Interpersonal Business

Vol. LXXXI

Dear Manager,

I also find myself contemplating the “takers of the world” who never seem to have anything of value to offer their profession. I believe we’ve all found this dichotomy to be perplexing. We can’t penalize those in need because there are those who are there to take advantage.

We’ve all been assisted on our path to success. If we retain a clear memory of this fact we, in turn, have a moral obligation to assist others along their path. Time must be found, regardless of our schedule, just as it was made available unselfishly to us. While this topic could capture a full issue of INTERPERSONAL, I’d like to give it a slight twist.

Where does freely providing advice to others end, and the act of consulting, sharing one’s own intellectual property, begin? I believe this is a quandary for most all professionals. This has little to do with the recent college graduate, or the friend who needs some advice over lunch. This has nothing to do with volunteering to assist companies in need, such as the Service Corp. of Retired Executives program. This has everything to do with receiving a call from parties whose objective is to gain personal or financial advantage from your expertise. That’s the rub, that’s where I feel ones good nature can be taken advantage of.

We certainly have a lot invested in our own education over these many years. The hard knocks cost us dearly both emotionally and, just as often, financially. I’ve always made a personal commitment to, in the very least, show acknowledgement and provide reciprocal assistance to those who have assisted me in any way. I hope that they understand I am a “reciprocator” in the hope we can assist one another again. While this would be true for many professionals, we also know it is not true for all. No one wants to keep score.

What is a new idea, let alone your expertise, worth? While some would say there are no fresh ideas, I believe in this time of ongoing technological transition, there are more new ideas than there have ever been in the past. These ideas weren’t thought of for the simple reason that they had no current or relevant application. Quite simply, now they do. My door is always open to a better way of doing things. In fact, there are times when I am obsessed by it. I find this time to be very exhilarating, with enormous potential for personal and organizational growth. I read about and analyze business practices at an ever-increasing pace.

This information can be found in many forms, and often the most cost effective approach is in the expertise of others … possibly yours. We can pool our network of reciprocal associates for the answers to many questions. Yet I have found it difficult to garner the depth of insight or detail to solve the broader equations. Often, we need a bit more. Certainly others will continue to ask for your expertise. How can you share in the benefit of providing your knowledge and ideas on a professional basis? We’ve just returned to the quandary that brought us to this discussion.

FINDING A MODEL THAT WILL WORK

It begins by first acknowledging that you have a significant amount of knowledge, experience, and expertise to offer. How can you possibly ask others to respect your time and expertise if you haven’t established a sense of value for it? What is an hour, a day, or week of your time worth? The price of time should be consistent with the lost potential of having invested equal time in another endeavor.

I’ve often written that at this stage in my career it’s very important to me that my services create clear and apparent value to all parties. There are consultative opportunities with individuals or companies that either don’t fit my expertise or whose values are inconsistent with my own. On more than one occasion I’ve taken myself out of a contract due to incompatibility issues. If I can’t see substance and consistent progress in my participation, I can’t become a part of the problem. In contrast, I’ve enjoyed some extraordinary and productive working relationships for extended periods of time. The role of a consultant can be very pure, but all parties must understand two things: First, it’s the consultant’s fundamental responsibility to be candid with observations and analysis, and to clearly express them. Second, the final decision is always the client’s.

I’ve researched a number of compensation options for my own use. Now that my only source of income is consultative-based, I needed a formula that would create value for both my clients and me, personally. Why shouldn’t you create a similar formula for your own time as well? My research suggested there were three formulas that would seem most beneficial to all parties. Failure to address your established compensation rates early on suggests you have no more respect for your time than they do.

1) Hourly/Daily: I’ve used this for limited projects and for specific areas of a client’s focus. In most cases, it’s comprised of a single meeting. Only you can establish a fair rate, but this is by far the highest rate I charge. I also believe it’s been the greatest value for my clients. In a very few hours, the majority of the obstacles in a focused area can be knocked down, creating priority, analysis and direction for a client. Whether it takes a few hours, or a couple of days, a client can literally save thousands of dollars versus the alternative of trial and error.

Challenges and Benefits: Assisting on an hourly or daily basis encapsulates the consultant’s experience leaving less time to provide the breadth of information the client needs to apply the conclusion. Time restraints may ultimately position the consultant as either a cheerleader or a wet blanket. Much can be shared in a limited period of time, yet will the information be assimilated and the proposed strategy effectively implemented? In the end, I believe it’s a small price for the client to pay as compared to proceeding into uncharted waters alone.

2) A Retainer: This approach to consulting provides a much greater long-term reward to the client. Fees are based on the number of days per month they choose to use consulting services, and usually include a one-year contract. The monthly rate is negotiated, but normally falls to approximately 70% of the equivalent daily rate. A retainer provides the opportunity to develop an ongoing relationship and partnership in meeting your collective objectives. It also provides ongoing checks and balances with regards to progress being made. I’ve found this to be a primary focus in working with my clients. We collectively establish a time line and list of goals and priorities for a ninety-day period. Once duties are delegated to either the client or me, I formalize the agenda in writing and return a copy to the client. Periodic reviews are made to establish progress and momentum.

Challenges and Benefits: In the consultant’s absence, there are no guarantees that the client won’t fall back into old established patterns and thought processes. In other words, you can’t want it more than they do! The good news is that, in this scenario, the consultant is available (as defined in the contract) to assist in the effective implementation of the established initiatives.

3) Shared Risk / Shared Reward: In the right circumstances, this is by far my preferred consulting relationship. To proceed in this model, it’s critical that the consultant is confident in the collective objective, and in the client’s ability to implement it effectively. Failure on a client’s part to follow through with the specifics of one’s initiative, and you’ll be left whistling in the wind. This approach is most effectively used in the implementation of innovative ideas, products, or expansion strategies. By nature, this type of relationship obviously demands greater partnership. I’ve used this approach in conjunction with a retainer as well. Effectively, the consultant is compensated on a percentage of the agreed-to sales growth, product performance, or revenue recovered.

Challenges and Benefits: Let’s put our shared risks and rewards side by side; we both win or we both lose. You have my full commitment: in turn, I’ll need yours. It doesn’t get any better than that. I have found these to be the most rewarding consulting relationships.

I hope this month’s issue gives you some alternatives, both in professionally assisting others and in dealing with those who are looking for a free ride. In the process, I hope it provides you with the time to do a little reciprocating!

Personal Regards,

Keenan

INTERPERSONAL© is published by INTERPERSONALBIZ.COM, Keenan Longcor, Editor, ©2011. Duplication of this publication is permitted for both personal and business use. Excerpts may only be quoted with acknowledgment of INTERPERSONAL/INTERPERSONALBIZ.ORG as the source. For re-publication rights, please contact the editor at KEENAN@INTERPERSONALBIZ.COM