dangers. Satisfying blue-chip clients doesn't make you a blue-chip yourself: one successful shop doesn't make you Marks & Spencer. When you've only just completed the first lap, the best piece of advice you can have - and that's what top consultants stress - is a reminder that the race is going to be long.
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