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CREATING SHARED SUCCESS

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Many consultants take the position (out of arrogance or ignorance) of “Let me show you how I'm going to improve things around here.” The success is the consultant's, a sort of largesse provided for the lucky client. There is a certain power in being “the expert” without whom all goes to hell, but there is a huge risk, although not the one that might be apparent.

The apparent risk is that the client might not benefit as desired or, heaven forbid, might actually suffer a reversal of fortune. Remember the physician's sage credo, “First, do no harm.” It's no accident that large consulting firms are being sued right and left in this litigious society. They have not “delivered” the desired results.

However, the greater risk is that even with demonstrable success, the buyer feels alienated, disenfranchised, and apart from it. The fee in this case, despite success, will be paid grudgingly. For one thing, the client is now fearful of long-term dependence and doesn't want to incur huge costs each time the consultant's “expertise” is required to solve another problem. For another, the buyer does not feel the intrinsic ownership and sense of well-being that would emotionally overwhelm any reservations about costs. Third, from an ego perspective, the buyer will feel the need to insert some leverage into the relationship to retain the perceived upper hand and emphasize that the consultant serves at the buyer's pleasure (especially if the results are so visible that others in the organization are talking about them).

True partners never begrudge each other their proper due. In fact, there's an implicit trust that neither partner will take advantage of the other and that agreed-upon terms, conditions, and time frames are innately fair.

Fee pressure decreases with a sense of shared investment, shared accountabilities, and shared success. Figure 1.4 shows the difference between a focus on a buyer and seller (top) who are locked into a battle over costs with only vague benefits established and two partners (bottom) who have agreed on tangible results where the fee is simply an intelligent and economical investment.

When the buyer simply views the consultant as another vendor providing certain expertise, the cost of acquisition becomes the key focus, because this is a commodity purchase (Who can provide the cheapest computer monitors per our specifications?). However, when the buyer's self-image and role are as a partner in the consulting process, the decision becomes one of return on investment, and the clearer the outcomes (under the conceptual agreement discussed earlier) and the more dramatic, the higher the investment that is justified.

This is particularly true when that investment includes the buyer and key organization people in the partnership. Some of the most successful consulting projects I've landed—and the ones most impervious to fee pressure—are those in which a “virtual consulting team” was formed comprising key client resources and myself. No educated buyer will want to underfund or hedge on that investment.

Figure 1.4 Costs from the Expert Versus Investment from the Partner

Alanism: Borrow $100,000 from a bank and you’re a customer. Borrow $10 million dollars and you’re a partner!

These are some of the key factors in shared success:

 A “we” mentality from the first contact with the prospect

 Literature, web sites, and promotional materials that talk about partnering and shared responsibilities

 A formal description of “joint accountabilities” in the proposal itself7

 A strong focus on outcomes and business results, not on tasks or deliverables

 Ample opportunity for the buyer and other key people to take credit and to bask in the success

 Candor in tackling inevitable problems and setbacks

 The consultant's being seen as an object of interest and center of expertise in the field

Err on the side of the client and buyer receiving more accolades for success than you. But also err on the side of higher fees and faster payment of those fees. That's the quid pro quo.

It really doesn't matter what the organization believes. What matters is what the current and future buyers believe. The danger of consultants trying to “do it alone” is that the client runs through this sequence:

1 Who's John Adams?

2 Get me that guy John Adams.

3 Get John Adams.

4 Get John Adams if you can.

5 Get someone close to John Adams.

6 Get me a young John Adams.

7 Who's John Adams?

In a true partnership that focuses on shared success, however, no buyer will try to eliminate one half of the successful combination.

Value-Based Fees

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