consulting strategies prevent nightmares

Consulting CEOs from Drake Beam Morgan, Bluedrop Performance Learning, and Information Mapping, Inc. on:

Consulting BestPractices: Strategies

Today to PreventTomorrow’s Nightmares

Thomas J. Silveri, Chief Executive Officer and President Drake Beam Morin

Emad Rizkalla, President and Chief Executive Officer Bluedrop Performance Learning

Doug Gorman, Chief Executive Officer Information Mapping, Inc.

Managing client expectations may be the most important wayfor a consulting firm to limit its liability and prevent futurenightmares. This process begins before the contract is

signed. Consultants must be extremely careful never to over-prom-ise, or to stray from their areas of expertise. They must also be veryclear, both before and in the contract, about what their goals, met-rics, and timelines will be. They must also spell out client expecta-tions and responsibilities. Many consulting problems result fromasymmetrical expectations. Once the contract is signed, consultantsmust communicate and negotiate any changes in scope. A consult-ing firm that is able to manage client expectations effectively willproduce more satisfied customers, which is the key to consulting suc-cess. Success in consulting means attracting repeat business, and theonly way to accomplish this is with clear communications, metrics,and goals. �

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Contents

About the Authors . . . . . . . . . . . . . . . . . . . . . . . . . p.2

Thomas J. Silveri. . . . . . . . . . . . . . . . . . . . . . . . . . . p.3

Emad Rizkalla . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p.5

Doug Gorman . . . . . . . . . . . . . . . . . . . . . . . . . . . . . p.9

Ideas to Build Upon & Action Points. . . . . . p.11

Copyright 2005 Books24x7®. All rights reserved. Reproduction in whole or part is prohibited without the prior written permission of the publisher. This ExecBlueprints™ document was published as part of a subscription based service. ExecBlueprints,a Referenceware® collection from Books24x7, provides concise, easy to absorb, practical information to help organizations address pressing strategic issues. For more information about ExecBlueprints please visit www.execblueprints.com.

Action Points

I. The Art of Consulting Successful consultants understand theclient’s long-term goals, culture, compe-tencies, and directions, and tailor theirsolutions to fit these qualities.

II. The Bottom LineConsultants need to have a clear vision of how they add value. Understandingyour own competencies and areas ofexpertise will help avoid over-promising.

III. Must-Have Consulting SafeguardsManaging expectations and limiting scope are both critical.

IV. The Golden Rules for ProfitabilityFace the customer, and focus on attracting repeat business.

V. Essential Take-AwaysConsulting success is driven by the value-add contribution you give the client. Establishing best practicesrequires looking externally.

© Books24x7, 2005 About the Authors ExecBlueprints 2

About the Authors

Thomas J. Silveri is chief execu-tive officer and president ofDrake Beam Morin, a position

he assumed in April of 2000. He isresponsible for handling the day-to-day management of the company’sglobal operations.

Before assuming this role, Mr. Silveriwas chief operating officer of DBM’s Unit-ed States operations. He also previously

held the position of senior vice presidentof finance and administration, where hewas responsible for DBM’s accountingdepartment, the financial planning andanalysis group, information systems, andfacilities management functions.

Before joining DBM in 1993, Mr. Sil-veri obtained 13 years of experience inspecialized fields of the media business,including public relations, advertising,

and research. Previously, Mr. Silveri wasexecutive vice president of finance andadministration at Hill and Knowlton,and prior to that, he was controller ofJWT Group.

Thomas J. SilveriChief Executive Officer and President, Drake Beam Morin

☛ Read Thomas’s insights on Page 3.

Emad Rizkalla is a professionalengineer who co-founded Blue-drop Performance upon gradua-

tion from Memorial University in 1992.He has 13 years of information tech-nology and e-learning industry experi-ence and an additional background inmarketing, organizational change man-agement, leadership, and return oninvestment assessment.

In 1996, Bluedrop developed one ofthe world’s first Web-based learningapplications while assisting French Phar-maceutical, Schering-Plough. Today, Blue-

drop is renowned as a company thatdrives the business performance throughlearning solutions that improve the per-formance of their clients’ employees, partners, and customers. Bluedrop’s pio-neering status and track record hasearned it the respect of clients such asCisco, Dell, Microsoft, Sony, HealthCanada, and Prentice Hall. Under Mr.Rizkalla’s leadership, Bluedrop has grownto become one of the preeminent e-learn-ing companies in North America.

Mr. Rizkalla is currently the chairmanof The Genesis Group (the technology

transfer corporation for Memorial Uni-versity). He was the recipient of the Busi-ness Development Bank of Canada’s“Young Entrepreneur of the Year” awardin 1997, and was honored as one ofCanada’s “Top 40 Under 40” for his lead-ership and vision in May of 2000. He alsosits on a task force for the Departmentof Foreign Affairs and InternationalTrade, reporting to Minister Pettigrew.

Emad RizkallaPresident and Chief Executive Officer, Bluedrop Performance Learning

☛ Read Emad’s insights on Page 5.

Doug Gorman has led InformationMapping, Inc. since 1986. Dur-ing this time, he has created an

organization and positive culture that haspermitted IMI to thrive.

From the classroom to the board-room, under Mr. Gorman’s leadership,IMI has been transformed from a thinktank to a thriving commercial concern.IMI has built upon its research-basedmethodology and products to help its cus-tomers solve real world information-intensive problems across industry lines.Information Mapping, Inc. has developedan international network of customers,strategic alliances, and partnerships in

more than 30 countries that has posi-tioned the company for continued, sus-tainable, long-term growth.

Information Mapping supplies a com-plete information architecture and vari-ous software tools to leverage anorganization’s substantial investment inpeople, information, and technology tosolve problems, improve efficiency,improve compliance, boost productivity,and reduce costs.

At the core of its services is Informa-tion Mapping’s research-based method-ology. Much like the Internet hasredefined the distribution of information,IMI’s proprietary methodology is fast

becoming the standard for making infor-mation more productive, adaptable, andreusable.

Mr. Gorman has been honored as afinalist for Inc. Magazine’s “Entrepreneurof the Year.” Information Mapping, Inc.has been recognized as a finalist for theGreater Boston Chamber of Commerce“Small Business of the Year” award. Mr.Gorman has a B.A. in Psychology fromColby College and an M.S. in Manage-ment from MIT.

Doug GormanChief Executive Officer, Information Mapping, Inc.

☛ Read Doug’s insights on Page 9.

Personal ServicesI’ve always been in the personalservices business. The personalservice sector is really what gives methe charge. In theory, everything isgrounded in good educational back-ground, but in practice, one needsto have active listening skills, andthey must be able to adapt thatbook knowledge and knowledgegained from experience, and imple-ment it through effective solutionsthat work for the customers. Ialways find that to be the mostexciting part of the job. Everythinghas to be tailored to meet theirneeds and where they, as an organ-ization, want to go.

You’re always dealing with dif-ferent people, and you’re alwaysdealing with unique challenges.The solution set for a customer isnever really the same, nor should itbe. You get to deal with the humancapital element, which is somethingevery consultant really does. If youwant to do your job well as a con-sultant, you’d better like workingwith people, you’d better like thatinterface, and you’d better be agood listener to be able to impartyour knowledge in a way that will

be accepted by those you’re con-sulting with. For me, that hasalways been the biggest reward. Ienjoy it and have stayed in it mywhole career.

The Art of ConsultingThe art of consulting requires mas-tering the art of listening to a set ofproblems, quickly and efficientlyassessing where the organization is,and developing a rational approachto getting where the organizationwants to go. It also requires thatyou make sure the solution set youprovide is in keeping with theorganization’s culture, its needs, itsdirections, and its competencies. Ifyou’re successful in doing that,you’ll be able to move the agendaof those you’re working for morequickly and efficiently in the con-stantly changing world of work.

Customers will often look to youas the solution to the problem,when in fact you’re the facilitatorto that solution. Customers tend tohave the feeling that once they’veturned a problem over, then theproblem is just going to get solved.That’s something we have to man-age on the front end. From our per-spective, the most important part ofactive listening is understanding thecustomer’s expectation and man-aging that early on as it relates towhat is possible and what we candeliver — and never, ever over-promise. Your credibility is on theline, the organization that’s hiringyou is on the line, and the invest-ment is on the line, so never over-promise and under-deliver.

Defining success in consultingdepends on the role and whomyou’re talking to. From my per-spective in my role as CEO, as theleader of a consulting company, I

define success as being able to havethe company execute as many ofour recommendations and proce-dures as possible in a way that ulti-mately moves their agenda forward.

Pitfalls and Golden Rules In my experience in consulting, Ihave found a direct correlationbetween the number of people infront of the customer and the prof-itability of the firm. What that essen-tially means is you want to put allof your company’s efforts andresources toward the customer in theform of face-to-face contact, andmarketing and sales activities andexternal research in the form of con-tinued development. You do not putyour resources into internal officespace or elaborate internal systems.If you keep your back office to aminimum, always provide an exter-nal focus to your meetings, and limityour internal process meetings, youwill be successful. I think those whoare not successful in the consultingarena view their company as a bigorganization where an entitlementculture is allowed to exist. I thinkthat is a major pitfall in consulting.

Thomas J. SilveriChief Executive Officer and President,

Drake Beam Morin

“I would urge anyone who wants toget into business today and lovesinterpersonal interaction to take alook at the consulting sector as acareer path.”

• Chief executive officer and presidentof Drake Beam Morin since 2000

• With the company since 1993

• Responsible for day-to-day management of the company’s global operations

Thomas J. SilveriChief Executive Officer and President, Drake Beam Morin

Your credibility is on the line, theorganization that’shiring you is on the line, and theinvestment is on the line, so never over-promise andunder-deliver.

Thomas J. Silveri, Chief Executive Officer

and President, Drake Beam Morin

© Books24x7, 2005 Thomas J. Silveri ExecBlueprints 3

The best business advice I cangive is that the more people on theline in front of the customer, thebetter. Your business is driven bythe value-add contribution yougive to the customer; all otheractivities around that should begeared toward that customer. Ifyou keep your focus on that,you’ll be successful. That’s howwe’ve built our company.

At DBM, we have six impera-tives that we filter through everybusiness decision we make:

1. Share a common vision world-wide.

2. Think and act globally.

3. See through the eyes of the cus-tomer or client.

4. Maximize employee talent.

5. Leverage technology.

6. Have a sense of urgency and purpose.

If any decision cannot easily beseen through the eyes of the cus-tomer as a value-add, then wedon’t do it. This doesn’t mean wedon’t have equipment that allowspeople to do their jobs, but by thesame token, we don’t want to havea sense of value internally that is notgenerated by the external market-place. People have to have the toolsto do their jobs, but if you are doing

something or buying something justto keep someone’s title or exclusivelyfor the profitability of the company,you will not be successful.

Avoid focusing on what you can’tdo. A lot of effort is expended oncreating solutions that aren’t core towhat companies do. By forming aplanning platform, we do stayfocused as an organization on ourcore competencies. We meet regu-larly and constantly challenge our-selves to re-test our thinking. I thinkany organization that wants to besuccessful really needs to do that.

It’s extraordinarily rare to see a con-sulting organization that is able toplay in the full spectrum of poten-tial consulting advice and counsel.They may play in other arenas, butthey have a specific skill set theyfocus on and move forward with.A smaller company would be wiseto limit themselves and pinpoint thevalue-add situations they can real-ly play in, as opposed to saying, “Ican be your consultant.”

Never play in an area where youdon’t have the value-add contribu-tion thought through in advance.Never over-commit to a customeryour ability to deliver the productyou suggest. Never surprise a com-pany with the size of a bill or howyou’re executing the program. Over-deliver, as opposed to under-deliv-er, and stay in touch. Whether ornot you’ve completed the assign-ment, maintain and develop thatrelationship, because you neverknow when that will come back.�

© Books24x7, 2005 Thomas J. Silveri ExecBlueprints 4

Insider’s Tip

Success for me is repeat business. Success for me is the moving forward of thatorganization’s agenda through the use of our time and our resources. And of course,speaking as a CEO, we want to do that in a way that is profitable. We want to doit in a way that allows for the growth and development of our people and our prac-tice, so we can constantly be moving forward and be at the forefront of whatev-er is coming next. My best definition of success is repeat customer activity. It meansthat we have secured a relationship with a customer where we have provided avalue-added contribution, and they want to use us again.

Thomas J. SilveriChief Executive Officer and President, Drake Beam Morin (continued)

Qualities of Successful Consultants

Likes workingwith people

Is a good listener

Able to impart knowledge in acredible way

Rewards and ChallengesBluedrop is currently in what wedefine as “hyper-growth mode.”This means we have been growingorganically at anywhere from 50 to100 percent each year in the last fewyears. Of course, this pace of growthpresents many challenges, not theleast of which is the question ofwhere does a company find the newclients to support this growth.Repeat business can generate 70 to80 percent of a company’s revenues,but not when they are growing thatquickly. A consulting company thatdoubles its revenues year over yearwill need to find several brand newclients each year to sustain growth.Due the nature of our offerings, andour desire to become trusted advis-ers to each and every client, thegrowth of our client base takes greattime, money, focus, and energy.

In leading Bluedrop for 13 years,it has been rewarding to helpclients in very different organiza-tions achieve their goals. I like thefact that this is a fast-changingindustry. Where things were lastyear is not where they’ll be this year.Everything changes very, very fast.I also enjoy the people aspect ofconsulting. I don’t think you can bein consulting without enjoying peo-ple — consulting generally meansdealing with very smart people who

constantly challenge you and pushyou to do more.

Of course, the things you love themost are often the ones that provideyou with your greatest challenges.Accordingly, a key challenge is thisincredible pace of change. Both ourofferings and the skill sets we usemost often internally have radical-ly changed several times in the pastfive years alone. Accordingly, con-sulting companies must focus ondeveloping flexible processes thatdefine very clearly how they addvalue for their clients, versus exact-ly what the value is. The way com-panies add value today is going tobe very different from the way theywill add value tomorrow. So con-sultants can’t afford to stick to arigid box, which tightly defines theirservices and technologies; they mustconstantly look toward the future.They must always ask what newservices and technologies can weramp up on our existing infrastruc-ture (people and physical) andprocesses? Consultants need to havea clear vision of how they add value,and understand why, how, andwhen they must embrace change.

Avoiding LiabilitiesPhilosophically speaking, the easiestway to avoid a liability is to not takeon projects in areas where your com-pany and/or its people are notdeeply experienced. However, lifewould be pretty boring if all com-panies did that. Most companieseventually would die if they did notget out of their comfort zone occa-sionally. So the keys to avoiding lia-bility must be tied to how projectsand relationships are managed.

Both the client and the consult-ant need to have very similar expec-tations and possess a shared vision

and understanding of deliverablesand processes. Further, the consul-tant’s project manager has a greatresponsibility to educate the clienton processes, limitations, and risksthroughout the project. In my esti-mation, most liabilities occur for afew underlying reasons:• Consultants do not have the

right people for the right jobs.

•. Clients are not properly edu-cated by the consultant aboutthe process, consultant’s costs,and realities, or their ownresponsibilities in the success ofthe project.

Emad RizkallaPresident and Chief Executive Officer, Bluedrop Performance Learning

Client over-satisfactionis the currency thatconsulting companiesshould collect, invest,and spend in thepursuit of excellence.

Emad Rizkalla, President and Chief Executive Officer,

Bluedrop Performance Learning

Emad RizkallaPresident and Chief Executive Officer,


“The most successful consulting com-panies unite stakeholders and bridgean organization’s business and learn-ing objectives.”

• 13 years of information technologyand e-learning industry experience

• Additional background in marketing,organizational change management,leadership, and return on investmentassessment

• Named one of Canada’s “Top 40Under 40” in May of 2000

© Books24x7, 2005 Emad Rizkalla ExecBlueprints 5

• There is poor communication.

• Expectations are not clearly set,documented, and managed upfront. Both parties must be on thesame page of what the engage-ment is about, what the deliver-ables will be, and what the goalsof the project are.

Contracts offer relatively littleprotection from liability. While con-tracts can certainly limit damagesand provide protection from unrea-sonable demands, justly disap-pointed clients can usually findsome avenue for legal protest. By the

time either side begins to haul outcontracts and start scanning andinterpreting clauses, it is already toolate. The best way for CEOs to steertheir company clear of major lia-bilities is to hire excellent projectmanagers who have great process-es, set up clear expectations, andeducate clients. We have a saying atBluedrop: “Project managementdoesn’t cost, it pays.” Project man-agers must understand exactly whatthe customer wants, and ensure thatthe client is very clear about whatthey will get for the fees provided.Consulting companies that do thiswell seldom worry about haulingout the contracts later.

Preparing for Legal Issues Aside from avoiding the need tohaul out contracts in the first place,there are several legal issues thatconsulting companies should keepabreast of. Consultants must striveto clearly define contracts so theirliability is defined and limited to theservices delivered and not to dam-ages that may or may not come asa result. They must ensure that theirrole in the engagement is definedclearly, ownership of intellectualproperty is clear, and that the clientis also expected to produce certaindeliverables (content, acceptancetesting, etc.) within certain param-eters and timeframes.

The other large contractual issueis defining the scope of the work(and the underlying assumptionsbehind them) very clearly in termsof what is going to be delivered,when, and where. These responsi-bilities, deliverables, and timeframesshould be identified for the client aswell as the vendor. Sometimes clientsdon’t meet their obligations or time-frames, yet still expect the same

timeline, cost, and effort from theconsultant. Contracts need to beclear that both parties have obliga-tions that can affect the costs, time-lines, and deliverables. If not, thislack of symmetry can wreak havoc.

Keeping Informed of Legal IssuesStaying abreast of new changes inlaws is a pretty organic process atBluedrop, since we are still relativelysmall. Although we have clearlytasked one person as accountable forthis important area (our vice presi-dent of operations), I make time forthis issue in my calendar at quarterlyoperational meetings. I also have dis-cussions with our lawyers, andother executives, at least twice a yeararound liability issues. Very largecompanies might have a wholeteam dedicated to this, but smallercompanies tend to do it more infor-mally, which is somewhat riskier.Vigilance is important here, and thattakes a conscious, concerted effort.

Important Financial PracticesIn terms of financial practices, rev-enue recognition is perhaps the keychallenge in financial managementfor consulting companies. We use a“work in progress” plan for recog-nizing revenue: we recognize revenueand profit as we earn it. To do thisproperly we must have competentproject managers and good systemsto let us know what percentage ofa project’s revenues and costs wehave accrued. Years ago, we recog-nized revenue when we invoiced, butit provided an inaccurate picture andhas perhaps now become contraryto good accounting principles. Wehave developed a comprehensiveinternal system to track hours, andwe have good project management

Expert Advice

Since consulting firms hire lots of peo-ple, the common legal issues relatedto employee contracts must also beaddressed. Confidentiality is critical,and it must be defined in employeecontracts and discussed with the proj-ect team at the outset of any newengagement. Likewise, non-disclo-sure and non-compete clauses areimportant. Departing employees mustclearly know their responsibilitiesand limitations when they leave. Ofcourse, they need to be able to makea living elsewhere when they leave,but they must not be capable of hurt-ing the company when they leavethrough the unfair transfer of knowl-edge to a competitor, poaching exist-ing clients/employees, or divulgingconfidential information.

Client-side feedback is by far the mostuseful feedback anyconsulting companywill receive.

Emad Rizkalla, President and Chief Executive Officer,



Emad RizkallaPresident and Chief Executive Officer, Bluedrop Performance Learning (continued)

to accurately assess and estimatewhere we are contractually into adollar amount. It is part art and partscience, but the key is to provide rig-orous but simple guidelines toremove subjectivity. The other keyis to meet monthly to challenge theaccruals, look backwards and for-wards with other numbers provid-ed, and hold project managersaccountable for their numbers.

Establishing and Measuringa Set of Best PracticesBefore attempting to establish a setof best practices, it is necessary tonetwork and attend industry eventsand conferences to learn from oth-ers. Any company that is insular andalways looking inward is not goingto have the results they want whendeveloping best practices. The verynature of best practices requires peo-ple to look externally.

It is very important to benchmarkprogress against corporate historicalperformance as well as externalindustry standards. I believe con-sultants need to start with a visionfor the client’s success and workbackwards to determine which inter-nal processes and behaviors have thegreatest impact on this success.Once these internal factors are iden-tified, they must be quantified,preferably using industry-widemeasurement standards. After this,companies can then establish met-rics to track their financial per-formance (efficiency, gross profit,utilization percentage, etc.) andbenchmark against historical per-formance and industry standards.

It is important to establish a thor-ough client survey process to garnerqualitative and quantitative feed-back. The quantitative feedback iscritical to benchmark progress over

time. Important benchmarks shouldultimately be directly correlated toemployee and/or managementreward programs. Client-side feed-back is by far the most useful feed-back any consulting company willreceive. Companies have to educatethe key employee groups about thenew metrics, what they mean, whythey are important, and how andwhen they will be tracked. The chal-lenge is often how companies trans-late corporate good behaviors intospecific actions that each individualcan be doing to help achieve targets.

The only reason to bother with thisentire process is to use it judiciouslyto improve internal efficiencies andthe quality of work, as reflected in acustomer satisfaction index.

Tackling the Race to the BottomSome types of custom e-learningcontent development are becomingmore commoditized. Accordingly,

more and more of the low end proj-ect work is going offshore to coun-tries such as India. Of course, thecosts are coming down substantial-ly, some say by 50 percent in the pastfive years. This is a trend that is hap-pening very broadly with informa-tion technology-related industries. Itis one of the most formidable chal-lenges many United States consult-ing companies have ever faced.

In e-learning, the client experi-ences on outsourcing are mixed, butI believe this trend will be beneficialoverall. Lower-cost overseasproviders are helping reduce the bar-riers to client experimentation withe-learning and hence creating moreactivity, which leads to more suc-cesses and more demand for highervalue e-learning.

Of course, clients have a right andneed to do things as inexpensivelyas possible. The trick for the con-sultant is to find efficiencies withoutsacrificing service or quality. Wehave decided to take a three fold



Managing Legal Issues

Clear ownership ofintellectual property

Expectations that the client is alsoexpected to produce deliverables

Defined liabilitySymmetrical expectations

Clear timeline and costs

Defined scope of work

Clear Contract

Defined roles inengagement

strategy to addressing this need:shifting production to lower-costlocations, leveraging technologiesand tightening methodology, andmoving up the food chain.

Shifting Production to Lower-Cost Locations Our client service model aims to placethe most important client-facingresources (such as account managersand project managers) as close to theclient as possible. However, at the same time we have located ourproduction team near shore in New-foundland, Canada. In Newfound-land, we have been able to hireexcellent talent at less than 50 per-cent of the costs associated with amajor United States city. We have hadgraduates from Oxford, Harvard,and UC Berkeley working therebecause they were born there andwanted to return home. Our staff insuch an unconventional location isvery loyal, committed, and happy towork with one of the world’s lead-ing organizations right in their home-town. Our production qualityimproved and our costs are half thoseof our competitors. Moreover,because of our commitment to hireAMs and PMs in major cities nearour clients, the ability to build a trust-ed advisor relationship is not impact-ed. Service does not suffer, qualitygoes up, and costs come down.

Leveraging Technologies and Tightening Methodology Another way we respond to this chal-lenge is technology and methodolo-gy. We are perpetually looking at newtechnologies and tinkering with ourprocesses to improve efficiencies. It isamazing how the latest versions ofeven the same multimedia software orlearning content management systemcan shave development time by up to50 percent over versions from just

three years ago. It is critical to con-tinuously research new technologiesand products to see how they can beused to reduce costs. Moreover, it iscritical to tinker often with your devel-opment processes to look for short-cuts and the removal of redundantsteps. Bluedrop has taken a veryaggressive definition of redundancy:any part of our process that does notadd value to the client can be con-sidered redundant. It often leaves medumbstruck how many steps andprocesses devised by companies serveno tangible value towards the endgoal of satisfying a client.

Moving up the Food Chain The final response we have taken isto move ourselves up the food chainby focusing more on defining ourvalue to clients, instead of our costto clients. In the current environ-ment, consulting companies must:

• Transition from vendor to trusted adviser

• Reposition from a provider ofcourses or software to a providerof tangible business outcomes

Sophisticated clients can discernwhen they need a low cost/higherrisk production contractor versuswhen they should seek a lowrisk/higher cost trusted adviser whocan deliver value. Even in the cur-rent environment, it is detrimentalfor consulting companies to positionthemselves as a low-cost provider,even if they are just that. In somecases, Bluedrop might be the low-cost provider, but I do not promotethis or use this as a selling tool. Con-sulting companies also need toswitch the equation from cost tovalue. That’s why most clients go toconsultants in the first place,whether they realize it or not.

If the only thing you can offer aclient is a cheaper price, then youalways run the risk of being out-gunned at your own game. Con-sulting companies need tounderstand the value they providefor clients and develop relationshipsthat enhance their ability to provideit. Client over-satisfaction is the cur-rency that consulting companiesshould collect, invest, and spend inthe pursuit of excellence. �



� Shifting production to lower-cost locations

� Moving up the food chain by definingour value to clients

� Leveraging technologies and

tightening methodology

Findingefficiencies without

sacrificing service or quality

Consulting ChallengesAt the top of the list of challengesis working with the customer sothey understand and budget theamount of money needed to do thejob right the first time. Recogniz-ing the complexity of the informa-tion environment in which mostpeople and companies operate issomewhat of a challenge to theleadership of those organizations.And then, the most recent newchallenge is dealing with theincreasingly empowered legal andpurchasing environment.

Problems and ClientManagementWorking to get on the same wave-length with a customer abouthow to solve problems is really acommunication function. Get toknow the company and the peoplein the company. Get to know whatmakes them tick, and what they dofor their customers. It’s a rela-tionship, and mutual expectationsneed to be both set and met. Askquestions like:

• What are we going to do, andwhat are you buying?

• What does “goodness” look like?

• What does “complete” look like?

• What will make you look great?

It’s important to avoid laissez-faire project management — ifsomebody isn’t managing the job tothe numbers and the client expec-tations, there will be trouble. Oftena less-experienced project manag-er, left to himself, will think theirjob is to give the customer every-thing he asks for throughout theproject. But that’s wrong — his jobis to deliver everything the customer

asked for in the beginning, whenthe consultants first signed up forthe project. Sometimes the projectmanager may forget what hisresponsibility is, either to his com-pany or the customer company,because he is the one that has towalk the line.

Payment and Legal IssuesAnother issue that the leadershipmust deal with is customer pay-ment. A customer who isn’t payingis a problem. A situation like thatcannot be ignored for long, becauseafter the customer hasn’t paid fortwo or three months, the problembecomes insurmountable. The bestpractice is to set the customer pay-ment terms up front, and make sureeveryone understands the terms.Non-payment usually indicates anissue that needs attention.

We try to address legal and pur-chasing issues directly with top-level business people. We try not toget turned over to the lawyers; wetry to have the lawyers workthrough their business people, andthe result is usually a more rea-sonable contract and mutuallyagreed-upon expectations. Oftenwith consulting, we are presentedwith a contract that was meant forbuying products, or software, andthat kind of a contract makes nosense at all for our business.Clients must understand that theyreally are buying a service, not aproduct. Steer clear of major lia-bility commitments in the consult-ing marketplace.

The legal issues we encounterinvolve intellectual property, own-ership, and theft, sometimes withdeparting employees. Intellectualproperty issues involving the cus-tomer can also be an issue. Just

© Books24x7, 2005 Doug Gorman ExecBlueprints 9

It’s important to avoid laissez-faireproject management —if somebody isn’tmanaging the job tothe numbers and theclient expectations,there will be trouble.

Doug Gorman,Chief Executive Officer,

Information Mapping, Inc.

Doug GormanChief Executive Officer,


“Leading a consulting business is very rewarding, but it has its chal-lenges, too.”

• Chief Executive Officer of InformationMapping, Inc. since 1986

• Transformed the company from athink tank to a thriving commercialconcern

• Finalist for Inc. Magazine’s “Entrepre-neur of the Year”

Doug GormanChief Executive Officer, Information Mapping, Inc.

because we apply intellectual prop-erty to achieve a solution in yourcompany doesn’t mean you own it.We still own it.

We also have to deal with scopechanges — understanding preciselywhen the job actually changed intosomething else. What is it going tocost? Waiting too long to addressissues can cause trouble. As soon aswe believe the scope of a project haschanged, we need to schedule a meet-ing. If the customer asks for some-thing more, we cannot wait until theend of the engagement to address therequest and the cost implications. Tryto deal with such things right away.Try to talk about possible changesbefore the job even starts.

Almost all engagements beginwith an analysis phase. At somepoint there is generally a writtenwork product. There must be agree-

ment on how long it is going to takethe customer to assemble and com-municate comments to the draftdeliverable. This may seem simple,but it is crucial to dig in and ask:

• Could you tell me how you aregoing to turn the commentsaround?

• Who are you going to give it to?

• How many people are going tolook at it?

• Are you going to have 10 dif-ferent people give us com-ments, or are you going to haveone person consolidate all thecomments?

Misunderstandings here cangreatly affect the cost of doingthe job.

The key to successfully meetingany of these challenges is constant,regular, and direct communicationwithin the context of the customerpartnership. �

© Books24x7, 2005 Doug Gorman ExecBlueprints 10

Expert Advice

Budgeting to do the job right is difficult, because the final procurement stage ofthe buying process is the purchasing departments, and purchasing is often meas-ured on how much they reduced the initial price. We have a tight business model,and it is difficult to reduce price without reducing resources and commitments.We find some prospects or potential customers that try to work us right to thatline. Then we may become overly conscious of limiting our deliverables, perhapsto the detriment of ourselves and our customers. We try not to cut what the cus-tomer needs, but sometimes the customer demands it by saying, “Do only this, orcut back on this.” It’s important to realize that if we skip on project management,it can end up costing both us and the client more in the long run.

Essentials of Communication

Knowledge of the client company

and staff

Establishingmutual

expectations

Understandingthe client’s valueproposition to its

customers

Doug GormanChief Executive Officer, Information Mapping, Inc. (continued)

I. The Art of Consulting The art of consulting requires:

• Mastering the art of listening toclient problems

• Quickly and efficiently assessingthe status of the organization

• Developing a rational approachto achieving client goals

Successful consultants under-stand the client’s:

• Long-term goals

• Culture

• Competencies

• Directions

They then tailor their solutionsto fit these client qualities.

II. The Bottom LineConsultants need to have a clearvision of how they add value.

• Understanding your own com-petencies and areas of expertisewill help avoid over-promising.

Most liabilities occur because of:

• Consultants not having the rightpeople for the job

• Poor communication of cost,responsibilities, and expectations

• Expectations that are not clear-ly set, documented, and managedup front

III. Must-Have ConsultingSafeguards

Managing Expectations

• Avoid laissez-faire project management.

• The consultant’s job is not to givethe client everything he asks forthroughout the project. It is todeliver what the client asked forat the beginning.

Limiting Scope

• Clients often try to change thescope of a project mid-stream.

• Be aware of scope changes, andcommunicate them to both sides.

• Changes in scope can lead tochanges in charges, deadlines,and goals. Be sure to discussthese changes with the clientimmediately when project scopechanges.

• Talk about possible changesbefore the job even starts.

IV. The Golden Rules for Prof-itability

Face the Customer

• There is a direct correlationbetween the number of people infront of the customer and theprofitability of the firm.

• Point all of your company’sresources toward the customer inthe form of face-to-face contact.

• Keep your back office to a minimum, and always provide

an external focus to your meetings.

Focus on Attracting Repeat Business

• Success is attracting repeat business.

• If you over-promise and under-deliver, you will never be able toretain clients.

V. Essential Take-AwaysConsulting success is driven by thevalue-add contribution you give theclient. All activities should be gearedtoward delivering value to the client.

Establishing best practicesrequires looking externally:

• Network and attend industryevents.

• Establish a thorough client sur-vey process.

• Client-side feedback is by far themost useful feedback any con-sulting company will receive.

• Companies must educate keyemployee groups about the met-rics, what they mean, why theyare important, and how andwhen they will be tracked.

• Employee and managementincentives should be directly tiedto client satisfaction. �

© Books24x7, 2005 Ideas to Build Upon & Action Points ExecBlueprints 11

Ideas to Build Upon & Action Points

We try to address legal and pur-chasing issues directly with top-levelbusiness people. We try not to getturned over to the lawyers; we try tohave the lawyers work through theirbusiness people, and the result is usu-ally a more reasonable contract andmutually agreed-upon expectations.

— Doug Gorman,Chief Executive Officer,


Avoid focusing on what you can’t do.A lot of effort is expended on creatingsolutions that aren’t core to what com-panies do. By forming a planning plat-form, we do stay focused as anorganization on our core competencies.

— Thomas J. Silveri, Chief Executive Officer and President,

Drake Beam Morin

© Books24x7, 2005 Ideas to Build Upon & Action Points ExecBlueprints 12

Ideas to Build Upon & Action Points (continued)

ExecBlueprints is a subscription-based offering from Books24x7, a SkillSoft Company, for more information on subscribingsee: www.books24x7.com.

10 KEY QUESTIONS AND DISCUSSION POINTS

What are the three most rewarding elements of leading your company?

What are the three biggest challenges?

What are the best ways CEOs can steer clear of potential major liabilities in the consulting marketplace?

What are the three biggest landmines a consulting company could face?

What are the top 3 legal issues that all consulting companies should prepare themselves for?

How does a consulting company establish a set of best practices?

In the fast-changing space of consulting, how can executives best stay informed of new changes and laws?

What best practices need to be in place for consulting companies in the areas offinance and accounting?

How can a consulting company best manage the client relationship? What best practices can be put in place to ensure a proper system of check and balances?

How can a consulting company best manage a client who demands more without committing to additional fees for work?

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