The Anatomy of a Consulting Firm 04 - The Client Marketplace

The Client Marketplace

Degrees of client contact and customization vary from to firm, or even practice area to practice area. Some differences between types of practice are shown in Figure 1. This defines four kinds of professional practice, which for the purposes of example we’ll call Pharmacist, Nurse, Brain Surgeon and Psychotherapist.

The Pharmacist

A Pharmacy practice is one where the client is trying to buy a relatively familiar service and does not require very much counseling, consultation or contact. The client wants the service performed to strict technical standards at a minimal cost. Notice that this type of practice is defined as a standardized process conducted with little, if any, client contact. This does not mean that the result cannot be highly customized, merely that the process to be followed in producing the result is well specified. While this type of work is common in systems installation and other IT firms, it can also be found in high-end strategy firms, where component analyses of cost structures, market shares, competitive positioning and many other studies, as valuable as they can be, have been highly proceduralized and can be conducted with thoroughness and accuracy by junior staff. The method of conducting these analyses does not vary from job to job.

Quality standards, in the sense of “conformance to specifications,” must be high for this work, since the client will be “swallowing the pills.” However, the client does not require that the pill be specifically designed for him or her. The client wants to buy well-established methodologies and procedures, not innovation and creativity.

The client is in effect saying, “I have a headache, and I know that you, along with many others, are licensed to dispense aspirin. Don’t waste your time and mine trying to convince me that it’s brain surgery that I need. I’ve done this before, and I can tell for myself the difference between the need for aspirin and for brain surgery. I want aspirin! What’s your best price?”

The Nurse

The Nursing practice also delivers relatively familiar (or “mature”) services that do not require high levels of innovation. However, it differs from the Pharmacist practice in that the emphasis is not only on the ability to dispense the pill (which still may be required), but also on the ability to counsel and guide the client through the process. This time, the client wants to be nurtured and nursed: “Help me understand what’s going on; explain to me what you’re doing and why; involve me in the decision making; help me understand my options. Be with me and interact with me throughout the process until this is all over. I need a front-room advisor, not a back-room technician.” (The nursing practice can be distinguished from the pharmacy practice by the proportion of total project time that is spent in contact with the client.) Practices that work in this area are those where the consultant’s approach to is to help the client (and the client’s organization) arrive at its own decisions and conclusions, rather than performing independent studies and presenting the consultant’s recommendations. This requires interpersonal and consultation skills in addition to analytical skills.

The Brain Surgeon

The Brain Surgeon combines high levels of customization, creativity and innovation with a low degree of client interaction. The client is searching for a practitioner who is at the leading edge of his or her discipline, and who can bring innovative thinking to bear on a unique assignment. Here, the client says, “I have a bet-your-company problem. Save me! I don’t want to know the details, just find the right answer! If I wake up in the morning, I’ll pay your outrageous bill! I’m not shopping on price, I’m trying to find the most creative or technically superior provider I can.” Consulting firms positioned here tend to be regarded as leading thinkers, and tackle unique, one-of-a-kind problems in the areas of strategy, technology or organization.

The Psychotherapist (or Family Doctor)

Finally, the Psychotherapist (or Family Doctor) practice is one where the client says, “Again I have a bet-your-company problem. This time, I don’t want you to give me the anesthetic and leave me out of the process. I want to be intimately involved in the problem-solving process.

What I’m really trying to buy is someone who can sit down with me, help me understand why my company is falling apart, how I should differentiate between a symptom and a cause, what I must deal with and what I can afford to postpone. Sit down with me and my executive team and help us understand our problem and our options.”

As with the Brain Surgeon, the emphasis for the Psychotherapist is as much about creative diagnosis as it is about execution. When buying the services of a Nurse or Pharmacist, clients know what they want done: they are hiring someone to execute it. But with Brain Surgeons and Psychotherapists, the clients are seeking help determining what needs to be done as well as how to do it.

Psychotherapy practitioners can be found in most high-end consulting firms, since many client projects contain an initial diagnostic component. Except for solo practitioners and other small firms, few consulting firms spend all their billable hours in this activity.