I Talked to the Spouse

Sometimes we management consultants get caught up in the jargon of our profession – you know, the words that only another person in the same field uses that have special meaning only to them. Some consultants assume that our clients understand us as our peers do, so words like “strategic” or “implementation” and an entire lexicon from Six-Sigma get tossed about loftily, as if our clients are paying us for our vocabulary. Of course the more money we charge, the loftier that vocabulary can become. That is before we get to statistics and graphic analysis, always the life of the party.

Many consultants lose sight of the fact that our clients are looking to us to help them do something they do not know how to do and how to do everything else better. In running their businesses, just about the last thing our clients want is for us to give them large packs of paper to read after their day is done. In addition, there is so much written material available, it is almost too much. The job of a consultant is not to help his client read more stuff.

In preparing to update this website, I conducted an inventory of my clients over the past five years to see what leaped off the page at me. Doing a customer inventory is one of the practices I use with my clients when I am looking for more business. It helps define who I should be looking for so I can save both time and resources. Specifically, I was looking for what the clients with whom I had the most success had in common. What I found was so simple that it surprised me and I can sum it up in five simple words.

I talked to the spouse.

To be sure I talked to family members in addition, but the discovery is certainly consistent with the studies having to do with small businesses in this country. Here is the short version of those party favors having to do with US business. According to statistics reported by the University of Southern Maine's Institute for Family-Owned Business: “Some 35% of Fortune 500 companies are family-controlled. Family businesses account for 50% of U.S. gross domestic product. They generate 60% of the country's employment and 78% of all new job creation.” Unfortunately, “only one in three family businesses succeeds in making it from the first to the second generation.”

There are lots of reasons for that phenomenon, but I am willing to bet that communications – specifically that between the family members from one generation to the next – has something to do with it. But I will save that for another article at another time. I want to stick with my “talked to the spouse” theory. Sometimes, it’s a tough job, but someone has got to do it. Let me share a couple of examples.

One client neglected to tell his wife that he had called me in to help him get his business in shape. The business had grown from a hobby and generated over $2-million a year when I showed up. I tried to get my client to arrange a meeting among him, me, his wife and anyone else who might have a stake in the outcome of the consulting project. The client kept hedging.

“She doesn’t have anything to do with my business [decision],” he insisted. But I insisted harder and the client relented. The next morning I showed up at the business site early, hoping to be there ahead of my client so I could better make my case as to what I thought we should do. My client was waiting for me – not a good sign. Then I noticed the tears in his eyes, definitely not a good sign. As I learned, he had gone home to tell his wife about the meeting the outside consultant wanted to facilitate. She hit the proverbial ceiling and the name calling began. It turned out that she had been paying the bills for the client’s former hobby and had not agreed to have anyone come in to help, especially at the hourly rate I had to charge for it. Harsh words turned for the worse, pushed turned into shoves and at the point of my discovery, my client was on his way to court and a restraining order.

The company I worked for could not understand why I could not get a working agreement [a contract for services] signed.

On another occasion, I started a consulting project’s opening conference one morning with my husband and wife team client, my company’s business analysts and project consultant and I to have the meeting get shaky from the got-go. It was another tear jerker. The clients kept interrupting each other to tell us how their crummy business was tearing their marriage apart and that they thought they just wanted to sell out and that they no longer saw any point in having consultants in to help. Oh, I talked to the spouses, alright.

I stood up abruptly and said, “Knock it off, both of you, right now! Who do you think I am? A marriage counselor?” Actually, in that case, I was. I stuck out my hand to the husband to shake his hand.

“Stand up.” He did. “You are the President of a multi-million dollar, international company that has been in business almost 10 years, right?” He shook my hand and nodded affirmatively. “Then act like it! And you,” I said as I turned to Mrs. Client, “What did you do before you got sucked into this company disaster?” She told me she was a Registered Nurse. “Good. That’s what you are going back to after we are done with this project.”

Sure, it stunned both clients and my company colleagues. You can imagine their faces and, if you can’t, let’s just say there were jaws that bounced off the floor. But, as I say, I talked to the spouses. It turned out that the clients had been victims of embezzlement and Mrs. Client came in to take care of the books because of the trust issues involved. My team and I prevailed, by the way, and so far as I know the clients and company lived more happily after the project concluded.

I have lots of other tales I could tell you that emphasize the importance of consultants talking to spouses, parents and siblings involved in any business, whether they admit to being in the decision making process or not. For one thing, each one is impacted by business decisions one way or another. For another, valuable information can be obtained from sources that are not familiar with the day-to-day activities in a company. Besides those considerations, a consulting project can be killed before it starts if family members are not taken into account from the beginning of an engagement.

Family businesses face a lot of problems, the family itself being a potential one. The reason is that family members all have names, as opposed to position titles, which can be difficult for them to comprehend. Another issue has to do with boundaries. At what point do people cease to be family members and become employees? Is it at home, on their way to the business or at the door? And there are a host of other issues, which I will get to another time.

Let me wrap up here by noting that effective communication is the key to business success, whether the topics of communication are statistical data, like opinion survey results and balance sheets, or they are people issue, like promotion decisions or embezzlement. Large corporations governance looks after the interests of the company’s stock holders just as family businesses operations looks after the interests of the company’s stake holders. Family business owners must expect that for a consulting engagement to be successful, the professional consultant they retain is going to talk to their spouse.

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originally published on tmackorg.com

Management Lessons [No Charge]

The job of many business consultants, in addition to invoicing their clients and collecting, is to appear to write management lessons for a substantial hourly rate. But I have rebelled against the practice and offer the following management lessons to you at no charge. Use them and prosper.

Lesson One

An eagle was sitting on a tree resting, doing nothing. A small rabbit saw the eagle and asked him, "Can I also sit on my ass like you and do nothing?"

The eagle answered: "Sure, why not."

So, the rabbit sat on the ground below the eagle, and rested. All of a sudden, a fox appeared, jumped on the rabbit and ate it.

Management Lesson:

To be sitting on your ass and doing nothing, you must be sitting very high up.

Lesson Two

A turkey was chatting with a bull. "I would love to be able to get to the top of that tree," sighed the turkey, "but I haven't got the energy."

"Well, why don't you nibble on some of my manure droppings?" replied the
bull. "They're packed with nutrients."

The turkey pecked at a lump of manure, found it actually gave him enough strength to reach the lowest branch of the tree. The next day, after eating some more dung, he reached the second branch. Finally after a fourth night, he was proudly perched at the top of the tree.

Soon thereafter he was promptly spotted by a farmer, who shot the turkey out of the tree.

Management Lesson:

Bull Shit might get you to the top, but it won't keep you there.

Lesson Three

A little bird was flying south for the winter. It was so cold the bird froze and fell to the ground in a large field. While it was lying there, a cow came by and dropped some dung on it. As the frozen bird lay there in the pile of cow dung, it began to realize how warm the dung was, actually thawing him out.

He lay there all warm and happy, and soon began to sing for joy. A passing cat heard the bird singing and came to investigate. Following the sound, the cat discovered the bird under the pile of cow dung, promptly dug him out and ate him.

Management Lessons:

(1) Not everyone who shits on you is your enemy.

(2) Not everyone who gets you out of shit is your friend.

(3) And when you're in deep shit, it's best to keep your mouth shut.

I hope this helps. Seasons Greetings.

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Edited from an unattributed source as much management consulting dicta, only I admit it.

Practice or Business: What’s the Difference?

I have met many business consultants who are either working on a book or at least thinking about writing a book. I have known several who actually have a manuscript they tote with them from client site to client site. These consultants have two problems in common: having manuscripts does not necessarily make them writers and books do not sell themselves. The mental exercise of putting experience into words can be its own reward, but what it reveals is a personality trait that says those consultants would prefer a consulting practice to a consulting business.

There are two kinds of consultants: financial oriented people and management oriented people. Financial folks love spread sheets and can write love letters in Excel. They tend to have finance and accounting backgrounds; many are CPAs, others have MBAs, some have both. Management folks love organizational charts and can write sonnets as PowerPoint presentations. They tend to have corporate backgrounds; many have business degrees, some have MBAs. Others have been business owners and are former entrepreneurs. All are familiar with the relationships between finance and management.

Regardless of their orientations, consultants share one common trait – they dislike, or at least distrust, sales people as a group of slick-talking, promise-anything-to-get-the-deal, glad-handing, tap-dancing liars and thieves. What sales people think about consultants is similar, but that is not my point. The use of professional sales people to acquire clients characterizes the difference between consulting practices, which do not, and consulting businesses, which do. Neither approach is better than the other. The significance is the difference in overhead.

Other differences in overhead include advertising, depth and size of support staff, and location. They may have large corporate structures to serve corporate customers, such as publicly traded companies, that employ hundreds to thousands of people, generating many millions of dollars in annual revenue. Consulting businesses have greater resources than many consulting practices and may offer layers of specialty in the services they offer, such as proprietary software, IT, tax consulting and financing.

Consulting practices are more entrepreneurial in nature and structure. They may be highly specialized themselves, depending upon the orientation of the consulting staff they employ. They may also be general practitioners whose services range from QuickBooks to websites. Because of their nature, consulting practices serve entrepreneurial clientele, most often privately held firms, who employ less than a hundred people and generate less than twenty-million dollars in annual revenue.

From a consultant’s point of view it is not about the money. It is all about the work. As I have previously written, when I worked for consulting companies my clients ranged from restaurants to general building contractors, from convenience stores to slaughter houses, from liquor stores to RV dealerships. For anyone who wants to become a professional consultant, I recommend the experience with the caveat that the travel can be torture.

From a client’s point of view it usually is about the money, what they think they need and they think about the work that is performed. So what is the difference between a consulting practice and a consulting business? The difference is in the overhead and in the specialties. Change is the product that the client buys or is sold.

What Is Your Plan?

Do you have a business plan? You might be surprised just how many businesses do not. They may have had one in the past but chances are that the business owners have been so busy that they have not written down much of anything. So if you answered “no” quietly and privately to yourself, understand that you are not alone.

Frequently, a business plan is a necessary evil that rears its head only when the business owner is told that they need one because they are trying to get money through something like an SBA guaranteed bank loan or a private investor. The problem is that the business owner is not in the business of writing such documentation. So what does an owner do?

There is the Internet.

One can search and eventually -- maybe -- find a boiler plate business plan for a company kind of like the owner’s business. A little change here, a little change there and a plan is born. However, banks and investors have seen the boiler plates before and have the pesky habit of asking questions about financial projections, ratios, ROI, assumptions, and the interrelationships between the numbers and profitability. Think of it as part of their language.

There is software.

Plug in some numbers and fill in some blanks and out comes a document. However, in addition to the cost of the program, the time it consumes in learning how to use it and the fact that there is a business to run, what does one end up with? Once again, bankers and investors are going to ask their questions. They will at least be polite when they decline the request for money.

There is the hired gun.

Plenty of ghost writers out there will be more than happy to write a plan for you using boiler plates and software. Just look on Craig’s list under your area, services, and “sm bz ads.” Then type “business plans.” Ghost writers are neither bad nor good, as long as an owner knows that questions will be asked, such as “Did you write this plan yourself?”

There are professional business consultants.

At this point I need to explain that the preparation of a business plan is a process. You should also think of a business plan in similarly to the way one thinks of an owner’s manual. Additionally, I also need to point out that a business plan is a working document, subject to change as times and circumstance dictate. At this time, for example, our economy has entered into a recession which is dictating that businesses need to reevaluate their owner’s manuals to adapt to the circumstances.

The purpose of hiring a professional consultant is to facilitate the writing process, not to knock out a binder full of paper and a PowerPoint presentation. A consultant is going to insist on the participation of everyone involved in the decision making process from owners to managers throughout an organization. A consultant’s job is to help owners think through and understand the concepts and assumptions that underlie a business venture.

A consultant’s role in the production of a business plan also is to teach owners and managers the significance of the business numbers and how those numbers affect profitability of the company, not how to build a spreadsheet. Do not forget that the objective of a business plan is to have a metaphoric owner’s manual that accurately reflects what the business is about. This should be addressed not only to a company’s stakeholders, but to people outside of the company in language that they understand, such as told by Profit and Loss statements and Balance Sheets.

The knowledge an owner derives from the process of building a business plan is empowering. It also reduces the cost of borrowed or invested funds.