AU Personnel & Organizational Policies Herman Holtz Flawless Consulting Discussion

  

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Provide me with a 1 page paper that summarizes and critiques the readings:

1-the book that called Herman holtz just read ch: 12

2-and that book that called Flawless Consulting just read ch:4and

3-for the word document read all of it

How to Succeed as an
Independent Consultant
Third Edition
Herman Holtz
John Wiley & Sons, Inc.
New York • Chichester • Brisbane • Toronto • Singapore
In recognition of the importance of preserving what has been
written, it is a policy of John Wiley & Sons, Inc., to have
books of enduring value published in the United States
printed on acid-free paper, and we exert our best efforts
to that end.
Copyright © 1993 by H R H Communications, Inc.
Published by John Wiley & Sons, Inc.
All rights reserved. Published simultaneously in Canada.
Reproduction or translation of any part of this work
beyond that permitted by Section 107 or 108 of the
1976 United States Copyright Act without the permission
of the copyright owner is unlawful. Requests for
permission or further information should be addressed to
the Permissions Department, John Wiley & Sons, Inc.
This publication is designed to provide accurate and
authoritative information in regard to the subject
matter covered. It is sold with the understanding that
the publisher is not engaged in rendering legal, accounting,
or other professional services. If legal advice or other
expert assistance is required, the services of a competent
professional person should be sought. From a Declaration
of Principles jointly adopted by a Committee of the
American Bar Association and a Committee of Publishers.
Library of Congress Cataloging-in-Publication Data
Holtz, Herman.
How to succeed as an independent consultant / Herman Holtz.—3rd
ed.
p.
cm.
ISBN 0-471-57581-X
1. Business consultants. I. Title.
HD69.C6H63
1993
001 ‘.068—dc20
Printed in the United States of America
10
9 8 7 6 5 4 3 2
92-36040
Contents
PREFACE
xi
Why a new edition is needed now. A needed response to great
changes. The general economic atmosphere and its influence.
New areas to be addressed. The I R S versus the on-site contractor.
The plight of today’s retirees. The explosion of pertinent
technology. The need for enhanced marketing. New information
in this edition.
INTRODUCTION
1
Increasing need for consultants. How consultants specialize.
How definition relates to consulting (marketing) success. The
consulting market has grown and changed. The more important
view: that of the client.
WHAT DOES (SHOULD) A CONSULTANT DO?
10
Computers and data processing. The aerospace industries. The
consultant organization. The consultant company. Hybrids. The
consultant as a self-employed independent. A few exceptions.
Suitable fields and services.
SEIZING OPPORTUNITY
27
Your consulting specialty versus your marketing needs. What
does it take to be a consultant? The skill of a consultant. The
avenues of specialization.
CONSULTING AS A SECOND CAREER
What is a “second career”? Almost any skill/knowledge/
experience can be the basis. Marketing—getting clients. What
kinds of clients to pursue. Marketing your services. Plowing new
fields. Consultants as temporaries. Finding assignments.
Companies for seniors.
38
vi
4
•
Contents
WHY DO SO MANY CONSULTANTS FAIL?
HOW TO SUCCEED
53
The roots of failure. The common mistakes of neophyte
consultants. The basic trade-offs. How specialized should
you be? Having it both ways in specializing. Marketing. The
ten laws of survival. The consultant’s image.
5
A FEW KEYS TO SUCCESS
66
The art of listening. Deciding what business you are in. The
key to the definition. The two basic sales situations. The
independent consultant: specialist or generalist? D o ‘ s and
don’ts, especially for the first year.
6
FOUNDING THE CONSULTING PRACTICE
83
If you had it to do over. General considerations such as
licensing. The matter of a business name. What type of
business organization should you use? Do you need a lawyer?
Do you need an accountant? Do you need a business plan?
Some general observations about business plans.
7
FINANCES, TAXES, AND RELATED PROBLEMS
97
Using what your accountant tells you. The information you
need. Some common mistakes. Some basic rules. Basic cost
centers and cost definitions. Insurance. Taxes: Avoidance
is legal.
8
MARKETING AND SALES: FINDING LEADS AND
CLOSING THEM
112
Success in marketing is always a tonic. What is marketing?
Discovering what clients wish to buy. “I know it when I see
it.” Creating needs. Face-to-face closing. Qualifying prospects.
9
RELEASES, BROCHURES, AND OTHER MATERIALS
130
Marketing and messages. Releases and newsworthiness.
Brochures as marketing tools. Other sales materials.
10
THE NEW MARKETING
Recession or “adjustment.” The good news. What’s wrong with
the ” o l d ” marketing? Is mass marketing dead? Why consulting is
not sold via mass marketing. The marketing database. Networking
for clients. Miscellaneous marketing considerations. Brokers, job
shops, subcontracts, and the I R S . Technical services firms.
143
Contents
11
MARKETING TO THE PUBLIC SECTOR: FEDERAL,
STATE, AND LOCAL GOVERNMENT
•
vii
155
A brief glimpse of government markets. What governments buy.
How governments buy. The procurement system. Market research.
Subcontracting and other special marketing approaches. Forms.
12
PROPOSAL WRITING: A VITAL ART
170
The evolution of modern proposal practice. What proposals call
for. Why proposals are requested. The ingredients of the RFP.
Kinds of information an R F P asks for. What is a proposal?
Proposal scenarios. Who must you sell? Public- versus
private-sector proposals. The evaluation system. The protest
process. Sole-source procurement. Proposal formats and rationales.
Format and general rationale. The necessary impact. Strategy and
its evolution. Functional flowcharts. A few odds and ends.
13
THE INITIAL MEETING WITH THE NEW CLIENT
OR PROSPECT
199
Rule number 1: Have a clear understanding from the beginning.
Rule number 2: Be a dignified professional—always. Rule number
3: Sell without hype. Selling is consulting. Pricing problems. Where
to conduct initial meetings. Things to settle at the initial meeting.
Follow up.
14
NEGOTIATIONS, FEES, AND CONTRACTS
213
Fees, costs, and profits. Standard rates. Calculating overhead.
What should your overhead rate be? Private-sector parallels.
Government contract negotiation. Private-sector contract forms.
What is a contract? Potential hazards. Alternatives to formal
documents. The informal contract or letter of agreement. Annual
retainers. Negotiating tips, tactics, and gambits.
15
CONSULTING PROCESSES AND PROCEDURES
231
The art of listening. The art of hearing. Hearing as a salesperson.
Listening as a hired consultant. A basic approach to all analysis:
Function.
16
FINAL REPORTS, PRESENTATIONS, AND OTHER
PRODUCTS
Written reports: Products of the consulting project. Verbal reports
and presentations. Other products. Finding a measuring stick.
254
viii
17
•
Contents
FEES AND COLLECTIONS
270
Cash flow is a problem for everyone. Warning flags. Credit
card convenience—and inconvenience. Collections.
Collecting from government clients.
18
SKILLS YOU NEED: MAKING PRESENTATIONS
280
Consulting: Business or profession? Public speaking. The
notion of born speakers. Planning the presentation. A few
presentation principles.
19
SKILLS YOU NEED: WRITING
292
Writing skills for the consultant. Research and data
gathering. The draft.
20
ADDITIONAL PROFIT CENTERS: WRITING FOR
PUBLICATION AND SELF-PUBLISHING
315
Consulting means different things to different consultants.
What are profit centers? Why other profit centers? The
common denominator. Writing for profit. Publishing your
own book. Marketing books. Other publishing ventures.
21
ADDITIONAL PROFIT CENTERS: SEMINARS AND
PUBLIC SPEAKING
337
Speaking for profit. The public speaking industry. The
seminar business. Marketing the seminar.
22
CONSULTING AND NEW TECHNOLOGIES
355
The new meaning of independent. Desktop computers. Significant
differences and advantages. The most popular functions. Desktop
publishing. Database and spreadsheet functions. Communications
software. Macro generators. Graphics developments. Printers.
Modems. Facsimile machines. Tape drives and backing up. The
computer as a general aide.
23
BUSINESS ETHICS IN CONSULTING
365
A standard of conduct. Conflicts of interest. Fees and related
ethical considerations. A recommended code.
24
THE REFERENCE FILE
Books on retirement and second careers. Books on writing and
publishing. Books on public speaking. Other books of interest.
Periodicals of direct interest. Wholesalers and distributors.
372
Contents
•
ix
People and organizations in public speaking. Convention
managers and planners. Speakers associations. Mailing list
brokers. A few tips on writing direct mail copy. Associations
of consultants. Miscellaneous resources. Consultant labor
contractors. For retirees and older workers. A few seminar
tips. Proposal do’s and don’ts. Outline for the preparation of
a business plan.
INDEX
393
Trademark Acknowledgments
C P / M is a trademark of Digital Research Corporation.
Hercules is a registered trademark of Hercules Computer Technology.
I B M , I B M Selectric, I B M P C , P C – D O S , Personal Computer X T , and Personal
Computer AT are trademarks of International Business Machines Corporation.
Macintosh is a trademark and A p p l e a registered trademark of Apple
Computer, Inc.
Microsoft and M S – D O S are trademarks of Microsoft Corporation.
Sidekick is a trademark of Borland Corporation.
SmartKey is a trademark of F B N Corporation.
WordPerfect is a trademark of WordPerfect Corporation.
WordStar and MicroPro are registered trademarks of MicroPro International
Corporation.
Preface
WHY A NEW EDITION IS NEEDED NOW
Not every author has the good fortune to create a second edition to his original
work, much less a third. Nor does every author have his book reviewed by a
group such as the computer consultants forum of CompuServe. The members
of a forum opted to review How to Succeed as an Independent Consultant as
the first choice of their new special Study Group section—a distinct honor.
I monitored the study and discussions as best I could and recorded the comments. Most of those comments are reflected in the third edition of this book.
A few comments, however, merit special notation. One set of thoughts that
struck me as especially rewarding were those of a man who is employed as an
internal consultant by his firm. He reported that he did not aspire to launch his
own, independent consulting venture, but he found certain principles enunciated “made the lights go on” for him and were “liberating eye openers.” These
are the specific items that were such eye openers for him:
•
Consulting is not of itself a profession, but how one practices a profession.
•
Consultants need to market their services proactively as a planned part
of the business, not as an afterthought.
•
The client’s perception defines the “truth” or reality of a consulting
situation.
•
Consultants need to make a profit in addition to making a living—pay
themselves a salary.
•
A consultant must be a specialist and a generalist at the same time.
•
A proposal is a sales presentation. (Too often we write proposals as displays of erudite technical knowledge and clever phrasing.)
This praise does not mean, of course, that everyone thought everything I
wrote in the earlier editions of this book was wonderful. Far from it, I got my
share of brickbats from consultants who did not agree with my admirers or
with many of the things I said in those earlier editions, and I bear the scars
and remember the pain of the wounds yet.
xii
•
Preface
What is more important, I learned more about consulting from other experienced practitioners, and this third edition includes input from real live,
practicing consultants whose comments reflect practical experience, rather
than theory. I also learned of the problems independent consultants are encountering today, and what help they need to cope with these new problems in
a changed world.
A NEEDED RESPONSE TO GREAT CHANGES
With all respect to Ben Franklin and his observation about the inevitability of
death and taxes, I must point out that he neglected to mention another thing (at
least directly) that is inevitable in this world; it is change. Change is inevitable,
it is constant, and, in the broad view, beneficial, although the immediate effects may not appear to be so. Many things about consulting have remained the
same since the second edition of this book was published, but much has
changed. This edition will reinforce that which is constant, but will also focus
on the significant changes that must be taken into account if you are to continue succeeding as an independent consultant.
Some of the changes are minor, while others are of great importance, critical
to success as a consultant. The third edition responds to these major changes
and offers solutions for the problems arising from them.
THE GENERAL ECONOMIC ATMOSPHERE AND
ITS INFLUENCE
In late 1992, government economists are pointing to what they believe are
signs of an economy recovering from over two years of slowdown and decline.
Many major industries, especially manufacturing and heavy industries, have
closed down in liquidation and in bankruptcies. For the first time since the
thirties, we see vacant store fronts, as small retailers are forced to close their
doors. We read every day of new bankruptcies of both small and big business.
Government officials have been assuring us almost from the first symptom of
economic bad news that this recession will linger for only a short time
and then dissipate, as we return to the boom times of the eighties. I am no
economist. I can offer no technical arguments for my own convictions. I confess
to being influenced by the haunting personal memories of the desperate days of
the thirties, when I was myself among the thirteen million victims. That may be
why I have difficulty in accepting these cheerful prognostications of economic
recovery. I am truly not sure what that term means. I have a deep-seated feeling
that we are not in a recession, but in an economic adjustment of quite another
kind, an inevitable settling down from a peak and unusual—perhaps even unnatural—boom condition to a normal economic condition of sharp and intense
competition. I think we must learn to compete, once again, and adjust to a
new kind of economy, with somewhat different rules of economic behavior and
Preface
•
xiii
performance than those of the past few decades. I think it unlikely that things
will ever be what they were. We know or ought to know that change is inevitable.
We never succeed in going back. We must learn to live with the new situation.
We must adjust and adapt, and market for today’s conditions, not yesterday’s or
the hopes of tomorrow.
Many thousands of people have lost their jobs permanently; they were not
laid off, to be recalled later; their jobs were terminated. They had to find new
careers, those among them who could, but employers had retreated too, and
jobs were less than abundant. Many of the newly unemployed therefore turned
to independent consulting, and we suddenly saw a great many new shingles
being hung out.
Is that good news or is it bad news for independent consultants? It is bad
news in that it reflects both a shrinking market for at least some of us and
increased competition for work in that market. But it is also good news for the
aggressive and imaginative consultant, in that in some respects the market has
grown, and the opportunities are greater than ever. In this period, regardless
of how accurately the government’s economists perceive and interpret the economic signs that portend the future, employers have become bearish in hiring
and turned to the independent consultant as the more desirable way to solve
problems and meet needs.
A l l the foregoing problems are among many others, classic and new
addressed in these pages. I assume in writing this, as I did in the earlier
editions, that you bring to your independent consulting practice ample technical/professional expertise in your special field and need no guidance in
helping your clients in that respect. But I assume also that you can benefit
from general guidance in all the other elements necessary to establish and
operate a successful independent consulting practice—in winning clients,
especially. (The major focus here is not on how to be an independent consultant, but how to succeed as an independent consultant.) Here you will find
guidance, suggestions, and ideas for all of these problems—for everything
necessary to independent consulting success except that specialized technical/professional knowledge which you possess and wish to sell to—put at the
disposal of—clients.
NEW AREAS TO BE ADDRESSED
One of the many compelling reasons for a new edition is the impact of changes
and the need to bring them to you. We have entered a stubborn recession that
resists remediation and yields only slowly. That makes the need for sophisticated and effective marketing more important than ever, and this edition will
address this problem with suggested remedies.
In the complex society of today, we must all be covered by insurance, especially hospitalization and general medical coverage. Without insurance few
of us can handle the costs of today’s routine medical costs, let alone the costs
of medical emergencies. Large corporations can get group coverage without
xiv
•
Preface
great difficulty; independents often have a problem. This new edition will
offer some ideas to alleviate this difficulty.
Credit is a problem for independents. Clients expect to be billed for services, even if they furnish a retainer to initiate a project. For the small project,
clients ought to be able to pay with any of the popular credit cards. But credit
card issuers—banks and others—do not welcome independent consultants, especially those who are home based. This, too, is a problem we must address.
THE IRS VERSUS THE ON-SITE CONTRACTOR
One of the problems facing consultants is the attitude of the I R S : The IRS has
been questioning the contractor status claimed by independent consultants
who work on the client’s premises and on long-term contracts. On the other
hand, many consultants, those employed in large organizations and those functioning as independent consultants, work on their own premises or on both the
client’s and their own premises, usually under contract to do a specific job,
rather than under an indefinite-term agreement to work for the client. Some
independent consultants tend to short-term assignments by the nature of the
work in which they consult, but this is not the case with all; many do consulting work that normally entails long-term contracts and assignments. Thus the
I R S position can be a serious problem, and it will be discussed in these pages,
with suggestions for overcoming it.
THE PLIGHT OF TODAY’S RETIREES
Early retirement and second careers have been an increasing trend for decades. One influence is the great increase in retirement plans and employees’
vested interests in such plans. Another has been an increase in numbers of
military retirees. T h e majority of these people have been retiring at relatively
early ages, even in their early fifties. W i t h the pressure of high costs of living
today added to the natural energy and vigor of men and women in early middle age, the majority opt to launch second careers, and consulting is a popular
choice. Now, with the tightened economy, more and more people are compelled to retire from both private industry and the military services, but it
is increasingly difficult for them to launch successful second careers. This
problem must also be addressed in this edition.
THE EXPLOSION OF PERTINENT TECHNOLOGY
The technological revolution has greatly amplified your capabilities for expanding your profit-making services and your resources for satisfying clients’
needs. The computer age is many decades old, but the era of the desktop computer is barely a decade old. It was explosively revolutionary, even more
Preface
•
xv
so than the mainframe computer age, reaching swiftly into every corner of our
lives and changing the way we do many things. The desktop computers
of 1988, the year of the second edition of this book, are almost primitive,
compared to the pc of today. Too, today’s portables, the laptop and notebook
computers, are more and more popular, so that even away from the office,
whether in an automobile, an airplane, or a hotel room, all computer services
and facilities are at hand. A n d with more widespread use of modems, computer owners have ready access to other computers and public databases—information services—at convenience and from anyplace.
You can’t provide modern services without a computer. Nor is that all that
has changed. In the few short years between these editions, the facsimile
machine ( F A X ) has become almost as popular and common as the telephone.
Cellular telephones also enable an increasing number of private individuals, as
well as consultants and other business people to be in touch with their offices
and their clients wherever they are.
THE NEED FOR ENHANCED MARKETING
In these times of general business slowdown and increasing competition, marketing becomes a more critical need than ever, and it will get even more attention here than previously, with discussions of and suggestions for more efficient
promotional schemes and materials. Because I wish to offer additional and new
insights into methods for marketing your services successfully, a large part of
this third edition will focus sharply on specific marketing ideas and methods to
consider and use, for those are the true ingredients of your success as an independent consultant.
NEW INFORMATION IN THIS EDITION
These are all matters to be addressed, along with many other new developments and current conditions. Thus, several completely new chapters appear in
this third edition; new and updated material appears in existing chapters; and
the book overall has been reorganized to simplify your finding specific coverage and, more important, specific help for today’s problems and the best opportunities to expand and increase your success.
HERMAN HOLTZ
Wheaton,
MD
Introduction
Consulting was a subject of great controversy around Washington, DC when
I was developing the first edition of this book. Consulting generally was and
is a greatly misunderstood profession. It is sometimes misunderstood by its
own practitioners, often misrepresented by its detractors and as difficult to
define as ever. These are not new problems, nor has anything about consulting
changed except, perhaps, that a definition is even more difficult to establish
with the increasing need for consulting services. The problems have ranged
from difficulty in creating any definition to difficulty in choosing among the
many definitions which often represent the biases of certain individuals and
groups. At the same time, both the difficulty of definition and the importance of agreeing on one are increased by the rapid expansion of consulting
specialties.
INCREASING NEED FOR CONSULTANTS
The increasing complexity of society, in both the technological and sociopolitical senses (changes due at least in part to technological dynamism), increases the need for consultants and the services we offer. Individuals in all
walks of life find it increasingly difficult to cope with modern complexities
without the help of various experts. I found it necessary to switch from a
typewriter to a computer to do my own work, for example, but I then often
needed to turn to a computer expert, a consultant, for help. Even today, when
I have become computer literate, I depend on a friendly associate who is a
true computer expert to bail me out of occasional problems. As another example, to battle for Social Security benefits often requires turning to a lawyer
who specializes in Social S e c u r i t y — a consultant, although he does not call
himself that. Companies hire consultants who show them how to minimize
their telephone costs while taking full advantage of new telephone services
available today. They hire consultants to improve office organization and procedures, to provide better inventory management, to train their staffs, in writing effectively, and to help with myriad other tasks. The need for consultant
specialists grows almost daily.
2
•
Introduction
It is interesting to note that there are virtually no listings under the heading Consultants in my telephone company’s directories, but only under such
titles as Management Consultants and Engineering Consultants. The adjective, the profession in which one consults, is the prime identifier rather than
consulting itself. T h e distinction apparently is recognized by The One Book
telephone directory in my area. It has no Consultants category as such, but
refers those seeking listings under the word Consultant to other areas of the
directory by offering the following presentation where one might expect to
find the Consultant heading normally:
Consultants
SEE
Business consultants
Career & vocational counseling
Child guidance
Color consultants
Educational consultants
Engineers—Consulting
Human resources consultants
Image consultants
Immigration & naturalization consultants
Infrared inspection services
Marriage, family, child, & individual counselors
Movers
Personnel consultants
Printers
Tax return preparation
Travel agencies & bureaus
Wedding consultants
Thus, the qualifying adjective becomes important in identifying an individual consultant and defining his or her special technical or professional field
and services. We have marketing consultants, editorial consultants, management consultants, and others. But those adjectival definers often prove to be
too general also, so we have marketing consultants of many kinds—proposal
consultants, direct mail consultants, advertising consultants. We therefore
ought to bear in mind that consulting is probably a viable career alternative for
anyone practicing any profession, subprofession, or paraprofession. And while
we continue to refer to the consulting profession, as I do in the following paragraphs, that is for convenience of reference, and should not mask the understanding of what it really is—a means or special method of practicing a given
professional specialty.
Many practitioners who regard themselves as consultants are reluctant to so
identify themselves because of the sneers and epithets of critics and opponents
of consulting. Lawyers, physicians, dentists, architects, and other professional
or technical experts, for example, do not call themselves legal consultants or
medical consultants even when they are extraordinarily specialized practitioners. Some, such as lawyers, do not generally use the term, as physicians do,
Increasing Need for Consultants
•
3
even in the special circumstances of being asked by another lawyer to participate in a case as an adviser or associate. The words associate or co-counsel are
terms the legal profession prefers to consultant. In legal practices, even when an
expert is brought in to depose or testify, the expert becomes an expert witness,
not a consultant. (Consultants are often called upon to become expert witnesses,
as I have been, and an entire class of independent consultants specialize in such
support of the legal profession, i.e., being expert witnesses and performing
other support services. There is a great deal more to being an expert witness
than appearing and testifying on the stand.)
Even large firms generally recognized as consultant firms do not always
identify themselves as such. Scrutinizing the yellow pages of the District of
Columbia telephone book, for example, reveals that some companies are listed
under both Management consultants and Certified public accountants, but
some other large management-consulting firms—Deloitte & Touche and Ernst
& Young, to name only two—are also accountants, although well known as
management consultants.
That is a major clue to defining one kind of consultant. It identifies a consultant as a specialist within a profession, representing a mode of practicing
the profession, but not itself the profession. That definition seems consistent
with all other evidence of how consulting appears to others, as well as with
how consultants themselves regard and define what they do. In my own case,
I must identify myself as first a marketing specialist, second a specialist in
marketing to government agencies, and third a consultant to others requiring
assistance in marketing, especially to government agencies and especially
with regard to writing proposals. But I might also regard myself as a writer
who consults with others requiring assistance in writing proposals, a must for
certain types of ventures. Even those are only two of several possible ways in
which I might identify and define what I am and what I do. But the differences
are more than semantics; they have a great deal to do with how successful I am
at marketing my services, specifically, what clients see me as doing for
them—what I can help clients perceive as what I do for them.
While on the subject, let me point out that the list shown earlier covers
many services that one may not normally think of as technical or professional.
The list includes movers, printers, tax return preparers, and travel agencies
and bureaus, while it fails to include dozens of technical, professional, and
other highly specialized categories in which many well-established consultants practice today.
For these reasons, I view consulting as a way of practicing a profession. That
is, it is not truly a profession in and of itself. A surgeon does not become something other than a surgeon when he or she acts as consultant to others. Nor does
a lawyer, an engineer, a marketer, or any other professional, subprofessional, or
paraprofessional change his or her profession when acting as a consultant. The
more we examine the nature of consulting, the more we affirm the idea that
consulting is a special way of practicing a profession, subject to all the hazards,
problems and opportunities of the profession, but also subject to all the hazards,
problems, and opportunities resulting from the consultant mode of practicing
the profession!
4
•
Introduction
You will find, if you have not already perceived it, that independent consultants are often defined or distinguished as much by the kinds of services they
provide or by the means by which they provide them as by the special fields in
which they operate. One of the most rapidly expanding general fields of consulting in recent years has been that of computer specialists, but that expansion has
been chiefly among computer specialists who concern themselves primarily
with desktop computers. The older profession of consulting to serve the needs
of owners and operators of the larger (mainframe) computers is relatively stable. But today there are computer specialists—independent consultants—who
are software specialists, for example, database specialists or desktop publishing
specialists, or general software specialists.
HOW CONSULTANTS SPECIALIZE
Consulting is not a new profession. It probably started as a necessary support
service to tribal chiefs and others of the earliest societies. We can easily imagine
the first primitive man who learned how to sharpen and point a stick to make an
early spear and was soon besieged by others eager to learn how to do the same!
That was a simple situation. Today, few situations are that simple. Today, consultants may be defined or described in many ways.
Consulting is not itself a licensed or controlled profession, although consultants may be specialists in a licensed and controlled profession. Many job
shops, those who supply technical/professional temporaries (technical writers,
engineers, computer programmers, designers, trainers, physicists, illustrators,
drafters, marketers, copywriters, and others), sometimes for short-term jobs,
such as a week or two, but more often for long-term jobs of many months and
even years, often identify themselves as consulting firms, and they often define the temporaries they supply as consultants. Many independent consultants
hire themselves out on the same basis (as technical or professional temporaries), bypassing the job shop or broker. (The so-called job shops are really
brokers dealing in human labor, very much like talent agencies or booking
agents.) In recent years, there has grown up a business of brokering in which
the broker takes on a contract with a client, requiring on-site work, and then
subcontracts to independent consultants who will work on the client’s
premises, billing the broker rather than the client. The practical effect is the
same; for the client, he or she has the on-site services of people who function
as temporary employees. Legally, however, there is a wide distinction, the distinction between an employee and a subcontractor.
HOW DEFINITION RELATES TO CONSULTING
(MARKETING) SUCCESS
Why trouble ourselves about defining what we do if we are completely free to
call it whatever we wish, to define it however we wish, and to practice it however we wish?
The Consulting Market Has Grown and Changed
•
5
The definition—and the knowledge that consulting is not itself a profession
per se but is more often a specialty within a profession—is of critical importance. Later, when we probe the problems of marketing your services and
methods for doing so most successfully, this will become more and more evident. You will see the absolute need to know what business you are in if you
are to succeed in the all-important marketing aspect of your chosen field. And
it is therefore marketing, more than anything else, that identifies and defines
what this book is all about, for that is what business success is all about. In
fact, while marketing—the vital ingredient to succeeding as an independent
consultant—has always been the overall theme and underlying purpose of this
book, the economic condition of today makes this more important to your success than ever before. More and more, you must compete successfully to survive, and this new edition addresses that need.
My perception of the independent consultant’s need for help in marketing
inspired much of what I wrote in the original book. To explain that undertaking and commitment to help others succeed as independent consultants, I
stated as plainly as I could my major premise that most beginning independent
consultants are perfectly capable in their chosen fields of technical or professional specialization and need no help from me there, even if I were capable of
offering that kind of help. However, many—perhaps most—are badly in need
of whatever help they can get in mastering the art of marketing their services—marketing themselves, that is.
Nothing since writing that first or second edition suggests that the premise
and the focus on marketing was anything but well conceived and accurate or
that it has become outdated—quite the contrary. As a result of that happy—
and unplanned—circumstance of my name, mailing address, and telephone
number on the dust jacket of that first edition, a great many readers were
encouraged to call and write. Almost all the readers agreed wholeheartedly
with those premises and found the marketing suggestions most helpful and
most needed.
THE CONSULTING MARKET HAS GROWN AND CHANGED
The career prospects for independent consultants have not changed greatly
over the past few years, except to continue growing. I perceive a steadily
increasing number of business opportunities for the independent consultant.
The swift and continuing popularity of the earlier editions of this book indicates the widespread interest in consulting as an independent career. A
growing number of technical and professional specialists see independent
consulting as the optimal way of practicing their career specialties. But the
demand for consulting services has grown generally in the public sector, as it
has in the private sector. The efforts of the C a r t e r administration and a few
members of Congress to discourage government use of consultants had no
lasting effect and was long ago swept into the dustbin of outre notions of new
administrations. The federal and state governments continue to rely on consultants. The significant events of history—growing technology, for one—
6
•
Introduction
create ever-greater need for specialists and their services. There is a growing
amount of literature recognizing this truth and covering the subject as a matter of popular interest. There is evidence of increasing recognition of and
references to consulting in contemporary business literature, and an increasing number of independent specialists who identify and list themselves as
consultants.
But one thing has not changed; Many who do specialized technical or professional work, even work that consists primarily of advising clients—counseling—
do not call themselves consultants. Lawyers are lawyers or attorneys, never legal
consultants, and investment specialists are more likely to call themselves counselors or analysts than consultants. On the other hand, many firms that began life
as engineering, accounting, or other kinds of firms decided to diversify and become consultants (or perhaps they decided that what they did was consulting, as
witness Booz Allen, Ernst & Young, and Arthur Andersen, to name only a few of
the many large and prominent firms recognized as successful consulting firms,
no matter how they list themselves in telephone books and other directories).
In short, many firms become consultants without changing anything at all except the description of what they are. They change a few words on the business
cards, letterhead, and other literature, but they continue to do what they have
been doing—serving clients in a variety of ways as advisers and service vendors.
Defining yourself as an independent consultant depends primarily on what
you choose to be and do, on what kinds of assignments or contracts you choose
to accept, and on how you deliver your services, but not on what you call yourself. You can accept only problem-solving jobs, if you wish, although you will
probably limit your market if you do. You can refuse assignments that require
you to write lengthy formal reports or make formal presentations to the client’s
assembled staff, if you rebel at writing or public speaking. You may confine
yourself to assignments only in your local area and refuse to travel, if you dislike
travel. You can, in fact, establish whatever rules, policies, and procedures you
wish. In so doing, you may define just what that title independent consultant
means for you and your own practice. In fact, only you can define the term for
yourself and for what you do.
THE MORE IMPORTANT VIEW: THAT OF THE CLIENT
However you view yourself and your practice, you do not control how a
prospective client perceives you and your services. Does that matter? It certainly does matter, if you are to market successfully. You can sell successfully
only to the client’s perception and the client’s expectations, not to your own.
Perhaps you can shape the client’s perception and expectations to some extent;
marketers do that—or try to—constantly, sometimes with success, sometimes
without it. But it can be risky to try to modify the client’s perception. It requires great skill (and in many cases it cannot be done at all), and the cost of
failure is not to win the contract and sometimes to lose the contract you won
earlier. It is usually more practical to determine what the client expects you to
be, whether that is scholar, expert, trainer, troubleshooter, mentor, guide, hard
The More Important View: That of the Client
•
7
worker, resident sage, father confessor, writer, and/or other functionary, and
try to conform to that image. (Note, too, that the same client may have different expectations in different situations, depending on what the client perceives
his or her immediate need to be in each situation.) Your success in marketing
yourself as a consultant depends largely on these factors:
1.
How accurately you have assessed the image you must project and how
well you have succeeded in projecting that precise image.
2.
How well you have estimated what your prospective clients want, including how they perceive their needs and problems.
3.
How effectively you have convinced the prospective client that y o u —
you and your image, that is—are exactly what he or she is looking for.
4.
How effectively you have disseminated that image—made enough
prospective clients aware of you, your image, and your availability to
help them overcome their problems and magnify their success. (In marketing, statistics and playing percentages are all important.)
Although presented in the context of achieving marketing success, these
factors are equally important to achieving client satisfaction after you have
won the contract (which is itself a factor in marketing). Everything you do
after winning the assignment must confirm and reinforce the image and expectations you generated or confirmed earlier. As in all marketing, truth is whatever the client perceives as truth; it is the client who decides what he or she
accepts, and you must understand the client’s perception always. It is also no
less important to create a favorable impression generally. You will always have
difficulty satisfying a client who has an adverse impression of you. But you
will find it rather easy to please the client who has a favorable image of you.
Clients tend to see what they expect and want to see, just as we all do.
There are many hazards in consulting independently, many of them peculiar to being a one-person show. For one, as an independent practitioner, it is
extremely difficult to cope with the feast-and-famine nature of consulting. It
is difficult—frequently impossible—to backlog consulting assignments, and
yet you have only so many hours a day available. How do you smooth out those
peaks and valleys? Some jobs require several people; how do you cope with
that successfully so that you do not lose the contract? Some clients simply
cannot afford your regular, direct rates, although they have need of help. How
can you help them—and yourself—without resorting to the dubious practice
of cutting your standard rates?
Experience demonstrates clearly enough that there are still three especially
noteworthy things about consulting:
1.
Consulting has more than its share of detractors who question its merits
and its necessity and the capabilities and integrity of its practitioners.
2.
Consulting remains difficult to define; the debates and controversies
over what it is (and what it is not!) continue to rage, although perhaps
not as vigorously as in the past. (Are we gaining recognition?)
8
•
3.
Introduction
Despite these problems the markets for consulting—the use of consultants, that is—and the number of consultants in everyday practice continue to grow.
The need for specialists of all kinds keeps growing. Nor are the two
trends—the growth in markets for consulting and in numbers of specialists
hanging out their shingles as consultants—unrelated; they are the logical and
inevitable consequence of several forces operating in the modern world, including at least the rapid increases in technological, political, economic, industrial, and other complexities of our society; and the rapidly rising average level
of education, as young people go to college in ever greater numbers. It is inevitable that consulting will continue to grow and be a force in the business
world and in society in general.
Yet, despite this, there is the strange phenomenon that consulting proves
to be an elusive quantity, like quicksilver, when you attempt to capture it in a
definition. Try, for example, to look up Consultants in the yellow pages telephone directory of any metropolitan area, and you will experience some frustration immediately; there is no such heading in most directories. But look it
up in the index to the directory, and you will find a long string of consultant
listings, at least in my own Washington, DC area.
The fact is that consulting is not a profession in itself, but a way of practicing a profession. The engineer who consults remains an engineer first, and a
consultant only after that. The physician who consults does not give up being
a physician first, nor do any of the others who turn to consulting change their
professions. They change merely the arrangements under which they render
their services, and often the kind of individuals and organizations to whom
they render the services.
That latter aspect, who the clients are, gives us another clue to the nature of
consulting and consultants, for we can divide the consultant’s clients into two
broad classes: peers and others. Most consultants serve one or the other, but
some consultants serve both. The physician invariably serves his or her peers—
other physicians—when called on to consult. But a public relations (PR) consultant would most often—almost invariably—serve a client who is a completely
lay person at PR. An engineer would be most likely to serve other engineers as
clients, but could easily be called upon by a client who is not an engineer.
This is an important point, one we shall discuss further. It has a great deal
to do with how you conduct your practice and especially with how you do your
marketing. But it also has a great deal to do with defining what you do as a
consultant. A n d the necessity for doing that will also become more and more
apparent as we proceed.
While I was hard at work gathering information for and writing the original, first edition of this book, an extremely important development was taking
place, a development that I and millions of others were not much more than
dimly conscious of: The desktop computer, or the personal computer, was
rapidly coming of age. I B M , for example, had finally realized that this new toy
was going to become a major industry, and that Apple Computer was going to
The More Important View: That of the Client
•
9
become an important company. But even within I B M itself, outside of the new
microcomputer division in B o c a Raton, Florida, there was little consciousness
of this, as I learned when I called their other divisions and could get no usable
or even sensible information on the subject.
And so the first edition of this book was created on a Selectric typewriter,
whereas the third edition was created via a WordStar word processor and
printed out as a manuscript on a laser printer. But what is most significant is
what the desktop computer has achieved for consultants, as well as for others—
for consulting.
For one thing, it has created an entire new class and population of computer
consultants, who specialize in small (desktop) computers and problems related to desktop computers. These consultants help millions of new computer
owners and users select, install, and learn to use the machines. But it has also
placed a priceless tool in the hands of independent consultants, giving them
resources that only large and powerful consulting firms enjoyed before.
The wise consultant will make it his or her business to be equipped with a
suitable desktop computer and to learn all its uses. In this new edition, I will
try to help you do this.
What Does (Should) a
Consultant Do?
Better to be proficient in one art than a smatterer in a
hundred.
—Japanese Proverb
There is nothing especially unusual about the services provided by the typical
consultant, nothing, at least, that distinguishes them from other contracted-for
specialist services, such as those that might be rendered by an interior decorator, image counselor, financial advisor, or freelance package designer. The differences between these individuals and the consultants who provide similar
services is the name by which the individual identifies him- or herself and
what he or she does. In this chapter, w e ‘ l l ignore the facade of titles and look
at some of the most active fields for consulting and at several aspects of the
consulting industry, especially as it pertains to independent consultants.
As a first step, w e ‘ l l look at those consultants who are most often employed
on the client’s premises on a full-time basis, often long-term (many months,
and even years, in more than a few cases), as a quasi-employee. That is a phenomenon of the modern technological age and especially in evidence, at least
until now, in areas of high technology and large federal contracts. Among the
most numerous of the warm bodies working as contractor personnel on clients’
premises are the many varieties of computer specialists, especially those who
create the software programs and solve the software problems.
COMPUTERS AND DATA PROCESSING
The very word computer has now acquired meaning for the average person,
who by now has seen at least one modern desktop computer, even if he or she
has never seen one of the earlier behemoths, with their desk-size consoles,
spinning tape servos, and other whirring, whirling, and clicking peripheral
Computers and Data Processing
•
11
equipments. Those early machines spawned a great many consulting jobs, especially jobs for consultants who specialized in writing custom programs.
There were then relatively few ready-made programs, and even the available
ones were rarely suitable for general applications. So hundreds of thousands of
individuals became computer programmers, many of them independent consultants, others evolving into large consulting companies. But not all these
computer specialists were programmers, literally; many were known by other
titles, such as systems analysts, systems designers, system engineers, and computer operators. And there were often gradations within categories, to indicate
levels of experience and capability, such as senior systems analyst and junior
systems analyst, or they might be graded numerically. They might even be
given other titles—information analyst or data designer. As the computer and,
especially, the software industries grew, further modifiers and qualifiers were
added to the descriptions of the individual’s qualifications and capabilities, so
that a programmer would also have to list the various computers and computer
languages he or she was familiar with and, finally, the kinds of programs in
which he or she was most experienced. There was a steady proliferation of
areas of specialization and expertise, as the technologies of the hardware and
software evolved.
In the hardware arena, for example, one of the most troublesome areas was
once that of data storage, and the improvements evolved through several stages
beyond that of the familiar punched card, through banks of electronic (flipflop) circuits, tape on large reels, magnetic drums, magnetic cores, and even a
few other things before the modern and efficient hard- and floppy-disk systems evolved. And at each stage manufacturers were eagerly seeking engineers
experienced in whatever was the current latest method for storage of data. Not
finding enough qualified applicants to accept jobs, many manufacturers turned
to hiring consultants to work on-site as long-term contract labor—temporary
employees, in effect.
The picture was the same in the software industry. Companies who could
not hire enough qualified employees or could not wait for the relatively slow
process of recruitment—seeking, finding, and selling—necessary to produce
required staffs, often resorted to contracting for the services of technical/professional temporaries—consultants—to fill the gaps as contractors. (The National Association of Temporary Services reports six to eight weeks as the
average time to fill a position with a new hire, a few days, often as little as one
day, to fill the job with a temporary worker.)
A great deal of the cost was passed on directly to the federal government
via cost-plus contracts, especially in military contracts, but also in others,
such as the N A S A space program. Hundreds of thousands of such consultants worked for the General Electric Company, R C A , General D y n a m i c s ,
Boeing, North A m e r i c a n R o c k w e l l , M c D o n n e l l Douglas, Northrup, Hughes
Aircraft, TRW, General Motors, Ford, and many other supercorporations as
well as smaller, less well-known companies developing weapons and space
systems under major government contracts. But it was not only contractors
and private industry who made use of consultants working as contract labor
12
•
What Does (Should) a Consultant Do?
or temporaries; many government agencies also found this an expedient way
to get their own, in-house projects completed. T h e N A S A bases, for example,
employed many such consultants, as did many military bases where a great
deal of R & D work was being conducted. Civilian agencies also used this
method for hiring hard-to-find specialists. T h e U . S . Postal Service, for one,
used many contract engineers, technicians, drafters, and designers, and
many of the major computer installations in federal agencies were and are
today operated by such contract personnel working on the government’s
premises. Many other kinds of government installations—the U . S . A r m y
ordnance explosives plants, for example—are operated by contractors. In
fact, there is a supply group classification for this in the federal procurement
system. Relevant requirements are listed under category ” M : Operation and
Maintenance of Government-Owned Facility.”
This is history, and much of it took place under the pressure of military
needs and the drive to beat the Soviets in the race for both commercial and
military use of space. The pace of it has abated now, with the end of the Soviet
Union and the cold war, but although less frantic, such hiring of consultants
still goes on, and still on a large scale. For many consultants this type of work
has become a way of life, a regular career. It can be a gypsy kind of life; to
work regularly on contracts in these dynamic industries, one must be willing
to go wherever the next job is. But that suits some individuals; there are those
who like to keep moving and keep seeing new places. In fact, some of the most
resourceful of these modern itinerant workers manage to find jobs in the climates of their choice, such as the Sun Belt in the winter and New England in
the summer. It suits those, also, who want a much greater income than they are
likely to make on a fixed job with an organization. Consultants generally can
earn up to twice as much as regular employees would in the same jobs (and
even more, in situations where specialists are in especially short supply or the
assignment involves hazards and hardships), although with considerably fewer
fringe benefits. (They also earn per-diem living allowances when more than
50 miles from their official home bases.)
This set of conditions, with its advantages and disadvantages, is not confined to the computer and data-processing industries; it is far more widespread
and general than that. Today enough individuals earn their livings via such
means that they have become a major part of the income-tax base. The most
recent figures (from the National Association of Temporary Services) provides a few significant statistics:
•
1,100+ temporary-help companies, operating 7,300+ offices in the
United States alone
•
6.5 million workers filling more than 1,000,000 job assignments daily
•
Total payroll in excess of 10 billion.
That has led the IRS to adopt regulations to define the legal and tax status of
independent consultants and contractors, making it difficult for such indepen-
The Aerospace Industries
•
13
dent workers to write off relevant expenses. It is no small problem to many independent consultants today. Later, we will discuss this problem at greater length.
THE AEROSPACE INDUSTRIES
The use of consultant specialists as temporary employees predates the computer industry. As a direct result of World War II and its consequences, specifically the emergence of the Soviet Union as a major military power and
potential threat to the western world, the U . S . government decided not to dismantle our huge military organization and lapse into typical peacetime somnolence, but rather to accept our new role as one of the only two remaining
superpowers. We accepted what our government saw as our obligation to be
the strongman of planet Earth and to develop powerful new weapons and
systems. So, as cold war became the status quo, reorganized U . S . military organizations were given huge budgets and authority to begin developing supersystems of all kinds. Most of these weapons and systems involved the new high
technologies of electronics applications—radar, sonar, missiles, computers,
secure communications, jet aircraft, helicopters, and sundry other BuckRogers-like technologies.
A new phenomenon appeared, reflecting a change in the thinking of the military developers; equipments (this new Pentagonese came into popular and accepted vogue quite quickly, as did another bit of Pentagonese contracting jargon,
deliverables) were soon perceived not as singular, independent items, but as
components of greater entities—of systems. They all became, in fact, military
weapons, killing machines. A fighter aircraft was no longer an airplane, but a
weapons-system, an entity involving radar, fire-control mechanisms (which
means aiming and tracking systems), and other sophisticated defensive and offensive gear integrated as a system. This philosophy of collecting complete complements of equipment into single systems identified as weapons extended
gradually to even larger, often city-size, entities, such as the Navy’s destroyers
and cruisers and the Air Force’s largest bombers and reconnaissance airplanes.
Airplanes became defensive and offensive systems. Self-contained in capabilities for detecting and neutralizing hostile attacks, they could also carry out their
own attacks using a variety of individual weapons—machine guns, light cannon,
and missiles—especially the latter, as the years wore on—while also using such
other weapons as napalm, rockets, and bombs against ground targets. (Even helicopters became gunships, equipped as systems for specialized kinds of missions in the war we carried on in Southeast Asia.)
The concept of integrated systems spread rapidly, and was reflected in what
was now identified as systems engineering, which again called for the services
of specialists who were in short supply. A great many systems engineers, individuals with broad enough interests and capabilities (both technical and managerial) to lead multidisciplinary teams, thus became consultants. And there
were many stories of employees who resigned their jobs, but never left their
14
•
What Does (Should) a Consultant Do?
desks. Instead, they merely changed status, now on the payroll of a job shop as
consultants or professional temporaries, assigned to continue doing what they
had done as employees of the client company, but now at a higher rate of pay.
They had given themselves promotions and raises, in effect, by changing their
status. Some even became independent consultants and contracted directly with
former employers to stay on in a new capacity, doing the same work. (In fact, a
great many independent consultants found their former employer to be their
first and most enthusiastic client.)
A contributing factor was that a new era had dawned in the world of technology. The concept of interdisciplinary specialties had arrived, and new problems
of hiring and staffing had to be solved; for example, what mix of specialists is
needed, and what kind of specialist should lead a team requiring a mix of different kinds of specialists? Suppose you need to put together a team to develop a
new missile system. You need to develop the rocket engine, airframe, launch system, guidance system, warheads, and perhaps telemetry. Because this is a highly
complex system of many complex components, you must also design and manage
complex tests to troubleshoot, debug, validate, and ultimately certify the resulting final system as an integrated entity. You must prepare operating and maintenance procedures, and full documentation for operation and maintenance. That
spells out a need for mechanical engineers, stress analysts, chemical engineers,
electronic engineers, test engineers, maintenance engineers, technical writers,
illustrators, and more than a few other specialists to put the whole system together. Where and how will you get all these expert specialists, and who should
lead that team? (To this day, that latter question has not been fully answered, and
perhaps there is no satisfactory answer to it. Perhaps our knowledge and our ambitions have reached beyond the technical and managerial capabilities of even the
most talented individual.)
The economics of doing business this way are relatively simple. The government might allow the contractor $30 an hour for some given type of specialist.
The firm supplying the specialists might charge the government contractor $27
an hour for the specialist, and pay the specialist $19 or $20 an hour. This provides the specialist about 50 percent more than he or she might earn as the typical direct employee of the client company, while providing the supplier of the
specialists some 10 percent net profit. (The actual numbers will almost surely
vary quite widely from this hypothetical case, of course, but the principles will
be the same.)
That typical 50 percent differential between what the specialists could earn
as the consultant/technical temporary and the direct employee explains why so
few such specialists resisted the many offers they received to go direct with
the client companies. It was easy to decline.
In fact, those specialists who choose to make a career of being job shoppers
(the firms who hire them and assign them to client companies are known colloquially as job shops, although many refer to themselves as consulting firms and
to their employees as consultants) are virtually a subculture of their own, jeering openly among themselves at the thought of going direct, referring to it almost as an act of heresy. By far the majority work for one of the many job shops,
The Aerospace Industries
•
15
but many are independent even to the extent that they place themselves in their
work assignments—contracting directly with the client companies, that i s —
thereby controlling their own situations entirely. (This generally comes about
after the consultant has become thoroughly experienced in this way of doing
business and knows many of the client companies and is well known to them as
a competent and reliable individual.)
In many cases the situation is quite complex, and the client for such services
may be a sub-subcontractor, especially when the project and original contract
are large ones. Even the largest corporations cannot and do not try to do everything. To perform on most of the huge government projects, even the largest of
the supercorporations must award hundreds of subcontracts, many of those
quite substantial and awarded to other great corporations. The basic contract for
the Atlas missile system, for example, went to General Dynamics, who awarded
a large contract for a supporting subsystem to R C A ; I B M was a subcontractor to
International Telephone & Telegraph (ITT) on a large A i r Force logistics network (the 465L system); and GE developed heavy radar sets for the Ballistic
Missile Early Warning System under contract to R C A , the prime contractor for
the system.
In these circumstances, where the contracts are in the hundreds of millions
and may even run to well over a billion dollars, there are usually several hundred
subcontracts, many of them rather large, imposing a temporary labor burden on
many of the subcontractors, as well as on the prime contractor. In many cases the
contractor does not want to hire people as regular, permanent employees, knowing that the contract represents a temporary need for more people who would
become surplus when the contract is finished. Although consultants are often
hired as temporary employees because it is the only way to staff a project rapidly
enough with qualified specialists, in many other cases consultants are hired as
temporaries because it makes better economic and business sense to do so. It
costs money to hire people, especially in the large organization; advertising, interviewing, paperwork, relocation, and numerous other costs are incurred in recruiting employees. Terminating no-longer-needed personnel also costs money.
And there are many legal obligations today in hiring people, as well as problems
in terminating them. The technical temporaries represent a way around many of
these problems. They can be hired quickly, with little paperwork and little legal
obligation, since they work for a contractor, not for the client, and they can be
terminated as easily when the need ends. Moreover, if and when a temporary
proves to be unsatisfactory as an individual, there are no complications in having
that individual’s services ended, whereas it is not always a simple matter today to
discharge a permanent employee for cause. (These are among the effective sales
arguments employed in selling consultant services.)
The sizes of programs for temporaries—numbers employed and duration of
assignments—vary widely. N A S A has used rather large forces of such personnel, notably in engineering and computer-related work, and General Electric
Company has almost traditionally employed large numbers of temporaries in
the various engineering functions of their missile and space programs. In fact,
where the project requires large numbers of temporaries, it is not unusual
16
•
What Does (Should) a Consultant Do?
to have temporaries from a half-dozen or more firms working together on
the premises.
As to duration, that also varies from a few days to several years. That is, a
consultant may be employed on an indefinite basis, and be kept on for one project
after another. At the Philadelphia-area plants of the GE missile and space systems many consultant temporaries were assigned there for as long as five years.
And very much the same situation prevailed at the large training center Xerox
Corporation established in Leesburg, Virginia, near Washington, where they
hired several dozen training technologists, many of whom remained on assignment there for approximately five years. Those were all hired—placed under
contract—as self-employed individuals or contractors working on the client’s
premises.
It is usually not by design that these assignments last so long. Frequently the
assignment starts as a relatively short-term one of several months, but new contracts come in, and the consultants are asked to remain. This can continue indefinitely, the client always acting on the reasonable assumption that the need is
temporary. (The word temporary thus becomes rather flexible in definition.)
The practice of bringing in whole staffs of specialists, whether they are
called consultants, contract labor, professional temporaries, on-site contractors,
or contract labor—all of these terms are used—has become rather widespread
in all sectors of the economy—in major government contracts, in commercial or
non-government industry, and in government itself. Many federal institutions
and facilities are staffed and operated by such personnel, especially by agencies
doing technical w o r k — N A S A , EPA, and D O D , for example—but not exclusively so. The A i r Force has contracted with private industry to manage and
operate a warehouse in which it stores the many technical documents required
to support its vast array of complex equipment systems. The Postal Service
Training and Development Institute awarded a contract to have a private firm
administer its correspondence courses in Norman, Oklahoma. The General Services Administration hired a private firm to run a chain of stores selling personal computers to government buyers. The N A S A Scientific and Technical
Information Facility in Maryland is staffed and run by a contractor. There
are many more such situations, where it is more expedient or more efficient to
contract out the management and operation of a government operation, even on
government premises.
Most clients for consulting in this mode—hiring consulting specialists
as temporary employees—have the common problem of needing a temporary
force of specialists of one sort or another, usually to staff a special project that
represents a nonrepetitive peak load. But this is not always the case. Some
clients have more classical problems, problems that are solved not by the mere
recruitment of a staff of specialists on a temporary basis, but by technical
problems that the consultants are expected to solve for them.
One such case was that of Remington-Rand, once a computer division
of Sperry Corporation (now Unisys). This organization had built a customdesigned, state-of-the-art computer for a California customer, and was approached by the U . S . Navy with an invitation to build another for them, albeit
The Aerospace Industries
•
17
with a few changes, such as a much greater memory. The trouble began when the
Navy rejected the user manuals the company offered. The Navy refused to pay
until an acceptable set of manuals was produced for them, but the publications
staff at Remington-Rand had been producing commercial manuals, and was not
familiar with typical military requirements for technical manuals. The company
thereupon felt forced to contract for consultant specialists to assist their publications staff in making the manuals acceptable to the customer, a project that
consumed several months.
Today we have a great many computer consultants, and the number is growing steadily as a result of two influences. One, the number of computers is growing exponentially, since the advent of the low-cost, personal computer, which
has made it possible for almost everyone in even the smallest business or professional practice to own at least one computer; two, the computer industry continues to become more and more sophisticated, and that means it has become and
continues to become more and more complex in both the hardware and software
aspects.
A factor in the hardware aspect of the growing complexity is the vast number
and variety of computers. When I B M entered the desktop-computer market with
its I B M PC, it quickly became a dominant design influence in the market, and
the entire industry began a rapid conversion to the production of I B M lookalikes,
advertised loudly as I B M compatible, with the arguments that these IBM-like
“me-too” machines would do almost anything an I B M PC would do, and for a
great deal lower price. But I B M went from its PC to even more sophisticated
machines—an XT (for extended technology) and an AT (for advanced technology) now supplanted by the PS series. The imitators—IBM clones, in the popular
jargon—followed suit with lower-priced compatibles for those, too.
Still, there is more. There is a universe of possible configurations of these
machines into systems, with various sizes of memories, drives, keyboards,
monitors, software, accessories, add-on boards, operating system versions,
and sundry other items, so that even an expert is soon confused.
Where the computer consultant of the prepersonal-computer days was probably called upon most often to help a client with the programming—software—
problems, many of today’s computer consultants find that clients want help in
selecting the right system for their needs or are already in trouble. That is, they
may be buying a first system, be ready to get a larger or more sophisticated
system (e.g., multi-tasking, multi-user, or local area network), or have already
bought a system that doesn’t do what they need it to do. Software problems are
less urgent today because of the wealth of proprietary software available.
This is not to neglect the more classical consulting situation, in which the
client not only has a problem to solve, but the problem is so highly specialized that part of it lies in finding the right consultant for the job. In one case,
my own clients found themselves in need of a specialist in Tempest and
EMP-hardening technology, areas concerned with data security and system
survival under nuclear attack. There are many engineering people w h o know
a great deal about these technologies, but in this case the work involved precise compliance with a highly detailed and sophisticated military technical
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What Does (Should) a Consultant Do?
specification. Esoteric although this subject is, there is enough demand to
keep an expert busy advising electronic companies, even the largest ones,
about it. T h e y managed to find one such expert w h o turned in an excellent
performance, but there are probably not a half-dozen others quite as knowledgeable as he about this specialized lore.
In the same vein, some years ago N A S A commissioned a venerable Japanese
scientist to write a definitive work on celestial mechanics because he was considered to be by far the most highly qualified person in the world for this assignment, and he was so well along in years that N A S A feared the loss of his great
knowledge if he did not soon record it.
Many consulting specialties are not in common supply, but also are not so
rare that it is extraordinarily difficult to find qualified practitioners. My own
specialty is one of these. I write, lecture, and consult on marketing generally,
but especially on government marketing, and clients call on me often to help
them write proposals, the key to government contracts. There are not a great
many consultants who can boast honestly of an impressive track record in writing winning proposals—good proposal writers must be sought out—but the skill
is not so highly specialized that the talented proposal writer is a rare and much
sought after expert.
During the Great Depression, there grew up a consulting class known popularly as efficiency experts. These were individuals who claimed an ability to
raise operating efficiency in companies and so reduce costs, an unusually attractive prospect. Business people, even those operating large companies, found
it difficult to resist the lure of relieving some of the economic pressure that
threatened to force them. More than a few companies succumbed to their blandishments and brought teams of efficiency experts aboard to work their magic.
How good were they? It’s hard to say for they ran into a buzz saw of opposition from employees and labor unions. Many of the latter were then struggling
to establish and justify their very existence, and understandably, they saw efficiency experts as the enemy who was determined to eliminate jobs, and therefore did everything they could to discredit the whole idea. Efficiency experts
vanished into history, at least in part as a result of having lost the battle of publicity and common acceptance. Well, perhaps vanished is not quite accurate.
The term efficiency expert that vanished to be replaced by today’s term for the
discipline, industrial engineer, also called methods engineer—specialists in designing workplaces and work systems for greatest efficiency.
Industrial engineering and methods engineering are respectable professions
today. Large industrial firms often have such experts on staff, sometimes serving the firm as internal consultants, but there are still many opportunities for
independent industrial engineers to win consulting assignments with firms
who have only occasional need for such capabilities.
THE CONSULTANT ORGANIZATION
There are at least two distinct types of consulting organizations, although
there are the inevitable hybrids (it is never a black and white world!) that blur
The Consultant Organization
•
19
the distinctions. The first type is that which we have been discussing here: the
supplier of technical/professional temporaries. The second type is the consulting organization that undertakes a project, generally under a contract, with a
defined end-product or service to be delivered, and with work done most often
on the consulting organization’s own site, but if necessary on the client’s site
or on both sites.
The Job Shop or Supplier of Temporaries
Typically, the job shop must submit a bid for each contract to provide on-site
consultants. In most cases, job shop employees are really potential employees,
slated to be employed only as long as the j o b shop has a client to send them to
and bill for their services. Therefore, employment by a job shop is a technicality and coincides exactly with assignment to a client, and not one hour longer.
Normally, the client does not simply order a number of anonymous warm
bodies, but selects the bodies to be ordered; the client wants to see resumes of
available consultants, and often wishes to interview before asking for quotation of rates, to satisfy himself or herself that the consultants are suitably
qualified. Clients may not scrutinize these resumes quite as closely as they
would those of prospective new hires, but they do study them with some care,
and they do normally interview candidates.
Typically, the job shop quotes consultants by classes, asking the same rate
for each person in a given class, although not necessarily paying each person
in a given class the same rate! (Beginners in this kind of work almost always
sign up too cheaply, but they soon learn what to demand.) The fringe benefits
are scant, consisting of a few paid days off and perhaps a group hospitalization plan. A n d the employee often qualifies for paid days off only when he is
employed for six months or a year, which is far from certain to happen in that
work. (Most job shoppers change employers frequently, as opportunities are
presented.)
This arrangement permits the job shops to operate at low overhead, an absolute necessity for survival in that field. T y p i c a l overhead rates are about 35
to 40 percent, which must cover insurance, taxes, miscellaneous costs, and
profit; however, when the job shop is fortunate enough to hire well-qualified
beginners, they may earn considerably more than 35 to 40 percent gross profit
on those individuals.
Some hardy individuals far prefer the frequent changes of jobs and locales, the
financial benefits of job shopping, and the many vacations they are able to take
(between assignments), so they make a career of such work, earning at least
half again as much as they would on salary, and in many cases considerably more
than that. There are also some individuals who choose that mode of working because they are unable to win jobs on the regular payroll of a company, because
either they are too old or can’t pass a medical examination. Large companies
often have rather rigid policies that bar older people, not necessarily because of
their age alone, but because they cannot pass the insurance examinations. Job
shopping is thus often a boon for people who are well beyond the typical retirement age, but are still active, alert, and capable of a full day’s work everyday.
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What Does (Should) a Consultant Do?
(Many are, in fact, retired from lifelong careers, but unwilling to spend the rest
of their lives sitting on the porch and rocking slowly.)
Although there are many hardy perennials in the field, there are a great
many individuals who turn to that mode of working for a short while, attracted
by the money or temporarily unable to find a job. Many soon tire of the uncertainty and the constant moving about necessary to work steadily in that field.
Seasoned by the experience of a few assignments, they move on to work they
find more satisfactory as employees or as independent consultants. In fact, it is
not at all uncommon for job shoppers to make such a good impression on clients
that the clients offer them permanent employment. A l l of this results in a steady
turnover in the field, making it relatively easy to break into it as a port in a
storm, a training ground, or a starting point in a career.
THE CONSULTANT COMPANY
Many people do not consider the job shops to be true consulting organizations
nor job shoppers to be true consultants. On the other hand, there is the wellknown difficulty in defining consulting in today’s business and industrial complex. For example, among the many procurement categories the government
employs to classify and organize its purchasing, there is H: Consultant and Expert Services. One might expect that anything listed here would be consulting
without question. Among the services requested here, however, are real estate
appraisals, computer software programming, technical writing, surveys, and
other pedestrian chores that we do not normally conceive of as consulting chores.
There are also a great many firms offering management consulting, among
other services, because that term appears to encompass virtually any service a
business or any other kind of organization might need.
Prominent among these are the major accounting firms—Ernst & Young; Deloitte & Touche; Haskins and Sells; Price Waterhouse; Coopers and Lybrand;
and Arthur Andersen. Accounting firms obviously find it expedient—perhaps
easy—to make the transition to management consulting and conduct major operations under that business umbrella, judging from the number who have done
so successfully.
But it is not only accountants who find that a useful transition. Engineering
firms, such as Booz A l l e n and Hamilton, have also migrated into management
consulting, as have firms in training development, public relations, and a great
many other successful firms in specialized businesses, service and otherwise.
But it is not only already-established companies who make such transitions.
Individuals launch their independent consulting practices from a base of experience in some given industry, for the potential for practicing as a counselor or
consultant in any of today’s many specialized fields is almost unlimited. In
fact, although none such firms or individual practitioners list themselves under a main heading of consulting as their basic category, they do make it clear
that they offer consulting services, whether the listing is consultants or counselor, services, or others. Witness the lengthy, and yet only partial, list offered
later in this chapter.
The Consultant as a Self-Employed Independent
•
21
HYBRIDS
We have looked at two basic types, which may be considered to be at the extremes of consulting, one being rather classic consulting, recognized as such
by even the purists, while the other barely qualifies as consulting to some. But
the world is not black and white, and a great many consultants and consulting
firms fall between these extremes of definition. In fact, it is probably a fairly
rare firm that does not fall between these extremes and have at least some of
the characteristics of each case.
There is a distinct difference between supplying technical/professional
temporaries and carrying out projects on-site (on the client’s premises, that
is). In providing technical/professional temporaries, the consultant firm is
selling hours of professional effort, normally at a per-hour rate. T h e firm is
obligated only to supply qualified personnel, as agreed to and contracted for,
and does not incur responsibility for the project, whatever it is. It is up to the
client to make best use of this labor—to manage the effort and the people. It
is the client who is responsible for the result, and who must pay the hourly
rate for every hour expended by the temporaries, regardless of result, just as
with internal, direct employees. ( O f course, the client may terminate summarily the services of the supplying firm or of any individual supplied.) In
carrying out a project on-site, (whether entirely or only partially on-site) the
contractor must assume responsibility for the project overall—for the endresult, which means also for the management of the staff, regardless of where
they are physically employed. It is a critical difference. A n d it should be
noted here in passing that under federal laws, you must always manage your
own employees when they are working on-site at some federal facility because the law prohibits civil-service employees from giving direct orders to
or being given direct orders by contractor personnel. Ergo, the on-site contractor must always provide on-site supervision and management of the staff
working on-site. (Civil-service employees provide only technical direction to
the contract personnel working on federal premises.)
Aside from that, a great many firms who specialize in supplying professional temporaries also have in-house capabilities for staffing, managing, and
carrying out projects on their own premises. But many of those firms whose
main enterprise is handling projects in-house are quite willing to carry out
projects on the client’s premises or to supply professional temporaries, so that
distinctions between the two tend to disappear.
THE CONSULTANT AS A SELF-EMPLOYED INDEPENDENT
Much of the foregoing discussion is outside the scope of this book, in one sense,
because this book has the objective of focusing on the individual, independent
consultant. As an independent consultant, however, you should be familiar with
all kinds of organizations and markets for their services, for you can take advantage of all these modes of selling your services too. But, the case is a little
different with the individual, independent consultant working on the client’s
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What Does (Should) a Consultant Do?
premises, even on government premises. Here you must manage yourself, and
the distinction between technical direction and direct orders becomes somewhat blurred. Even in the case of the client in the commercial or private sector,
when you are working on a client’s premises as an independent consultant, you
usually find it necessary to be project oriented—to be at least as much concerned with final results as with conscientious effort. In a career as a consultant, if you are aware of and alert for these opportunities, you will almost surely
find yourself able to take advantage of them to sell your expert services in all
these consulting modes.
Whether you find yourself working mostly on clients’ premises or in your
own office depends largely on the kind of consulting service you provide, and
perhaps even more on the basic nature of your clients. If you counsel individuals in personal matters, it is likely that you will have to arrange to receive them
in your own offices. First, because fees are generally by the hour, usually
running to only an hour or two per consultation and by appointment, you must
see several clients a day, making it impractical to call on the clients. In addition, it is usually necessary to have a controlled environment—privacy and
quiet, for example—something often difficult to achieve in a client’s home.
A n d in at least some cases, you need direct access to certain resources, such as
a computer, a library, or files.
On the other hand, if you serve organizations and the nature of your work
is such that most of your assignments run to at least several days and are billed
by the day, it is likely that you will work largely and perhaps entirely on the
clients’ premises.
A FEW EXCEPTIONS
There are exceptions to this, of course. By nature, consulting is a custom service, and therefore must be tailored to each case. Even dealing with large organizations may result in clients visiting you and working with you on your
premises. Such was the case on more than one occasion when I was fortunate
enough to work with a division of Dun & Bradstreet, with a large hospital in
Florida, and with many other such clients. (In fact, except for presenting seminars, it is a rare occasion when I do not carry out part of my consulting work
in my own office.)
This does not necessarily mean that you must rent offices in a downtown
location or office building. Although I did just that for some years, I subsequently discovered that even major companies were not dismayed at finding
that my offices were in my home, and they were entirely willing to call on me
and work with me there. (In fact, some applauded the wisdom of minimizing
overhead costs by working from an office at home.)
Overhead reduction and other benefits of working from an office at home
are obvious; however, you must decide for yourself whether it is a desirable
alternative for you—whether you have suitable facilities for an office at home,
whether it is or is not harmful to your practice, and whether there are or are
Suitable Fields and Services
•
23
not local ordinances that prevent you from doing so. It is worth studying carefully before making a decision, and we shall have some further discussion on
this matter later.
SUITABLE FIELDS AND SERVICES
Probably everyone w h o enters independent consulting (or perhaps any independent business venture, for that matter) has an education coming to him
or her; the world we face is full of surprises, and the longer we live, the
more we learn how little we really know of it. My own early experience in
presenting seminars was an eye opener for me, but it reflects a common
problem of underestimating the value of what we offer, as I did in the example I cite here.
The Graduate Course Seminar
Many of us tend to assume that what we ourselves know well is common
knowledge. T h e first time I conducted a seminar on how to w r i t e proposals
for government contracts, I assumed that it would be a waste of time to teach
the rudiments. I therefore planned to focus my presentation on the grand
strategies that distinguish the great proposals, and brush hurriedly by the
basics I thought were common knowledge to everyone with an interest in
proposals and marketing to the government. In fact, I stipulated in my advertising that it was a graduate course and not at all suitable for beginners in
proposal writing.
To my surprise, a generous portion of the 54 attendees who registered for
that first session proved to be beginners, lured by my promises to reveal a
number of inside tips, techniques, and strategies I had learned or developed
over the years. (In fact, the cautionary note that it was not for tyros proved to
be more an attraction than anything else, and undoubtedly was at least partially responsible for the extraordinary results I got from my first venture into
seminar promotion.) There were also a number of thoroughly experienced people, including two senior executives who were in the process of forming a new
division of their large corporation. They had come to the seminar to see if they
could pick up even a handful of useful ideas.
Until I conducted that session, I had doubts that I could reveal enough littleknown information to justify the cost and the full day’s time spent by each
attendee. (I seriously underpriced that first seminar because of this fear.) I
was amazed to discover that even senior, experienced people were unaware of
many basic facts that I thought to be quite fundamental and even obvious about
proposal writing, facts that I would have expected senior executives to know as
well as I knew them. (Later, I had the satisfaction of having a senior executive
of one large company bring groups from his staff to two successive sessions of
my presentation, remarking that he found just one of the ideas I imparted to be
worth the entire day’s cost in dollars and time.)
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What Does (Should) a Consultant Do?
Let the Client Choose the Services
I was quite surprised by the reaction to my coverage of the topic of costs—
those cost analyses and detailed presentations required in most proposals. I had
originally planned to do little more than mention these briefly in passing. To
my amazement, that portion of my presentation proved to be one of the greatest areas of interest to the attendees. Even senior people, I found, tend to be
somewhat confused and uncertain about direct and indirect costs, overhead,
other direct, and many other basic cost elements and concepts, let alone the
more esoteric jargon and concepts such as G & A and expense pools. I had originally thought that even if the attendees did not know something of the subject,
they would be intensely bored by it.
This experience has been repeated in almost every seminar I have conducted,
and I am always slightly surprised by it. Aside from my difficult-to-shed feeling
that accounting is a boring subject to most people, I can never believe that experienced proposal writers in contracting companies have so little understanding
of what costs are, how they are generated, how they proliferate, how they are
classified, what they really mean, and how they must be analyzed and presented. That is because I myself found the matter of costs a fascinating and critically important one many years ago when I first became involved in proposal
writing. Unlike many other proposal writers, I was not content to surrender this
portion of the proposal effort to the accountants (maybe I was recalling what
Clemenceau said about war being too serious a matter to be left to the generals
and decided that costs were too serious a matter to be left to the accountants); I
insisted that I would work out the costs and let the accountants review them.
I insisted that I would not submit (and be responsible for the success of) a proposal until and unless I personally approved of everything in the proposal. In the
course of time, I became so knowledgeable about the cost side of the business
that I took such knowledge for granted and assumed that everyone writing proposals was equally knowledgeable. Therefore, I was too modest about what I had
to offer in this respect.
It’s a common enough error. Most of us assume that we have special knowledge or abilities to offer to those unfamiliar with our fields, but not to those
who are our peers in whatever those fields are. Not so: You can probably sell
your services to your technical/professional peers too, once you take the trouble to learn the areas in which they most need help, or what part of your special knowledge or skills will be helpful, yet is not widely known or available in
your profession. (Examples: shortcuts, methods, ideas, tricks of the trade you
have learned from especially knowledgeable old timers, through extensive special reading and studies, or through your own experience, introspection, and
innovation.)
We make the mistake too often of trying to decide for ourselves what our
clients need and want, when we should be asking the clients. That is, we should
be doing a great deal of experimenting by offering services and carefully listening and observing client reactions, to discover what works best.
This applies to virtually all professions and fields. Following, as the conclusion of this chapter, is a list of just a few of the many fields/areas in which
Suitable Fields and Services
•
25
consulting services are offered. Even these are, for the most part, generalized
items, with various specializations possible within each. (Many were derived
from the general index to the telephone company’s yellow pages directory,
which does not list consultants as a primary classification, but only as a subclassification within general headings.) Study this list to gain an appreciation
of the diversity. You may find yourself qualified to consult in more than one
field!
Even these are often too general. One security consultant, for example, may
be a specialist in security devices—locks, alarms, barriers, safes, surveillance
equipment, and other such items, while another is a specialist in guard forces,
patrolling, background checking, and other security measures based on direct
human surveillance. Most of the categories listed can be divided into several
subcategories. Career and vocational counselors, for example, may easily specialize in at least a half-dozen areas. There are many kinds of engineers—civil,
construction, mechanical, electrical, electronic, stress, and industrial—and
these are all subdivided into many narrower specialties. Designers likewise fit
into all kinds of categories—package designers, lighting designers, presentation
designers—as do most of the specialists listed here. It is a rare field today that
will not support a well-experienced specialist as a consultant.
Accounting
Educational counselors
Advertising
Engineering, general
Agriculture/farming
Executive compensation
Arbitration
Executive search
Audiovisual presentations
Financial management
Auditing
Food preparation
Automation
Forecasting
Aviation
Fund raising
Buisness and business planning
Grantsmanship
Business writing
Hotel management
Career and vocational counselors
Import/export
Communications
Industrial engineering
Club management
Industrial methods
Computer advisory services
Information
Contract administration
Insurance
management
Convention, conference,
meeting planning/arrangement
Labor relations
Lighting
Customer service
Management
Data processing
Marketing
Design
Municipal services
Drug and alcohol abuse
Organizational development
Editorial services
Personal security
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What Does (Should) a Consultant Do?
Public relations
Sales promotion
Public speaking
Security
Publishing
Taxes
Quality control
Technical writing services
Recreation program counselors
Training
Restaurant management
Transportation
Resume preparation
Weddings and social affairs
Safety
Word processing services
Sales management
Writing services
Seizing Opportunity
A wise man will make more opportunity than he finds.
—Francis
Bacon
The opportunities to become a consultant are far more numerous than is commonly supposed, especially in this technological and increasingly complex society. The examples are all about us:
•
A former bookstore manager, Hubert Bermont, of Sarasota, Florida,
built a successful consulting practice as a specialist in book publishing,
then went on to take his own advice by building The Consultants’ L i brary, his own publishing firm, specializing in books for and about consultants and consulting. Today, he heads up the American Consultants
League, an association for independent consultants, from his Sarasota
headquarters.
•
Marilyn Ross, of Buena Vista, Colorado, became a consultant and author
in publishing one’s own books, but she also conducts seminars and sells
books by mail (the Maverick Mail Order Bookstore). A n d to prove that
location is not of the essence—that remote locations need not be a bar to
success—consider this: Marilyn started in such a remote part of C o l o rado that she was unable to get a telephone installed unless she was willing to pay about $25,000 for a line.
•
Dottie Walters, the well-known public speaker, writer, publisher, and
public speaking consultant, all but stumbled into public speaking and
consulting, as so many do. Her career illustrates the power of imagination and perseverance, overcoming obstacles that would have discouraged many of us. She is today an outstanding example of personal
versatility and diversified services. When she is not busy traveling the
world as a public speaker, she is producing her bimonthly publication,
Sharing Ideas, for other speakers, writing and publishing books, conducting seminars, and serving as an executive, board member, or advisor
to several national associations.
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Seizing Opportunity
•
Many individuals have started resume-writing services, but among them
are also many who are…
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