Tom "Bald Dog" Varjan's PSF (Professional Service Firm) Barking Board

Welcome to my blog. Here we discuss all aspects of running a successful consulting firm. Mainly we’re searching for the answer to the ultimate consulting firm question: How can we deliver more value for higher fees using less of our time, money and effort? If you like this concept, then I invite you to start reading. You may find something valuable.

Tuesday, January 17, 2006

Specialist or Generalist, This is the Question

The specialist vs. generalist debate comes up very often in relations to premium professional service firms (PPSF). I've always believed that deep generalists with a broad range of knowledge are more valuable advisors than narrow specialists. Yes, specialists are better at their content, but generalists are better at matching their content to the context of the business.

Just look at web design. Many people can do web design. But only very few people, with good business background, can do web design that actually seamlessly meshes into the context (big picture or and strategy) of the business and supports it.

And here we can use a military example. The difference between an army and a commando.
The army is a group of specialists in a highly compartmentalised environment. There are the heavy horses, the fighter planes, the archers, the submariners, musketeers, guided missiles, etc. What it means is that you can't just transfer a soldier from one unit into the other without extensive and expensive training. All in all, army soldiers are specialists.

On the other hand, in a commando everyone can do everything. Everyone can shoot, do first aid, dive, skydive, operate the radio, throw a knife and dig trenches. Commando soldiers are cross-trained generalists.

When it comes to warfare you have two options.

Option 1: You line up your army of specialists (archers, fighter planes, etc.) against the other army and march into each other's volley of fire. Yes, you may win but it will be a Pyrrhic victory.

Option 2: You hire a small commando of deep generalists and send them into the night before the day of the battle. They infiltrate the enemy's camp, kill the generals in their sleep, and come home by breakfast. You can rest assured there will be no battle. Neither on the next day nor for a long time. No army goes into battle without generals, and you can actually scare the whole army shitless by taking out its generals. Now there is no strategy, no direction. You have lots of tacticians (specialists), like captains, sergeants and privates who know how to operate a machine gun, fire cannons and launch missiles, but no one can tell them which direction to shoot. That's strategy.

Similarly, when it comes to "battle" in the battlefield of commerce, you have two options. Either you hire an army of specialists and hope that their skills match the challenge your competition throws at you, or you hire a few generalists who are more agile and responsive to whatever the competition throws at you, thus have a better chance to protect you.

So, specialist or generalist, this is the question. If the kind of help you need is more tactical, you're better off with a specialist. But if you require strategic help, then you're better off with a generalist.

Wednesday, January 11, 2006

What Farmers and Service Professionals Ought to Have in Common, But Usually Don't

You may find it surprising comparing service professionals to farmers but I believe for demonstrating this specific example it is brilliant. Besides, being a former rabbit farmer myself, I'm biased. I want to talk a little bit about principles versus practices. Or putting it differently learning the trade itself versus learning the tricks of the trade.

In the business world many people are looking for the shortcuts to achieve certain results. Many professional firms want to be market leaders and innovators, but upon presenting a new idea, their first question is, "Where else have you implemented this idea?", "Who else is doing this?" or "Can you prove the validity of this concept to us?"

By definition new and innovative ideas don't have metrics, so they cannot be proved. Metrics are only good for slapping dreams in the face and stabbing visions in the heart. They are useless when we are creating something valuable, something worthwhile. Do you know couples who evaluate each other's "performance" based on the "metrics" of their newborn babies? And in a sense a good professional firm is like a family.

What was Edison's metrics for the light bulb, Bill Gate's metrics for Windows, General Patton's metrics for beating the shit out of the Nazis or Stephenson's metrics for the steam engine? Nothing! These people just dared to boldly go ahead, while others were too busy analysing facts and determining metrics to accurately measure the desperate maintenance of the stinking status quo.

And this is where the problem lies. Many service professionals believe that there is a safe and secure shortcut to become innovative. As a farmer I knew that it would take a full month for the mamma rabbit to deliver the baby rabbits. I couldn't rush the mama rabbit to deliver the babies. I had no guarantee that the baby rabbits would survive and grow up, so I could take them all the way either to the market or the dinner table. I knew one thing: Without regularly "dating" my mama rabbits with George, the daddy rabbit, taking good care of them and then their babies, I would have had nothing to take to the market. And even worse, I would have had nothing to put on the dinner table and would be condemned to eat chicken.

So, I had to invest a lot of work and quite a bit of money on blind faith and believing in my expertise to be able to do the best for these bunnies to grow up in a healthy and happy way. There were no guarantees. Every farmer knows that. Maybe some day farmers – I have already started – will teach at business schools, and then more business people will understand that there are no guarantees besides death and taxes.


The other thing we have to consider is that farmers operate on principles (because that's how nature works), while professional firms try to invent their own artificial principles that often go against the fundamental grains of nature. Here in Canada the papers are full of ads that firms are seeking people with all sorts of fiendish credentials, experiences and qualifications, and they guarantee to pay minimum wage for all this expertise. So, they want a Ferrari for the price of Yugo.

* Yugo used to be a car manufacturer in Yugoslavia hell-bent on making the world's cheapest cars. It failed and went bankrupt a few years ago.

Yet, when I ask service professionals about their practice development activities, most of them say the same: There is no point in investing in it - be it up to date technology, marketing initiative or skill building for associates - because what is the guarantee that it works. It is like a sport team's members say, "What is the point in wasting money on hiring a coach. He can't guarantee results anyway. So, let's save our money."

But what is the underlying message here? Something like this, "We are bunch of hopeless idiots, and that there is no coach in the whole universe who could make something of us."

I can bet my bottom dollars that the more guarantees professional firms are seeking in the process of becoming the best they can be, the more they fall behind with no hope in hell to ever crawl out of the mediocre bunch. In his book, Good to Great, Jim Collins writes about people who have a DNA-level urge to do their best regardless of the circumstances. And they do. The rest are seeking guarantees, investors and other people who are willing to make financial or other sacrifices, so these fools can be successful. I've recently been asked by an HR expert to help her to start her business on a joint venture basis. I asked for a modest monthly retainer and equal revenue split, stipulating that as money starts coming in, she can gradually recoup the initial retainers from my share. I wanted the retainer as a sign of commitment on her part. She flatly denied. She offered no retainer and a maximum 20% revenue sharing. What's the point in taking 100% of the risk for 20% of the reward?
I walked away, and months later she still doesn't have a business. She clearly proved her level of belief in herself and in the potential of her business through her actions. It was basically none.

So, what are you willing to put on the line to demonstrate that you're serious about your firm and you actually believe in what you're doing?

Imagine this situation: Novice farmer goes to the farm shop and asks the owner: "Hey I want to joint venture with you on a lucrative opportunity. I’m a farmer. If you give me all the equipment, seeds, fertiliser and everything I need for farming for free, then I’ll give you 25% of the money I make on the harvest. Believe me, this is a great opportunity."

Then the shop owner asks: "Have you ever done any farming?”

"No" – The "farmer" says, but I have a triple Ph.D. in farming, and I know how to do it. And this will be great opportunity for you.

Then the shop owners says: "So, you expect me to invest my assets and take 100% risk on an venture that is most likely to fail simply because you've never done it before? And in return for my 100% risk and 100% investment I get 25% of the reward? Is this what you mean?"

"Well, yes. If you are as good as you say, you would have the courage to take the risk on me." – Says the "farmer".

"Well, if you are as good as you say, you’d have the courage to take the risk on yourself, punk." – says the shopkeeper.

What kind of farmer are you?

Are Voice Mail Systems Harming Professional Service Firms?

The problem is that voice mail systems are now so rampant in professional firms that we have almost forgotten what it's like to talk to a real person. Technology consulting firms are famous for this. You simply can't contact a live person, but when you leave a message, it can take days until someone calls you back. Responding to clients' requests is just not a priority.

The biggest complaint clients of professional firms have is the lack of connection and responsiveness. While most firms and practitioners are wired up to their eyebrows with all sorts of fiendish electronic gadgets, most of them are mysteriously unavailable for their clients. When most firms are contacted, callers end up on the firm's complex voicemail labyrinth with no hope in hell to ever find the way to the people they are calling.

The "electronic receptionist" sends two messages to your callers:
  1. You are so busy that you have no time to answer the phone
  2. In spite of being so breathtakingly busy, you are still not profitable enough to employ a real person to answer the phone. So, what is the ultimate message here?
Can this happen because you run a high-volume low-margin operation?

Can this happen because you make a lot but keep very little? Make sure that - almost - always the same person answers the phone at your front desk.

People get used to a specific voice, and expect to hear it every time they call. Although conventional wisdom says that familiarity breeds contempt, I believe lack of familiarity breeds contempt. If I call a firm, and a different person answers the phone every time, that makes me think that the firm has atrocious staff turnover, which is the result of a stinking culture. And a stinking culture can only provide stinking service.

And if the firm provides stinking services, then I don't want to be the part of that. What's the logic in being this firm's client in the first place?

And huge part of your perceived value comes from your responsiveness. And let's face it, since these clients are paying you, they deserve answers to their questions between two official meetings. Remember, you are working with this client from the beginning of the project until completion. That means they can rightfully expect access to you.

Multitask Or Not To Multitask – This Is The Question

I've always had mixed feelings about multitasking. To me it means doing many things in a half-arsed way. It's a little bit like making love with one's spouse while giving him/her a good beating. And sadly many professional service practitioners live by this erroneous method in every aspect of their lives.

Just think of it. Have you noticed that you go out for lunch with a colleague, engage in an interesting discussion, and during your discussion your colleague keeps checking his PDA for email messages, his mobile phone for incoming calls and his pager for calls, while graciously ignoring you? I think that's plain retarded. I don't think anyone is so important that s/he can't have an hour of peace of mind without technological interruptions.

Many professionals believe that the ability to multitask is really just a matter of intelligence, and for smart people multitasking is really no problem. After all they have the brains for it.

So, what do we see?

Well, so-called type A people use multitasking in every single area of their lives. Interestingly type A people also have an increased chance of suffering heart attack and they also happen to be the most ineffective people in their work. Everything they do, they do it in second gear, with the handbrake halfway on and with only two cylinders firing. Their work often needs to be re-done... properly.

So, what is the logic in multitasking if nothing gets properly done? Also, I've recently read an interesting article in Time magazine about the really false impressions of multitasking.

Researchers Gloria Mark and Victor at the University of California at Irvine tracked 36 information-technology office workers and recorded how they spent their time, minute by minute. The researchers found that the employees devoted an average of just 11 minutes to a project before they got interrupted by an e-mail, a telephone call or a knock on their office doors. After the interruption, on average, it took them 25 minutes to return to the original task. In extreme case people weren't able to continue on the same day.

The workers in the study were juggling an average of 12 projects per person. One described it as "constant, multitasking craziness." The five biggest causes of interruption in descending order, according to Mark:

  • a colleague stopping by the worker
  • being called away from the desk
  • the arrival of new e-mail
  • the worker switching to another task on the computer
  • a telephone call

So, I personally believe that even the thought of multitasking can have a serious negative impact both on your work and your life, including some of your best relationships.