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| Habits |
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As I sat in the project team's workroom one afternoon, two colleagues were tussling over how to pull together a short sales proposal.
Consultant One: This format for the proposal is perfect. It has all the sections we need, it's worked for us before, and the project team already knows it well.
Consultant Two: That's great, and it will be easy, but I think the client is looking for something a little less structured.
Consultant One: Once they see how complete it is, they'll be glad we chose this approach.
Consultant Two: But...
Researchers tell us that most of what we do everyday, we've done before, which makes sense. After all, much of human behavior is based on habit. We all have long lists of habits, some of which we are blissfully unaware.
At times, though, our habits fail to serve us. Just ask a chronic smoker or an American trying to cross a London street for the first time. The smoker automatically reaches for that cigarette, and the pedestrian expects traffic to come from the left.
Our worst habits are those that remain unexamined. In our professional lives, for example, we may have habitual ways to sell work, deliver projects, position our businesses, or write proposals.
Could you change a habit that would make a difference in your business?
Enjoy this month's issue.
And send me an email if you have comments.
Mike
McLaughlin
Editor
Management Consulting News is a publication of MindShare
Consulting.
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| MCNews 12 Index of Professional Services |
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US Economic News |
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McNews 12 Index |
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Last month was a good news/bad news one for the US economy.
US factories were busy cranking out big ticket items, as durable goods orders jumped by 1.3 percent in July. Some economists speculate that the rise is due to high demand for US exports because of the weakness of the US dollar.
The recent run up in oil prices is driving an unwelcome spike in consumer inflation, which hit a seventeen-year high of 5.6 percent. On the bright side, home sales rose last month, though some attribute the jump to sales of foreclosed properties at fire-sale prices. It is estimated that almost 20 percent of US housing transactions are foreclosures.
The MCNews 12 Index companies gave up a little ground last month, while still easily outperforming the broader market for the year to date.
The beleaguered executives at BearingPoint are smiling this month, as the firm posted a net profit of $18.5 million for the second quarter of the year. The profit report, which is the first in three years for the firm, beat analysts' expectations. BearingPoint's executives are still exploring their strategic options, which could include a sale or merger.
 The $13.9 billion acquisition of EDS will make HP the second largest consulting and outsourcing services provider--behind IBM. |
Speaking of profit, both Hewitt and Watson Wyatt also reported second-quarter earnings that beat analysts' expectations. The HR and outsourcing businesses are performing very well in spite of a faltering economy.
Also this month, Hewlett Packard completed its acquisition of EDS. The $13.9 billion acquisition of EDS will make HP the second largest consulting and outsourcing services provider--behind IBM.
Finally, Infosys executives, seeing an opportunity to expand their presence in Europe, have offered to buy Axom, the British SAP consulting firm, for $753 million.
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MCNews 12 Index* |
YTD
Change* |
S+P 500 YTD Change |
| August 2008 |
1,014 |
13.5% |
-4.62% |
| July 2008 |
1,017 |
13.9% |
-5.32% |
| June 2008 |
988 |
10.6% |
-4.14% |
*Note: Due to its acquisition by HP, EDS stock is no longer traded. We have removed EDS from the MCNews 12 Index, retroactive to January 2008, added Korn/Ferry International in its place, and restated the 2008 Index to reflect these changes.
The addition of Korn/Ferry broadens the services market covered by the MCNews 12 Index. Founded in 1969, Korn/Ferry provides talent management solutions worldwide. Its services include executive recruitment, outsourced and middle-management recruitment, and leadership development solutions.
The MCNews 12 Index reflects general investor sentiment about the state of the global professional services industry.
The twelve publicly-traded companies included in the MCNews 12 Index account for roughly $80 billion in combined annual revenue, and serve clients around the world.
Learn more about the MCNews 12 Index 
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| Interview:
Chunka Mui |
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 "One of the biggest surprises in our research was the staggering percentage of business failures that were due to errors in planning as opposed to errors in execution."
Chunka Mui is a consultant, popular speaker, and the bestselling coauthor of Unleashing the Killer App. He also chairs the Diamond Fellows, Diamond Management & Technology Consultants' network of external advisors, and regularly works with Diamond consultants on client-related research and consulting projects.
Previously, he was a partner at Diamond, a vice president at the CSC Index division of Computer Sciences Corporation, and a founding member of the Center for Strategic Technology Research at Arthur Andersen & Company (now Accenture).
He talked to us about his latest book, Billion-Dollar Lessons, which warns about the strategies that are most likely to lead to a colossal business failure.
Read
our interview with Chunka Mui
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| Flying Solo, by Alan Weiss |
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 Why Consensus Is Overrated
Consensus is overrated. Agreement can be deceptive. Universal support can be universally dumb.
Our job is to create and circulate fresh air. Don't worry about being unpopular or going against the flow. Too many consultants are petrified about people not liking them.
Read
the article
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| Pay Raises Not Keeping Up? |
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In spite of the gloomy economic news, US companies are reporting that employee pay raises will average 3.5 percent in 2009, according to researchers at Watson Wyatt.
Companies plan to award steeper increases to high-performing employees. Those whose performance ratings exceed expectations will receive an average merit increase of 4.2 percent, while those who far exceed expectations will receive an average 6 percent increase.
The planned increases are similar to those offered in 2008, in spite of the rapidly rising US Consumer Price Index, which has gone up by 5.6 percent in the past 12 months.
Roughly 66 percent of US employers have contingency plans for times when the economy takes a turn for the worse. The most common planned response to a downturn is layoffs (52 percent), followed by plans to restructure the organization (46 percent), freeze the hiring of additional workers (39 percent), give smaller pay raises (27 percent) and freeze salaries (13 percent).
Many client organizations find it difficult to plan for the worst until events force them to act. Almost one-third of US organizations don't have a plan for managing in a downturn, which means their first act will likely be to drop forecasted pay raises.
This is a good time to ask your clients about how they'll manage through potentially rough times, and how they'll take advantage of the inevitable upturn in the economy.
The complete results of Watson Wyatt's Global Strategic Rewards Survey will be released later this year. About 1,390 employers participated in the survey, including 276 US employers.
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Memo to Sales and Marketing Consultants |
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In a recent study of 1,250 companies, consultants at Chief Sales Officer (CSO) found that salespeople are struggling to convert initial sales leads into meetings, and they are experiencing lower win rates for opportunities.
Almost half of the survey respondents said that their sales process needed improvement, across all phases of the sales cycle. It's difficult to generalize about why salespeople are struggling, but it's often a matter of mastering the first steps in the sales process.
If a company can improve sales effectiveness by even two percent, that can make the difference between a so-so year and a record-breaking one.
There's an opportunity to help sales and marketing executives diagnose--and improve--sales force effectiveness in converting leads to calls and, more importantly, converting calls to sales.
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| Special Report: 12 Experts on Pricing Your Services |
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Few topics inspire more curiosity than how to price professional services. Even though you can probably count the number of true pricing experts on one hand, editors at RainToday asked twelve people to weigh in on this question:
What is the one piece of advice you would give a professional service provider to maximize their fees for services?
Their answers are included in a free, 39-page report, "The One Piece of Advice You Need to Get the Fees You Deserve."
Like any compilation, this report contains some generic stuff. But it also includes some very good advice about creating compelling value as a basis for establishing professional fees.
Some of the leading thinkers in the field of professional services are represented in the report, which is worth a careful look.
Download it here.
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| Coming
Attractions |
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 "Each time we solve a problem, we begin a new game at a higher level, one in which we are facing new problems."
Next month, we'll talk with Michael Port, the author of Book Yourself Solid and Beyond Booked Solid, about growing a small business to the next level without losing your mind. Port offers us strategies for creating manageable and profitable business growth.
Look for the next issue of Management Consulting News on October 7, 2008.
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