Friday, June 15, 2007

The Value of Consulting and Charging for that Value

Most consultants have probably heard of Alan Weiss. He's considered the consultant's consultant, author of at least 25 books on the subject and is hailed by the New York Post as "one of the most highly regarded independent consultants in America."

I've always wondered why Alan never had a blog, until now. In May, Alan launched Contrarian Consulting and has been contributing to it on a regular basis. One of his first posts was on The Myths of Consulting … and other factual errors.

It's an interesting post focusing in on how consulting adds value to the client and should be priced as such. I've always said that consulting is much like being a doctor. Clients don't need us until they're in trouble and even when they are in trouble, they don't care to admit it. It isn't until they start bleeding that they call upon us. Yes, I know, I just gave a ridiculous example, but there's an element of truth to it.

Alan uses his own doctor analogy:

Consulting is about a single issue: Improving the client’s condition. The physician’s admonishment to “first, do no harm” is simply not good enough. You don’t deserve to be paid for simply not screwing up. You should only be paid if your client is demonstrably better off after you leave than the client was before you got there.


I've also been saying that as consultants we should continually demonstrate our knowledge and skills to the business community whether it be through articles, blogs, books or seminars. Along with that, we should be demonstrating our value to the client. In the end, it's more meaningful (and measurable) to them and more fulfilling to you.

1 comment:

Richard I. Garber said...

The added value should be priced differently than just “time and materials”.

About seventy years ago my late father was teaching chemical engineering at the University of Cincinnati.

His first consulting assignment was to develop a process for shrink-proofing of wool athletic socks. He just billed the Adler Company (later Burlington-Adler) for time and materials.

Later he lamented to others that he hadn’t asked for a royalty of a fraction of a penny per sock. If so, then he could have retired much earlier.

Another professor in the department, George Rieveschl, did research resulting in the discovery of the drug Benadryl (which was first sold in 1946). Parke, Davis & Company held the original patent for Benadryl. While they held the patent Rieveschl received five percent of the royalties from sales of the drug (till ~1964).