Innovation In Consulting Offers
What if the secret to a breakthrough consulting offer was not creating a breakthrough consulting offer?
Lots of solo consultants and small boutique firms I talk to are making their lives more complicated than they need to be. And are in fact risking the very survival of their business.
They are prioritising Innovation over building a strong foundation of business growth and success.
An example of this is trying to create an offer that the market hasn't shown they will buy or worse, they don't even know they need. Often as a response to increased competition or changing buyer behaviour, often demanding more for less.
And sadly this is something I'm hearing a lot of recently.
Now, I'm not saying don't create new innovations in your consulting offers. I'm saying that to be able to create innovation you have to have the foundational elements in place first.
There are 2 foundational success factors for smaller consulting businesses. You must understand where you are in the quadrants of the intersections of these success factors and how it relates to creating innovative consulting offers.
1. Consistent cash flow
2. A network of the right people or the right sales skills
1) Consistent Cashflow:
Establishing consistent cash flow has to be the number 1 priority for every solo consultant and a small boutique.
Without this, you can not invest in marketing, exceptional client delivery and creating new, innovative offers.
2) A Network Of The Right People Or Sales Skills
Yes. You might argue this is 2 separate things but this wouldn't then fit my 2 axis thought leadership model!
What do I mean by this one?
A foundational success factor for a thriving consulting business is being able to access a network of the right people i.e. the decision makers that will buy your offer.
As I am writing this my Hemingway app is trying to change 'network of the right people' to an extensive network. Hemingway is wrong - You don't need an extensive network. You need the right network of the right people.
And the second component to this is sales skills and specifically the ability to sell against unknown pains, selling long sales cycles with multi-stakeholder decision-making units.
If you sell to know pains and with an easy-to-say yes to offer then you don't need to sink years of your life into becoming the best salesperson in the world.
What Do I Mean By Innovation?
For this model innovation is the level of innovation around the problem you solve for a client - nothing more or less.
So if you are solving a known and immediate problem then there is no innovation.
This is something clients are familiar with so you don't need to educate them at all.
If you are solving a problem that you think the clients don't even know they have then this is what I'm calling solution innovation for this model.
Take Elixiir - one of the high-growth Consulting companies that position themselves as the challenger consultancy - they innovate on employee pay and company ownership, delivery models, and client partnerships but don't innovate too much on the problems they solve in Industry.
If you are innovating in how you deliver the services then this is brilliant but not what I'm talking about.
If you can deliver the result in 6 weeks down from 20 due to delivery innovation then good for you.
Bill people more but this isn't solution innovation, it's solution optimisation.
Remember we are consultants, not tech or product developers. Books aimed at SaaS and Tech and Start-up success are largely irrelevant to Consulting.
Let's see how I'd assess and advise you on your likelihood of success in applying solution innovation in your consulting business.
THE SOLUTION INNOVATION QUADRANT
Before I jump into explaining the model it is vital to make 1 thing clear.
Unlike most quadrant-based models there is no need to see it as a goal to move from 1 quadrant to another.
No quadrant is better than another.
They are different and require different strategies and tactics to be successful. All you need to do is be brutally honest about the quadrant you are in.
Quadrant 1: Innovation Leaders
High on both Success Factors, (consistent cash and network/sales skills) this stage is perfect for exploring innovative, breakthrough offers. With consistent, predictable cash flow and even better cash reserves then a decision can be taken whether to invest in educating the marketplace about a problem they have that they aren't even aware.
This will take considerable investment, considerable time and considerable skills.
The main challenge here is maintaining the balance of consistent monthly cash flow from your core consulting offers and the drain before new cash comes in from the innovation.
Quadrant 2: The Stable Solvers
With a firm grip on predictable monthly cash flow but lacking the right network or sales/marketing skills, businesses here should focus on what they do best, utilising their steady cash flow to deliver value in familiar areas.
The objective must always be to protect the core. Do everything possible to maintain and grow the cash coming in from core consulting offers.
There is no need to create offers here to solve problems the market doesn't know it has. A boutique consultancy can live within this quadrant very happily for a long time unless there is a threat of the market being disrupted or new non-consulting solutions entering the market i.e a SaaS solution.
1) A continual focus on building out a network of the RIGHT level of senior people that are likely to carry on buying your core offer and any possible future solution innovations if you want/need to create them.
2) Build out your thought leadership using your cash flow to cement your Niche dominance. Use paid media especially to promote content to your target audience addressing known pain points.
Quadrant 3: The Network Navigators
Here consultants have one of the 2 following assets:
1) A warm network of the right people (decision makers) that can buy consulting
2) Sales skills based on experience selling high-value consulting deals which require multi-stakeholder engagement, political navigation, selling to politics, managing long sales cycles etc
If you are in this quadrant then with the right approach you can really build a great business. The first focus for you is to create predictable cash flow.
1) Sell to the people you have in your network. Sweat the asset you have created. Even if the solution isn't sexy, innovative or what you aspire to long term. Consider it your foundation building to give you the consistency to experiment later on. Run client insight interviews with your network. What are the immediate and pressing pain points they are likely to be spending money on now that you can solve?
2) Apply situational fluency - If you have a good network of the right people and the sales chops to handle everything thrown at you then you must maximise that value. This isn't a time for an irresistible front-end offer or a productized service. You need to be nimble, diagnose with the right senior people and then create solutions to fix those present and urgent problems which you'd present in a more conventional proposal format.
3) Once your cash flow becomes more predictable you can take the projects you have won and turn the solutions into productised services to give you more freedom for standardisation, growth and possible solution innovation.
Quadrant 4: The Groundwork Growers
Low on both Success Factors (consistent cash flow and network/sales skills) this stage is not about innovation but focus.
The focus should be on building cash flow and network, creating a solid foundation for the future.
Predictable cash flow is going to come from selling core consulting solutions to known and immediate pain points in your target niche. This is not the time to even consider the investment and time drain from selling solution innovation.
1) Sell to the people you have in your network. Sweat the asset you have created. Even if the solution isn't sexy, innovative or what you aspire to long term. Consider it your foundation building to give you the consistency to experiment later on.
2) A continual focus on building out a network of the RIGHT level of senior people that are likely to carry on buying your core offer and any possible future solution innovations if you want/need to create them.
3) Build out an Irresistible Front End Offer that you can proactively sell to your network which ascends people into a bigger consulting piece
The Pitfalls of Ignoring Your Current Stage
Not recognising where you are on the quadrant could spell disaster for your business. I'll illustrate with an extreme example from a recent call with a prospective client:
Prospective Client Brief:
- Looking for knowledge on how to sell to people who don't know they have a problem. Wants to launch a solution innovation offer to solve a problem that exists that the market doesn't know they have.
- Solo consultant historically engaged in day-rate work to deliver truly huge projects
- Inconsistent cash flow due to not having committed future long-term projects
- The project if sold correctly would be £500k+ and entail a long sales process with many people involved. High risk - made worse by the fact that the public sector (no commercial imperative) would be a target industry.
- The consultant had been involved in selling large projects before but never alone - only as part of a group and largely as the implementer's voice.
- A maximum of 20 people who could be decision-makers in their existing trusted network. Not too many more that would go to bat for them as an influencer in their organisations too.
What would you recommend to this Consultant?
Ok... so this consultant is in the Groundwork Growers segment with some network, some sales skills and some cash flow but far from predictable.
- Don't focus on a new innovative solution. Focus on selling to a known problem that companies are historically known to buy.
- Break the traditional bigger offer down into smaller chunks to increase the speed to get to yes and increase cash flow.
- While working on creating predictable cash flow run client insight interviews to speak to the 20 people in his network that could buy the new solution (a little too simplistic as no 1 person would be able to say yes). Get their feedback and insight
- Work to establish if the market actually wants the new solution and will they pay or if are they evangelising based on their expertise about something that will never get off the ground.
- Build out his network on places like Linkedin for his future ideal client decision-making unit
Despite my best recommendations, the consultant wanted to plough on focusing ONLY on selling a brand new, unproven solution to a problem the market didn't know they had with a solution that would be a multiple £100k investment rather than building stable cash flow utilising their existing assets while slowly proving the validity of the new offer.
And I want to make this absolute clear here - this was my fault. Not his. I hadn't done my job properly.
Trying to jump quadrants or ignoring the opportunities inherent in your current quadrant could lead to significant setbacks for your consulting business.
All of them are valuable and none inferior to the other.
Remember that the pathway to achieving breakthrough offers in your consultancy business is not linear, but a journey through stages - if you even want the journey.
You can function fantastically well in 2 of the 4 quadrants (highly predictable cash flow) and you could argue that Stable Solvers is the Nirvana - not Innovation leaders
Where are you in the quadrant?
Want to learn more from me? Here's a few options: Follow my content on LinkedIn
1. Grab a subscription to my free newsletter - if you aren't already
It’s the roadmap to attracting prospects, signing clients, and growing your consulting business. — Click Here
2. Join a community of forward thinking consultants on Linkedin Here - here
3. Work with me and a group of your peers to build a leveraged consulting business - The Consulting Revenue Accelerator