What is Business Consulting?
Business consulting in its purest sense is the ability to magnetize a business owner, entrepreneur, professional, mature or startup business to areas of critical performance based on meaningful, experienced, and documented understanding of the issue. Those critical areas can be marketing strategy, competitive advantage, business model, any of the 9 drivers that I talk about, leverage, etc. It’s not a theoretical process and it’s not only understanding the macro problem but also the nuances.
An enormous amount of consulting is theoretical and done by wonderfully-intended and knowledgeable people, but their empirical understanding of the complexities of the situation is limited, particularly regarding things that have many moving parts and multiple impact points. Business consulting is about being able to look at a problem and opportunity in a non-static way and see it dynamically. It is to analyze in an integrative way; to understand how the problem or the opportunity, the challenge or the issue, interrelates with other factors and to be able to, from experience, council, advise, and direct the business owner to take better actions and make better decisions that will produce a greater outcome for the time and effort.
What Does a Business Consultant Do?
A business consultant, first of all, has to have the ability to understand function over form and cause over effect, because the consultant is going to either be brought in for a specific or a macro problem. A specific problem can be, “My website’s not getting any traffic. The macro problem can be, Were not getting enough sales, or, We’re getting beat in the market. And you’ve got to be able to be causation-focused. You have to first look at the effect, but then determine what is really causing it. And then you’ve got to be able to deal not with form Oh, you just need better marketing but you have got to be able to understand function.
You have got to know that the micro, the granular, reality-base alternatives and know that one alternative doesn’t fit all. Let’s take a look at a complex business scenario as an example. Let’s say that you’re selling a supplement for weight loss. You’ve got to understand what everybody else in the market is doing right and doing wrong. You’ve got to understand the alternative means of achieving the end goal, i.e weight loss. But is the end goal just weight loss? Because it could be just a lose weight or it could be to get fit and you’ve got to see okay, they can buy my supplement they can buy competitor’s supplement. My competitor has certain kind of positioning, how are they selling? What are they selling? What’s their mechanism for selling? How have they validated or authenticated their product? What’s wrong with it? Where is a gap? And you look at all the alternatives somebody could be doing.
They could be buying videos on weight loss. They could be going to weight watchers. They could be buying Jenny Craig. They could be going to 24 Hour Fitness. They could have a trainer. They could basically do nothing. You have to look at all that. Most consultants don’t have the composite perspective. I come from a very different vantage point. I look at all that contrast and I say, “Okay let’s talk about what’s the real issue.” I know what the problem in your sense is, but what’s causing that problem? You know what is the uh not the form, because you’re going to need that in marketing. What’s the function? What do we have to do? And I ask that question, and I ask the best priority, what’s first thing we have to do, second thing we have to do, third thing we have to do, and yet people are thinking those kind of terms in a paternalistic but a tough-love sort of an authoritative way where you definitely can’t be theoretical. You can’t give good advice if you haven’t actually done it and have dealt on the sidelines of capitalism with scenarios that parallel the issue.
What Is the Difference Between a Good and a Bad Consultant?
I’ll give you an example about Henry Ford. When he ran Ford Motor Company and they were at the absolute peak, he would take a prospective executive, somebody who he was contemplating hiring, out to lunch. And if that potential executive salted his or her food before they tasted it, he would not hire them, because he thought somebody would make a decision impetuously without really assessing the problem, probably was dangerous.
Consultants who swoop in and diagnose the problem before assessing the situation are dangerous. Assessment is a poorly-respected concept.
Most people’s assessment is to look at a situation superficially. I think a masterful business consultant has to understand all the impact points and all the leverage points that are affecting something. There’s causation to everything. There are forces, factors, and principles that drive almost everything. There are acts of God or things out of your control. But 98% are things within your control, but you can’t control them if you don’t understand the forces, the laws, the principles and the elements that are going on.
And it’s as if, back in the old days before they ever understood the internal workings of a human body, everyone put a leech on your chest to take care of the problem that you have on your back.
What Types of Business Consulting Services Do You Offer?
I tend to be a bit of an enigma, an anomaly if you will. I’m probably the ultimate, deep dive specialist, or a generalist.
I mean on the one hand I do strategic consulting, changing strategy and understanding it because I’ve got a context of 465 industries not businesses that I’ve worked in and I’ve been able to duplicate, replicate, experiment, and validate on 4 or 5 continents. On the other hand, I do marketing. On the other hand I do competitive advantage. On the other hand I do business modeling. On the other hand, I do cultural consulting, which is to transform a mediocre or dysfunctional organization to a pre-eminent one; where it’s a small to medium size firm where the owner or the manager is committed to growing and developing the capability of the talent and they understand the leverage of doing so.
On the other hand, I teach leverage marketing which is an integral concept. On the other hand, I do preemptive marketing, which is like a sister of preeminence, but it’s all different. It’s a different segment of positioning the business so that there’s no one that can even come close to touching you, your market, or your niche.
Somebody will come to me and say, “I want you to help me with this.” My answer is always, “Well, maybe. Then let me look at the whole company first.” Because it’s as if you said, “My elbow is killing me, I want you to fix my elbow.” And I said, “Okay I’ll fix your elbow.” But if I found out that your elbow was killing you because every night when you slept, you slept in a way that your shoulder was taking all the blood and putting the pressure on your elbow, if I fixed your elbow, I only help with the problem that night.
So I want to see how everything connects. And my skill set is really very dynamic. I bring to bear an integration that is like a laser-like force that can be concentrated and directed at specific problems. And when I come in and look at a business, I have a very simple process of looking at what they’re doing now, and how everything they’re doing is performing or not performing.
I typically try to maximize what they’re doing even if I think it’s dumb because that’s what’s driving the business and we want to get greater yield while we’re trying to systematically fix the first problem, though the the second problem is going to have the most impact on changing the outcome.
There’s a great analogy that a partner of mine in another business said. It goes, Most people in business are busy digging holes. The more competitive pressure, the more profit squeeze, the more intimidated they are by the world competition, the faster and deeper they dig this hole.
And so the first question is, should you be digging the hole? The second question is why? The third question is, should you be digging it there? And then the next question is, should you be digging the hole or should you be passing it on to someone else so you can leverage yourself? And then finally, whoever is digging the hole, should they be using a spoon, a shovel or a power shovel?
How will my business grow by working with a business consultant like yourself?
Ok, well, you’re asking me how I’m going to help you? I would rather ask you what you want the rest of your business life to look like? You’re the one that’s invested time, effort, and capital. You have the vision, financial and psychic expectations. My question to you is how much do you want it to be worth to you?
If your business were a mutual fund, would you invest in it? A business is the ultimate investment portfolio because it’s really the combination of an enormous number of actions and activities that are performing in different ways all the time.
A mutual fund has different investments. If one investment was yielding 2%, one was yielding 10%, one was negative 5%, and one was neutral, would you be spending the same amount of time and effort on all? So what I want to know is how badly do you want your business to perform at optimal for you, because the key to me is either you work hard to optimize business and all its performance elements so its performance dynamics working harder and harder for you.
So the first thing I want to know is what you want from your business. Because if you don’t want for it what I want for it, I can’t want it more than you do.
I think the great business consultant is also a masterful thinking partner because they help you think differently. They are a true mentor as opposed to a coach and I think coaches are very noble in what they do, but most coaches ask you what you want your business to do when can you give me an answer. And so they work backwards.
A mentor is somebody who’s been there, done that, knows what’s possible, what’s dangerous and will not allow you to under-aspire or over-aspire without progression.
A great consultant helps you first of all clarify what you’re trying to accomplish and why. He or she helps you reconcile where accomplishing that in your current competitive environment with the strategy and business model, the marketing approach, the performance, and dynamics metrics you’re yielding is going to get you there or not. He or she then needs to look at what you think the problem is.
Consultants are brought in for one of two reasons. Either the owner, the bank, the board directors, the family, the specialist, etc., is not producing the outcome they want, there is eminent breakdown or they feel intuitively or observationally that there is a factor that’s causing the business to underperform; or a consultant comes in when he or she is masterful at selling the business, or the fact that the business can perform better with this consultant whatever his or her expertise is. I operate in this world called optimization. Sometimes I just invest, integrate 8 years, I have some performance of you know opportunity, cost, effort, access, activity, capital, human capital, venture capital, relationship capital.
So the great news for most consultants is that almost every business under performs on some or all those areas and either they over perform in one, or they’re spread across several points of impact and under deliver across the board. It’s like I was obsessed when I was younger to have, with upper chest work out. At one time I had a 46 inch chest and 20 inch arms. The problem was I wasn’t balanced in my developmental approach, so I ended up with humongous problems, tremendous arm and shoulder problems in older age. I’ve got like a little bit of a stoop because I so taught my neck with happens to have 8 inches of titanium.
So there’s a lot of inequities even if you’re over excelling in one part of the business. A consultant also has to have the integrity and the business ethos to help a business owner understand if there’s a connective or a bigger problem with some other element of the business that that consultant may not be masterful or that consultant may not be able to monetize anything for him or herself. I hope this gives you some perspective.
How does the consultant-client relationship work specifically in terms of the contracting structure, the retainer fee, project rate, performance compensation, etc.? Can you give me some examples?
Sure, but it’s going to be all over the place. If you don’t want and/or need continuous collaboration, you can bring somebody in for a deep dive immersive compression accelerated process. I’ve a client that is brilliant. We talk occasionally and he’s got this list and he asks me all these outrageously great questions and we don’t talk again for 3 months.
You can bring somebody in for a day or two and just have them either give you generic stuff or you can just come over with very specific and well reasoned issues, questions, or clarifying requests. You can ask somebody that comes in with regularity, you get somebody that does it for you, you can have somebody that does it with you. You can have somebody who teaches your team how to do it. You can have somebody that comes in and for a while is the de facto marketing manager or sales manager. You can have somebody who’s paid, is paid a one-time fee and leaves and you never see him again. They come back whenever you want to pay them the fee again. You go to somebody who gets paid a fee every time they come. It depends on the quality, not even the quality; it depends on the self worth. There are probably some very capable and confident consultants who don’t have a very high self-image and they’re probably cheap and they’re probably great values.
I do multiple kinds of consulting; it depends really on the issue. Sometimes we just do a 1 or 2 day version and it’s expensive, but it’s done and we deal systematically and sequentially on a prioritized basis with all the issues and all the connections and all the different elements of the business and the personnel in the business and we figure it out and we try to develop it and then you never see him again.
Sometimes we will do a process where we work with him for a period of time twice a month just for an hour or two. Sometimes I get a fee. Sometimes we’ll work long term and we’ve got to pay his fee and we work an hour or so a week intensively and we get a percentage of the quote from making their current activities perform better, making their current under-performing activities either replace, eliminate or reinvigorate, figuring out new revenue generating approaches, products, service, markets, figuring out new value propositions.
But I like arrangements where I get tied in some degree, either significantly or at least reasonably to the outcomes, so you’re in for a penny you’re in for a pound. We also expound over the years if you don’t have the company somewhat invested in you they aren’t going to take it seriously and contain it. There’s too much diversion and too much clutter they have to have some kind of a meaningful investment if they are motivated to get a return on or it doesn’t seem to work out as well.
Certain firms will charge you for a minimum amount, they’ll charge you by the hour, they’ll charge you a day rate. They’ll charge you for coming into your office and doing on-sites which is basically that they modify it. We have one model if the company is big enough, we don’t want to spend a lot of time with him, we want to make a million dollar fee and we’ll take you know 95% with our performance pace if they’re suitable in other arrangements where you know, we charge them $25,000 a month and they get 4 type accesses and quarterly we’ll get together and certainly use all over the place with me.
There are so many models. The good news for a company large and small is that you’re not really obligated to decide on anyone for us. I had a client one time who was at the time and this is a while back, the premier expert in buying several family rental houses. He had a wonderful philosophy. He said, Don’t buy your first one until you’ve looked at a hundred, because you’re always going to even get too impetuous and too motivated. Well I always tell it to someone, myself included.
If you think you need a … it doesn’t matter, you’re a sales expert, you’re a marketing expert, you’re a strategic expert, you need a competitive superiority expert, you need a business model and remodeler. Please don’t try to find somebody that reports to be that. Then find a bunch of somebodies, then go through a rigorous but a very understandable competitive value evaluation. Do the example, number 1, you get educated and if they all say the same thing, different things, you get perspective, you get context. You get to see how they think, the same or differently, you get insight on the problem and in all this case, if you want to be morally honest, pay them $100 per hour, they climb on the pillar of 200 don’t worry about it, because if it’s a big enough problem or opportunity challenge issue market niche that you’re going after try to fix, you now it’s a cheap investment for not making a mistake.
I mean the big problem is that advice can be dangerous to your business world if it is well intended but inaccurate, if it’s the cart before the horse. I mean you like talking, we’re doing all these stuff and we don’t even have our website being fully all set up to get it. So you’ve got to be in harmony to optimize and you want advisers.
I mean if you are a pre-eminent adviser, I teach it and I live it, but I also observe it in certain calibers of people. You want them to educate you. You want them to not sell you as much as advise you before you ever make a commitment. Some of them are just trying to tease you and sell you and deal with a bunch of abstraction that doesn’t bring you a lot and really doesn’t want you to understand.
If it’s a big large substantial company, I’ve been known to buy them a whole day of my time if they fly me up and invest in looking at the business and giving them a presentation, but an actual pretty amazing console where is 50 or 60 or $100,000. Because I know that if it’s a big deal you know they’re probably not going to know how to execute and they’ll be impressed and if they’re not impressed they’ll do some of the things that you say anyway.
So you want to see what’s available, you want to see the scope of thinking. You want to choose very wisely and you also want to choose somebody who understands collaborative thinking. Well it depends, I mean there could be scenarios where you don’t really care you just want to fix your software. You want to fix your billing system, but you also need them once they do that to make sure your current staff and anyone that follows really knows what’s going on, so they don’t have control of your destiny in your hand.
And again I’m not trying to distinguish myself, but one of my disciplines is I don’t want to be the one that covets the knowledge. I want to basically translate, transfer, and so install and deeply root my way of thinking in the entire company. I want to transform how they look at everything, what I work with and so that they’re not going to be forever dependent on people like myself.
I love helping. I like being generously rewarded, but I think the purpose of a true masterful consultant is, well there’s still recurrence of medical problems but the purpose of a great neurosurgeon is to fix the problems there and to keep coming back every year. There are certain specialists, heart specialists who are just keeping you alive and keeping you healthy it’s probably good, and I think that indeed those kinds of scenarios apply. I don’t know if I’m giving you good query or giving you abstraction here?
How Does Someone Know If They Should Become Business consultant? What questions Should They Ask Themselves? How Does Someone Become a Business Consultant?
Well what you shouldn’t do is just achieve … Try to do that through aspiration. That’s very dangerous for your own career. It is even more dangerous you try to serve because you don’t know what you’re doing. You should become a business consultant or a trainer or a specialist only if, when, and after you can honestly say that you understand how to deal with the problem and opportunity and scenario at least 51% better than the people that would be doing it at the company level, because if you don’t then you’re not adding to anything.
So the first thing is you have to possess the knowledge. Now, you can be trained, but once you’re trained, I you know, I’m always I don’t know, probably 8, 10 times the chance to franchise my brand. In experimenting with trying to teach people how to be a contingency or a high performance space marketing and strategic business group specialists and I think you can teach them all that the macro concepts, you can teach them a lot of different connective factors, but ultimately if they don’t understand the real world dynamics of business or the industry that they’re going to operate in, they are dangerous to that company. As well then they are really dangerous speculating their career future, because they’re not going to end up with very much.
But if you have expertise, if it’s a hard one and is well documented and you really do understand the issue, the problem, the challenge in an area, multiple areas of the business better than either most of the people doing it or most of the people doing it at a different level. I mean you can either be one to understand that the same way at the corporate level, but maybe even take it to a $2 million entrepreneur who’s got established 7 and wouldn’t have all those specialties that you have been involved in, you’re going to be, so like the land of the blind commander’s king. But you have to have an application where you really do bring superiority of understanding and insight and capability.
You have to really care deeply about the transformative impact that your expertise or your skill or your understanding or your ability will bring to the situation once if after your skill has been deployed. Meaning that when they retain you when you apply it, you have to add a reasonable certainty that given the right environment, and the right dynamics, that you’re rendering this expertise or this skill or this, or this advice or advice coupled with activity is in fact, has a higher probability of producing a desired and a positive outcome than a negative one. You’ve got to be reasonably lucid and a decent clear communicator or you can’t really, unless it’s the type of thing where they bring you in and all you have to do is rewrite code or something. Even then it breaks down and they depending on you as see you left them at a very bad alert.
You have to really care deeply about what you’re doing. You have to understand if you are going to be a consultant how to be superior in what you do and how you revere yourself, and not the expertise that you offer, but the impact and implication that that expertise can mean when I’m actively engaged in someone’s business. Maybe you can make the ability of the company to compete twice as good and that’s pretty static.
But if good means now, that company is going to survive and endure and now that that owner is going to be able to be really in distress and isn’t going to die of a heart attack and now that owner’s future is going to be secure and now that owner’s child can go to a great college and be a success. And now that owner is going to employ 50 people instead of 10. I mean you’ve got to think about it in a more transformative sort of a way. If you just come in, render it, and leave, I guess that’s fine, but I think if you really want to be great, it all flows from the beginning. It has to be your capability and your expertise at what your doing, not just the fact you want to be a consultant.
You have to want to use true expertise understanding ability, and I think you have already proven, well, I’m a consultant, but I need to figure how to get clients. And I’ll say, “Well, tell me what have you done?” I’ll say, well I not at a chance to bring myself.” Why in the will would I want to just because you can utter uh superficially a bunch of ideological basis, USP, marketing strategy, metrics.
It’s what I said and most people don’t allow and it’s like if you were going to do some work around your house, you would probably, unless you really knew the performance of the person, you would probably evaluate other people and their reputation. You would ask good questions of the people that you work for, about how they work. To work with a budget to produce a result that was consistent with the expectation, and answering all these things. But mostly what I do I’m with consultant and they either find one or they defer the person who wrote the book even if the book is superficial because that person is a better promoter, not necessarily a better expert.
Without prejudice or disrespect, I believe many consultants are very good sales people, but that doesn’t mean they are good consultants. Consulting is like a double-edged sword; it can be the most profitable, paradigm-shifting, reshaping experience a business can have, or it can be one of the most dangerous.
Some more resources that I’d like to share to your benefit are as follows… href=”https://abraham-pop.s3.amazonaws.com/JayPhilosophyEmails2012.pdf” target=”_blank”>Jay Abraham’s Business Philosophies and href=”https://s3-us-west-2.amazonaws.com/jayabrahamassets/Books/YourSecretWealthBookVersion.pdf” target=”_blank”>Your Secret Wealth