- Four Habits of Successful Entrepreneurs Running Fast-Growing Consulting Firms
Four Habits of Successful Entrepreneurs Running Fast-Growing Consulting Firms
By Mark Robinson, CMO and co-founder of Kimble Applications
So, you took the plunge, set up your own consulting firm, and things were going well. However, you’ve noticed lately that you’re not growing at the rate you once were. How do you maintain a steady rate of growth to ensure your consultancy continues to thrive, rather than suffers a stop-start, feast or famine trajectory?
For consultancies, growth means increasing the headcount of fee-generating staff. But you don’t want your consultants being overworked and frazzled as you desperately recruit to meet new business wins. Equally, you don’t want them bored, sitting on the bench and costing you money when you don’t have enough work for the staff you have. There is a delicate balance to strike.
Here are four things you should start doing right now to drive lasting growth in your consultancy. By changing the way you manage people and time, you can instill the right organizational behaviors that will drive performance and get your business scaling in a sustainable way.
1. Look forward not backward:
Don’t waste your time looking at what’s happened – it’s like looking in the rear-view mirror rather than concentrating on what’s ahead of you. You should value forecast accuracy above all else because if you have a reliable, predictable forecast that you know is correct, it takes out the uncertainty associated with growth.
If you’re forecasting less than you’re achieving, then you’re potentially missing out on growing more quickly. And if you’re consistently forecasting more than you’re achieving, then you’ll fall behind very quickly. Smart consultancies know that even if the forecast is telling you you’ll be below budget, then you can least plan for it by, for example, reducing spend or slowing recruitment. But if you don’t trust your forecast you can’t plan for the future. The result? Risky, stop-start growth.
You should obsess about the future because metrics and data are not useful when viewed historically. Gather information that will help you predict the future and support you in making smart decisions to grow the business. Consider investing in innovative business applications and software that can help you keep on top of budgeting, resource forecasting, revenue forecasting and project status.
2. Don’t be a bottleneck to growth:
The nature of being a fast-growing consultancy means that there will never be enough experienced people to go around. But what you don’t want is for these senior people to become bottlenecks, slowing down decisions and slowing the growth of the business.
To avoid this, there needs to be a two-pronged approach. You need to cultivate a culture where decision making and responsibility is delegated down, allowing more junior members of the team to learn and develop. But you must also have checks and balances in place, both to support these more junior members and to ensure that, when appropriate, decisions are flagged to senior staff to make.
To do this, you need to decide the outcomes that you want and put the processes in place to ensure that the discipline is encouraged and rewarded. By understanding the cause and effect in your business and putting the right set of KPIs in at the right levels, you’ll empower staff but still have oversight when needed.
3. Never lose focus on client and prospect relationships:
Whatever you delegate to your team, involvement in client relationships should not be one of them. I have often heard entrepreneur consultants say, “I want to have a management team, so I don’t have to get involved in the detail.” But no one tells the story of why your business is different more convincingly than you, which is why client focus should be your priority. While I encourage investing in people and systems to free up time, you should be spending this time on strategic client acquisition and growth.
It’s crucial to recognize that entering a new geographic market or creating a new service line is tough. It’s a whole different ball game to taking the lead in a well-established practice with regular processes and ways of working. All too often people think leading a big, proven team has the most cachet, so they pass on the ‘new stuff’ to unproven members of the team to head up. That is a recipe for failure. If you’ve made a strategic decision to expand, then you or your most trusted lieutenants should take responsibility. Let your less experienced managers develop their craft within an established team where any mistakes can be more easily absorbed. Again, no one can understand your business and sell it better than you and your senior team.
4. Develop a mechanism for fine-tuning market and skills focus:
In a smaller consultancy, it’s very easy to lose focus of the bigger picture and future market trends when you are busy managing day-to-day activities. While bigger firms can rely on their brand and established client relationships to continue to bring work in, the vast majority of smaller consultancies must ensure they have the hot skills in hot sectors. If you are not keeping abreast of industry trends, you are probably losing out on opportunities to get ahead of the curve.
At the very least, make time every quarter for a formal sit down with your team to discuss where the business is heading, identify what the new opportunities in the market are and what areas of expertise the business is lacking in.
Our client Kainos, a digital technology solutions provider, stole a march on its competitors by becoming one of the first businesses to take advantage of the integrated Workday solutions for its customers. This move helped it scale and become a major player in the sector.
Follow these behavioral hacks, and you’ll not only transform your consultancy but your organizational culture. Because, by having more visibility over your business and where you are heading, you buy yourself a level of predictability that allows you to plan ahead and focus on the activities that will help grow your company faster.
Let me leave you with this: in a consulting firm you inevitably have to pay your consultants before the client pays you. So if you are not worrying about running out of cash, you are not growing fast enough.