Author: Editor

How to Deliver Bad News to a Client

We all dread receiving bad news, but sometimes it is even more challenging to be the one who must deliver bad news. Unfortunately, it’s a reality in many professional careers, especially consulting, and often we are ill-prepared for this responsibility. We tend to focus on the aftermath created by issues rather than addressing them proactively. So how can we best prepare to address issues and deliver bad news in an effective and productive manner? We believe that there are three periods of time in which bad news is delivered to clients. In the following paragraphs, we will discuss each of them and explain the opportunities they present and the challenges that must be considered in each.

Before Challenges Arise

Proactively identifying issues can be difficult but is achievable by foreseeing potential outcomes and closely observing unfolding situations. From here, you can forecast or identify problems and begin to develop your response to them. The earlier you communicate the bad news to a client, the better chance you have to stay ahead of it. This proactive approach puts you in a better position to explore various solutions, minimizes the impact of the situation, and could develop credibility with the client. After all, you are attempting to solve their problem.

As Challenges Arise

Of course, predicting future problems and communicating them in advance is not always possible. In these instances, it is best to deliver bad news as it happens. It is important to note that if the message is delivered to your client promptly, you will still have a chance to influence the outcome and to come up with a solution. While it may not result in the best-case scenario, you can still make a difference, which is surely to be appreciated by your client.

After Challenges Arise

Now, in most cases, you will likely be forced to deliver bad news after the fallout has already occurred.  It’s crucial to be prepared and deliver the news to your client effectively and respectfully. Admittedly, this is the worst of the three scenarios, which is why a plan should be followed. When delivering bad news to a client, after it has occurred, we recommend keeping the following four considerations in mind.

  1. Be Empathetic – Empathy plays a vital role. Putting yourself in the shoes of your client and understanding the challenges that they face is essential. You should engage in active listening and acknowledge the concerns that they are expressing, as these are crucial elements of empathetic communication. If the bad news is a result of your own decisions or actions, taking ownership and being apologetic is paramount. This is not the time for excuses or blaming other, it is a time to apologize and show them that you care.
  2. Get to the Point – When delivering bad news to a client it is important to be direct and concise. Although it may feel uncomfortable, it is essential to strike a balance between being straightforward and empathetic. By efficiently relaying the information, you show respect for the situation at hand and the challenges that your client faces. This will be appreciated by your client because it will provide them with the necessary information to start building a plan of action, without wasting more time.
  3. Be Hopeful – Maintaining an optimistic and positive attitude is crucial to keeping everyone together. Even in situations where the news seems overwhelmingly negative, it is important to remember that there is always something you, and your client, can do to mitigate the impact of the problem. Keeping a positive mindset is foundational to exploring alternative solutions and finding ways to improve the situation.
  4. Provide a Solution – Providing a potential solution is paramount. While the solution may not fully resolve the problem or be ideal, offering a proactive approach demonstrates your commitment to addressing the issue. By taking ownership and presenting a solution, you can instill a sense of hope and confidence in the client and prove to them that they have your support.

Life consists of both good and bad news, and they both must be delivered. Delivering bad news is never enjoyable, but if it is delivered in a timely and effective manner, you can help mitigate the impending fallout. While you may not always be able to anticipate every situation, your approach to delivering bad news and ability to provide solutions can make a significant difference in managing the impact that is felt by your client.

Written by: Dean McMann

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About the Author: Dean McMann is a Founding Partner at McMann & Ransford with 35+ years of experience in consulting and professional services.  He is a sought-after expert and speaker on topics of: B2B differentiation, professional services best practices, and overcoming commoditization.  In addition to his extensive experience in the Professional Services space, Dean also serves on the board of various non-profit organizations.

Unlocking the Power of Utilization for Professional Services Businesses

In the dynamic world of Professional Services (PS), businesses are always seeking effective strategies to optimize performance and profitability. One crucial yet often overlooked aspect is the concept of ‘Utilization’. Let’s demystify this term and delve into its importance.

Understanding Utilization and Its Significance

Utilization is the measure of total talent capacity available to the business for project-based work. Essentially, it’s a lens through which we can see how efficiently resources are being used. But why is it so important?

When we combine Utilization with internal cost structure, we can reveal a multi-layered picture of profitability. This can be assessed:

    • By Resource: Analyzing utilization on projects by resource level cost helps identify how much profit a resource contributed in comparison to their overall costs.
    • By Project: By factoring in the utilization and associated cost of different resources used in a project, we can determine the profitability of that project.
    • By Offer: As we deliver multiple similar projects, we can factor in training time and standardize expectations for utilization and profitability.
    • By Business: When resources, projects, or offers consistently hit utilization targets and are profitable, the business is likely to be profitable as a whole.

The Multifaceted Benefits of Utilization

While profitability is a direct benefit, Utilization offers insights beyond just numbers. It serves as a crucial tool to prevent employee burnout. When utilization rates start to exceed 100% over an extended period, it’s a clear indication that resources may be on the brink of burnout.

To illustrate, consider a software development firm with employees consistently logging in over 60 hours a week. This would show up as an over 100% utilization rate and may indicate potential burnout. On the other hand, if utilization starts to drop during downtime or between projects, it could be an opportune moment to focus on internal initiatives or training.

Moreover, Utilization also sheds light on our capacity to undertake new projects. Low utilization rates mean we can start new projects promptly, whereas high utilization rates might necessitate setting client expectations about slower project commencement or possible delays.

Beware the Ghosting Hours: A Cautionary Tale

However, it’s essential to be aware of potential pitfalls in tracking utilization, such as the phenomenon known as “ghosting hours.” This refers to when resources work on a billable project but don’t track the time, thereby creating an illusion of higher productivity or project profitability.

Imagine a project manager in a consulting firm who works 50 hours on a project but only records 40 hours to make the project seem more profitable. This can have severe ramifications. The business could end up overselling its capabilities, underdelivering on projects, and even unknowingly pushing its resources towards burnout. Leverage the best practices from our previous blog, financial management communication best practices, to encourage employees to not ghost hours.

Equipping Your Business with the Right Tools

Despite the importance of utilization, some PS businesses still shy away from tracking it, mainly due to lack of a method or an unwillingness to make resources track their time. However, the market is flush with tools designed to make this task effortless.

Time tracking solutions range from simple tools like Toggl and Harvest, suitable for small businesses, to sophisticated Professional Services Automation systems like Monday.com and Zoho Projects. Selecting the right tool can significantly simplify the process of tracking time, making it easier to calculate utilization and build a predictable, profitable business.

Conclusion

In summary, tracking utilization is an invaluable strategy for PS businesses, serving not only as a profitability indicator but also as a key tool to monitor burnout, plan future projects, and overall, run a predictable and profitable business.

Jack Draeb is a Senior Consultant with McMann & Ransford who has experience working with Fortune 1000 companies to identify issues, define solutions, guide change management, and deliver lasting results.

The Chief Commercial Officer as a Growth Differentiator Part 4

In this fourth and final post in the Chief Commercial Officer series (Chief Commercial Officer (CCO) role is a growth differentiator , Role and Responsibilities of a CCO , Strategic Actions of a CCO), we address how an organization might proceed with leveraging a Chief Commercial Officer to drive transformational growth.

It probably goes without saying but driving the entire organization forward on its goal of high growth requires more than hiring one technology executive into its newly created CCO role. For example, alignment across the current leadership team is a key success factor since the act of deciding whether to create and fulfill the CCO role will have significant impact and implications to:

  • Current functions, and functional leaders
    1. Sales Team
    2. Portfolio and Product/Service Strategy and Management
    3. Strategic Marketing, Marketing Communications
    4. Services Team – support, field, PS, installation/implementation, etc.
    5. Customer Experience and Customer Success
  • Organization design, and corresponding roles, responsibilities and decision rights
  • Financial and operational metrics, KPIs
  • Talent sourcing, search and acquisition for a CCO

Therefore, leadership alignment is the first step to creating and supporting a CCO to success. We suggest the following three steps to obtain agreement and alignment.

 

 

 

 

 

It is our experience that an organization’s leadership team must be honest amongst themselves about the reality of their company’s situation to determine whether having a CCO is needed as part of the strategy to reignite growth. Hence, it is often helpful to have an objective guide to overcome the normal “forest for the trees” challenge.

For now, let’s assume the decision has been made to leverage a CCO to lead a differentiated growth strategy for the organization. The immediate first step for a new CCO to take is to conduct an initial business and operational review so an actionable operational plan can be crafted.

 

 

 

 

 

The Chief Commercial Officer Challenge

This brings us to the end of our blog series. To sum it up, the CCO needs to have clarity of the True Intimacy Model, the road map to get there, and, because the new business model will be significantly different than today’s operating model, they need a guide to help them on the way.

How big is the problem? This is unique to each company, but all suffer from the challenge of commoditization in some of their products or brands. Further, we have found that most B2B companies are constantly fighting to protect their margins and find growth. Many of the current ways of doing business will need to be changed to become a highly differentiated competitor by:

  • Thinking through the “Where to Act”, “What to Do”, and “How to Win” decisions.
  • Utilizing Advisory Services, Account Pathways, Advising not Selling, etc. and their implications throughout the organization.

Each of these in themselves can require significant change. Therefore, you need a clear model to guide the organization forward, which helps gain alignment early and provide litmus tests as you progress. Also, a clear road map of how you are going to get there and making sure you are taking the shortest and least risky route will be important. Finally, like any trip into uncharted territory, consider bringing a guide that has taken the trip before.

Thank you for taking the time to explore this interesting and key role with us. It is greatly appreciated.

Written by: Mark Slotnik

About the Author:

Mark Slotnik has spent nearly 20+ years advising clients in the areas of designing and taking to market high-value business solutions, solution portfolio management, talent development, resource management, business process re-engineering and commercial software.  

Financial Management Communication for Professional Services Firms

Financial management is key in every for-profit business regardless of size, structure, or industry. However, communicating aspects of the organization’s financials and instilling the attitude that Financial Management is everybody’s responsibility can pose unique challenges for Professional Services businesses. In this blog, we are going to walk through what those challenges are and how to overcome them as well as some of the benefits of team financial literacy.

Challenges of Professional Services Financial Management

The largest financial lever for PS firms is the individual. Each employee is a direct cost for the business that can be managed to financial metrics such as utilization and project profitability. This reality of PS businesses, that financial management is tied to people and their salaries, can create the feeling that financial management is a sensitive topic.

Let’s compare this model to a traditional product company. Direct costs for a product company would typically be production costs. The people of the company (sales, marketing, finance, etc.) are viewed as indirect costs – rather than driving gross or project margin. This allows for financial discussions to be impersonal. Production costs can be treated as numbers on a spreadsheet, but for Professional Services companies, the numbers on a spreadsheet are team members.

This creates a challenge for PS businesses. How do we communicate financial management without making employees feel like numbers on a spreadsheet?

Tips for Financial Discussions

1. Emphasize to the team the fully loaded costs of positions and levels rather than individuals. Costs and bill rates are derived by the net margin needs of the organization by position level (consultant, manager, etc.). This helps decouple business costs from employee salaries and focus discussions on business needs.

2. Avoid setting strict rules for project profitability. Consider the following drivers of project profitability that are out of the control of team members staffed on a project:

    • Sale Price
    • Level of Project/Client Difficulty, Effort Required
    • Training and Development of Team Members

While it may be tempting to set rules such as “each project must return at least a 10% margin” these rules place an unnecessary strain on team members and encourage bad habits such as ghosting hours. Encourage the team to track actual hours and manage to an average project margin and/or budgeted costs.

3.  Communicate the positive outcomes of financial management. In some cases, financial management can feel like metrics used to punish employees for underperforming. However, in many cases the positives will outweigh the negatives. Accurate time tracking and utilization rates help the firm avoid employee burnout by staffing projects appropriately and ensuring team members have the support they need.

4.  Remind the team that Financial Management is not the only part of the business that matters. Businesses cannot be managed on a spreadsheet alone. Accounting for opportunities that employees want to be involved in, development opportunities, and team chemistry all affect employee experiences and firm productivity. Financial management is important and it must be understood, but it is not the only part of the business.

Benefits of Communicating Financial Performance and Detail

Reiterating these messages with team members takes time and energy, but the value is well worth the effort. PS team members and firms achieve the following benefits when firm and project financials are better understood through clear and effective communication:

  • Increased Accuracy of Financial Metrics: Team members who feel that financial metrics are there to support them and the firm are less likely to ghost hours to increase project profitability. This helps the firm plan for resources needed on future projects more accurately and make informed decisions to avoid employee burnout.
  • Additional Firm and Employee Alignment: When employees understand the downstream impacts of their everyday decisions, the firm’s financial performance improves. Helping employees understand what decisions positively and negatively impact the themselves, their team members, and the firm creates an environment of working together to achieve the firm’s financial goals.
  • Improved Employee Experience and Development: PS financial management highlights the relationship of the firm and the employee. The firm succeeds when employees succeed and vice versa. This relationship can encourage employees to seek to improve their skills and advance their career.

In our next blog, we will explore some key financial metrics that Professional Services businesses should manage to using this framework.

Written by: Anthony Paluska

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About the Author: Anthony Paluska is a Partner at McMann & Ransford with experience helping organizations overcome commoditization by developing stronger, more intimate, relationships with their customers. He has leveraged his management consulting, problem-solving, and change management skills to support 15+ Fortune 1000 organizations, across a multitude of industries.

The Chief Commercial Officer as a Growth Differentiator Part 3

In our previous blogs in this series, we introduced that the Chief Commercial Officer (CCO) role is a growth differentiator to enable businesses to harness the entire commercial power of the organization and the role and responsibilities of a CCO differ between a Chief Revenue Officer (i.e., Sales Leader) and the Chief Marketing Officer.

In this blog, we will share some of the more explicit strategic questions and aspects that a CCO is tasked with addressing to drive growth for their organization.

Defining the Transformative Growth Journey

We believe most companies not “born in the cloud” desire to become a software technology-first business and leverage it for competitive advantage. If true, then a company must redesign the way it operates and navigate its way through complexity and uncertainty.

Let’s assume that your organization has decided to create this role and bring on an individual to successfully execute it. After conducting a current state business and operational review, what are the key steps and decisions the CCO should act on?

  1. Decide the growth journey, which includes:
    • Strategy, milestones, phases/steps – road sign of success and challenges
    • Key decisions and actions of the journey
    • Change Management
    • Communication plan and management
  2. Evaluate current products, services, and talent capabilities for their fit in the growth journey
    • Define Talent needs and performance expectations for the “CCO Team”; Source and select initial internal team members
    • Complete detailed segmentation of market and account segments and affinity targeting – determine what problems must be solved and for whom you are solving them for
  3. Create/design a new operating model to enable high growth
    • Define “Where to Act” – Create an initial point of view for the commercial portfolio of solutions, products, and services focused on the markets and accounts that your organization needs/wants
    • Define “What to Do” – Design the transformative Portfolio and integrated offers to apply and populate newly defined account pathways
    • Define “How to Win” – Provide everything to the “Intimacy Targeted” accounts; This puts you in an intimate place with the key executives, provides the means to stay relevant between big deals, and makes you an advisor the Account – and its key decision makers – cannot live without.
  4. Define the investment model and funding needs to successfully implement the growth plan
    • When embarking on a growth path, there is the need to plan for new Talent, determine the impact to current products and services, invest into new integrated solutions, outline the go-to-market strategy, etc.
    • Additionally, the CCO must also define the financial and operational dashboard. KPIs include but are not limited to:
      • Growth: revenue, margin, market share
      • New Logos
      • Reduced account churn, leakage
      • ROI improvement on go-to-market, marketing, sales force
      • Improved access to customer executives
      • Account roadmap(s) and pathways that demonstrated true intimacy and indispensability
  5. The last step in the journey is to implement the new business model while maintaining/adjusting the current one.

This is best understood at the account level since there are always two simultaneous journeys going on – the customers’ experience and your account plans.

a) In the new model, you can greatly impact the customers’ journey and thereby achieve your business goals.

b)  This is accomplished by working upon those issues that matter to the executive team – above the Safety-lineSM in the customer.

c)  Working at this level facilitates both the implementation of changes in their business and pull through for your more commoditized products and services. This will allow you to both improve their business and meet your revenue and margin goals.

d)  Finally, as you continue to work above the Safety-lineSM bringing new ideas and assistance to the customer, you become part of their executive decision-making process.

“But wait a minute”, you may be wanting to say at this point. “What if my organization has not yet decided whether to create the CCO role?”. In our next blog on this topic, we will share how an organization might proceed with leveraging a Chief Commercial Officer to drive transformational growth.

 

Written by: Mark Slotnik

About the Author:

Mark Slotnik has spent nearly 20+ years advising clients in the areas of designing and taking to market high-value business solutions, solution portfolio management, talent development, resource management, business process re-engineering and commercial software.  

The Chief Commercial Officer as a Growth Differentiator Part 2

In our previous blog in this series, we introduced the notion that the Chief Commercial Officer (CCO) role is a growth differentiator to enable businesses to harness the entire commercial power of the organization. Given this premise, the roles and responsibilities of a CCO differ between a Chief Revenue Officer (i.e., Sales Leader) and the Chief Marketing Officer. Please note that this comparison does not mean that one role is more important than others; rather it is intended to highlight the key differences between them.

The Expectations of the CCO

To get us started on the differences between the 3 roles, let’s focus on what is expected of the CCO. Organizations expect their CCOs to be transformational and drive value in at least three main ways:

  • Synthesize and act on information across internal and external functions/stakeholders, while addressing the complaints/issues that affect the ability to get meaningful revenue.
  • Fill a gap in the CEOs’ own commercial experience, particularly when a CEO did not come from a go-to-market role and therefore wants a stronger voice in charge.
  • Address a rapidly shifting world and market. Buyers do their own due-diligence and competitors rapidly replicate new product improvements, fueling the commoditization cycle to a pace never seen before.

Hence, successful CCOs hold all the pieces to leverage a consolidated commercial strategy. They direct how to interface with the market, what portfolio to pursue, the go-to-market model, and the organizational structure that creates revenue. In other words, the holder of this position is involved with the entire product/service cycle and the development of the associated strategies beginning with R&D and product development, transitions to marketing and sales, and finishes with customer experience and customer service.

Aren’t the Responsibilities the Same as a Chief Revenue Officer (i.e., Sales Leader)?

In short, the answer is “no”. Traditionally, the Chief Revenue Officer is tasked with deploying a team to best meet the revenue objectives of the business. This includes the overall organization of the sales team, usually encompassing the:

  • Design of the sales team mix of direct sales, inside sales, channel/partner, etc.
  • Alignment of the sales team to geographies, products, services, or segments
  • Enablement of the sales organization (training, tools such as CRM, focus, goals)
  • Compensation plans and bonuses
  • Sales leadership development and structure to support the sales people and deals
  • Management of the pipeline and deal flow
  • Communication of forecast to corporate leadership and broader organization

In general, the Chief Revenue Officer is focused later in the product/service cycle than the CCO, where sales are actively being made or solicited. They are tasked with growing revenue through developing short-term actionable strategies that pertain to selling established products and/or services to new customers or upselling to current customers. In summary, this role is directly associated with one important strategy of the company – the sales strategy.

Aren’t the Responsibilities the Same as a Chief Marketing Officer?

In short, again the answer is “no”. Traditionally, the Chief Marketing Officer is tasked with deploying a team to best meet the marketing objectives of the business – grow the business through marketing and outreach. This includes the overall organization of the marketing team, usually encompassing the:

  • Design of the marketing team structure
  • Company’s advertising and branding strategy and plan to support and enable the selling strategy
  • Approval of marketing campaign ideas and coordinating marketing efforts with the company’s financial and branding goals
  • Market research studies and analysis of the results to better understand the market and customer tastes
  • Pricing strategies
  • Selection of the most lucrative marketing channels and curate company content to tell a compelling brand story
  • Analysis of revenue sources and predict how advertising could help them generate the highest possible return on their investment

In general, the Chief Marketing Officer is focused on designing and implementing strategies that 1) support the selling cycle for current products and services and 2) inform the portfolio strategy for future products and services. In summary, this role is directly associated with one important strategy of the company – the marketing strategy.

Some readers may take offense and/or disagree with these role generalities. Again, the point we are trying to make is that although these are included in the broader Chief Commercial Officer role, the CCO through his or her cross-functional and departmental influence, has additional responsibilities and associated metrics. The CCO owns the vision of how to create and focus revenue over a longer period. CCOs’ typical responsibilities span across commercial functions: From research and development to product management and strategy, to strategic and tactical marketing, and sales. To execute on this expanded charter, the CCO requires additional tools and capabilities as well. This integration removes barriers and gives the CEO one point of contact to drive commercial success.

In our next blog on the CCO role, we will share some of the more explicit strategic questions and aspects that a CCO is tasked with addressing to drive growth for their organization.

Written by: Mark Slotnik

About the Author:

Mark Slotnik has spent nearly 20+ years advising clients in the areas of designing and taking to market high-value business solutions, solution portfolio management, talent development, resource management, business process re-engineering and commercial software.  

The Chief Commercial Officer as a Growth Differentiator

Driving organic growth is consistently one of the top goals of for-profit businesses or organizations. Other goals such as quality, customer and employee satisfaction, research and other investment, cash flow, and capital deployment are also important depending on the industry and customer expectations. However, many of these goals are ultimately derived from a healthy growth profile that is a key focal point for increasing a company’s valuation.

The Growth Dilemma

The typical growth path is to 1) provide a unique, differentiated product or service that meets an unmet need in the market and then 2) leverage that initial success to extend into an adjacent product and service, and so on. At some point, however, that initial growth curve begins to flatten as competition and commoditization sets in. Therefore, companies must:

  • Move their business model from “simple” (i.e., sell products and related services) to a more complex one (i.e., services and solution-led, services-followed, services aside, etc.) to maintain and/or reignite their growth curve.
  • Recognize and accept they are on a longer strategic journey that is more than making a few acquisitions to become a technology focused company (i.e., software).

The Need for a CCO

The introduction of the Chief Commercial Officer (CCO) for companies both small and large has resulted from the need to help businesses harness the entire commercial power of the organization.  Before the advent of the CCO, sales responsibilities were (and to some extent, still are) centered on the Executive Vice President of Sales or “Head of Sales” who reports directly to a key C-level leader in the organization like the CEO or COO.  At first glance, the responsibilities of the CCO and sales leader seem similar. However, there are key differences in the roles beyond reporting structure and elevation to CxO status.

The Chief Commercial Officer (CCO) is key to addressing the uncertainty in the B2B market and guiding companies through the growth challenges of a complex marketplace. The position’s existence attests to an organization’s need for a single leader focused solely on the commercial side who can orchestrate all the moving parts – strategy, innovation, product development, marketing, and sales – across all platforms, both digital and brick-and-mortar.

The Role of a CCO

The CCO is a different leader in the sense they have the skills to design, build, and implement a new business operating model that spans numerous functions and drives outcomes across multiple – and new – metrics. For example:

Business/Operating Model Changes Business Impact
Portfolio strategy

Segmentation of markets and accounts

Complex accounts and account management

Simultaneously run multiple sales motions – complex solutions, transactional, services-led, etc.

Update talent and human capital

New product/service/solution launch

 Growth: revenue, margin, market share

New Logos

Reduced churn, leakage

ROI improvement on Go-To-Market, marketing, sales force, product and service development

Improved access to customer executives

Improved customer intimacy and consistency in the commercial life cycle, thus improving the customer experience

The Chief Commercial Officer should be the internal strategist and external spokesperson for how the company interfaces with its customers to drive current and future growth. The CCO’s interaction and contemplation on customers is not only financial or growth-driven but holistic.  The CCO looks at account relationships and positioning, customer executive-level bonding (i.e., customer intimacy), and offering and product footprints at clients and in the marketplace.  They are truly the chief in charge of the revenue model and its execution for the business.

In our next blog, we will share the expectations of the CCO and how the role and responsibilities differ from a Chief Revenue Officer (i.e., Sales Leader) and the Chief Marketing Officer.

Written by: Mark Slotnik

About the Author:

Mark Slotnik has spent nearly 20+ years advising clients in the areas of designing and taking to market high-value business solutions, solution portfolio management, talent development, resource management, business process re-engineering and commercial software.  

The PS Dilemma of Managing Just-In-Time Talent – Part 2

As discussed in a previous blog  (The PS Dilemma of Managing Just-In-Time Talent), leveraging a Just-In-Time (JIT) Professional Services (PS) Talent staffing without having a corresponding operating model can lead to increased risk to both delivery excellence and financial performance.

Smoothing the natural peaks and valleys of a JIT model is key and many manufacturing organizations have accomplished this via their manufacturing/assembly facilities – i.e., their Factory, which is defined as a person, group, or institution that continually produces a great quantity of something specified in a predictable and efficient manner.

Overcoming the Dilemma – A Factory Model as “The Way Out”

Therefore, we believe the best way to reduce the JIT PS Talent model risks is by leveraging a “factory” model. Factory success requires defined standards, tools, methods and processes, and your JIT PS Talent Factory model will include:

  • Organizing and documenting Service Offers into Playbooks to provide a clear plan for how the delivery teams will operate, stay focused, be organized and accountable and get things done
  • Making visual/video content available on-demand to enable JIT delivery resources to obtain key project delivery refreshers
  • Providing checklists, “cheat sheets” and other simple reminders that are easily accessed and leveraged
  • Continuously managing a Talent Pipeline while forecasting customer demand
  • Core business processes and infrastructure to enable and support the model: e.g., Professional Services Automation application, project management, COVID requirements, pricing/cost models, direct vs. 3rd party, standard contracts/Statements of Work, etc.

Lastly, the model and all the operating components should be configurable so you can adjust and ensure optimized and repeatable results for you and your clients. The visual below depicts a summary of these elements working together:

In summary, a Factory with playbooks, visual content and standard checklists make it easier to manage a dynamic JIT PS Talent staffing model on a repeatable basis by:

  • Defining roles, responsibilities, and decision rights of the Book-to-Bill business process
  • Pre-defining the repeatable and known installation/implementation “plays” to allow your core key experts to focus on 1) the unique client situational exceptions rather than training newly formed teams on every activity and task on a project plan and 2) client management
  • Having clearly defined talent needs for each step
  • Onboarding contracted SMEs more efficiently

Results include:

  • Improved financial performance
    • Time to revenue for both your organization and your clients
    • Improve margins
  • De-risked delivery: Start at getting involved early with sales and account teams – true PS value is the execution piece and anything PS can do to shape deals and educate sellers is ideal; frees up capacity and reduces non-billable time
  • Freed up leadership time to work on the business rather than in the business – e.g., define and plan for aspirational goals of the PS business
  • The potential to create new lines of business and revenue streams (e.g., staff augmentation, PS-as-a-Service) by leveraging the foundational investment of having a “more ready and available” bench

In our next and final blog on this topic, we will provide a Factory construct example and an approach to take to apply this to your business.

Written by: Mark Slotnik

About the Author:

Mark Slotnik has spent nearly 20+ years advising clients in the areas of designing and taking to market high-value business solutions, solution portfolio management, talent development, resource management, business process re-engineering and commercial software.  

The PS Dilemma of Managing Just-In-Time Talent

Many Professional Service (PS) Businesses have taken a page from product manufacturing’s cost reduction book and “leaned out” their inventory. In the case of PS businesses, the inventory being referred to and leaned-out is Talent capacity and by default capability. The result is having to do more just-in-time (JIT) hiring and deployment to meet client program/project demand. And while those that have taken this action may have obtained some financial gains, we believe most PS businesses did not also implement a corresponding JIT business/operating model to ensure additional gains are achieved and client obligations are met efficiently.

It is very difficult to manage staffing capacity – and capability – in this JIT model, and you likely find yourselves understaffed and operationally inefficient during peaks in demand. Therefore, leveraging JIT talent can lead to two challenges without having a corresponding operating model.

1. Delivery Excellence – As you know, PS Businesses strive for efficient program and project delivery (i.e., the mantra is to be ahead of time and under budget) because delays significantly affect the client’s time to value and target outcomes. In turn, the reputational and financial risk of sub-par performance to a PS Business is extremely high and significantly impacts its future success.

Subcontracting talent on a just-in-time basis can increase risk and costs on a business that is already margin constrained. Why? Even though billable utilization remains high for your employed core staff, reliance on JIT staffing limits program and project teams’ ability to readily meet demand and achieve delivery excellence, which increases “hidden” costs such as:

    • Important “tribal knowledge”, IP and expertise leaving after each project.
    • Onboarding and teaming issues and elongated time to productivity (i.e., longer storming and norming period).
    • Needing to re-do work even though projects are similar – and repeatable – from client to client.

2. Financial Performance – Naturally, a PS Business’ near-term financial performance is negatively impacted via inefficient delivery. Longer term financial performance is also negatively impacted as:

    • Fewer clients are referenceable should client delivery decline (see #1 above).
    • Traditional PS leveraged talent pyramids are no longer in use; you may have an upside-down pyramid as your remaining employed billable staff is likely very experienced and therefore highly compensated SMEs and when their billable utilization is 90+% your organization loses their ability to focus on client management and upselling/account expansion.
    • Ultimately, the billable utilization targets are high since there is not enough bench strength (i.e., capacity); the cycle of contracting/releasing Talent keeps utilization high but puts overall performance at risk (i.e., high billable utilization is a “false positive”).

Overcoming the Dilemma

Please note we are not advocating against JIT Talent. Rather, it can be highly effective given a corresponding model to operationalize and optimize it. We believe the best way to overcome the obstacles listed above is by adapting what we are calling a “factory model”. A factory is defined as “a person, group, or institution that continually produces a great quantity of something specified”.

Being factory-like infuses repeatability, configurability, consistency, and predictability into what is inherently dynamic to a PS Business. Therefore, having a successful JIT Talent model requires implementing a corresponding factory model with defined standards, tools, methods, and processes. An important note – you will need to have the ability to reconfigure the factory as needed to meet the specific needs of both your business and clients. Therefore, a configurable PS Factory model includes:

    1. Creating Playbooks: Organize and document Service offers into playbooks to provide a clear plan for how the delivery teams will operate, stay focused, be organized, remain accountable, and get things done.
    2. Making Visuals/ Video Content: Make them available on-demand to enable JIT delivery resources to obtain key project delivery refreshers in real time.
    3. Providing Checklists and “Cheat Sheets”: To be easily accessed and leveraged.
    4. Continuously Managing the JIT Talent Pipeline: To be done while forecasting client demand.
    5. Maintaining Core Business Processes: To enable and support the model; may include PSA application, Project management, Pricing/ cost models, etc.

The factory foundation is the first step to delivering optimal results to you and your client time and time again. In our next blog, we will discuss “how” a PS Businesses should implement a factory model, examples of how it can work in your business and the best approach.

Written by: Mark Slotnik

About the Author:

Mark Slotnik has spent nearly 20+ years advising clients in the areas of designing and taking to market high-value business solutions, solution portfolio management, talent development, resource management, business process re-engineering and commercial software.  

Our Role as a Guide in Professional Services Client Management – Part 3

In our previous blogs, we introduced the idea that Client Management does not “just happen”…it must be deliberate and proactive in order to be effective. And while there are many key roles needed for success of a PS business, there is an overarching role that is important for every consulting professional: your role as a guide. This role is more of a mindset, and we often find it is helpful and valuable to think of PS as a guide to communicate to others why Client Management skills are necessary and how they get applied in the real world.

As a reminder, the best and most impactful guides all have the same commonalities. They:

      1. Build Rapport
      2. Provide Vision
      3. Embrace Problems
      4. Grow Accounts (i.e., expand relationships)

A successful guide must Embrace Problems rather than whine about them or make them someone else’s to deal with even if they are caused by someone else. And when caused by us, naturally it is important to take client feedback to heart. Some actions to embrace problems include:

      • Bringing a positive attitude to each problem
      • Leveraging creative members of your team to assist in creating solution alternatives
      • Burning the midnight oil solving problems—no matter who caused them
      • Identifying chronic problems caused by the client and bringing them up in your “looking down the road” role with the account
      • Treating all feedback about your team and yourself as important and meaningful; You never know…they might be right

A successful guide must also Grow Accounts. After all, the best guides are those that successfully complete the current journey but also identify and create the desire for more.  PS is no different. It is also one of the biggest challenges because most PS folks are uncomfortable “selling” or have no desire to do so – i.e., “I am not a sales rep”. Hence, this is typically one of the largest development gaps that needs to be filled. Some actions to take to grow accounts include:

      • Identifying ideas for up-sell, cross-sell, and pull-through opportunities
      • Relating ideas to client business issues
      • Developing champions and building momentum for those ideas
      • Coordinating resources for proposals and sales activities
      • Determining who the buyers are for the ideas

In summary, possessing the “Guide” mindset provides the foundation for what it is like to be a “consultant” and can serve as a reminder to the important but oftentimes difficult and misunderstood role PS professionals play to provide the outcomes and deliver on the promise(s) made to clients.

Written by: Mark Slotnik

About the Author:

Mark Slotnik has spent nearly 20+ years advising clients in the areas of designing and taking to market high-value business solutions, solution portfolio management, talent development, resource management, business process re-engineering and commercial software.