Commando Consulting: April 2008 - Handling Consulting Prospects Who Are Dragging Their Feet Or Misbehave

by Tom "Bald Dog" Varjan, Organisational Provocateur

Summary: I suppose we've all had our fair shares of clients whom we should have never accepted, and should have abandoned at the first red flag. But we didn't. We kept working and by the end of the engagement we realise that we lost money, sleep and tonnes of personal or family time. How did it happen? How could we do this to ourselves? Audio Version (MP3): 55 minutes

In spite of our best efforts, every now and then we all end up with some foot-draggers who seem to have mission-critical issues at the moment of our first discussions, but then just before we would exchange the downpayment money and start the show, these absolute must-have, mission-critical issues suddenly become trivial, nice-to-have "backburner" issues. And the same prospects are frantically busy working on something completely different.

When it happens to us, we get pissed off to different degrees. Firms with 100% manual-labour based client acquisition get pissed off more because they've invested a truckload of resources (money, time and people) in dragging prospects even to the very first meeting or to the erroneous point of submitting a proposal for consideration. And when this hard work results in nothing, it obviously creates resentment for these prospects. It's just normal human nature. All the hard work of writing proposals, doing presentations and preparing some initial goodwill work to strut the firm's stuff goes down the toilet.

And What Happens When We Let The Tail Wag The Dog

This is the moment when many consulting firms mistakenly believe that workload is going up, and it's a 100% correct conclusion. So, they start hiring new people because they are now blazingly successful and incredibly busy.

And yes, it's getting busy temporally.

What they don't realise is that they are busy the wrong way. And that their busy-ness is in the mercy of a handful of clients who should have been rejected in the first place.

Why?

These are the clients who are over-demanding, demanding first class journey but willing to pay only for coach. They are the clients who call you at home during dinner and expect you to solve their problems right away. These are the clients who tend to treat their consultants as outsourced labourers, and expect them to do the kind of "dirty" work clients have neither time nor inclination to do in house.

I reckon, we all have had clients who expected us to do research which they already had somewhere either in the filing cabinet or in their heads. It was just easier for them to demand someone to do it than finding the document or writing down what was in their heads.

And while these clients can make your firm very very busy and even create the impression that you are doing great billable work, in most cases consultants get frustrated because they're doing mundane work for the wrong clients. Well, in this case, demanding arseholes.

And this approach undermines one basic fact of acquiring top-notch talents in order to do top-notch premium work. Top-notch talents don't get too excited to perform proverbial latrine duty for jerk clients who wipe their feet on the backs of their consultants.

So, when management tries to maintain busy-ness this way, the best people start jumping ship and either look for better work somewhere else or start their own consulting practices and take many clients with them, so they can receive better service.

Or the other option is that the workload sooner or later dies down and now management has to lay off all the people it hired to deal with the extra workload.

And This Creates A Serious Problem...

While on the inside this frenetic hiring and laying off cycle is normal, it has another impact on the outside perception of the firm.

For a few years now, as a volunteer, I've been involved in helping people with their careers, so to keep my fingers on the pulse of the industry, I apply for some positions from different job search sites. I can see that some firms hire on an ongoing basis. And what is a bit disturbing is that after receiving job offers from some, the same positions are being advertised again, which makes me conclude that something is seriously screwed up inside that company.

I believe that top-notch professionals are very selective with the positions they apply for, and when they see these repeat ads, they can only think that the companies they about to apply to have the typical "hire 'em => tire 'em => fire 'em" mentality to employees: Bring them in cheap; wear them to the ground; dispose of them unceremoniously.

So, who's going to apply for these positions? Well, no one with a certain level of self-worth and professional pride. Then who? Well, the bottom region of the unemployment scum barrel.

Nathan Mirwald, the former CTO of Microsoft once said regarding software developers, but it applies to all knowledge workers...

"Top software developers are more productive than average ones by a factor of 10,000 times."

And these top-notch folks need great stimulation from conducive working environments, great clients and sexy projects.

And The Traditional Approach To Cure The Illness Doesn't Work Because Managers Overlook Something Vital

I've recently come across some great data at Employee Retention Headquarters on what management believes employees want from their jobs and what employees actually want. Hold on to your hat and start reading. Of you fall on your arse in surprise, then scrape yourself up and look into your own HR issues and start aligning the two.

So, managers try to solve the problem using their opinions. But look at the differences at "Full appreciation for work done", "Good wages", "Promotion" and "Feeling "In" on Things", and you can realise that management is going down the wrong track.

Yes, paying peanuts is a demotivator, but paying significantly more is not a motivator. Well, not for the right people. And people who are highly motivated by money probably shouldn't be on your team anyway.

Using Douglas McGregor's theories of motivation, employees want to belong to a "Y" environment, whereas managers erroneously believe employees need a strong "X" environment.

In his 1960 book, The Human Side of Enterprise, MIT Sloan School of Management professor of social psychology, Douglas McGregor put forward two theories on human motivation.

According To Theory X The Average Person...

• Hates work and does anything to avoid it


• Aimlessly cruises through life without purpose, drive, ambition, sense responsibility


• Prefers to follow the crowd


• Is self-centred and doesn't give a rat's arse about others and the company he works for


• Hates changes


• Is rather dumb and gullible

According to Theory X, people must be cajoled, threatened and heavily controlled, so they do what the company wants them to do. Theory X accepts Machiavelli's theory that it's better if people fear their leaders than respect them.

According To Theory Y The Average Person...

• Can love good work


• Is inspired to achieve great and worthwhile goals


• Aspires to serve the greater good


• Lives and works to achieve self-fulfilment


• Seeks and accepts responsibility


• Is ready and willing to apply her creativity and ingenuity

According to Theory Y, when people are put in the right environment, they become the extension of that environment and the reigning culture. For instance, lots of convicts, after their release, put into great cultures and find their life purposes and become valuable members of society.

We Can't Solve A Client Acquisition Problem With An HR Solution

When we look at the issue, we can assume we have an HR problem. But do we really?

The best people are driven out by clients who don't fit into the firm's Ideal Client Profile. Just look at some career ads on Monster or even on Craigslist. Employers are bragging about being top innovators and world-class market leaders. But the reality is that many of them stay alive by accepting table scraps from bottom feeder clients.

Yes, they hire new people because they are flooded with crappy work, but they accept it because there is nothing better.

And it's tempting to fiddle with HR issues because the fiddling process doesn't cost a penny. Many people may know that the real issue is client acquisition, but that's a pricey topic, so many firms just leave it alone.

So, they comfortable to muck around with the symptoms but...

Totally Fail To Address The Real Cause(s)

After seeing this in so many client firms, my strong belief is that hiring new people should be the very last solution to any organisational problem. As Deming wrote so many years ago, in 97% of the cases the problem lies in the systems not in the people.

Here we have a defective system that floods the firm with bottom end clients, so the solution can't be to hire new people.

I reckon we all know people who take pain killers both before and after their aerobics classes to dull their pain. What they don't realise is that their pain is most probably caused by advanced osteoarthritis, when synovial fluid from their joints is seriously reduced and the joint cartilage is gone, and now the pain is caused by bone grinding on bone. Painkillers can dull the pain, but the activity wears the remains of the joint out altogether, and they are on the fast track to joint replacement.

And where is the problem coming from? It comes from an "over-humanised" lead generation system, where instead of objective systems, subjective humans set the criteria of whom to accept as a client, and these humans try to escort prospects from first contact to signed contract.

Yes, consulting is a highly subjective profession but not yet. Not in the lead generation stage.

Many firms make the mistake of investing serious human efforts before prospects make a shred of a commitment.

And it's not just commitment. Here we have to consider a broad range of psychological problems too, including...

Clients With Personality Disorders…

American Psychiatric Association (APA) describes personality disorders as...

"An enduring pattern of inner experience and behavior that deviates markedly from the expectations of the culture of the individual who exhibits it".

The Diagnostic and Statistical Manual of Mental Disorders (DSM), issued by American Psychiatric Association lists ten personality disorders in three groups.

Group A: Odd or eccentric disorders

• Paranoid personality disorder


• Schizoid personality disorder


• Schizotypal personality disorder

Group B: Dramatic, emotional, or erratic disorders

• Antisocial personality disorder


• Borderline personality disorder


• Histrionic personality disorder


• Narcissistic personality disorder

Group C: Anxious or fearful disorders

• Avoidant personality disorder


• Dependent personality disorder


• Obsessive-compulsive personality disorder

And many years ago the Soviet Union invented a very special personality disorder for people who deviated from societal norms, and decided to go against the fundamental grains of the well-established communist dogma. These people were called to suffer from social personality disorder and were treated as if they were psychologically disturbed. Many ended up in lunatic asylums and many others were forced to live the rest of their lives in Siberia, including doing forced labour in the dreaded Gulag.

Procrastinator Clients

For this "Me worried?!" type client everything happens tomorrow and there is plenty of time to address the issue. Everything you suggest is too quick and there are always many other things to take care off.

These folks basically drag consultants by their noses with rosy promises and incredible opportunities. But these opportunities never happen.

Haggler Clients

Every time I buy something anywhere, I always jokingly ask, "Any room for negotiation?" Then cashiers have a good laugh, give me a polite, "Not today, sir," and we all move on.

Hagglers are different. They consider discounts as their birthrights. The worst client I've had in this area is an electrician who left his union job and started his company. Unfortunately, he brought with him his socialist "union" mentality, specifically that he had the right to dictate anything to anyone in this world. As a unionised socialist, he got used to the idea that the world was revolving around his arse, and the human race's sole purpose is to provide him with happiness and prosperity. Then he tried to take this screwy mindset into the private sector.

Instead of a discount, I gave him a copy of Atlas Shrugged by Ayn Rand. Then he did some reading on Ayn on the web, and concluded that she was a self-centred and ruthless exploiter of people. Hm.

And another interesting thing also happened. A good few years ago I learnt from Alan Weiss, that when the client kicks up a fuss about the investment, start taking value components out of the engagement. And mention that every component we remove lowers the client's probability and velocity of reaching the set objectives. So, I did that. Then this guy went plain ballistic. Well, I love nuts in my morning porridge, and I have a dedicated nutcase in the kitchen containing all sorts of delicious nuts, but this kind of nutcase I can easily live without.

Just imagine the situation. You go to the airline ticket office and announce that you want to travel first class, but all you have is a $30. I reckon a ticket officer with a good sense of humour will hand you a pair of cheap Wal-Mart running shoes. Yes, you can reach your destination on foot too, but the probability of pulling it off and the velocity of the journey drops down pretty significantly.

Over-Committed Clients

Some clients just say that they want to achieve certain things but they don't have time to do it, so they need a consultant to do it FOR them.

The other version of the same problem is when you start the engagement and everything is just fine, but as the engagement progresses, the client pushes the initiative to the back burner.

Actually, I'm just thinking about something...

The hotness of chilli peppers is rated on the Scoville scale, named after the American chemist, Wilbur Scoville, who developed the hotness scale for chilli peppers in 1912. It is known as the Scoville Organoleptic Test. For instance, bell peppers have no heat, scoring 0 SHU (Scoville Heat Units).

Jalapeño peppers score 2,500-8,000 SHU. Cayenne pepper and Tabasco pepper rank at 30,000-50,000 SHU. Habanero pepper ranks at 100,000-350,000 SHU. The standard U.S. pepper spray is of 2,000,000-5,300,000 SHU. And the pure capsaicin, the chemical compound that causes the heat is 15,000,000-16,000,000 SHU.

Being a farm boy, I'm thinking of re-creating this hotness scale for clients and prospects to subjectively measure how mission critical their issues are. So, if the prospect says that his problem is barely "Jalapeño hot", well, I may not even be interested. It's too mild to create true commitment and urgency from most prospects. If the client's problem is "Tabasco hot", well, there may be something there. But if a prospect screams "Habanero", then it's pretty serious.

Anyway...

And throughout the engagement we judge the hotness of the issue. Now this hotness doesn't have to be about urgency but about importance and being mission critical. And when you sense that the clients' commitment drops, then you bring it to her attention. And if the client says that priorities have changed, then you can just end the engagement and walk away. There is no refund, of course. The client made a conscious decision to change direction behind your back, so you're fully entitled to the downpayment you've received.

Disappointed Clients

Disappointed clients have nothing to talk about except their disappointment. Disappointment in the world, in their spouses, kids, and last but not least, in you. They are chronic goalpost movers. In the beginning of engagements, they agree with you what needs to be done, and then later on they start complaining about the deviation from the plan.

A few years ago a six-month engagement was well on its way, when I introduced a new idea to the president. Fist he liked it and then got pissed of why I hadn't introduced it earlier. When I told him that I had just leant it, he said, that as a business consultant, I should have known that anyway.

He spent the rest of the engagement time on voicing his disappointment in my competency. And he did that in spite of the fact that monthly sales went up by 27% by the end of the third month. And he kept bitching that it was "only" 27%, and if I had worked harder, he would have made more money, and I would have actually deserved the money he paid me. The dumb bastard simply didn't understand that there is no relationship between working harder and longer and business results. You can drive your plough horses to total exhaustion and certain death, but you can never keep up with your neighbour who ploughs his land with a tractor.

The problem is that these clients are usually chronically disappointed in everything and everyone. You may find that they've been through a number of other consultants and they were disappointed in each of them. So, the best thing you can do is that you unanimously appoint yourself the next ex-consultant to this client and fire his arse.

Suspicious Clients

These folks constantly second-guess their consultants. They have this pervert idea that the world is out there to screw them and they have to be on guard 24/7.

Consulting is brainwork, but for these clients brainwork is no work. We can summarise their expectations of their consultants this way...

"I want to see you sweat, suffer, starve, slave and struggle to earn your money, so by the time you finish your work, you're battered, bruised, bashed, bloodied, beaten, crashed and crushed, so you actually deserve my money."

A while ago I was excited about an opportunity to work with Taiga, an outdoor apparel company here in Vancouver. I'm an outdoorsy guy, so the opportunity looked exciting.

When I sat down with the president, he started attacking me right away...

"I can read the same books that you've read and take the same courses you've taken, and then you have nothing new to tell me. So, why would I waste my money on your marketing expertise?"

I told him he was right and that I made a mistake of coming here to talk to him. I told him I should have done my due diligence and discover that Taiga was really just a glorified sweatshop run by a paranoid dictator, a modern day "organisational Hitler", so I wouldn't have shown interest in his joint in the first place.

This is the ideal engagement in which I would be under constant scrutiny, and the client would demand all sorts of retarded criteria to be fulfilled, so I would deserve the peanuts payment.

Anyway, I feel sorry for the people who spend their hard-earned money on this Taiga stuff. If they knew how they're made, they would think twice.

By the way, it's also the suspicious prospects who demand tonnes of references because they don't believe you. But if they don't believe you now, the fact is they will never believe you. They will always see the worst in you and treat you as a necessary evil.

I believe the fact of demanding references boils down to the fact that prospects don't have the emotional and intuitional chops to make up their minds based on their on first-hand experiences. And frankly, I do my best to avoid these mental cripples. That's why I never give references. I start my engagements with new clients on a small scale with a damn good service guarantee, and if that's not good enough for them, then they'd better stay out of my life.

To paraphrase Dan Kennedy's phrase, never interrupt a task of known importance for a potential task of unknown importance...

"Never interrupt a client of known value and importance for a potential client of unknown value and importance."

And the opposite is true too. My best clients have never asked for references. They have had the intellectual and emotional wherewithal to judge if I was the right person to help them.

And similarly, when I help clients to hire people, I'm yet to ask for the first reference and yet to read the first resume. We sit down, and five minutes later I know pretty accurately what to expect of that person.

References and resumes (My friend, Carlos calls them Ridiculum Vitae) can lie. Body language and spontaneous subconscious reactions can't. It's like the doctor hitting you on the knee with the little hammer. You can't control the reaction. The truth comes out. And I'm not looking for impressive resumes (mostly written by experts) and glorious references. I'm looking for the truth. One day, even the HR industry will catch up with this rogue approach.

Bully Clients

These people are verbally abusive but there is a difference here.

It's one thing to say...

"The moronic senior partner's idea about marketing."

And another thing is...

"The senior partner's moronic idea about marketing."

Talking tough with clients is fine because it's for the success of the client company. But talking rough is unacceptable.

Calling a person moronic is unacceptable. But calling an idea moronic is fine. We all have them. After all, statistically some 50% of all business decisions are total failures. But these 50% also motivate people to move ahead and find the right answers.

Bullies are verbally rough on people, calling them by names and diminishing everything they do. Realistically what hides behind these bullies is cowards. They don't have the balls to face their own shortcomings, so they act it out on others.

Freeloader Clients

These are the clients who keep demanding more and more than you have established in your agreement but refuse to pay for the extra. They believe that for the pre-agreed fee they can increase the scope of the engagement.

These are the people who first agree to fly cheap, strapped to the roof rack, and shortly after the plane takes off, they knock on the window and demand entry to the fist class section with the best French champagne and Russian caviar.

Make sure you always have a Change Request at the ready. You can even refer to the Change Request document in your agreement, mentioning that any deviation from the original agreement must be requested from and accepted by the consultant.

In project management this is usually called Change Order, but at a project management workshop last April, the stupendous Ed Kless explained the subtle difference to us.

"An order means that when it's given, consultants have no option but to act upon it. A request is a two-way street. Clients submit it, and consultants can either accept or reject the requested changes. And consultants should never tolerate clients who give them orders."

Slight difference in wording, but the connotation and the meaning are drastically different.

The other problem is the intellectual capital nature of consulting. It's not about manual labour, so some clients think and often even say...

"What's the big deal about the 30% sales increase? It would have happened anyway. Why should I reward you for it?"

And these clients keep looking for opportunities to demand and expect higher service levels. Over the years, I've fired some clients from my mentor programme because they bought the Basic Programme but demanded the Advanced or the Guided programme.

Slow-Paying Clients

This is partly our fault. We should always request a hefty upfront payment, and collect the final payment before completion of the engagement. For instance, when I do copywriting, I don't release the copy until I'm fully paid and the royalty agreement is signed. Since the copy produces results on an ongoing basis, I deserve to be paid on an ongoing basis.

In any kind of engagement we can delay something until we get fully paid. Or the other option is that we simply withdraw from the engagement and move on… with the downpayment in our pockets. After all, it was the client who broke the agreement by not paying us on time.

One more thing. Never tolerate slow payment because it can easily become a routine.

Clients can always find the money for the important things. When I bankrupted myself many years ago and lived in a homeless shelter I saw this. Chronically broke people always had a healthy supply of cigarettes, alcohol and drugs. All right, they probably stole some, but also bought some. So, even they had the dough.

Pretending Clients

These folks are great talkers but when it comes to action, they have problems. They love talking about how successful they are and how much money they make, but their actions are incongruent with their big talks.

As an ex-farmer, I like comparing them to the cattle ranchers with big hats, fancy branding irons with impressive logos and tonnes of cattle shit on their boots, but no actual cattle to their names. You can easily recognise them after two minutes in a discussion.

One-Word Clients

These people communicate in one-word messages. You send out a detailed explanation of what to do next, and they get back to you saying things like, "OK", "No" or "Possibly". Nothing special. And you're left there guessing. "What the bloody hell does this moron mean?"

There is only one meaning here: Fire his arse. This is a communication disaster in the making.

Lying Clients

This kind of clients go to as far as lying to manipulate others for their causes. They know they don't have the chops to communicate on an even playing field with their consultants, so they cheat, lie and deceive to get what they want.

Threatening Clients

These clients threaten you with non-payment unless you do some extra bits and bobs they invent above and beyond the scope of the engagement. Be careful because this problem surfaces very gradually. But once it surfaces, it can suck you into the swamp of never-ending work.

Chronically Unprofitable Clients

Careful here. In most cases these companies are profitable but their owners carefully skin the piggy bank every month for personal enrichment, so technically the company is penniless, while the owner lives pretty high on the hog. A while ago I worked with an Internet marketing firm, and the owner bought himself a new SUV by embezzling money from payroll, affiliates and joint venture partners. And this is why these companies are always unprofitable. All the money is carefully stolen out of them.

So, as you set up your automated lead generation system, make sure you test prospects against these criteria. And of course, against your own idiosyncrasies. For instance, I use pretty liberal non-corporate language and oddball examples from my oddball past. And I emphasise that working with me is like working with a demanding hard-arse drill sergeant. I push people pretty hard because I care about their successes. But I also know how far people can be pushed. And many people can't take that, so my lead generation system instantly disqualifies them.

But There Are No Emotions When The Process Is Automated

Now imagine the other kind of firms where client acquisition is largely automated. They know that the initial stages of client acquisition are purely transactional, so it can be automated to the hilt. There is no need for human involvement.

All they need is a great filtering system that allows prospects to qualify/disqualify themselves. And when the system is running as smoothly as a baby's arse, no one in the firm even notices that prospects come and go.

Of course, many people argue that consulting is a highly interactive and collaborative process, so it can't be automated. I believe, it depends on what stage of the process we are at. But not automating the process is just as silly as a fisherman, instead of using a net, jumping into the water and personally swimming after each fish. The whole idea is that using the right enticement, you let the fish come to your net. You need no manipulation. The fish come off their own bats.

So, when you have such an automated client acquisition system, by the time you need in-person interaction with prospects, they are pretty qualified.

So, Where To Start?

To make life easier, let's start at the beginning. You have to draw up the process of your business development, including every lead generation channel. When you see the blocks and arrows in front of you, you can better think of what has to be automated and what has to be humanised.

Then start looking inside each box on the diagram and design the inside of each box: The input, the process inside the box, the output (which is the input for the next box) and the feedback loop from output to input. The feedback loop is the measuring device and the controller. What can be automated? What has to be humanised?

One more thing...

I've just read in the local paper that British Airways has fired model Naomi Campbell for life as a client for abusive behaviour. If BA can do this in a hyper-competitive industry with such a celebrity, then you should have no problem to get rid of the sources of your headaches. Hopefully, you have the courage to do that.

"Dynamic Duo" Mentor Programme... ...has 0 openings for May and 2 for June 2012. Click here to continue to read the fiendish details.

Recommended Reading

Fees and Pricing Benchmark Report: Consulting Industry 2008

by RainToday

If you want to have a peek at the pricing strategies of your industry, then this is a must read for every consultant.

Pricing is the ultimate profit modifier in any consulting business. 1% price increase can add as much as 11.7% to net profits. Nothing else can do that, so it's worth paying attention to this pricing thing.

The report compares various pricing methods in IT services and consulting, management and strategy consulting, operations consulting, HR consulting, organisational development consulting and corporate training.

You can also read about how the market perceives various pricing methods and how premium firms price their services differently from budget firms.

Take a closer look and grab your copy the Fees and Pricing Benchmark Report: Consulting Industry 2008. You'll be glad you did.