ALL CHAPTERS
| How We Got Started 1 |
| What it Takes to Succeed 2 |
| Rating the Clients 3 |
| Dealing With Clients 4 |
| Presentations & Meetings 5 |
| The Matter of Ethics 6 |
| On the Road Again: Travel 7 |
| International Business 8 |
| The Home Front 9 |
| Story Tellers |
Chapter Four
Managing Client Relationships
“Being a Professional Involves Looking After the Client's Best Interests”
- Ford Harding
Consultants are hired to solve problems, develop strategies, overcome hurdles, and meet goals. Accordingly, most consulting projects will be judged by the success or failure of their strategic or financial objectives. Solve the problem!
But on another level, success as a consultant hinges on how much mutual integrity, trust, communication and understanding are brought to the business relationship. In other words, what kind of bond or connection has been established between a consultant and a client?
In this chapter our contributors share stories, anecdotes, and viewpoints on the topic of how they build relationships with clients. By definition consulting is a client-centric business. That means a relationship-oriented business. The best consultants and firms never forget this. They have an outward focus on the market and on clients. They go to bed thinking about their clients and they get up in the morning thinking about their clients. What more can we do? How can we serve them better? How do we get them to like us better? Where did we go wrong? How can we make it up? Have we anticipated all their needs? The plots and counterplots. If we follow this course, will the client love us more? It’s all about clients, period.
Here our senior consultants explore the challenges involved in telling clients what they need to hear, when it is not necessarily what they want to hear; or how to bring expertise to the table without appearing arrogant or bruising egos. They reveal how most clients want answers, not process, and have little interest in watching a room full of background research unfurled before them. We learn how the best consultants take the long view on their work, understanding when to get out of a project or association, sacrificing short-term income for long-term credibility.
There’s some consultant folk wisdom here, too. Like, never give your client a nickname, because it just might slip out. And here as well are just some colorful recollections of a few among the many interesting characters and personalities met along the way.
In a sense, consulting is about creating a story, as one of our contributor’s concludes, not finding the Holy Grail. Creating that story requires a toolbox of skills, technical expertise, and business experience. But effectively engaging clients in the strategic scenario you’ve created also requires a certain proficiency in the story telling arts. The best consultants learn to speak in a language that people understand. That is, they translate their broad expertise into the local vernacular of their clients’ corporate culture. This is the language not only of project goals but also of the psychology of organizational cultures and human relationships. Or, as one consultant describes, the “people factor in its totality.”
And that, you might say, is the heart of the matter.
“Consulting Was Always About Clients”
Some consulting firms emphasize their products, while others focus on their staff. Obviously both are important. But to me, the business of consulting was always about clients and the building of relationships with those clients. Our end products often are nebulous, and the client must have a strong feeling of trust in the consultant to allow him into his business, to create major changes, and to pay him the big dollars.
I went to Little Rock, Arkansas for the first time in 1976. Arkansas Power & Light Company asked us to carry out a company-wide management and operations review. The company was part of Middle South Utilities (later Entergy Corporation), a utility holding company with subsidiaries in Louisiana, Mississippi and later Texas.
I commuted from Chicago to Little Rock every Monday morning through Friday night for close to two years. During that time I believe I met the entire management team, and visited most of their offices throughout the state (Toad Suck Ferry is my personal favorite name for an Arkansas town). I had dinner with their directors several times and was invited into the homes of a great many of the key players in the company. I really enjoyed working with the Arkansans and still keep up to date with several of them 25 years later.
Ultimately, six of the managers and officers that I worked with became presidents and CEO’s of other utilities. Think about that, a smallish utility in Arkansas being the cradle for that many top people. And other managers moved up the ladder at Middle South and at other utilities even though they may not have reached the top spot. And guess what, old Metzler went with them throughout their careers. I had project work at one of the Middle South companies every year for at least the next 20 years. And I followed the others as they went to their new positions at other utilities in Texas, North Carolina, Georgia, Pennsylvania, Tennessee and New Jersey. Literally, I developed a major business out of one client early in my career as a consultant.
By the way, when I started my own shop in 1984, I first went to see one of the six managers who later became a president of a utility, in this case Arkansas Power & Light Company. I told him that I was thinking about starting my own business. Without blinking an eye, he said that was a great idea and that he wanted to be my first client. He gave me a two-year retainer that was enough to pay the mortgage and the car payments and to keep food on the table. By the end of the first year, I had another six consultants working on my projects throughout the utility industry and I was on my way to building a major firm.
“Can You Fix the Car Too Well?”
Is there a fine line between being the perfect consultant and being a really good consultant? Can you fix the car too well? For myself, the answer to that is easy. You always fix the car perfectly. You always do your assignment to the best of your ability. But you can’t fix an organization perfectly. The guy will at some point have to buy a new car. So you can only do what you think is right at the moment. But you never, ever, ever try to wire yourself in. It’s a mistake that even some of the best consultants make. I mean, there’s so much they can do. But the corporation needs them so much they could just be there forever. Have fifteen engagements going on at once, millions of dollars a month in billing, thirty, forty, fifty people at the client site.
Well, sooner or later the client gets sick of you. The really good consultants understand that they should fix things and get out. They even understand that they should sometimes not fix things and get out. The wrong answer is not to fix things so you can stay in. The client will ask you to return, but if they don’t that’s fine because there will be other clients out there. That’s probably the line that separates ordinary senior consultants from truly outstanding senior consultants. The outstanding ones will have a sense of when to leave the client alone and enough confidence in their capability to build new relationships and move on.
“Are You Still Driving That Cadillac?”
I was working on a major project in Toronto and had arrived very late one night at the airport. It was the last flight in, actually. I went to the rental car agency where the person there was very happy to tell me that because it was so late and they only had one car left, they were going to give me a free upgrade to a luxury car. I said that was nice, but no, I didn’t want a luxury car. Well, actually, that was all they had left. I decided to check first with the other agencies, but most had closed and the ones still open had no cars left. So I ended up back at the first agency, driving out in a brand new Cadillac.
The next morning I decided it was probably not a good thing to park a new Cadillac in the client's parking lot. I parked way across the street. Made it through the day fine. At the end of the day, the vice president happened to be leaving as I was, and saw me crossing the street and getting into this Cadillac. Do you know I worked for that client and that VP for the next two years, and later, this same VP moved to another company and I worked with him there, too. And for the next five years, every time that fellow saw me, his first question would be, "Are you still driving that Cadillac?" It did not matter how much I explained the situation, that it was rented at the same rate you would have paid for a Ford Taurus. It didn't matter. It was the image that counted. He didn't want consultants coming to his plant driving Cadillacs.
“Looking After The Client’s Best Interests”
I remember one client we worked for that had terrible labor-management relations. They had hired a cost-cutting consulting firm to come in and that consultant was paid on the basis of the amount of savings their work would generate. So they came in with an ax and started chopping. In the short run they saved the company a lot of money. But in the process they so alienated labor from management that the company never really did recover. They ended up just short of bankruptcy.
I'm sure they thought they were doing a good job. Yet it was very shortsighted. They lost track of what the company was trying to do, which ultimately was to be a successful, profitable organization. Instead, they just focused on the job they'd been assigned to do, which was to find cash now. And in the process they caused great harm.
The client also has some responsibility. These are not naive buyers in most cases. They're sophisticated business people in their own right. So the blame certainly extends to the client, too. But that does not mean that consultant should have done what he did. Of course, I imagine there are cases where clients also have protected us from ourselves.
Part of being a professional involves looking after the client's best interests. In reality, you often have technical expertise and specialized knowledge that the client doesn't have. You may understand the implications of decisions better than the client can. But there’s also a delicate line you don’t want to cross, where you start to come across as arrogant and presumptuous because you think you understand the client’s interest.
If a client is acting on self-serving motives, I think that makes it easier for consultants to come in and run amok. I’m talking about individuals who want things done for very selfish reasons that have nothing to do with the good of the company. Or they’ve forgotten that the company, in most cases, does not belong to them.
“The Link to People”
I try to caution my partners not to fall into the thinking, no matter how confident they may be in their advice, that there is really only one correct solution. If I, for example, told six people where I live and said meet me there in two hours, I’m sure those six would all get there. But they might also take six different routes. One person might take the absolutely wrong route and arrive very late. Another might get there a little earlier than everyone else, while the rest might arrive in more or less the same time.
Of course, none of those five would be exclusively wrong or right in the route they took. That’s how it is in our profession. There are often multiple solutions to any situation. The pitfall we need to avoid is to believe our solution is the only solution, or that there is only one correct solution. It’s important in our business not to get too cocky.
In my estimation, the consultants who really try to understand the client's business and concerns make the best consultants. They are the ones who recognize what I call the link to people. Remember when everyone was talking about reengineering? That was the buzzword for a long time. Well, most of us in this business have been doing reengineering and process improvement all of our professional lives. Back in the days when I was doing brokerage work at Andersen, that is what we were doing. We just didn’t call it that. So I’ve learned that you can reorganize processes all you want, but if you exclude the people factor, you’re in trouble; because it is the people in an organization who have to implement change.
Those in our profession who recognize the people factor in its totality have the best chance at success. In many cases, the solution that we think objectively to be the optimal solution may not necessarily or always be so. That’s because it may not work in the client’s particular environment or culture.
“Creating a Story, Not Finding the Holy Grail”
In a sense, consulting is about creating a story, not finding the Holy Grail. We spend a lot of time coming up with information, doing research, and then working with the information. It’s all about taking a set of facts, figures, and events and creating a theme around them. When we do a presentation we're taking that story or theme and leading the client through it to an acceptable or perhaps even exciting conclusion. This is what clients expect.
How can I best say it? Perhaps clients expect to hear the buzz words. But what you have to do is create an entire plot around those words. In a sense, you’re setting up a burning platform and telling the client they had better do something about it. They can either jump off that platform or they can reconstruct it, but they need to do something different. It is then up to us to outline all the options and try to draw out their implications.
Actually, I think the intellectual aspect of our work might be a little overblown. I don't think there's as much brainstorming and trying to find the next great idea as much as there is just taking existing ideas and trying to wrap it up in a new package. Apply it in a new context. In reality most of our time is spent on fairly mundane matters. We probably put about 50 percent of our time into research and 20 to 30 percent of our time is in meetings with clients. There are always a lot of meetings. The other 20 percent of the time is sort of the fill-in kind of stuff, whether it's traveling, making phone calls, or dealing with internal, administrative types of issues. I probably spend over half of my time by myself, doing research.
Of course, you do have to be a smart person to do well in this business. But you also have to be very people savvy. You have to understand how to get along with all sorts of people. If you’re really smart but don't understand the people side of things, you’re not going to do well. It also goes without saying that you can be very people savvy, but if the intellectual content is lacking, you’re not going to do well, either.
“A Partnership With Clients”
I like to talk about a partnership with clients. It’s the attitude that we’re solving problems together. They’re not asking us to give them a solution, we’re working as a team. There’s a mutual recognition that both sides need to be flexible in the way we approach things. Consulting becomes something you're doing with clients, rather than to clients. And the clients understand that and desire that. If you can really develop what for lack of a better word I would call a relationship with the client, then you're going to be much better off than if you’re viewed as strictly a vendor.
“Ambivalence To The Relationship”
Some consultants are very good. Some are fair. Some are no good at all. But most of them I believe are pretty good. They really do know how to help. They have particular professional skills to help the client. In my experience, I would say where consultants fail most is in the subjective part of the relationship. Ninety-nine percent of all consultants give all their attention to what I call “the objective reality,” meaning how to help the client solve a particular problem? It's not that they don’t help the client to solve the problem. But they pay no attention at all to the personal quality of the client relationship.
Here’s what I mean. Suppose you asked for advice and I started criticizing you. Let's assume that the criticism was really good and insightful. How are you going to feel? You're going to resent it like hell. You're going to say that I don't know what I’m talking about, or you’re going to feel stupid—why didn’t I think of that, he must be smarter than I am? And so it's a no-win situation.
Assuming it was good advice, the client is going to resent the fact that I thought of something that he didn’t. Also, he's going to feel dependent upon me because I gave him an answer to a problem that he didn't have. So there's ambivalence to the relationship. There's both the respect and an appreciation for the help I'm giving him and there's a resentment that he had to come to me to get it. I think this is at the heart of the problems that arise in consulting relationships.
So what's the solution to this? I think first and foremost the answer for me is to be terribly aware of how the client is going to feel if I give him the “right” answer. Secondly, I need to be aware that my client is absolutely no different from me. He doesn't like to be criticized. We're all that way. The dilemma is that on the one hand, if I don't tell him the absolute truth, I have no value. I'm a phony. But on the other hand, if I do tell him the truth, I have got to find a way to let him save face. I have got to find a way to let him psychologically accept the criticism I'm giving him. That's where most consultants fail.
I want the client to see that I’m not being judgmental, I’m not condemning him. I’m saying, we’re all human and we all make mistakes. Then he will find it acceptable to listen to what I have to say.
So whenever my partners and I would go into a client situation, we would always look at the problem on two levels. One was the objective level—what's the best way to help solve the problem? But the other hand, we pay almost as much attention to the subjective level, meaning how are we going to make what we say psychologically acceptable to the client?
“Form a Bond and that Makes a Difference”
When you have some kind of bond with a client, this also really helps. With some long-term clients, you form a bond and that makes a difference. For example, I had occasion to meet recently with a client who had just been promoted within a large corporation. He is in a new position now, with a company he’s worked at for over fifteen years. So we were catching up to see where things were at, in regard to possibilities for future work. This is the kind of client who is always nearby.
Let me tell you a little about how we go back. He is from the southeast and truly a good old boy. He had been manager of a plant in Alabama and the company transferred him to Green Bay, Wisconsin. He hadn’t been there too long when he asked me to come up to work on a project. So I paid him a visit up there in Green Bay. A winter visit, I should say. Well, the day I was there the assistant plant manager came in about noon and said he thought they’d better send everybody home because the weather was getting bad. As it turned out they ended up shutting the plant down. The only two people left there were me and this fellow, two guys from the southeast. We stuck it out for the afternoon.
That night, it finally cleared up, at least enough for us to drive to a local restaurant. The airport was still closed. During dinner I made a remark about how you always hear about how people from the south can’t handle the bad weather. A little snow falls and we all panic and close our airports and shut down our plants; how people from the north harass us about this. Yet here we were, two guys from the southeast and the only ones in the restaurant, the only ones willing to go out in this weather. You know, it was kind of a bonding experience. It was a chance for the two of us to really sit down and talk. We probably spent about six hours together, and I learned more about him and his background, his company’s way of doing business. It helps you in the future.
“They Want Answers, Not Process”
In the early days of my work, and perhaps to some extent even lingering today, there is this internal pressure you feel that you have to surprise the client. To feel that you have to provide the client with something that is very high level. But the discovery I’ve made over the years is that the client really wants basics, not exotica. They want answers, not process. They want babies, not to hear about the birth pains. The client doesn’t want you to render up all the data you may have created, and call that part of the report. The client, especially in the construction industry, is entrepreneurial driven, results focused. And, while we may take elaborate steps to get to a conclusion, elaborating those steps does not impress the client. What impresses the client is speed, accuracy, and preferably low cost.
Of course, you can’t always give them all three. But if you have focused recommendations, well, that’s what it is all about. I’m not saying that data isn’t important. It is. But as a backdrop that’s usually best left in the briefcase. If the client wants to see data, then you can show them more. But packaging some 30-pound report is not useful. On a couple of occasions, I’ve seen a client attack a consultant because they’ve given them something they viewed as a lot of BS wrapped around something useful. Their directive was to cut the BS and focus on the useful part.
When something like that happens, I really just try to take it as a reminder. Client satisfaction is number one. That’s why we’ve been doing formal client evaluations of our work for years. Looking at our approach, the degree of communication, all the factors that go into a job well done. I can admit there have been a couple of times when I’ve forgotten some of these things.
“Defuse Problems With Clients’ Employees”
There are a handful of ways to defuse problems with clients’ employees. The first and most important way is that the senior management and leadership of the company have to be engaged and be visible. They have to really sponsor the project! The company has to be willing to work at it. If a company thinks the consultant is going to defuse all the problems, you’d better not embark on this thing in the first place because that's the wrong use of your consultants. Although certainly the consultants can help, we can help communicate. We'll coach executives in terms of how to deal with conflict, those types of situations. Obviously, too, our behavior as consultants can affect the situation. I don't want to absolve consultants in our industry of their behavior because there are plenty of consultants out there who can go in and find more ways to upset an organization, and end up putting an organization at a disadvantage.
So, although our job isn't necessarily to defuse every situation, it surely also isn't to create problems, either. Just by the very nature of coming in the door and being who we are, you've got to be cautious of that. But it's hard to defuse. The way we coach and train our people for these situations is to focus on relationships early on. You have to build relationships with the right people, both junior and senior people, right away so they can come to you and almost be the safety valve to let you know about conflict early on. And then you can work through the organization to defuse the conflict.
That becomes a very important strategic aspect of what we do during these transformations, because everything comes down to very personal issues in the end. It doesn't mean conflicts are solved every time, and it doesn't mean these problems don’t happen. But I think the best way to defuse conflicts is through a combination of forming good relationships and making sure our client’s senior management does its job.
I have no problem telling a CEO, “Here's what you have to do. You want to do this project, you want to hire us, and you're investing a boatload of money to do this. Here's your job. Here are the ten things that you have to do to make this thing go.” And we'll have very frank conversations. “Unless you're prepared to do it, don't begin because you're not going to get there. It's going to be a huge failure. You, yourself, will be embarrassed. The Board will have your shoes,” and so on and so forth. But if the CEO is willing to do what it takes, that becomes the first critical success factor in a major improvement program. You can see that factor when the project works, and when the project doesn’t work it’s not there. It’s one of those things that is so obvious.
“No……. Presumptive Sell”
There’s no such thing as the presumptive sell in our line of work. That’s one of the realities I’ve learned in working with clients. You can’t walk in and convince anybody. But if you know they have a serious problem and they’re aware of it, the deal is closed in no time. I mean, it’s just how fast can you get in here and help us? I’ve been working with a financial services company whose CEO literally had a one-day turnaround to give the go-ahead on a major project. I went in and here it was, here’s what we want to do. I sent him our proposal in a fax and he was practically calling me before the fax was finished. When can we get started? That’s very unusual. At that level they’ve usually delegated it to somebody.
“An Even Bigger Reward In The Long Term”
One definition of maturity is the ability to defer an immediate reward for an even bigger reward in the long term. My firm had been retained by Texas Utilities to provide regulatory support to management and to their attorneys during a rate case involving the Comanche Peak Nuclear Plant. The case and the hearings dragged on for years. We had a team in place throughout that time. At first, we played a key role in setting the strategy and assembling the overall rate case team. Eventually, however, the effort centered on the attorneys and the witnesses and our role was reduce to ready standby in the event that something popped up that had to be taken care of right away. Although this was very profitable, it wasn’t very satisfying and it certainly didn’t serve the client in the best possible way.
Finally, I went to the president, and told him that I thought it was time for our involvement to come to an end. He was paying us for work that wasn’t needed. We would be available if something came up, but it was time for us to leave. In case you think that I was losing my grip, I should mention as an aside that our firm had plenty of other work and that we could reassign the staff to other clients and other projects by the next week.
But Texas Utilities saw us as the only consulting firm that ever volunteered to leave a project, to do what was best for the client even though it cost us money. My reputation was made at Texas Utilities. The President and I became very close friends and we still are. He is a very bright guy and has a wonderful sense of humor. Very often we would literally know what the other was thinking.
Over the years, Texas Utilities became one of my largest clients. And they always referred to me and the firm as the “honest consultants.”
“You Can’t Just Kiss Up”
You can’t just kiss up to the majority shareholders. That’s never the right approach. Over time the failure to do the right stuff will find a way to bite you back. You always have to look at the bigger picture, at the things that need fixing. The client will go bankrupt if you’re too much of a wuss to give the right recommendation, or too ineffective as a sales person to promote your idea and get them to take action on it. Also, if you think your work is done at the moment you’ve made a recommendation, that’s wrong too.
“A Strong Balance Sheet Gives You Moral Courage”
I think one of the age-old problems of consulting is whether you slant your recommendations one way or another in order to have a continuing relationship with the client? Recognizing that clients have a propensity to like one answer better than the other, and that if you keep feeding up answers they don’t like, no matter how truthful they may be, you’ve probably shortened your time with the client.
Well, that’s led me to a couple of conclusions. You can talk about how to broach recommendations you know are going to be unpopular. But perhaps what is more important is your own firm’s position. Consulting firms typically look at their profit and loss statement, but I think it’s important that you manage the firm by its balance sheet. And by that I mean to always have a strong balance sheet, a strong net worth and plenty of liquidity. Because if you’ve got a solid balance sheet, then you can always tell the client what he needs to hear rather than what he wants to hear. We’re all human. If we’re living at the edge of survival and barely able to pay our bills, it is only human that the often subtle distinction between what the client needs to hear and what the client wants to hear gets fuzzed over. And I found that having a strong balance sheet gives you the moral courage to earn your living properly as a consultant. What I mean by that is to tell the client what they need to hear rather than what they want to hear, but also do it in a way that doesn’t blow your relationship because then you’ve lost your opportunity to have an impact.
“A Job Offer”
Every consulting assignment in its own right has got a little romance in it in terms of the client relationship. Thirty years ago, one of the ways you knew whether you were successful or not on engagements was whether you got a job offer. It was definitely a measuring stick then, but I don’t think it is today. Younger consultants should know that used to be a way to judge success.
Now, whether you should take the job offer is a whole different subject. I had an offer about twenty years ago for probably five times what I was making at the time. It was an extraordinary money offer, but it was an iffy-kind of situation. I thought it through, and realized that the chairman of this company wanted me to come and be his chief operating officer, because he had a huge problem he wanted me to fix. I wondered what my half-life would be once the problem was fixed, because it was a fixable problem.
So here this guy was, spending a lot of money on me and the consulting team to do this work. I imagine he just did a simple little cost benefit analysis: He’s thinking, let’s say I’ll hire this guy for a lot more than he’s making. He won’t be able to resist the temptation. He’ll fix the problem and in a couple of years I can get rid of him. Perhaps the lesson was, even if they offer you five times your income, you better think through what it’s really about.
“Something On The Floor To Make Noise”
Managing relationships means having to adapt to all kind of personalities or management styles. We consulted to the utility industry where some of the firms in the industry had the reputation of being somewhat slow moving. At least this was true before deregulation. Somewhat after, too, for that matter.
We had a Southern client, a section manager at one of the major utilities. He was a grand old Southern gentleman with a great accent. He was section manager at this really labyrinthine organization, and we suspected he probably didn’t have to work that hard to earn his keep.
He had this corner office, with a great view outside. The office was U-shaped, and when you came into the office, you saw a couch and his actual desk was around the corner out of view.
And what he would do is he would sit up at his desk with his head resting on his hands and his feet up on the desk. He had a very tiny mirror the size of a three-by-five card planted on the back of the couch. And he had something on the floor that would make noise when you walked in. So with the noise, he could look up and see you in the mirror. He'd turn around to his credenza to compose himself, and then he'd swing around to face you.
I thought that was just a remarkable way to go about business. The entire organization knew of it and that's just how he did things. We were told that's just what he does.
“Don’t Y’all Ever Finish Another Man’s Sentence”
I had never been south of the Mason-Dixon Line when I got a call to go to Little Rock, Arkansas. The client was Arkansas Power & Light Company, and we were asked to carry out a company-wide audit of management and operations.
Their Senior Vice President was a gentleman in his 60’s, just a few years from retirement. He would start most conversations by pulling out a pipe, loading it with tobacco, firing it up, blowing smoke rings and looking at ceilings. Sometimes he would put the pipe in the pocket of his old tweed sport coat and smoke would come out of his pocket. He was very calm and deliberate, the essence of southern courtesy in every way. In contrast, at that time I was a young Yankee. Brusque, fast talking, in a hurry, always pushing as hard as I could. He and I were almost complete opposites.
One day, he asked me stop by and chat. He started out with his pipe, of course. He told me that I probably had some promise and looked to him like a decent guy, and that he would like me to succeed with our work at the company. But he had three bits of advice for me. I don’t even remember the first two suggestions but I sure remember the third. Because when he got to his third point, he stopped and went through his pipe routine. And this time, he took even longer than usual. In my inimitable fashion, I said, “Is it this?” “Is it that?” “Could this be what you mean?” “Have we talked about this?” And on and on.
Finally, I ran out of ideas and stopped talking. He took some more time and relit his pipe. He then looked over and slowly said, “Metzler, don’t y’all ever finish another man’s sentence.”
Ouch! I never ever forgot that bit of advice.
“Keep In touch”
We keep in touch. For example, with a major beverage company back in the ’70s we set up their first records management system. In the late ’80s companies were moving into digital systems. We wanted to do that in the ’70s but their IT group was not ready then. You’d think it was a little weird that a company that size hadn’t gotten their act together. But by the end of the ’80s they had, and we said, okay, it’s time, let’s do it. We’d stayed in touch so we could do that. Most of us have had relationships like that, over long periods of time.
In one case, we had a client who we had worked for in ’51 or’52 and they called us back around ’86 or ’87. This was a government client. We also stay in touch through connections we have in professional associations. We’ll see people on either an annual or semi-annual basis. If we’re doing a presentation, we might have people who we’ve worked with come up and say, “Hey, you know, that sparks something. Maybe we need to talk to you about this. Let’s get together.” But it’s follow-up work and is never of the same magnitude as the initial project.
All of our focus is on practical, day-to-day issues, so whether they’re staying up to date usually becomes real obvious to the client. They know when they’re having a problem. A few of the clients, usually the smaller ones, want us to retain a sort of quality check for them. It’s usually because it’s only part time for someone there to make sure things are going okay. In these situations, they want us to come back and diagnose it from outside. To say, is it still healthy? Or do we need to be doing some other things?
“You Are Known By Clients You Serve”.
The strength of McKinsey over the years was in their client selection. It goes back to the brand issue. For example, there’s some mythology at McKinsey about Marvin Bowers being asked to consult for General Motors. The story goes that Marvin had said, in response, “That’s fine, but I really need to clear this with your chairman. We work only with the very top and I want his commitment on this.” The fellow he was working with said, “Look, I’m a senior guy here. I give you my word. But if you want I’ll bring in the vice-chairman of the board.” So the vice-chairman comes in and reaffirms how really committed they are to working with McKinsey. Again, Marvin says, “Fine, I really appreciate it. But I still want to talk to the chairman.” So finally they brought the chairman in.
Now whether it really happened exactly that way, I’ve got no idea. But the mythology was that you’ve got to have great clients and they have to be running the company. Or be in a position to make tough decisions and get people to act. The broader lesson is that you are only as good as your clients. If you pick bad clients or if you tolerate bad clients or you tolerate their definition of the problem, that will not enable you to serve them properly. You’re dead then.
I think over the years McKinsey has made better decisions about their clients than other consulting firms for two reasons. One, it was drilled into the senior guys by Marvin and other leaders of the firm. Second, when you’re on top and reasonably busy it’s much easier to say no. You know the Moll Flanders story, give me food lest I steal. Well, it’s a reinforcing cycle. If you can say no, people respect you. You’ve got to be willing to walk away. Basically, you are known by the clients you serve, and your work as a consultant is entirely affected by their ability to make things happen.
“Never, Ever Make Up Nicknames for Your Clients”
One of the cardinal rules of consulting is to never, ever make up nicknames for your clients. Nicknames often come out in the worst possible ways.
Years ago when I was new to consulting, CMP assigned me to a compensation study for the State of Illinois in Springfield, the state capital. At that time, Illinois had been under the control of the Democratic Party for years and years. Also, Illinois was still a patronage state where the workers got their jobs by paying off the party hacks and pols.
Our offices were in the Secretary of State’s office building. His name was Paul Powell. Powell was the male version of the old maid. He lived by himself in one of the local hotels, never had a house. Well, while we were on the project, he died. Lo and behold, when going through his possessions they found millions of dollars stuffed in shoe boxes in the closet of his hotel room. He was forever known after that as Shoe Box Powell. He is a legend in Illinois politics. But I digress.
Richard Ogilvie was elected as the first Republican governor in years in 1968. He saw it as his mandate to clean up the state. This included eliminating patronage and the compensation job we were doing was a key part of this effort. Ogilvie brought in a new team, mostly young, enthusiastic and idealistic, to help him. One of these young men was assigned to coordinate our project. As time went on, he began to wear a bit thin, and the consulting team began to refer to him as Numb Nuts. “You’ll never guess what Numb Nuts did today. What did Numb Nuts wants this time?” And so on.
The client’s building had automatic elevators and a patronage worker who pushed the buttons for us as we went from floor to floor manned each elevator car. The guy working our elevator bank was named Frank. He was in his 70s, and was on crutches. He no doubt needed a paycheck but it wasn’t really a job. To complete the background for this story, our partner in-charge-was a former marine, husky and he had a very short temper.
One night we were all working late including the full team, the client coordinator (Numb Nuts), and our partner. About nine o’clock we decided to quit and left as a group in the same elevator. One of the younger guys asked where Frank was? Another said he was off in the evenings. The younger consultant talking without thinking said, “Looks like the only way to get a job with the state is to stand around and look useless.” Then realizing what he said and trying to cover, he turned around to Numb Nuts and blurted out, “Oh no, Numb Nuts, I didn’t mean you.”
Needless to say, it seemed like forever before that elevator reached the ground floor and the client coordinator, taken aback, went on his way. But, it seemed even longer time as our partner ripped each and every one of us from one end to the other. I thought we were all going to be fired.
So the rule is, always refer to your clients in the most glowing of terms. Wonderful. Brilliant. Thoughtful. Honest. Strong. That way if you make a mistake, it’s a good one.
By the way, this client coordinator made a career in state government. Years later, he along with several others, was indicted for alleged fraud in the Motor Vehicles Department. It seems that driver’s licenses were being sold go non-qualified commercial drivers for cash bribes. You know, we were right on when we named him Numb Nuts.
“You Can’t Negotiate If You’re Backing Up”
If you have a really bad client, you should resign or they should fire you. You ought to make it uncomfortable enough that you get fired. I’ve been fired by a really great client who, at the time, was really pissed at some actions that we were taking. This was a more than a $20 million dollar relationship. This was a big, big client, It was a culmination of some scope change issues, and I just didn’t make it happen. You can’t negotiate if you’re backing up all the time.
So he fired me. I said, “Are you sure you want to do this?” His response was, expletive, expletive, expletive, you’re outta here. I told him I felt very bad that we had reached this conclusion, because I think we’ve made a lot of progress together. But he basically threw me out of his office; he would not shake hands with me.
Now his chairman learned of this and thought through the consequences and basically reversed the decision to eliminate us as a firm. But I was definitely history. Role the clock forward a year. I get a phone call from this guy. He says “I know we had a problem a year ago. A lot of the things that you were trying to get done need to get done; could you come over and see me and talk about how we might put some actions in place that will achieve this?” He reinitiated the relationship and we had a 30-second let-bygones-be-bygones. It didn’t last any longer that that. And away we went back to work.
If I had been him, knowing what he knew and under the pressures he was under, I might have fired me, too. I mean I’m not sure where what my call would have been. But I’ve never had a guy so pissed at me.
STORIES FROM READERS
Do you have a story about how you got started in consulting? We would love to hear it. Please send your best to the email address below. Top submissions may be included on this site or in future editions of Lore of Wizards. Submissions will be reviewed and contributors will be contacted prior to publication.
Subject: RE: Lore Of Wizards
I no longer want to work for clients who pay for our services with personal checks. Be they millionaires or billionaires, we have found that eccentric clients of extraordinary means cause extraordinary problems. My firm wins local approvals for our clients’ controversial real estate projects and prevents local approvals for our client’s competitors.
One Example: Asked to help win approval of a golf course in a tiny and affluent resort community, we did some research and quickly discovered that the biggest impediment to winning the necessary local support was the reputation of our client. In the course of his knock down drag out fight to win approval, he had threatened, screamed at and harassed too many residents and officials. We told him we would take on this tough assignment under one condition- he had to leave town and not return until after the vote. We told him to disappear and he did.
We sent our best people working day and night for weeks to educate residents on the benefits of the proposal, build support and make sure we had the votes we needed lined up. It was a tough fight but in the final days the polling numbers were going our way. We were confident we were about to pull it off.
Apparently our client was confident of victory as well as he jetted back on his private plane with his usual entourage the day before the crucial vote. They were playing golf on that beautiful summer afternoon and enjoying some sandwiches when a large black bird swooped down and dared to take my clients lunch from him. He pulled a 45 caliber hand gun out of his pants and took aim at the bird before his buddies wrestled the gun from his hands. Later that evening at a crowded local bar, my client got into an argument with a local resident and again pulled out his 45 before being subdued by his hangers on.
I got calls about both of these incidents moments after they occurred and I knew that everyone in this small, tight knit community would know all about it in no time. All of our work went down the drain and the vote was lost. He still owes us for the last months bill.
The Saint Consulting Group