Strategic Consulting as Detective and Diplomat
“Strategy consultant” is a job title that is can mean everything and nothing. It’s no surprise that people have trouble understanding what skills are necessary for a strategy consultant, let alone what the role even normally entails.
As a pricing strategy consultant, I’ve found it helpful to talk about the required skillsets in terms of two roles: detective and diplomat.
Let’s investigate both from the perspective of consulting in general and pricing in particular.
The skills of a detective include listening and breaking apart problems.
In order to find and identify problem areas, a detective must be a good listener. When you are engaging with a new client, it is critical to remember that they know their own business better than anyone else. Each company and organization has its own particularities, and it is a mistake to presume you know how things are done. The meaning of something as seemingly objective as a job title can vary greatly between industries, companies, and even units within the same organization. Without taking the time to learn details on the front end, you will waste even more time on the back end realizing that your recommendations suffer from a fundamental misunderstanding.
For a consultant, applying a cookie-cutter approach to problem solving is a sign of either arrogance or naiveté. While there can be standardized approaches to uncovering information or organizing concepts, the significance and application of such knowledge must be tailored to the unique circumstances of each organization. Even in pricing, where the goals are generally to protect or improve profitability, it is a mistake to think you have the right approach without careful listening first to managers’ priorities.
Breaking Apart Problems
Profitability. It sounds like a simple enough bull’s eye to hit. But again, the method and approach by which to reach this goal depends on developing smaller, actionable steps. Once you have done your listening, you will have starting hypotheses as to how to improve the organization’s performance (according to the measures that matter most to that group).
With pricing, problems with the most potential for improvements can manifest at any point in the Value-Based Pricing Framework. For example:
- Business strategy may represent an incomplete understanding of the marketplace
- Pricing strategy may need reconceptualization to achieve corporate and product goals
- Market pricing may be out of line with competition and the value delivered
- Pricing variance policy may suffer from a lack of control that allows profit leakage and damages market standing
- Price execution may result in inaccurate invoices and a convoluted closing experience for sales teams and customers alike
- Pricing analysis may be insufficient or nonexistent, leading to blind decision making
Any issue has multiple potential approaches toward improvement. It is important to be able to break each into step-by-step approaches that will bring the client closer to pricing excellence.
The skills of a diplomat include team building and persuasion.
For strategic consulting, results always depend on the assistance and follow-through of multiple people. This is especially true for such a cross-functional subject as pricing. While pricing is sometimes a separate function within an organization, oftentimes it is a role that is handled by marketing, finance, or even sales. Even when it is its own separate role, its success depends critically on those three functions and even more.
On the front end of a project, teams are important to grow and maintain a sense of importance and urgency with anticipated changes. Projects cannot progress without teams dedicated to their success.
On the back end, a project is useless if there isn’t a team to implement and maintain the new strategy, processes, and tools delivered. It is very easy to check the box on a project; it is much harder (and much more valuable) to make the changes internalized and permanent.
A consultant, by definition, is external to the group to which they are consulting. This means that consultants don’t have hierarchical or managerial control over the people whose help they need. Other tools are required to effect action.
Any organizational change involves shifting power from someone who has it currently to someone who doesn’t. This is always a time for potential conflict. It is critical to apply what you have learned earlier about the organization to bring people together to make changes together.
“Leadership is the art of getting someone else to do something you want done because he wants to do it, not because your position of power can compel him to do it.” U.S. President Eisenhower said so in 1954. The same is true for the type of persuasion critical to success as a consultant.
Organizations, in the end, are groups of individuals. Individuals have differing values, goals, and metrics of success. You need to be able to speak to that to make any change effective.
Combining the Two
Clearly, there is much overlap in skillsets as well. Diplomats must be good at listening and problem-solving too, and detectives won’t get far if they can’t encourage the participation of people who can help them.
The good news is that developing skills in one area helps in the other. Keep these in mind to become a more effective agent of change to your clients.