Shefaly Yogendra

The client-consultant relationship

by Shefaly on June 9, 2009

Over the years of being an independent consultant, I have enjoyed good relationships, characterised by camaraderie and mutual respect, with most of my clients. But there have been a few less than ideal relationships too.

As we all know, success is a bad teacher. So here is what I have learnt from my sub-par experiences and outright failures. When any or more of the following were found lacking, the interaction was not as productive as it could have been.

Sharing the blue-print

A consultant is an outsider to the client’s business. The main upside of this is that the consultant is not hamstrung by the knowledge of the client company’s past failures. The downside is that without the client sharing information, the consultant may not have clarity on the organisational goals.

A bricklayer, who understands the blue-print of the cathedral he is helping build, is more likely to identify with the higher purpose than one who is simply told to lay the walls. Likewise, sharing the strategic aims motivates and focuses the minds of both the consultant and the client. The consultant can then contribute meaningfully to the cathedral rather than to the particular wall! The client also finds it easy to measure the consultant’s contribution to the company’s strategic aims. This works. Especially with a mutual NDA in place.

Balancing gut-feel and intellectual honesty

It would be naive to suggest that consultants are never hired purely to validate an executive’s gut feel. It is more common than is accepted or discussed openly.

But sometimes, in the course of investigations, things emerge that invalidate that gut feel. Times like these call for intellectual honesty on the part of both the client and the consultant. Because although differences may emerge, it is also a chance to make better informed decisions. How the differences are handled can determine whether the relationship is working or not.

Striving for manageable, open communication

When I was young, I was an impatient child. The kind that would pull out the roots of a plant every 15 minutes to see if they were taking hold. Such impatience is a problem when working on a large strategic project, pulling data and information from a variety of sources including interviews with people in different time-zones. It is better instead to focus on the milestones and boundary conditions.

My clients and I agree on reasonable milestones up front, with the caveat that both parties will  flag any egregious developments right away. This helps both parties save time and energy otherwise wasted on micromanaging the other side’s expectations or deliverables.

Understanding the process of creation

A popular management cliché goes: “we cannot manage what we cannot measure”. Analogously, “we cannot outsource/ purchase what we do not understand”. If the client understands the process of creation, it helps in assessing the consultant’s contribution to the organisation’s goals. Equally it is the consultant’s job to make things less obscure for the client to understand.

An interesting point in projects is scope discussion. The consultant does not want scope-creep and the client does not want to leave anything meaningful out. Both parties may use different assumptions about the relationship between scope and pricing. These assumptions need to be articulated and discussed openly. This sets the right expectations, helps set milestones and helps the assessment of the output.

Passing the “chemistry” check

This is actually the very first step. The right chemistry between the client and the consultant is nearly as important as the right value/ price package. Without it, projects may happen but a relationship certainly won’t develop.

In my case, I usually meet the CEO/ board director/ a senior decision-maker or a few of them. The first meeting is usually an informal chat or a lunch, and there may (or may not be) signs of a good chemistry, commonality of values or similarities in our respective weltanschauung. Projects that help the client almost always lead to professional growth for me too. But only if the chemistry was right in the first place.

So in my experience, successful clients help consultants help them and consultants can also help clients better by avoiding obfuscation and random posturing.

These factors apply to a consulting or advisory situation of any kind, from strategy advice to software development. I return to this checklist often but I am certain there are other lessons in the readership too. Please use the comments link to contribute.

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Leverage & strategic creativity in tough times

by Shefaly on June 2, 2009

“Give me a place to stand and I will move the earth”, said Archimedes. He was of course illustrating the principle of leverage, a word that is now an unutterable, thanks to the mega-banks disaster and the resulting credit crunch.

Engraving from Mechanic’s Magazine, cover of bound Volume II, (c) Knight & Lacey, London, 1824Engraving from “Mechanic’s Magazine”, cover of bound Volume II, (c) Knight & Lacey, London, 1824

Yet never does one need leverage more than in tough economic times or under tight operating conditions.

It is not a secret that the credit crunch in the western economies has put paid to a vast amount of investment related activity. Yet small and creative businesses do not simply cease to exist. Indeed the small-to-medium sized biotech and the communications technology firms that I am working with at the moment are forging ahead. Will they outlast the recession?

Obvious as it is, it helps to be in the right business, one that is not seen as a luxury and that can adapt rapidly to serve changed needs. Luxury brands such as Christian Lacroix and Tiffany have borne the brunt of the recession whilst supermarkets such as Sainsbury’s (UK), Tesco (UK) and Ahold (NL, US) are reporting strong profits by being able to serve families’ need to eat-in more. This, I realise, isn’t something that can be changed overnight. My biotech clients can scarcely enter the food business to keep cash flowing in. But being in the right business does increase the chances of one’s survival.

A core strategic advantage lies in owning IP, the asset that can be used as leverage to open doors that may have been blocked by queues in happier times, when money was flowing like water. This, too, cannot be created overnight but if it exists, it can strengthen a company’s prospects.

With these two conditions met, here are some other things my clients are doing to survive and outlast the recession.

Some are seeking investment but when faced with eye-watering demands for equity in return for capital, most are deciding to bootstrap instead. Their main tool? Cutting costs where they can without damaging the revenue, such as founder executive and/ or senior executive salaries. This requires creativity, commitment, and laser-focus on ensuring the business stays afloat and on sales.

There may not be much capital flowing but there are still opportunities to make alliances, partnerships and other deals. Owning protected assets and the ability to deliver added value help. A great deal. Many conversations are going ahead as I write and I am happy to leverage my networks to help my clients.

Owning assets is also useful in exploration of new markets in search of growth and profits. After all Ahold, the Dutch group, is lifted by its performance in the US, whereas Tiffany’s sales did not drop in Asia as precipitously as they did elsewhere. I am working with a few companies – both biotech and software – on helping them enter new markets.

While smaller businesses cannot do some things as well as their larger, wealthier counterparts, their size gives them a great advantage in being able to change priorities more easily, to adapt quicker.

Being in the right business and owning IP gives small businesses that ‘place to stand’ from where they can, if they so wish, ‘move the earth’.

 

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Is your business missing a trick?

by Shefaly on May 27, 2009

These are tough times. For most businesses. Whilst large organisations such as banks are worried about survival and solvency, smaller businesses are collapsing for want of short-term loans, suppliers collapsing or bills receivables remaining unpaid.

The simplest management 101 type solution is two-fold: maximising the revenue opportunities and minimising costs, without cutting into the flesh of the business. But are the businesses really doing all they can? 

Earlier this week, I was looking for gift coupons or vouchers. On Twitter, Shel Israel suggested Dell and Starbucks. That was a useful suggestion but I was looking for something more personal, such as a fashion or lifestyle brand in the UK. So I continued looking.

Surprise! I found that most of the UK’s big-name fashion and lifestyle brands came up croppers when it came to purchasing electronic gift coupons. The “luxury-is-for-a-special-few” etc argument does not apply here because all of these brands are big on e-commerce; indeed some businesses exist entirely as web businesses. 

There is no way to purchase a gift voucher or coupon at the  well-known fashion department store Browns. The search for ‘gift voucher’ or ‘gift coupon’ returns partial results, i.e. those that focus on the word ‘gift’ rather than on ‘voucher’ or ‘coupon’. For some reason, Selfridges distinguishes between a gift card which can only be bought in-store and a gift voucher, which apparently is another gift card which will be physically delivered. As a favour to customers, next-day delivery is available for £5.50!  At my favourite store - MatchesFashion - too, they want me to go in-store. Their online shop is a great experience and their service is fabulous but why this extra requirement? Multi-brand skincare and cosmetics store SpaceNK wants you to email them for a gift voucher or buy in-store, but at any rate, the vouchers cannot be redeemed online.  Net-a-porter, the online-only mecca of high fashion brands, has no gift vouchers or coupons. Shame, seeing as it is a web-only business selling products worth a few hundred pounds to a few thousand pounds so it is not as if people wouldn’t like to buy gift vouchers from them! Their outlet business, The Outnet, where average price tags are far lower, isn’t doing any differently. 

These businesses, all with a solid online presence and customer base, are missing a trick by not using their web stores to ’spread the love’ so to speak.

Electronic gift vouchers are easy to do. They can make pre-existing customers spend more; they can bring new customers; and since vouchers may not fully cover what the customer ends up buying, they can increase the retailer’s share of the customer’s wallet. By enabling electronic delivery, you are reducing the customer’s effort in making the purchase. Please don’t ask us to come in-store when the real reason why we are seeking vouchers is to avoid making that trip. Make it easy for us to buy, ok? 

I know most of my clients are not in the consumer retail business, but some of them were missing similar tricks. 

What about you? Is your business missing the obvious tricks too?

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Unanswered questions: The manager in the firing line

by Shefaly on May 7, 2009

Pink slip or P-45. Redundancy. Job loss. Head-count reduction. Downsizing. Right-sizing. Many words, the same meaning. 

While much attention is paid to the laid-off, not much sympathy or attention is reserved for the manager, the person, who hands out these pink slips or P-45 to his or her team-members, subordinates, employees. This person’s experience is different from survivor guilt. Yet it remains deeply upsetting and painful, and it is hard not to feel emotionally drained. Sooner than later, work is bound to suffer.

I was 24, when I first made several people redundant. The business logic was quite simple. There was a central business plan, in which no regional input had been taken. So regions hired according to the central projections.  However market realities required that plans be reconsidered and we had to let people go. Not all were undeserving, mind you. We were selling a new product category and brand, in a new retail format. So there was rather a lot of selling to do. Some weren’t really doing that well. Some were doing well and resented having to carry any deadweight with them. So the business case was clear and several had to go. However there was an interesting side-show. Whilst handing out the redundancies, I lost so much weight that at one point, I weighed a mere 32 kilos. I found it hard to eat and I worked longer and longer hours. Since my business unit was intrapreneurial and a new venture, I worked quite independently and with little direct supervision. 

Back to the present time in London. Several friends in senior corporate roles, mainly in the City, are firing people at work. During the week, they spend long hours at work. Then on weekends, they spend inordinate amounts of time playing golf or cycling – basically doing anything to stay away from more emotional engagement at home. For some, this is affecting their relationships, their family, where “head-count reduction”, “redundancy” , “right-sizing” etc are not available options.

Remembering what happened to me then and seeing the emotional trauma these friends are experiencing now makes me ask this question.

Who is looking after the welfare of the manager, who makes his/ her team-members redundant for a business case, but is retained to keep the business going, even to lead the business on its growth trajectory in the future? 

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How Kevin Bacon can help your business

by Shefaly on May 5, 2009

Or “how to use Network Science to advance strategic goals”. Sorry, but that wouldn’t make as catchy a title as the mention of Kevin Bacon, would it? But read on and you will see how Kevin Bacon could have smart lessons for business.

Let’s deal with Network Science first. Network Science is the study of networks – social, physical, biological and other kinds – to identify patterns, principles and possible algorithms in their interaction. It can help answer questions about how information is shared, how diseases may spread, how immigrants choose where to live, who knows whom and so on. Such understanding can help build predictive models of network behaviour. For instance, scientists have developed successful models to predict the spread of a disease. Such a predictive model can help focus preventive and curative resources to contain the spread of disease. The applications are numerous and varied.

Understanding the patterns, dynamics, principles and algorithms in social, biological and information networks can help businesses become smarter.

If businesses understand the whole context in which they operate, identify the links between seemingly unconnected factors and utilise the information about their networks sensibly, they could do things more efficiently and effectively. Here are some ways how.

Define problems better

Here is a real investment decision situation I saw many years ago. An investor received a business plan seeking funding to roll out high speed web access on high speed trains. Much time was spent discussing their customer contracts etc. When my opinion was sought, belatedly, I asked about the design and installation of antennae, the stage of manufacturing when the locos were being wired, and the relationship between the antennae design and supply company and the investment proposal in front of us.  Needless to say, involving me – who is an electronics engineer and spent a summer working in an Indian electric locomotive manufacturing facility supplying a European mega-brand – helped the investors redefine the investment proposition and change the conversation to their advantage.

Evaluate and allocate resources smartly

Close observation makes it clear that some start-ups are more likely to last than others. Amongst others, their ability to allocate their limited resources smartly makes a difference. If you are a software product or biomedical device company, with 4-5 employees, would you rather spend your time sitting indoors tinkering with your product to make it perfect or would you rather get it out in front of a sympathetic yet knowledgeable group of people who can help you get to the next stage – whether prototyping or mass manufacturing or something else? Knowing who in their network can help maximise the return on your scarcest resource – executive time and time to market – would give a start-up a considerable advantage.

Find and hire better employees, cheaper

Several consulting firms actively encourage their staff, with cash or non-cash incentives, to recommend potential employees for open positions. It helps them target a latent market of individuals who are not actively seeking a change, whose being employed is a signal of their employability; they can save costs by bypassing the need to advertise the open jobs. After all, an alleged 70-80% of jobs are never advertised. A new employee comes with an implicit recommendation of an existing one. The risk, that you end up hiring too many similar people, can be mitigated by being selective about the sort of linkages that are valuable to you.

Work your network. A network is as good as its connections, their dynamics and how they can help define and solve problems better.

Solve problems cleverly

Awareness of network dynamics can help generate innovative solutions to sticky problems. One such problem was the non-availability of credit to the unbanked people, the financially excluded and those whose poor creditworthiness meant large lenders are not interested in them. Nearly 41% of India’s population is unbanked, while estimates in the USA stand between 9-13% (pdf link).

Peer-to-peer lending emerged when willing lenders could connect with such borrowers via the web, utilising its global nature.There are now several P2P lending companies that make cash available to micro-entrepreneurs, students and other borrowers. Some others provide verification services to both parties involved. Creative solution to a real problem.

So, what does this have to do with Kevin Bacon?

Kevin Bacn (as if one needs a photo)_

 

Well he lends his name, to a social experiment called Six Degrees of Kevin Bacon. The premise is that nearly everyone is connected to Kevin Bacon, the entertainer, with 6 or fewer links in between.  For the record, I am two persons removed from Kevin Bacon on LinkedIn. If I were keen to learn to dance like him in Footloose, I would work my network.

The question is: are you working your network to get closer to your goals?

Related reading:

Beyond Privilege: Managing Information Asymmetries

Trust as social currency

Learning to love and solve multivariate problems

Interesting Links:

A short repository of links on Network Science on MIT’s website

Chris Brogan asks Will Companies Value Your Personal Network? The smart ones already do.

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