gT7zJhywTJMBNaqoAGQPyyPfKygUE4IvdYLTNeBNNWY

Blog

Why Maintaining Organizational Flexibility is the Key to Sustainable Growth for your Consultancy?

A consulting firm is a dynamic organization that is vulnerable to the fluctuations of the business cycle. New projects come and go, and the people who staff your firm tend to change over time. While you may not have current problems with recruitment, finding the appropriate level of staffing is tricky. A major economic event could shift the entire market, meaning that your company might quickly lose or gain projects that affect your staffing scheme. Whether you have too many staff on hand or not enough, firms rarely end up in the middle with the perfect number of consultants.

Due to unpredictable economic changes, it’s important to have a flexible staffing plan that accounts for factors affecting your firm’s optimal size, considering the structure of the business and the market demand. The appropriate level of staffing is not an issue that will go away. With too many consultants, you could lose profitability in the case of headwinds. Without enough consultants, your firm could miss important opportunities to grow and profit. In addition, having excess staff could mean that your firm accepts projects for which it isn’t qualified, which creates the risk of damaging your credibility. In a consulting firm, delivering great value and return on investment for your clients is a must have, but the key to profitability is finding the size and cost structure that works for you.

 

Optimizing the Risk Rewards Equation

 

The driver for profitability, in all asset intensive businesses, is optimizing the utilization of the assets. Consulting, despite being asset light from a tangible standpoint carries the bulk of its costs through salaries. This means that you need to find the right trade off to get the maximum economic performance results from the utilization of each employee, without overextending your human capital budget.

Besides sizing, finding the right equilibrium between base salary and bonus Is very often an underestimated lever. Many consultancies consider the total compensation as a fixed cost and link the bonuses to the quality of delivery without taking advantage of the flexibility it could provide.

Tying part of the bonus calculation to the economic profitability of the firm can not only mitigate partially the risk of the downturn but also drive the right behaviors from your consulting staff.

Another lever can be, to change the ratio between base salary and bonus to lower the guaranteed amount but grant higher rewards if the firm is doing well. This is a deal that many young consultants are more than willing to take as it mimics the classical partner structure they aspire to.

 

Sizing for the Unexpected

 

Just like staffing for any business, maintaining the right number of employees directly affects your profitability. Keep in mind that, once you have people on the payroll, you measure profitability by what remains after their checks clear your company bank account.

Your firm makes a financial obligation to employees, at least in the short term, by offering ongoing employment and perhaps benefits and perks. When you extend your budget for a certain number of staff, financial issues and downsizing might threaten your ability to keep them on the payroll. Or worse, the pressure to keep up with your payroll needs could lead you to unscrupulous or deviant behaviors to capture new business.

You cannot always predict an economic downturn. Because of this, your firm should add new employees in stages, so as not to overextend the payroll budget. It’s always easier to hire new consultants than it is to fire them, so be prudent. If you do have to begin downsizing, you run the risk of blemishing your firm’s reputation and damaging relationships with your consultants.

 

Investing in Non- Production activities

 

When reviewing your sizing assumptions, it is important to anticipate that not all days will be productive. First by design as assignments usually don’t align themselves to optimize your own schedule. Second as you need to dedicate some time to other activities that are key for the sustainability of your company. Those activities will range from commercial and networking to more knowledge related tasks on research, capitalization, thought leadership and knowledge sharing. This layer in your resource planning is extremely important as it will condition your ability to bring something fresh to your clients and your flexibility to move from one contract to another.

 

Preparing for Good News

 

Once you have defined the minimum size and added some resources to handle other activities, choosing the right size for a consulting firm is still not an exact science. As it turns out, with a sizing like this you might be unable to take additional projects and therefore to grow your business.

The secret formula lies somewhere in the ideal balance between internal and external resources. This means that you have enough full-time consultants on staff to provide stability and to inspire client confidence. While at the same time, you have successful partnerships with external organizations and individuals to meet the requirements of special projects on schedule.

You want the size of the staff to meet the level of projected demand. You also want your company to build a network of valued partners and qualified subcontractors. This enables your firm to augment consulting staff when the demand for all projects exceeds your internal capacity. When you accept new projects, you can temporarily take on extra consultants. Later, you can scale down to the usual team size, especially after those extra projects are completed. Unless in the frame of a deliberate strategic move, none of your projects should extend your firm too far beyond its core competencies.

 

Partnering with Qualified Staff

 

While you may rely on external consultants, you must also ensure that each of these resources possesses the right skillset for the job. Not every consultant will have the appropriate qualifications for each new project. You may need a diverse recruitment strategy to attract subcontractors who can augment your operations.

Beyond the optimization of your cost base and the proper management of your company’s risk profile, working with external partners creates new business opportunities. When you expand your professional network, you can pitch new business. Your additional partners can bring capabilities that are complimentary to your core business. At first, this may seem like conflicting advice, but your firm should begin by adding partners with capabilities that closely relate to your core competencies.

While you could augment your staff through relationships with other firms around the world, it’s important to choose those located in countries or regions that offer your company the biggest competitive advantage. The intent is to win new business. This occurs, in part, by attracting the interest of the companies that are familiar with your new business partners.

 

Be Flexible and Prepare for the Future

 

Your firm will eventually adjust the number of staff, hopefully to include more consultants. This will mean that the pessimistic scenario is improving and that you are growing your activities in a sustainable way.

Even though financial challenges may arise, you will agree that the best time to add more human assets is when things are going well. When your company is successfully completing its current projects, and attracting more projects and your worst-case scenario in term of planning can cover your internal staff it may be time to consider adding at least a few consultants to your team. In essence, you are scaling up to prepare for future growth while managing risks. Looking at your teams and discussing the capabilities needed for new opportunities, as well as factoring in the use of qualified partners and subcontractors, will help you to optimize your consulting set-up.

Balancing your current resources, while leveraging partnerships, doesn’t mean you need to fundamentally change your recruitment plan but those adjustments can make all the difference on your balance sheet, reduce risk, provide higher rewards to your employees and open new opportunities to fuel your growth.

 

About Teambuilder


Teambuilder is the first global marketplace specialized in providing consultancies and independent consultants alike a shared location to communicate their project team needs and pair it with the right skills and expertise. The platform is designed to streamline the search process for bringing on consultants to strengthen your team and win more projects.

Never Miss Another Opportunity with the Right Collaboration

Most talented small and medium-size consulting firms are likely to have run up against the same type of frustrating conundrum while securing new work: staffing limits. No, this is not simply a matter of the number of colleagues on board. Instead, we are focusing here on other staffing-related limitations:

  • What if an opportunity at hand includes a specific area of expertise that your firm currently lacks?
  • What if a given opportunity requires widespread geographic and/or cultural challenges?

The good news? There is one word to ensure you never miss an opportunity: collaboration.

Effective consulting firms innately understand and value the idea of collaboration. The internal work habits of effective consulting firms reflect a constant flow of interconnecting collaboration. After all, consultants collaborate with clients all the time—and train clients’ staffs to strengthen their own internal collaboration.

Let’s take a closer look at turning to collaboration to enlarge your consulting firm’s circle of opportunity. But first, we’ll briefly review impractical paths to avoid, as they may end up doing more harm than good.

 

Impractical Paths

The Eager Beaver

The eager beaver is the one who jumps up and says, “Yes, we will do it!” while not quite knowing whether the specific expertise is there, sufficient consulting time is available within the client’s timeframe, or the ability to reach the client geographically is practicable. It’s similar to that old joke about the piano mover who says, “I got it, I got it, I got it …I don’t got it,” as his end of the piano crashes to the floor.

We’ll just call Charlie Whatshisname.

An opportunity comes your way, and you realize that you will need to add one specialist to round out the best team to tackle the job successfully. Possibilities race through your mind until you recall that at a recent conference you met Charlie (what was his last name again?) who has just the right experience. Or does he?

  • Do you know the depth and breadth of his expertise?
  • Does his value proposition complement or clash with yours? What about his consulting style?
  • Have you checked references?

The downside to precipitous consulting decisions? Damage all around: to your reputation and professional relationships, to your ability to attract new clients, and most importantly, to your and your client’s bottom lines. It is much better to take a pass than jump in too hastily and unprepared.

So how can you accept and deliver on the opportunities that come your way, without taking one of these impractical (and risky) paths? Read on to learn how collaboration can rescue you from missing future opportunities and provide the value your customers seek.

 

Preparing for Those Forks Along the Path

Different forks along the path can stop consultants in their tracks—or worse, lead them astray—unless collaboration is built into the equation. Understanding those forks is the best preparation for deciding to create new collaborations. Here are six forks to look out for:

1. If yours is a generalist firm, you often face the tough choice of whether to take on a job yourself, take on a subcontractor, or take a pass in favor of a specialist.

2. On the other hand, as a specialist, you may be asked to expand a project into areas outside your expertise.

3. In today’s global economy, some assignments will require a simultaneous presence in more than one part of the globe. For example, a manufacturing firm may need you at headquarters and at their plant, half a world away. A high-tech enterprise may require simultaneous services at their site and the site of an important partner on another continent. In other words, while some assignments are manageable with minimal travel, others require you to decide which fork to take: a consulting partner, or a pass.

4. Globalization also provides the chance to land choice assignments with clients and stakeholders anywhere in the world—an exciting opportunity to be sure, but yet another fork along that path. I remember the story of a French consultant asked to facilitate the cultural integration between Korean and Chinese workers on the Chinese border. That French consultant faced the question, “If not me, specifically who would be the right fit to handle this project for the best outcome?”

5. Let’s say you are considering taking on a consulting team as a subcontractor for a sizable project. Have you explored their comportment with clients, their stances on the situation facing your client, and how they go about working with a client’s staff? A partnership that works at cross purposes or is perceived by clients as incompatible will not only confuse clients but fail to provide the quality outcome the client deserves.

6. The nature of a project defines your consulting relationship with the client’s staff. Some projects require you to be perceived almost as one of the team. Yet, the needs of that client may evolve, altering the nature of the work, which now may require you to be the bearer of tough messages—creating a perception among client staff that you are Dr. Jekyll and Mr. Hyde rolled into one. It’s more than uncomfortable; it impacts your ability to serve the client’s needs effectively. Are you ready to pivot to a collaborator?

 

Tapping the Right Collaborators

The ability to tap the right collaborator is your next challenge.

First, be clear about the scope and boundaries of the collaboration, before you approach a key potential collaborator. Here are three options:

  • Pitching the project together as a partnership: You may gain a competitive advantage to land the assignment with the combination of your respective skillsets and credentials.
  • Subcontracting deliverables: It makes sense to turn to this option when you need a wider geographic range during the project and/or simply more help.
  • Brokering a new consulting relationship between your client and another consultant: The consultant in question may just be the better fit for a specific assignment—allowing you to bask in the glow of the value you have added for the client.

A partnership, of course, may be the most interesting and rewarding path to follow.

 

Building a Collaborative Network

One way to ground your decision to collaborate is to take the time to build a network of highly qualified specialists, over a wide geographic area, whose value propositions and styles mesh with your own.

Vetting can take quite a bit of time up front. However, you can minimize that by taking a hard look at the types of work coming your way and the geography you would need to cover to handle those opportunities successfully. Look for specific partners who are able to fill the gaps you have identified in your firm, and don’t forget to factor in their potential availability.

Regardless of how natural a networker you may be, if you are like most consultants, your time is tight and your current network typically consists of former colleagues, some consultants with whom you have crossed paths, and former clients-turned-consultants.

Fortunately, for those times when you encounter an assignment leading to one of those forks along the way, you can turn to a company whose sole expertise is helping you find qualified consulting partners with the specific expertise and geographic area that will allow you to never miss another opportunities, reduce your risks and deliver the value your clients expect.

Consulting Quest specializes in identifying consulting solutions that boost your competitive edge. We have put in the time, build the world largest database of pre-vetted the consultants, and understand that you need the perfect fit in terms of skillset, value proposition, style, culture, and geography. Do not hesitate to reach out if you want to discuss further how we could collaborate.

Save Filter
×