Authority, Power & Influence as a New Consultant

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In all corporate environments, you need to pay attention to who and what has power.

This is a human dynamic that is rarely discussed out loud but is always present in any corporate environment. It is something as a new consultant you must pay attention to.

Let me give you some examples.

Authority = Who is officially in charge.

Your senior client is the person with the authority.

Authority is one of many types of power.

Another type of power is influence.

Influence comes from who you have access to, and of course whose opinion you can alter.

As a consultant, your "power" when working with front line employee-type clients comes from your access to senior management, your influence (or perception of influence) over senior management, and your ability to request senior  management to exercise their authority to help you accomplish a goal.

Your power with senior management comes from having access in this case to facts and analysis that the senior clients do not have access (or easy access) to.

Your power also comes from your perspective as an outsider.

Do not underestimate this.

Many senior clients very much value a fresh set of eyes on their situation.

Often many months after working together, they might ask you to recall what your first impressions of their business, markets, or company was many months prior.

Be sure your remember those first impressions!

Those impressions are usually made in the first month or so of working with a client.

However, the client often doesn't know you or your team well enough to ask for those impressions until several months later.

So be sure to make a mental note of these impressions.

In addition, these impressions can often help determine your team's initial hypothesis about the client's situation.

You might be wondering what kind of insights you could possibly bring to the table on a first impression basis... especially if you are younger or don't have an MBA.  You might be surprised!

(By the way, if you have this attitude, I suggest you lose it. An MBA is not the end all and be all about business. It is simply one of many ways to learn about it.  An MBA is useful, but it also has its limitations and liabilities - which I will elaborate on at some point in the future.)

By far the easiest (and equally useful) observation you can make is that of noticing inconsistency.

There are many different types of inconsistency to look out for. Here's a partial list:

1) The company says it is focusing on X, but in reality it does not.

The client says they are focusing on growing their XYZ product line, but in reality, there are no sales people dedicated to selling it, there is only one person in marketing who tries to market it, and there are no dedicated R&D efforts to improve the products in this area.

This is inconsistent.

Now you might think this hypothetical example is too extreme to be possible, but it happens all the time.

There is enormous value in you noticing it and pointing it out to a senior client (and the best way to do that is to state the observation in the form of a question).

"Jane, I couldn't help but notice a disconnect (by the way, McKinsey people love that word) between your stated focus and how your resources are allocated. Is there a particular reason the resources are allocated this way that I haven't been able to notice?"

Notice how you are essentially saying to the client, "Hey, I think you screwed up," but you are phrasing it asking the client if you made a mistake.

This is a subtle way to bring up the point without it being conveyed as a criticism, attack or judgement.

By the way, in my example above, I probably would not use the word "disconnect" with the client initially in this context.

I would use that amongst McKinsey team members, but in front of the client, I would use a phrase like "difference I couldn't understand" or something along those lines.

Once I have a well established relationship, I would tend to use much more direct language with a client.

Well established = the client knows you are looking out for him/her... so the client perceives any comment you make as one designed to protect him or her.

In contrast, earlier in a relationship, a client is not sure if your comment is one passing judgement (an attempt to usurp the client's authority position) or one designed to be helpful.

Incidentally, this is why consulting is a relationship business. When you have a long-term relationship with a client, you can get away with saying very direct and blunt things and have it be taken favorably.

In comparison, an equally skilled consultant from a different firm could say the exact same thing and have it be taken negatively by the client.

Now let me circle back to my original topic of noticing inconsistencies. Here's another one:

2) The company thinks it is doing X in the marketplace, but customers disagree.

So maybe the company thinks they offer the fastest service in the industry. Maybe customer's barely notice... sure it's 5% faster, but that's such a small difference that no customer actually cares. Yet the client believes they do.

Again, it seems like such a major disconnect (there's that word again) that it couldn't possibly happen in a big company.  Yet it does.

Here's why.

The customers used to appreciate the speed difference, but over time, competitors have closed the gap such that the client still leads the industry -- but not by much.

And the senior clients didn't notice this shift in the marketplace.

It's the same reason why on any given day I do not notice my daughters changing that much.  From Monday to Tuesday, they look the same, act the same, and pretty much seem the same to me.

But when my parents visit every few months, they always say, "Oh my, look how much she's grown... wow."

My reaction is always, "Huh, what are you talking about?"

The pace of change in a 24-hour period is too small to notice. But when you put 365 of those 24-hour periods in a row, or 2 - 3 years' worth, it is not surprising some of the changes do not get noticed initially (that is, until youpoint it out!)

Here's another little secret.

In many big companies, the senior executives don't actually spend a lot of time talking to customers.  They are seven layers of employees removed from customers and many rely (I would argue over-rely) on getting reports, market research studies, and yes, even presentations from consultants.

Personally, I think this is a mistake on their part, but it is what it is... and it creates an opportunity for you.

One of the things I used to do a lot is interview a bunch of my client's customers, interview all the front line employees about what their customers are saying and what the company should be doing about it... and then synthesize itand present it to the senior client.

This is where all those criticisms of the consulting industry come from.

The front line employees can't believe their employer just paid $2 million to tell their bosses something they've known for years.

The reaction is, "Geez, just give us the money instead, we've been telling you for years!"

Yet, despite this criticism, there actually is value in doing this.

Where does the value come from? And why does it exist?

Often the senior client doesn't trust the information being passed up from the front lines.

The senior client can't tell if the people lower down in the organization are exaggerating, trying to cover up their mistakes, or heavily biased.

Other times, the information is presented in the form of lots and lots of opinions with no structure and no quantification and no recommendation about what to do about it.

So perhaps they heard the comments before, but they had no idea if 1) it was true, 2) if it's actually significant, or 3) what do do about it.

(Now you know why interviewers tested you on problem-solving structure so much during the case interview... it's because clients (especially the more junior ones) are terrible at it, and senior clients have difficulty getting good information from their staff.)

So taking a bunch of unstructured opinions from the front lines, re-organizing it in an issue tree format and illustrating how the client's only course of action left is to improve customer service (because no other option makes sense or the economics don't work) does add value.

It adds value because by process of elimination (sound familiar?), you've led a client to the only possible logical conclusion (still sounds familiar doesn't it?)...
..such that they now have the confidence and conviction to take action... whereas before they just heard a lot of opinions.

This is also why I have continually emphasized the synthesis approach to presenting recommendations at the end of a case interview.

I did so because that is exactly how you want to communicate with clients... tell them what to do first when opening a conversation (or tell them what is important) and then tell them why (and always, always in that order).

Hopefully I have impressed upon you how something as simple as noticing inconsistencies in a client's organization, operations, or strategy can provide enormous value.

Also notice how noticing inconsistencies doesn't actually require much industry knowledge or even business expertise.

This is also one of the reasons why I can meet a CEO for the first time... spend less than an hour with him or her... and have the prospective client just be amazed at how fast I am able to notice certain things about the business (thingsthat took them three years to conclude, I'm able to do in 35 minutes).

In reality, all I'm doing is just extremely fast pattern-matching of the client's situation with situations I'm familiar with. And one of the patterns I am always searching for is inconsistency.  And it is something you should be too.

The key takeaways for today is to not only notice these inconsistencies, but to also realize the enormous value you can provide by communicating these inconsistencies to your clients.

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