Consulting Is A Perilous Business But Credibility Is What Matters
Posted on 26. Mar, 2009 by Stephen in Personal
I’ve called myself a “vendor-independent storage consultant” for more than a decade now, but my good friend, Greg Schultz, recently challenged me on that statement. Sure, I haven’t worked for a vendor of tin boxes and spinning rust, or the software that runs the stuff, but I’m firmly rooted in the supply side of things. As a provider of consulting services, I just happen to be selling myself instead.
This got me thinking: The real distinction is between buyers and sellers of products and services. There is a spectrum on the sell side between being an independent and a company man, but we are all vendors. Our credibility comes from who we are, not where we work.
The Business of Consulting
Consulting is a simple and perilous business, and it is governed by a simple formula: Billing rate times billability is gross revenue, everything else is overhead. You keep what’s left over.
Only three elements matter to a consulting business, and all are variable
There are really only two reasons a customer hires a consultant:
- They need specific skills or knowledge
- They need focus or manpower
The consulting business rests on these simple elements, and we all try to make the best of them. But at the end of the day, a company that has to make its money selling services has to decide what it wants to be:
- Strategic and professional services (PS) organizations focus on maximizing rate by specializing in a special area of skill and take shorter-term engagements.
- Body shops or outsourcers focus on maximizing billability by providing low-rate manpower in long-term engagements.
- Subcontractors focus on reducing overhead by running lean and outsourcing services to non-employees (typically self-employed “1099″ consultants).
I’m using common jargon here, and most consulting businesses wouldn’t want to be classified into one of these buckets, but the business speaks for itself. For any given consulting shop, ask yourself one question: Which of the three factors in the equation is being maximized?
This simple math deeply affects the life of the consultant. Some decide to go it alone, happily risking a steady income for a higher rate as a 1099 subcontractor. Others choose to stick with the steady life of the outsourcer, accepting a lower pay but knowing where they’ll work each day. Personally, I always gravitated towards the strategic and PS roles because the focus on skills made me feel special.
Who Are You?
Let’s step back to that continuum of supply-siders for a moment. In my field of specialization, enterprise data storage, one can immediately identify some positions along the spectrum:
- PR people relentlessly and (sometimes) creatively push their clients. They are among the most vendor-focused folks out there because that’s their job!
- Marketing communications folks have to be creative to create a product-centric point of view, so you can expect solid vendor-angled messaging from them.
- Product marketing people tend to be much more technical and tend to truly believe in the virtues of their product, since they helped shape it.
- Subject-matter experts in the vendor and reseller community know the plusses and minuses of the products inside and out and love to get into deep technical discussions.
- Analysts present their opinions in a balanced way, but the topics they focus on are driven by the vendors they work with.
- Consultants vary in focus depending on the aims of their company, but tend to be more utilitarian, asking “what does this do for a customer?”
I have great affection for folks in every category on this list. Take Sunshine Mugrabi, for example, a PR pro who has taken that job to a whole new level of relevance with her work for Ocarina Networks. Or Marc Farley, who works somewhere in 3PAR marketing but still manages to crank out hilarious videos and thoughtful commentary. Or Chad Sakac, whose knowledge of VMware and storage makes him credible as much more than “an EMC guy”. And what about storage analyst extraordinaire, Steve Duplessie? This list could go on and on, so please accept my apologies, but I could not possibly include everyone I respect.
What’s the common denominator that makes someone credible? Simply that they rise above their positions to protect and project their personal reputations. Yes, they all work for vendors and they all deliver sales, but their work benefits the community well beyond that.
Credibility
The net is simply that we each build up or tear down our own credibility in life. Consultants, analysts, and pundits do not corner the market, and simply being in one of these fields does not make one especially independent or trustworthy. What matters is what we do with whatever soapbox we have. Do you trust me?
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MrLoftcraft
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3parfarley
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sfoskett
