With the vast number of layoffs which have been the recent plague of the pharmaceutical industry, many management-level folks find that their industry knowledge and insider access positions them well for consulting. And why not? When CNNMoney asked what the best jobs in America are, management consulting ranks in the top three — behind software architect and physician assistant. The money is not bad either. Salaries for consulting vary, depending upon experience and industry. A typical range is from 50K to more than 200K, ranking it as one of the top 20 highest-paying jobs. And thus, the allure of consulting — good money, great job satisfaction, and the barrier to entry is limited only by your past experience. But do you really have what it takes? — because consulting has its downside as well. For example, one of the U.S.-based consultants with whom I spoke was calling me from overseas. The grueling travel, late hours, and punishing deadlines can put a tremendous strain on those with family commitments. Another downside seems to be that just about anybody can claim the title of consultant, thereby diminishing the credibility of the profession.
I reached out to a variety of consultants with varied levels of experience (i.e. from as little as 18 months to more than 20 years). My goal in interviewing these people — to provide our readers with insight into the profession, pitfalls to avoid, necessary skills and attributes, as well as resources on getting started should becoming a consultant be something you are pondering. Some of their clients include 3M, Baxter, Bristol-Myers Squibb, Deloitte, Fidelity Investments, GM, Hitachi, Kraft, Medtronics, Pfizer, Sony, and UCLA. None of the consultants interviewed work for the large consulting groups such as PricewaterhouseCoopers, though interestingly enough, they have served as consultants to these consultants. Heeding their words of wisdom may prevent you from having to learn the field of consulting via the school of hard knocks.
How They Got Their Start
Leslie Kossoff has been a speaker, writer, entrepreneur, and confidential advisor to executives for 23 years. “I became a consultant because of my frustrations with my previous job,” she says. As a director with a major aerospace and defense contractor, Kossoff was responsible for a quality and change initiative inside a division of 20,000 people. Executives were interested in understanding how people from inside the organization were doing things, generating ideas, and implementing innovations. A system was created to capture this information, and a presentation of recommendations was conducted with senior executives. “The last straw for me,” says Kossoff, “was when the executive team with which I was working brought in a group of consultants that made the exact same recommendations which we had made internally.” The executive team paid the consultants several hundred thousand dollars for the same recommendations which had been generated internally. This was an eye-opening experience for Kossoff because she felt, that in order for her to get executive management to listen to the ideas being generated within a company, you have to be from the outside. “If I want to be able to achieve what I want for an organization, I have to be a consultant. I have to be outside the company. The system demands it,” she states.
Unlike Kossoff, Jacquie Mardell, director Anhvita Biopharma Consulting; Peter Calcott, president and CEO at Calcott Consulting; and John Farris, president and CEO of SafeBridge, all got into consulting because the corporations they worked for underwent restructuring. Both Calcott and Mardell have the same regrets — wishing they had grabbed the opportunity to become consultants sooner. For Farris, the story of how he and his colleagues started SafeBridge (a life sciences industry safety, health, and environmental services firm) is a little different.
In 1995, Farris worked for Syntex Corp., a Palo Alto, CA, pharmaceutical company which was being acquired by Roche for $5.3 billion. A new management representative from Roche visited the Syntex facility in April 1995 to announce that all Syntex management would be gone by the end of the year. Just one problem — Farris and his team of environmental and toxic experts were in the process of being mobilized to attack a court-ordered cleanup project of 26 sites, including Times Beach, MO, — a small town southwest of St. Louis, which, by order of the federal government, had been evacuated of all of its 2,240 residents in what was the largest civilian exposure to dioxin in the United States. Dioxin is deadly to animals and causes chloracne — an eruption of pimples, cysts, and pustules — and is suspected of causing cancer in humans. After being told he was going to be let go, Farris asked Roche management who was going to be doing the cleanup. Roche quickly realized it needed Farris and his team, but now he and his crew no longer trusted Roche. Farris negotiated an agreement that would keep him and his team in place through the completion of the Times Beach project, and when that was completed, they would launch SafeBridge, with Roche being its first client. When SafeBridge opened its doors the following year, it had a $500,000 contract from Roche. Farris hadn’t intended on becoming a consultant. He confided that when he was working for Sytnex, he had aspirations of retiring at 55, an age he passed over eight years ago. That being said, he enjoys having had the opportunity to build a company which is recognized as an industry leader in its field, from the ground up. He still puts in 60-hour work weeks and has three offices around the world. He advises, “Unless you are passionate about it, don’t do it. Be responsive, and go the extra mile to help clients and prospective clients. Surprise them with your commitment regarding turnaround time and not charging for every little thing,” he states. Most importantly, Farris advises consultants to focus on building long-term relationships with clients. Mardell, Calcott, and Farris all entered the consulting world unexpectedly. Nonetheless, they did have some sort of business plan. Their advice — if you are seriously thinking about becoming a consultant, don’t make the mistake of entering into the business without a formalized business plan with cash flow projections, a SWOT analysis, and so on.
Pitfalls To Avoid
If you were in a large corporation, you may be tempted to set up your business with a loose structure in an attempt to avoid bureaucracy. Moving completely away from a corporate structure of having written goals, objectives, and firm budgets is not wise and can be a struggle to implement later. “Thinking that because you are self-employed means freedom from bureaucracy results in seat-of-the-pants management,” say Farris. He advises getting advice and support from outside professionals such as accountants, insurance agents, and lawyers and starting with a structure for your business. Further, if you are trying to set up a consulting firm with several team members, avoid making the mistake of attempting to do so without administrative support. This is one mistake Farris was thankful to have avoided. “I told the group I was not willing to start the business without an experienced office manager to mind the business while the technical professionals found and completed the work,” he states.
For Mardell, her mistake was undervaluing her services when she was first getting started. “I sort of doubted my ability and lacked the confidence I needed, so I settled for a lower rate of pay than I should have,” she says. She learned from this, and says she will never do it again. According to Kossoff, a 23-year consulting veteran, this is a very common pitfall for new consultants. “Never adjust your fees,” she advises. “Adjust your services. If the client says they aren’t willing to pay your fee, find out what they are willing to pay and adjust your services accordingly,” she recommends. Consultants typically have a daily rate. Kossoff believes structuring fees based on the type and length of engagement is better for you and the client. “You need to be honest with yourself as to how much time you think a project is going to take,” says Kossoff. Once you have done this you can develop your fees based on your hourly or daily rate for a big or small project. Then you can present the client with a price. Avoid presenting clients with a daily or hourly rate for a project because this seems too open-ended, and according to Kossoff, “They get scared about what you’re going to be doing to their budget, because they know how much they want to spend.” For a new consultant, it is important to take the time up front to analyze your value in terms of time. Doing so will allow you to build menus of services and their fees. This will allow you to more easily adjust your fees for clients who experience sticker shock by being able to remove items from the menu and lowering the price. Kossoff also advises getting a percentage payment up front for two reasons. First, it helps with the mortgage payment. Second, it makes the client feel committed to the project. “Until they put that money out, they don’t have ‘skin in the game,’” states Kossoff.
Another common mistake for a new consultant is becoming too closely aligned with the client, behaving as if you are an internal employee. Never ask for an office on-site at a client location. If you need an office, Mardell and Kossoff suggest you just ask for a job, because you will find it very difficult to break away once you have embedded yourself into the company. Good consultants have planned obsolescence so that when the job is done, the client is free to implement the recommendations without being dependent on the consultant. No on-site office makes this much easier.
Another mistake Calcott sees rookies making is taking on work just to pay the bills when there might be someone more qualified either internally or externally. Remember, demonstrating a willingness to recommend someone else for a project builds trust, return business, and referrals. For example, Calcott once had a client who wanted him to write some standard operating procedures (SOPs). Instead of taking the job, he suggested the client have someone internally produce these documents, because it would create a sense of ownership for that individual, and the SOPs would be written in the company’s own “language.” A project like this is also more likely to be successfully implemented because someone inside the organization has a vested interest in seeing it succeed. Not doing this is what Calcott refers to as consultant overfishing — the willingness to do everything for a client and bill for it as well. If you really want the client to be successful, be willing to recommend other consultants who may be a better fit for a project or internal processes/resources that will save the client money.
Skills Versus Attributes
Skills, such as technical competence in an area of expertise, aptitude for oral and written communication, a knack for running a business, marketing, and selling are all things which can and should be learned if you are going to be a successful consultant. Attributes, though, differ from skills. Successful consultants need the attributes of honesty, integrity, trust, strong interpersonal qualities, the ability to quickly assess a situation, and most importantly, courage. The consultants I interviewed caution you from entering the profession if you do not possess these attributes, or else find a business partner who does.
Consultants often have to deliver messages that make clients a bit uncomfortable, especially if it has to do with change management. Consultants need to have the courage and conviction to be able to deliver tough messages in a tactful way without their being watered down. According to Kossoff, “You have to be brave. Skills can be developed, but you have to have a comfort with risk that goes beyond anything else. You have to be courageous for yourself, and you have to be courageous for your clients.” Consultants are usually brought in because the client has a problem which can’t be fixed internally. “You have to be willing to say things you know could conceivably lead to their terminating your contract,” she states. “They’re spending money that, no matter how much they have, they don’t have to spend on you, unless you’re going to do something that’s radically different from what they would get from keeping it inside anyway,” concludes Kossoff.
Calcott suggests using the Internet to begin your research. One site he found helpful was the Small Business Administration. “They have an incredible amount of information which, if you go through it, can help you set yourself up, whether it be as a sole proprietorship, LLC, or corporation,” he affirms. Farris recommends taking the time to read books on consulting and talking to experienced consultants and business advisors. Doing this helped his team develop a set of founding principles which still guide them today and include: Think long term, always have the best interests of the client at heart, accept the client’s problem or challenge as your own, write good proposals and ask the client to manage to those commitments, focus on quality in everything you do, stay within your boundaries of technical knowhow, underpromise and overdeliver, and finally — earn more money than you spend.
Kossoff recommends seeking out a mentor. For her it was Dr. W. Edwards Deming, most well-known for his role in turning around Japan’s manufacturing industry after WWII and considered by many to be the father of quality. Kossoff sought the opportunity to become one of his assistants while attending one of his seminars. She had the opportunity to briefly meet with Deming and inform him of how meaningful she found his theories. He asked her if she would like to travel with him as an assistant. She jumped at the opportunity and was able to see firsthand how he implemented his consulting model. Kossoff describes working with Deming for three years as an eye-opening experience. “It really taught me what is wasted inside an organization in terms of human potential, capability, product service, and innovation. The waste is just horrific,” she exclaims. Of course, your mentor does not have to be someone world-famous. Have the courage to seek out someone, perhaps within your organization, whom you admire and would enjoy learning from. Following the wisdom provided by your mentor and these consultants will serve you well should you ever decide to take the plunge into the challenging and rewarding field of consulting.
What To Do During An Economic Downturn
During an economic downturn, consultants are often the first things to be cut. Kossoff hates the financial impact of economic downturns but also sees a positive side to the situation. “In a downturn, everything is up for grabs,” she says. It gives you time to reflect, analyze, assess, plan, and prepare. Use the time to start putting the pieces into place for when the cycle reverses.
Farris says that if you have developed your war chest as advised, then you can focus your efforts on increased marketing efforts. Take the time to update your website, write papers for journals, author a book, seek out speaking opportunities at professional forums, and contact prospective clients with ideas on how you can help.
Calcott also advises adjusting your strategy. For example, before he moved into industry he had taught in university. He approached a school about some of their current offerings. Through the conversation he uncovered the administration’s desire to develop a new offering. He ended up consulting with the school to develop the curricula for a new postgraduate certificate program in the areas of quality and compliance, regulatory affairs, process development, and manufacturing as these pertain to the pharmaceutical and biotech industries. He was invited to teach one of the courses, which kept him front and center in the industry and garnered him other consulting opportunities. “If you are really serious about being a consultant, be on the lookout for other opportunities, including academia,” Calcott espouses. In other words, don’t throw in the towel on your consulting career during an economic downturn.
5 Things A Consultant Should Do When Getting Started
Build your war chest — Make sure you have two years of living expenses. If you tap into it, put the money back in during the good times once successfully established. Not having to worry about money will prevent you from becoming desperate (i.e. choosing work which is not the best fit, lowering your fees, or giving up).
Define your consulting focus — This will help you establish who your potential customers are as well as your competition.
Build a realistic business plan — Be sure to set up a business system and utilize outside sources for professional assistance ( e.g. bankers, lawyers, accountants, HR ). With a realistic budget and appropriate funding you can focus on building your clientele. There are plenty of free resources to get started, such as the U.S. Small Business Administration (www.sba.gov).
Develop a marketing strategy so you can best tell your story — Decide which conferences to attend. Volunteer to moderate sessions, serve on a panel as a speaker and develop editorial which can be submitted to different journals and trade publications. Social media should also be a component of the marketing plan and is a great inexpensive means of building a reputation. Set up profiles on LinkedIn, Facebook, Twitter, YouTube, etc. Set up a website and a blog, and be sure to keep them up to date. Not sure how to start? Dan Zarrella has plenty of good advice at danzarrella.com.
Network — Talk to as many people as you can. For example, if you get a request to connect via LinkedIn, don’t just accept it; request that they call. Perhaps there is more to be gained than just getting access to each other’s connections. Word-of-mouth still remains one of the most powerful marketing tools at your disposal and is best achieved through excellent service and effective networking.