What I do (previous section) is here.
How I do it: Readers already familiar with strategy initiatives and the differences between pyramid-based and independent consulting models may wish to skip ahead to a description of my ideal clients or the outline of my fee structure.
The process of developing good strategy is idiosyncratic: appropriately tailored to each situation and adaptive/flexible to what's learned along the way. There's no cookie-cutter project plan; for a more thorough understanding of my mindset, an online copy of an internal staff paper describing the McKinsey approach to problem solving appears to be available here.
Like the rest of the business world, strategy consulting is experiencing significant disruption. Even clients familiar with traditional pyramid-based consulting models are often unfamiliar with how to best utilize an independent executive.
Below are some general thoughts about how to structure our work together: level of involvement, work focus and product, and structure of the team.
Level of involvement: How to scale our commitment in parallel
Two broad objectives shape how I think about structuring our work together. First, that we develop and maintain a clear, shared understanding of the work to be done and its value to your organization. Second, that I am fairly (and transparently) paid for that work. These goals reinforce each other.
There are three broad levels of commitment which most client work falls into:
- Half day, closed-ended conversation: For clients with a narrowly focused question, especially ones who haven't worked with me before
- Structure is often a business plan or pitch deck review
- Read your doc (~2 hrs)
- Write my reaction and send to you (~2 hrs)
- Live conversation (in-person or phone) to discuss my reaction (~1 hr)
- Key criteria is no pre-work or follow-up required
- Arranging an "office-hours" whiteboard brainstorming session is possible
- Sessions without a shared context may be of limited use unless developed over multiple interactions
- Shorter, focused diagnostic: For clients with a murky or open-ended business question, who want to work together to refine that question. This ensures later work will be more focused - regardless of whether that work includes me.
- Result of diagnostic is clearer view on core question and a testable hypothesis of what the answer likely looks like
- Content generation of diagnostic is usually based more on synthesis than analysis: interviews (mostly internal) and literature reviews (identifying/summarizing existing internal/external financial reports, strategic plans, industry white papers, academic research, etc.)
- Work product of diagnostic is usually documentation of shared context: outlining a proposal for in-depth analysis and solution generation, resource requirements, and work plan to continue the work (regardless of my own involvement)
- Length of diagnostic is usually 15-20 days including drafting of work product and edits for clarity
- Longer, often open-ended engagement: For clients with needs ranging from flexible project design to minimizing frictions of budget/accounts payable
- Structure is often a contract for a "bank" of days which are released towards particular work plans developed later, invoiced in a periodic or ongoing manner.
- Types of client engagements best suited for this structure include
- Recently completed a diagnostic with me and we're embarking together on a longer project of uncertain duration (see "Five main phases" of a strategic initiative, below)
- Current clients wanting ongoing, unstructured support. We've completed a project together, and client execs want topic expert participation in periodic meetings, training sessions, "check-ups", etc.
- This could include one-off assistance on narrow topics such as a customer/value/impact white paper for a high-value enterprise software sales cycle
- In theory, staffing me onto someone else's project. I'm usually approached once or twice each year about augmenting/mentoring a potential client's strategy team or joining another consultant's project
- In practice, logistical issues on both sides often challenge the ability to start new relationships in this bucket
- Transparency, availability, and/or long-term commitment requirements are often issues for both sides particularly while drafting the contract workplan
- If clients want to end up in a broad, open-ended relationship we're usually better off starting in the diagnostic or closed-ended relationship described above. It gives each of us an opportunity to qualify the other, in a complete business transaction with no strings attached
This approach allows us get to know each other better while escalating in parallel our shared commitments of time and money. Finding the appropriate balance of work and communication at each step is important: too much focus on work risks being surprised by the time/money spent exploring an unexpected path, while too much focus on communication/oversight of process slows projects and increases their expense.
Work is invoiced at a daily rate, explained in more detail here. Alternative fee arrangements (contingent fee, value billing, equity or convertible debt, etc.) are generally not appropriate for the type of work I engage in.
Most clients rely on flexible scheduling to ensure their organization keeps pace with my work - flexing from 1-3 days/week and surging (when required) to 5 days/week for short periods of time.
Clients sometimes believe they'll require full-time support for a longer period of time; many are unable to make effective use of an executive-level consultant at such a consistently high utilization rate.
Those which can maintain such high utilization should often consider making an interim or full-time executive hire. My availability and interest in longer-term appointments varies with workload; it's often a more effective use of our time to begin working together and see where the relationship goes.
Work focus: Strategic initiatives have five main phases
Below are some thoughts about different phases of initiatives which are just as applicable at a strategic level (M&A, pivot, turnaround) as they are at an operational level (DMAIC, A/B testing, process improvements, etc). They're also consistent with a variety of cultural philosophies such as Lean (startup), Agile, etc.
Readers familiar with the design/execution of strategic initiatives may wish to skip ahead to the "structure of the team" section below.
While the phases are presented below in a linear and distinct manner their execution may be iterative and blended in a less explicit manner.
Any strategic initiative is sui generis for a variety of reasons, yet these five general phases will usually be reflected at an appropriate level of detail in both the workplan and final work product.
I operate as an independent executive, staffing strategic initiatives using client personnel (whenever feasible) instead of external consultants.
This learn-by-doing approach helps build lasting client capabilities, and ensures a deeper understanding of the "why" behind the "what" and "how." This better equips client teams to sustain execution of the strategy after the initiative has completed.
My general approach is that I'm performing work that client team executives and other members are unable to perform for bandwidth or expertise reasons. In appropriate circumstances I'm able to supplement our team's capabilities using several professional networks, including former industry executives and McKinsey/Bain/BCG analysts and consultants.
Unlike traditional "pyramid" consulting models which rely on staffing large teams at mark-ups of 100% or more (to support their internal overhead and utilization), if our work requires me to staff and coordinate a supplement to our team, I'll pass through the cost of the additional consultant's time at my cost plus a nominal 15%.
I want to make money from providing direct value, not from selling clients a marked-up team then charging them to lead it. When we're finished, most/all of the team members remain with client organizations instead of immediately leaving with all their contextual knowledge and skill upgrades.
The long, thin model may not be for you
Some organizations are much better served by seeking a full-service (or larger boutique) pyramid-style consulting firm, particularly if they are large and complex enough to:
In these cases, traditional pyramid-style staffing makes perfect sense: the consulting teams exist in part to ensure the senior consultant has an independent source of information from which to advise client executives, and in part to ensure the senior consultant is focused on doing only things which can't be done more efficiently by others at the consulting firm.
My "expert generalist" background is most distinctive in the "diagnostic" and "initiative design" phases, though I have practical experience (strategic and operational) in all five phases.
A former colleague once said that much of my business leadership is a result of "asking the questions no one else is asking, which generates analyses no one else is doing, which results in recommendations no one else is making."
In part, this is due to the majority of my McKinsey experience being on what were called "01" strategy studies in a wide variety of industries and functions. Those initial projects tended to rely more heavily on the "diagnostic" and "deep dive" phases because there was no prior client work to build off.
- Diagnostic - A diagnostic sharpens the phrasing of a core strategic question and develops a testable hypothesis of what the answer likely looks like.
- Goal is not originality as much as completeness of thought and a clear synthesis of existing (internal & external) knowledge and points of view
- Ensures that later analytic work is focused enough to generate distinctive insights without (unnecessarily) reinventing the wheel
- Diagnostic is usually conducted by a small team with significant input from and report out to relevant senior executives.
- Deep dive - A deep dive is designed to further explore/refine the core question and hypothesized solution
- Goal is to generate strong, unbiased supporting arguments for and against various solutions; through conducting detailed macro- and micro-level analyses (both theoretical and empirical); usually considering multiple stakeholders' points of view
- Result often requires framing of both optimal and second-best solutions, so that the scenario design phase is able to focus on the handful of feasible solutions while understanding explicit and implicit trade-offs and externalities (e.g. "optics" and "politics")
- Deep dive is usually much longer in duration, higher in intensity, and conducted by a larger team than a diagnostic. It is sometimes conducted with transparency to and/or direct participation by representatives of various stakeholders required for execution
- Initiative design - The initiative design phase is designed to stress test the result of the deep dive by describing how a solution would be implemented
- Goal is to ensure that the articulated strategy is executable: a clear view of the handful of design elements critical to success, not just a high-level restatement of the world everyone wants to live in someday
- Result is an "operating handbook" of sorts for your business, describing the specific goals you're trying to reach and how you're going to go about reaching them at an appropriate level of detail. Work product may be presentation and/or long-form (white paper), and generally includes consideration of pilot/phased roll-out design and sequencing questions
- Process is generally longer in duration, lower in intensity, and conducted by an even larger team than the deep dive - often making use of iterated workshops planned by members of the deep dive, led by key client executives, facilitated by external consultants, with broad participation by stakeholders responsible for execution.
- Pilot/phased rollout - The pilot/phased roll-out is designed to operationalize the strategic initiative. Larger organizations may have dedicated change management organizations and practices that drive process in this phase.
- Goal is to learn by doing, ensuring that estimates of cost and impact are validated by real-world experience in a handful of segments. The sequencing is chosen for an appropriate balance of considerations such as size of impact, speed of implementation, and openness to change at each segment whether by geography, business, product, etc
- Result is proof points that can be generalized to the larger organization, cementing broader prioritization, timeline, and feedback into budget cycles. Generally seen as the final opportunity for major changes to the initiative prior to committing the entire organization
- For large business process/organization changes, the rollout process gets iteratively shorter. The team may or may not get larger from a run-rate FTE perspective, but more individual people begin working on it in some capacity
- Early parts of a roll-out are often led hands-on by the client exec responsible for the broader initiative PMO, supported by the core deep-dive/initiative design team
- Project Management Organization (if used) is often staffed by rotating mid-level leaders in a "learn one, do one, teach one" fashion
- Scaling & embedding - The scaling/embedding phase is designed to integrate the strategic initiative into the broader fabric of the organization. Some initiatives never reach this phase, particularly if the organization experiences change as a steady-state, or if there are externalities which require a semi-permanent PMO team
- Goal is to embed the initiative into the fabric of the organization - hiring, performance reviews, compensation, standard operating procedures, budgeting, strategic review, etc
- Result is well-managed situation which is monitored for opportunities for further, incremental improvement (reduction in process variance and/or means)
- This phase doesn't end as long as the initiative remains a core part of the broader organization strategy. After 18-24 months the PMO team generally will perform a controlled shutdown, gradually reducing headcount and being reabsorbed back into the "regular" business operations
One of the hardest aspects of strategy work is finding the appropriate level of detail: always begin with the end in mind; don't cross bridges until you come to them; make sure you're on a road that's taking you where you want to go.
And don't be afraid to go all the way back to the beginning to sharpen the view of the original question.
Structure of the team: Long, thin consulting model focuses on increasing client capabilities to sustain executable strategy
I operate as an independent executive, staffing strategic initiatives using client personnel (whenever feasible) instead of external consultants.
This learn-by-doing approach helps build lasting client capabilities, and ensures a deeper understanding of the "why" behind the "what" and "how." This better equips client teams to sustain execution of the strategy after the initiative has completed.
My general approach is that I'm performing work that client team executives and other members are unable to perform for bandwidth or expertise reasons. In appropriate circumstances I'm able to supplement our team's capabilities using several professional networks, including former industry executives and McKinsey/Bain/BCG analysts and consultants.
Unlike traditional "pyramid" consulting models which rely on staffing large teams at mark-ups of 100% or more (to support their internal overhead and utilization), if our work requires me to staff and coordinate a supplement to our team, I'll pass through the cost of the additional consultant's time at my cost plus a nominal 15%.
I want to make money from providing direct value, not from selling clients a marked-up team then charging them to lead it. When we're finished, most/all of the team members remain with client organizations instead of immediately leaving with all their contextual knowledge and skill upgrades.
The long, thin model may not be for you
Some organizations are much better served by seeking a full-service (or larger boutique) pyramid-style consulting firm, particularly if they are large and complex enough to:
- Require external, expert advice across a large number of topics on very short notice
- Undertake comprehensive organizational re-designs
- Require highly scalable external consulting teams, simultaneously deployed at multiple levels of the organization
One downside to the pyramid-style consulting is that neither the business model nor the career development model of the firms support extended, direct client support by seasoned, mid-level consulting executives.
When clients go the pyramid route, and value the advice they receive, clients may find it challenging to obtain regular counsel from those advisers unless they are staffed as part of an active team.
Keep learning more about me...
My ideal clients aren't interested in (or can't afford) a pyramid-style strategy firm. If you remain interested and would like to continue reading about my fee structure, please click here.
My ideal clients aren't interested in (or can't afford) a pyramid-style strategy firm. If you remain interested and would like to continue reading about my fee structure, please click here.
