WEBVTT 00:08.160 --> 00:09.360 Good afternoon. 00:11.700 --> 00:20.900 My name is Edward Verlander and I live about 50 miles east of New York 00:20.900 --> 00:22.560 City on Long Island. 00:22.860 --> 00:24.060 Anyone been to New York City? 00:25.080 --> 00:26.240 You know where Long Island is? 00:26.860 --> 00:30.000 Okay, so that's where I live on the North Shore by the water. 00:31.980 --> 00:35.300 But I was born and raised in England but have spent all of my 00:35.300 --> 00:38.500 professional working life in the United States. 00:38.700 --> 00:40.380 So I have a funny accent. 00:40.580 --> 00:41.740 It's a little bit of both. 00:43.900 --> 00:48.040 On the South Shore. 00:48.780 --> 00:52.760 Sandy was a big, big problem for us and for many, many communities but 00:52.760 --> 00:53.540 not mine. 00:53.940 --> 00:56.100 Although I had lots of big trees come down. 00:57.420 --> 01:04.260 So I'm here with my colleague Gerhold Rumpf today and he and I, with 01:04.260 --> 01:13.480 others, we come to Karlsruhe to deliver a particular training program. 01:14.280 --> 01:19.140 I have a consulting company that does leadership development, 01:19.920 --> 01:25.020 executive coaching, management training and other things in different 01:25.020 --> 01:25.800 parts of the world. 01:25.960 --> 01:30.860 I have a business in China and a staff in China and colleagues here in 01:30.860 --> 01:33.520 Germany as well as an office, of course, in New York. 01:34.620 --> 01:40.740 And part of what I've been doing, of course, is doing a lot of 01:40.740 --> 01:41.160 consulting. 01:42.020 --> 01:46.920 I used to work for a consulting firm and then since 1993 I've had my 01:46.920 --> 01:47.800 own consulting firm. 01:47.900 --> 01:53.220 So I'm very interested in consulting as a field, as a business. 01:53.920 --> 01:58.540 It's a wonderful place for entrepreneurs, actually, to start a 01:58.540 --> 02:00.640 business and to grow a consulting service. 02:02.280 --> 02:07.860 Well, part of that then has involved developing what we call 02:07.860 --> 02:10.020 consulting business essentials. 02:11.400 --> 02:16.000 There is a curriculum of courses and each course is two days long. 02:16.920 --> 02:22.200 And I've been here delivering that course for many companies here in 02:22.200 --> 02:31.620 Karlsruhe, mostly small to medium-sized IT companies that want to grow 02:31.620 --> 02:34.500 and develop and get bigger and so forth. 02:34.740 --> 02:40.600 So I and my colleagues have been helping them with that by having 02:40.600 --> 02:42.780 their employees attend the training. 02:43.200 --> 02:45.640 And I do a lot of delivery myself as well. 02:46.580 --> 02:50.800 And one of the things that emerged out of this experience and interest 02:50.800 --> 02:52.440 was the book that's going around. 02:53.740 --> 03:01.460 It's a unique book in many ways and competes with, at least in North 03:01.460 --> 03:06.460 America, what is the biggest seller on the topic, which is called 03:06.460 --> 03:07.520 Flawless Consulting. 03:08.980 --> 03:14.440 But that book on Flawless Consulting appeals to people that do a 03:14.440 --> 03:17.540 particular kind of consulting called Organizational Development, 03:18.060 --> 03:19.840 Organizational Effectiveness Consulting. 03:20.180 --> 03:21.480 And it's a very good book for that. 03:21.840 --> 03:27.340 But I wanted something that was more comprehensive, since there's lots 03:27.340 --> 03:28.520 of different kinds of consulting. 03:29.120 --> 03:32.580 And what I do is just kind of one area of consulting. 03:32.760 --> 03:35.780 And I'll speak about that in a few minutes, about the different areas. 03:39.960 --> 03:43.460 So I wrote a book that takes a different approach and is more 03:43.460 --> 03:45.080 comprehensive and has a model. 03:45.200 --> 03:47.940 And I'm going to show you the model in a few minutes. 03:50.300 --> 03:51.660 Why am I here in Karlsruhe? 03:51.820 --> 03:58.240 It's because the IT companies recognize that their customers need 03:58.240 --> 03:59.880 consulting services. 04:00.460 --> 04:04.840 These IT companies produce very good products of all different kinds 04:04.840 --> 04:06.520 to do various things. 04:06.960 --> 04:10.620 And they've hired hundreds of people like yourselves. 04:11.540 --> 04:15.720 We were just at a training program early part of this week, and there 04:15.720 --> 04:19.280 were four brand new graduates. 04:20.040 --> 04:24.020 I'm not sure precisely when they graduated, but fairly recently, fresh 04:24.020 --> 04:26.160 out of university, a number from KIT. 04:26.920 --> 04:32.240 And they've joined one of these companies to learn how to consult and 04:32.240 --> 04:38.560 to provide, if you like, value-added services to this company's 04:38.560 --> 04:38.980 customers. 04:40.880 --> 04:41.880 Can you all hear me okay? 04:42.660 --> 04:42.940 Good. 04:44.800 --> 04:48.300 I don't know how good your English is, but I'm just going to keep 04:48.300 --> 04:49.120 going at this pace. 04:49.620 --> 04:53.020 If you don't understand me or I need to slow down or something, just 04:53.020 --> 04:53.700 let me know. 04:56.180 --> 05:05.300 So these companies feel as if they can extend their services and 05:05.300 --> 05:10.920 include consulting and add more value to what they bring to their 05:10.920 --> 05:15.000 customers in and around this region of Germany and beyond. 05:15.720 --> 05:20.400 These companies are big enough to do international work as well. 05:22.740 --> 05:27.460 But as you might expect, they tend to look for people with backgrounds 05:27.460 --> 05:33.580 and degrees in informatics and engineering and mathematics and that 05:33.580 --> 05:34.000 sort of thing. 05:34.500 --> 05:37.620 And they might have bachelor's degrees, master's degrees, and also 05:37.620 --> 05:39.440 PhDs in these subjects. 05:40.040 --> 05:41.140 This is their expertise. 05:41.980 --> 05:43.020 This is what they know. 05:43.940 --> 05:45.240 This is also their focus. 05:47.040 --> 05:52.100 And what the focus of their research and what the Vorstands of these 05:52.100 --> 05:55.800 companies, or Geschäftsführer, I'm not quite sure which one it is, or 05:55.800 --> 06:01.000 maybe both, recognize is that their employees need to expand their 06:01.000 --> 06:05.480 ability to be able to consult with their customers. 06:06.240 --> 06:09.160 They're very good at the sort of things that the professor was just 06:09.160 --> 06:13.660 discussing in the building of these, if you like, machines and how 06:13.660 --> 06:14.900 those have evolved over time. 06:15.240 --> 06:21.060 But when it comes to consulting, no exposure, no training, no 06:21.060 --> 06:22.120 education in that. 06:22.620 --> 06:23.500 That's my book. 06:24.080 --> 06:25.220 They can buy it and read it. 06:25.920 --> 06:29.240 And that's the training program, Consulting Business Essentials, which 06:29.240 --> 06:34.580 is designed to try and help them be more consulting in the way they 06:34.580 --> 06:36.780 work. 06:37.620 --> 06:41.080 So that's why I'm here and kind of what I do, at least in part, 06:41.500 --> 06:43.760 amongst other things in my consulting business. 06:45.680 --> 06:50.100 I knew you were discussing the whole concept and idea of value 06:50.100 --> 06:51.920 proposition today. 06:52.520 --> 06:56.940 I don't know what you did before I came in, so I hope I don't repeat 06:56.940 --> 06:58.240 anything that you've already covered. 06:59.000 --> 07:02.860 But I'd like to sort of step back and take a look at the whole 07:02.860 --> 07:09.300 question of value and where value comes from in a company, in any 07:09.300 --> 07:13.860 company actually, whether it be a technology company or otherwise, and 07:13.860 --> 07:15.960 how value can be recreated. 07:17.020 --> 07:21.140 It can be born when you start the company and can develop, but a large 07:21.140 --> 07:25.360 company that's been around for a while can sort of rediscover or 07:25.360 --> 07:31.920 innovate and develop its value proposition over and over again as it 07:31.920 --> 07:33.620 needs to, as it needs to compete. 07:33.940 --> 07:38.360 So I want to take a look at that and then link it to what I would call 07:38.360 --> 07:43.740 professional service firms, of which consulting is one, and show you 07:43.740 --> 07:46.900 how that develops. 07:48.060 --> 07:51.900 The ultimate goal, of course, of creating something that the company 07:51.900 --> 07:56.980 can offer that the customers will want, pay for, and thus we make 07:56.980 --> 07:57.240 money. 07:59.520 --> 08:01.100 Entrepreneurialism is about making money. 08:01.180 --> 08:03.720 We need profit to hire people like yourself. 08:03.720 --> 08:04.440 Do we not? 08:04.840 --> 08:05.480 How much profit? 08:05.640 --> 08:07.540 We could discuss, but we need profit. 08:09.480 --> 08:12.620 So let me begin. 08:13.680 --> 08:15.140 Build down, I think? 08:15.380 --> 08:15.840 Build down? 08:16.060 --> 08:16.420 Yeah, good. 08:16.820 --> 08:20.800 So different ways we could discuss this, but value proposition. 08:21.820 --> 08:22.380 What is it? 08:22.740 --> 08:28.700 So it's a business or marketing statement that summarises why a 08:28.700 --> 08:33.500 consumer should buy a product or use a particular service that you're 08:33.500 --> 08:33.760 offering. 08:35.520 --> 08:38.600 I look at this bottle of water that you have and why should I buy 08:38.600 --> 08:38.900 this? 08:39.560 --> 08:42.080 There are many bottles of water that I could buy, but why should I buy 08:42.080 --> 08:43.100 this particular bottle? 08:43.940 --> 08:48.960 So perhaps the company that manufactures this and distributes it has 08:48.960 --> 08:53.360 given thought to its value proposition in order to communicate that to 08:53.360 --> 08:57.480 me that helps me decide to buy that bottle at that price. 08:58.600 --> 09:02.680 A company's value proposition is supposed to create sustainable 09:02.680 --> 09:08.720 competitive advantage, as our colleague and friend at the Harvard 09:08.720 --> 09:11.660 Business School, Michael Porter, likes to call it. 09:11.660 --> 09:14.460 Sustainable competitive advantage. 09:14.840 --> 09:18.720 This doesn't mean sustainable in the sense of environmental health. 09:19.660 --> 09:21.180 That's another definition of sustainable. 09:21.780 --> 09:26.740 Sustainable here means continuous, ongoing competitive advantage and 09:26.740 --> 09:30.860 requires defining what makes the company different. 09:33.300 --> 09:37.040 What actually creates differential advantage for the company? 09:37.560 --> 09:40.600 Now, I don't know whether you've covered this very much, but this is 09:40.600 --> 09:41.180 very important. 09:41.920 --> 09:45.120 But by the way, it's not just for these companies. 09:46.280 --> 09:49.020 What I'm going to talk about now is for you as well. 09:49.360 --> 09:53.940 In other words, when you graduate, when you go to find a job, what is 09:53.940 --> 09:55.700 your differential advantage? 09:56.400 --> 09:57.720 Why should I hire you? 09:59.220 --> 10:00.520 What's your value proposition? 10:01.540 --> 10:04.920 What do we get for the money that we're going to pay to hire you? 10:05.220 --> 10:07.880 So it applies to us individually as well as the company. 10:08.240 --> 10:11.020 We don't often think of it that way, but that's what's going on. 10:11.980 --> 10:14.300 Why should I buy this product or service? 10:17.700 --> 10:24.140 So, this little diagram here tries to sort of capture the major 10:24.140 --> 10:28.680 components of what goes into profitability. 10:29.540 --> 10:34.280 So on the left-hand side here we see, sort of in the pink area, that a 10:34.280 --> 10:39.040 company needs to look internally, if you like, do an internal audit to 10:39.040 --> 10:43.080 try and figure out its distinctive capabilities. 10:43.940 --> 10:47.020 See the box, distinctive capabilities. 10:47.540 --> 10:50.520 What makes the company distinctive? 10:51.600 --> 10:54.140 That is to say, different from its competitors. 10:55.580 --> 11:01.360 And it can do this by looking at the various functions of the 11:01.360 --> 11:01.920 organization. 11:02.840 --> 11:04.020 We all know what those are. 11:04.600 --> 11:08.740 And considering each of those functions in terms of EQIR. 11:09.760 --> 11:14.820 I won't tell you what that is right now, keep you in suspense, but 11:14.820 --> 11:16.380 I'll explain what that is in a second. 11:17.120 --> 11:23.680 So functional EQIR, information insight from this internal audit can 11:23.680 --> 11:27.460 help the company's management figure out does it have any distinctive 11:27.460 --> 11:29.220 capability or not. 11:30.560 --> 11:35.340 And it's looking at the resources that it can bring in to its work as 11:35.340 --> 11:37.700 well as the processes that it's using to do its work. 11:38.100 --> 11:43.600 And these come together, sort of a circular interactive process here 11:43.600 --> 11:45.800 that creates distinctive capability. 11:46.900 --> 11:50.680 Michael Porter would then say, once you've figured out what your 11:50.680 --> 11:54.300 distinctive capability is, you can then think about the business 11:54.300 --> 11:57.540 strategy that you want to use in your marketplace. 11:58.340 --> 12:05.380 And he defines three distinct capabilities that then come together in 12:05.380 --> 12:08.020 combination, so you might have a mixed business strategy. 12:08.420 --> 12:09.000 That's the yellow. 12:10.540 --> 12:14.380 Do we have a business strategy based on differentiation, focus, or low 12:14.380 --> 12:14.680 cost? 12:17.200 --> 12:21.900 Whatever strategy we decide to use, what comes out of that, the result 12:21.900 --> 12:24.060 of that, has got to be some value. 12:24.320 --> 12:29.400 Some value that we're offering our customers that we want our 12:29.400 --> 12:34.360 customers to understand, pay for, and thus we create superior 12:34.360 --> 12:34.800 profitability. 12:36.800 --> 12:40.240 So this is kind of a way of what we do in consulting, which is to 12:40.240 --> 12:41.540 simplify complexity. 12:42.720 --> 12:45.980 We could make this very complex, but this is my way of trying to 12:45.980 --> 12:48.000 simplify it so we can see what the components are. 12:50.340 --> 12:54.960 So if we were to look at distinctive capability of a company, we can 12:54.960 --> 12:59.060 look at resources and processes, and you can see what kinds of things 12:59.060 --> 12:59.920 you might look at. 13:00.500 --> 13:03.480 So you look internally in your company, you look at the human 13:03.480 --> 13:04.660 resources that you have. 13:04.960 --> 13:09.260 Is there anything about your human resources that is distinctive, or 13:09.260 --> 13:10.660 are you like everyone else? 13:12.180 --> 13:16.460 So the knowledge and skills that they have, the brains, the 13:16.460 --> 13:20.080 intellectual property, the ability to analyze, whatever you'd want to 13:20.080 --> 13:20.500 look at there. 13:20.560 --> 13:22.100 But what's distinctive about the people? 13:22.340 --> 13:27.220 The organization itself, and perhaps the way it's structured, the kind 13:27.220 --> 13:29.120 of culture that you have in the company. 13:29.540 --> 13:32.980 The processes and systems that have been developed of which IT would 13:32.980 --> 13:37.020 have been an important contributor, of course, and maybe patterns that 13:37.020 --> 13:37.340 you have. 13:37.660 --> 13:41.200 Things that give you some distinction compared to your competitor. 13:41.660 --> 13:44.740 The image that you have, the strength of your brand. 13:45.480 --> 13:50.300 Maybe you have financial capability as a resource that's quite 13:50.300 --> 13:52.520 distinctive, the amount of cash on hand that you have. 13:53.060 --> 13:59.380 I mean, the fact that, what, Microsoft must have $50 or $60 billion 13:59.380 --> 14:02.440 sitting in its cash account is a distinctive capability. 14:02.800 --> 14:04.740 They can do a lot with that money if they choose to. 14:06.400 --> 14:11.220 A lot of companies, the US companies have been hoarding cash for all 14:11.220 --> 14:13.540 sorts of reasons I'd love to go into, but they're more political than 14:13.540 --> 14:16.900 anything else concerning North America, but they're hoarding lots of 14:16.900 --> 14:17.180 cash. 14:17.260 --> 14:22.280 So you might have that available to you, but it may not be as 14:22.280 --> 14:25.200 distinctive now as it used to be in your industry. 14:25.600 --> 14:29.000 Or your debt capacity and your ability to raise money when you need it 14:29.000 --> 14:29.680 and so forth. 14:30.040 --> 14:33.680 Or maybe there's something about your physical plant, your property 14:33.680 --> 14:37.100 plant, an equipment that you're using that gives you something that's 14:37.100 --> 14:37.460 distinctive. 14:38.440 --> 14:42.220 Processes may also be a source of competitiveness. 14:43.200 --> 14:47.800 So those are the regular, predictable patterns of activity that you 14:47.800 --> 14:48.680 have in your organisation. 14:48.880 --> 14:50.640 Every organisation creates these. 14:50.980 --> 14:55.240 Regular patterns of activity, the way it does its work, workflows 14:55.240 --> 14:59.500 obviously, the way it makes decisions and on and on. 15:01.200 --> 15:07.660 The sequence of coordinated action, work routines, workflows, how 15:07.660 --> 15:11.680 inputs are transformed into outputs and the value added activity 15:11.680 --> 15:12.900 across the value chain. 15:14.640 --> 15:16.780 So every company is doing this. 15:16.880 --> 15:19.640 The question is effective or not? 15:19.860 --> 15:20.720 Different or not? 15:21.160 --> 15:22.720 Distinctive at all or not? 15:24.440 --> 15:27.840 And so what we can do, and as consultants we can actually help a 15:27.840 --> 15:30.740 company assess itself and figure this out. 15:31.220 --> 15:35.180 Whatever we decide about these resources and processes, the criteria 15:35.180 --> 15:35.960 are threefold. 15:36.140 --> 15:40.540 A distinctive capability exists when it's a unique activity. 15:41.580 --> 15:43.080 It's different than its competitors. 15:43.240 --> 15:43.680 It's unique. 15:45.400 --> 15:48.220 Number two, it's valuable to the customer. 15:48.560 --> 15:51.700 When the customer experiences the product or the service, it's 15:51.700 --> 15:52.500 valuable to them. 15:53.720 --> 15:57.820 And thirdly, it's difficult to copy, hard to imitate. 15:59.680 --> 16:03.600 Well, it's actually quite difficult to think about a company and come 16:03.600 --> 16:06.620 up with a capability that meets those three criteria. 16:06.860 --> 16:12.080 But once you've got it, you'll have sustainable, competitive 16:12.080 --> 16:13.000 advantage. 16:14.540 --> 16:17.540 You'll have sustainable, competitive advantage. 16:18.380 --> 16:23.660 Part of the problem in today's world is that this sustainability, I 16:23.660 --> 16:26.280 think is getting shorter and shorter and shorter because there's so 16:26.280 --> 16:28.800 much knowledge, information floating around. 16:29.360 --> 16:33.760 People learn very quickly about what a company is doing that is 16:33.760 --> 16:34.960 distinctive and what do they do? 16:35.060 --> 16:35.900 They try to copy it. 16:36.640 --> 16:39.020 So you've got to find something that's difficult to copy. 16:41.400 --> 16:46.380 In the manufacturing environment, I believe, perhaps you would see it 16:46.380 --> 16:50.240 differently, but I believe it's actually fairly easy to copy what's 16:50.240 --> 16:50.980 being manufactured. 16:51.320 --> 16:55.320 You can buy it and de-engineer it and figure out how it's made and 16:55.320 --> 16:56.120 reproduce it. 16:56.480 --> 16:57.420 Chinese do this very well. 16:58.360 --> 17:01.720 Japanese do it very well, for example. 17:03.040 --> 17:06.120 But those are the three criteria that we're always going to have to be 17:06.120 --> 17:07.040 thinking about. 17:09.100 --> 17:10.220 Think about yourself. 17:11.960 --> 17:17.240 What unique activity, maybe in the way you think, the way you behave, 17:17.840 --> 17:19.660 what unique activity do you have? 17:20.800 --> 17:23.660 Is it valuable to whomever your customer might be? 17:23.940 --> 17:25.460 It might be your boyfriend or your girlfriend. 17:26.280 --> 17:27.440 It might be your employer. 17:27.880 --> 17:28.840 It might be your professor. 17:29.860 --> 17:35.540 And it's difficult to reproduce you and reproduce this ability that 17:35.540 --> 17:38.640 you have, and therefore it goes up in value. 17:41.500 --> 17:44.860 So with that as a background, let me just share with you the model 17:44.860 --> 17:46.120 that we use in consulting. 17:47.580 --> 17:52.040 So if you were interested in consulting as a career, as a profession, 17:52.780 --> 17:55.040 the question would be, what is consulting? 17:55.040 --> 17:56.440 What would I have to do? 17:57.180 --> 18:00.840 So you could take the expertise that you're gaining through your 18:00.840 --> 18:06.860 education and perhaps work experience, and then use what I think of 18:06.860 --> 18:13.680 as, you can see it in the red, stages, roles, tasks, and outcomes, to 18:13.680 --> 18:15.900 produce consulting services for a customer. 18:16.720 --> 18:19.100 I won't spend a lot of time on this because you can read it and see 18:19.100 --> 18:20.820 it, but basically you see four stages. 18:21.600 --> 18:23.400 All consultants must develop business. 18:23.780 --> 18:26.620 All consulting firms must do something to develop business. 18:27.480 --> 18:32.960 They have to perform certain tasks, and you can see it in the upper 18:32.960 --> 18:36.580 left -hand box, certain tasks to win the business, to get the 18:36.580 --> 18:36.820 business. 18:38.300 --> 18:42.320 And once they've won the business, they then have to start putting a 18:42.320 --> 18:45.600 team together, do some risk analysis, and figure out how they're going 18:45.600 --> 18:46.920 to do the work with the client. 18:47.700 --> 18:52.380 That's usually around a team of expert people on a project team 18:52.380 --> 18:53.620 performing different roles. 18:54.320 --> 18:57.440 And then at some point they launch the project and they start to 18:57.440 --> 19:01.220 build, make something for the customer. 19:01.880 --> 19:04.980 When I say make something, it's not necessarily something tangible 19:04.980 --> 19:05.960 that gets made. 19:06.020 --> 19:06.540 It might be. 19:07.800 --> 19:10.820 Many of the companies that I work with here in Karlsruhe make things 19:10.820 --> 19:17.720 like this, not how it's made so much as how it may be tailored and 19:17.720 --> 19:19.420 deployed in a company. 19:19.840 --> 19:22.700 This is a consulting service that the company may provide as it's 19:22.700 --> 19:25.020 tailored to the particular needs of a customer. 19:27.640 --> 19:29.600 But it also may be something like a report. 19:30.500 --> 19:33.100 Consultants do lots of analysis and they produce reports and they 19:33.100 --> 19:34.160 present those reports. 19:34.480 --> 19:35.480 That is a deliverable. 19:35.560 --> 19:38.960 That has to be built, constructed, presented, and so forth. 19:39.940 --> 19:43.560 And when all that's done, according to the proposal and what they said 19:43.560 --> 19:47.040 they were going to do, something has to be implemented in the fourth 19:47.040 --> 19:47.360 step. 19:48.340 --> 19:51.560 And that sort of ends the cycle of the work that's done, performing 19:51.560 --> 19:55.000 all those tasks, until we get to this box over here and right at the 19:55.000 --> 19:56.100 bottom we see renewal. 19:57.260 --> 20:01.220 So consultants then, having worked with the client, seen a lot of 20:01.220 --> 20:05.340 things, hopefully done really good work, they see new opportunities. 20:05.960 --> 20:08.940 So then they have a conversation with the customer about these new 20:08.940 --> 20:12.260 opportunities and whether they can provide more services to the 20:12.260 --> 20:13.700 customer to do that work. 20:13.920 --> 20:15.000 And that's business renewal. 20:15.620 --> 20:22.020 And if the customer likes you, if the customer likes you as a person, 20:22.380 --> 20:25.580 as a consultant, as well as the quality of the service that you've 20:25.580 --> 20:30.840 done, probably will say, yeah, okay, why don't you give us a proposal 20:30.840 --> 20:33.520 on how you'd work with us to do this. 20:33.700 --> 20:35.160 And that sends us right back to the beginning. 20:35.580 --> 20:36.980 So this is the consulting cycle. 20:38.400 --> 20:44.240 Behind this are tools, values, skills, knowledge, and so forth. 20:44.460 --> 20:46.420 And around and around and around we go. 20:47.120 --> 20:50.960 Trying to produce proposals, building teams, building deliverables, 20:51.160 --> 20:53.900 and solutions to problems that customers have. 20:54.380 --> 20:59.700 So in a nutshell, that's kind of my book, so now you don't have to buy 20:59.700 --> 21:00.000 it. 21:02.720 --> 21:10.000 Well, how do we then think about the value proposition in consulting? 21:12.240 --> 21:15.180 On the left-hand side, you see sort of a summary of what I just went 21:15.180 --> 21:17.920 through, stages, roles, and tasks, and so forth. 21:18.020 --> 21:21.460 In the middle, we see the ways in which you can take a look at your 21:21.460 --> 21:26.680 company, or if you're starting up a new consulting company, you can 21:26.680 --> 21:29.800 think about these things and decide to do them. 21:31.600 --> 21:34.120 Things that might be unique, valuable, and difficult to copy. 21:34.860 --> 21:42.160 And then you can look on the right-hand side and think about the kind 21:42.160 --> 21:46.560 of capabilities you want to have as a consulting firm in the 21:46.560 --> 21:46.920 marketplace. 21:49.620 --> 21:51.800 I'm not going to go through every one of those, but just looking at 21:51.800 --> 21:52.520 the blue for a moment. 21:53.600 --> 21:58.120 So a capability that you could have with the people that you hire and 21:58.120 --> 22:05.220 train and develop could be the ability of those people to understand 22:05.220 --> 22:06.200 the client's business. 22:08.380 --> 22:10.360 Sounds easy, but it's actually quite hard. 22:10.960 --> 22:14.280 You're all trained, I imagine, in technology and science and math and 22:14.280 --> 22:14.640 so forth. 22:14.960 --> 22:16.900 What interest do you really have in business? 22:17.320 --> 22:19.280 Do you understand how a business works? 22:20.160 --> 22:25.460 I don't mean just functions and organizational levels, but I mean how 22:25.460 --> 22:27.880 this customer makes money. 22:28.380 --> 22:29.880 How this business works and makes money. 22:30.200 --> 22:33.760 So you've got to have people that are interested in that working for 22:33.760 --> 22:33.880 you. 22:33.940 --> 22:35.260 That's a consulting capability. 22:36.240 --> 22:40.800 And if the customer sees that in the consultant, this consultant seems 22:40.800 --> 22:45.740 really interested in business and understanding my business and how we 22:45.740 --> 22:50.800 work and how we make money and what our vision and strategy is and so 22:50.800 --> 22:52.480 forth, that's a good thing. 22:53.060 --> 22:56.340 The second thing would be managing the consulting business. 22:56.600 --> 23:02.220 I want people who understand that consulting is a business, needs to 23:02.220 --> 23:02.640 make money. 23:03.480 --> 23:06.700 So how we start projects, the economics of projects, etc. 23:07.660 --> 23:11.260 and how we build customers and how much we build them, all of that is 23:11.260 --> 23:13.980 part of how the consulting firm makes money. 23:14.220 --> 23:17.880 I want consultants that are interested in that and doing a really good 23:17.880 --> 23:22.360 job of managing the consulting business itself. 23:23.480 --> 23:25.440 So we've got kind of two business focus here. 23:25.700 --> 23:29.980 One is managing and understanding the client's business, the 23:29.980 --> 23:32.880 customer's business, and the second one is managing our own business. 23:33.800 --> 23:36.620 The third thing is the firm's technical ability. 23:37.160 --> 23:39.260 Now technical ability doesn't necessarily mean IT. 23:41.160 --> 23:45.640 When McKinsey talks about its 7S's, it has a whole slew of these 23:45.640 --> 23:49.320 things, but its most famous one is the 7S, that's part of its 23:49.320 --> 23:49.820 technology. 23:53.380 --> 23:57.560 The Boston Consulting Group, when it has its portfolio analysis 23:57.560 --> 24:00.840 technique, that's part of its technology. 24:01.440 --> 24:05.780 And its consultants need to understand that framework, that model, and 24:05.780 --> 24:07.740 do that analysis and bring that to clients. 24:08.260 --> 24:10.840 So that's what I mean by the firm's technical ability. 24:11.340 --> 24:14.720 And every professional firm has those sorts of things. 24:15.480 --> 24:20.060 So we'll be looking for people that can understand those things and 24:20.060 --> 24:23.320 execute them, implement them really well with customers. 24:24.340 --> 24:27.560 The third thing is interpersonal attributes. 24:28.600 --> 24:30.640 What do you like as a person? 24:32.700 --> 24:33.840 How do you think? 24:34.440 --> 24:35.460 How do you behave? 24:36.020 --> 24:37.060 How do you communicate? 24:38.180 --> 24:39.400 How do you present yourself? 24:40.980 --> 24:43.220 Who are you in the world as a person? 24:45.320 --> 24:50.140 So we can define those things that we are looking for, for our 24:50.140 --> 24:53.800 company, and then try to find people that have those qualities, those 24:53.800 --> 24:55.000 abilities, if you like. 24:55.080 --> 24:57.060 So I'm just calling them interpersonal abilities. 24:57.260 --> 24:57.480 Why? 24:57.840 --> 25:02.760 Because it's very important in consulting to build long-term 25:02.760 --> 25:04.000 relationships with clients. 25:04.340 --> 25:10.420 So you need to have people that can build relationships and build long 25:10.420 --> 25:14.400 -term relationships with the quality of how they interact with the 25:14.400 --> 25:14.740 customer. 25:16.380 --> 25:18.480 And then lastly, effective leadership. 25:20.060 --> 25:22.120 Consultants, by their very nature, are leaders. 25:22.260 --> 25:23.580 They are thought leaders. 25:24.100 --> 25:30.720 So does the person that I'm looking at have the ability to influence a 25:30.720 --> 25:35.560 group of colleagues, influence management, influence the customer in a 25:35.560 --> 25:40.120 way that takes the thinking to a new stage, a new area, can be 25:40.120 --> 25:44.080 innovative, can brainstorm very well, can bring together lots of 25:44.080 --> 25:47.480 different ideas and make sense out of them, and sort of do this with 25:47.480 --> 25:51.120 effective leadership of those people. 25:52.780 --> 25:56.260 So that kind of thing is important in consulting. 25:57.900 --> 26:03.060 There is a whole area of consulting application which is leadership 26:03.060 --> 26:03.620 development. 26:03.960 --> 26:09.000 Firms that are there simply to help their customers improve the 26:09.000 --> 26:13.100 customer's leadership capability, its internal managerial leadership 26:13.100 --> 26:15.160 capability as well. 26:15.760 --> 26:21.160 So my point is there are four or five different major areas that you 26:21.160 --> 26:25.280 can look at and you have to think about in any one of these areas or 26:25.280 --> 26:28.540 some of these areas, is there anything that we've got or that we can 26:28.540 --> 26:34.240 do that is distinctive, unique, valuable to the customer, and 26:34.240 --> 26:35.300 difficult to copy. 26:39.360 --> 26:45.520 Well, in addition to those distinctive capabilities, I would add the 26:45.520 --> 26:50.280 functional strategies as well because consulting firms like any other 26:50.280 --> 26:52.960 firm or business that you've looked at in this course and others, 26:53.080 --> 26:54.520 they're all organized by functions. 26:55.680 --> 27:00.340 So within the function itself, we're back to EQIR. 27:01.500 --> 27:05.680 The way in which the function actually functions, the way it actually 27:05.680 --> 27:08.900 works, what it does and produces, what that function does, whether it 27:08.900 --> 27:12.840 be finance or operations or distribution or marketing or sales or 27:12.840 --> 27:16.080 human resources, we could look at efficiencies. 27:16.440 --> 27:21.660 Does this function have an efficiency that is distinctive, that really 27:21.660 --> 27:26.260 stands out compared to, let's say, our competitor's function, similar 27:26.260 --> 27:26.640 function? 27:27.320 --> 27:31.240 The quality of the work that's done by the function, the 27:31.240 --> 27:35.360 innovativeness, the continuous improvement, if you like, of the way in 27:35.360 --> 27:40.300 which the function works, and responsiveness here, I think of as 27:40.300 --> 27:46.360 responsive to customers, internal customers as well as external 27:46.360 --> 27:46.880 customers. 27:47.620 --> 27:54.900 So we could assess and analyze a company's functional strategies in 27:54.900 --> 27:58.900 those four areas and see if there is anything that they're doing that 27:58.900 --> 28:00.280 really is distinctive. 28:01.100 --> 28:05.920 And if not, can we make it distinctive, somehow change it in some way 28:05.920 --> 28:10.360 so that we can make it distinctive and thus increase the value of what 28:10.360 --> 28:13.220 we're bringing to the customer. 28:15.940 --> 28:19.620 Now, some of these companies you're probably very familiar with. 28:20.780 --> 28:24.840 Just a set of mostly, I have to say, North American consulting firms. 28:25.360 --> 28:30.520 Since my interest is consulting, I'm interested in what the industry 28:30.520 --> 28:31.400 is doing. 28:31.540 --> 28:33.800 So these are some of the major players. 28:34.320 --> 28:39.220 The bottom right-hand side are some companies here in Karlsruhe that 28:39.220 --> 28:40.120 we work with. 28:41.160 --> 28:44.700 I think we have about 20, 22 companies now we're working with, so this 28:44.700 --> 28:45.440 is just a few of them. 28:47.640 --> 28:51.260 And so what I've been talking about, distinctive capabilities, value 28:51.260 --> 28:55.020 proposition, is it relevant to these companies? 28:55.240 --> 28:56.300 Well, yes, it is. 28:57.140 --> 28:57.660 Yes, it is. 28:58.140 --> 29:01.660 I was just at a meeting, well, just about two months ago, at a meeting 29:01.660 --> 29:04.620 with the vice chair of KPMG. 29:05.180 --> 29:08.440 And he spent virtually the entire time talking about value 29:08.440 --> 29:08.940 proposition. 29:10.480 --> 29:14.620 He was talking to employees and he was asking them to really think 29:14.620 --> 29:19.220 hard about what is the value proposition that KPMG brings to its 29:19.220 --> 29:19.620 customers? 29:21.020 --> 29:24.060 What makes us different, was the question, from 29:24.060 --> 29:27.400 PricewaterhouseCoopers, PwC, or Deloitte, or Ernst & Young? 29:28.300 --> 29:30.180 Is there any difference at all, or not? 29:30.800 --> 29:35.180 We better be different if we're going to keep our customers and grow 29:35.180 --> 29:39.740 our customers, customer base relative to our competition. 29:40.340 --> 29:46.040 So all of these companies should be doing it, can be doing it, and 29:46.040 --> 29:47.800 those that I'm working with are doing it, that I know. 29:50.520 --> 30:01.140 Well, the companies then have to look internally and look at these 1, 30:01.300 --> 30:04.500 2, 3, 4, 5 areas and think about what are we doing? 30:05.340 --> 30:06.000 What have we got? 30:06.660 --> 30:09.060 And what's distinctive about what we're doing? 30:12.160 --> 30:15.760 When you look at the major competitors, let's take the bottom left 30:15.760 --> 30:22.560 -hand side here, Booz & Co., McKinsey, Bain & Co., BCG, are they all 30:22.560 --> 30:23.360 doing the same thing? 30:24.520 --> 30:26.740 Well, yes, in some ways. 30:27.160 --> 30:29.700 Let's say they're all doing management consulting of one sort or 30:29.700 --> 30:29.960 another. 30:30.540 --> 30:34.000 So as a customer, why should I go to McKinsey versus BCG? 30:35.540 --> 30:38.200 Why should I go to Bain as opposed to Booz? 30:38.560 --> 30:41.700 These companies better be saying something to their customers that 30:41.700 --> 30:46.660 makes them stand out, that makes them distinctive, that convinces the 30:46.660 --> 30:51.280 customer that they get more value by going to BCG than they do 30:51.280 --> 30:51.800 McKinsey. 30:52.320 --> 30:54.120 Could you imagine how difficult that is? 30:54.200 --> 30:57.980 These companies are world-famous, incredibly strong brands, doing 30:57.980 --> 31:00.740 excellent work, full of fantastic consultants. 31:01.080 --> 31:02.360 How do you distinguish yourself? 31:03.500 --> 31:04.240 It's very difficult. 31:05.240 --> 31:05.920 Very difficult. 31:10.800 --> 31:15.740 Three areas that I would focus on that would be the source of 31:15.740 --> 31:21.260 distinctiveness and added value that becomes your statement about your 31:21.260 --> 31:21.900 value proposition. 31:22.240 --> 31:26.080 Your firm's technical ability, the professional staff that you have, 31:26.600 --> 31:29.600 and the interpersonal skills of the staff. 31:35.120 --> 31:39.920 It's very hard to say if one set that you see or one box is easier to 31:39.920 --> 31:40.640 develop than the other. 31:40.760 --> 31:42.120 They're all actually quite difficult. 31:42.820 --> 31:47.060 But all of these firms develop their diagnostic and analytical tools, 31:47.180 --> 31:49.780 their methods and procedures, ways in which they do business. 31:49.940 --> 31:53.380 You go in as a consultant to one of these firms, perhaps as a fresh 31:53.380 --> 31:59.080 graduate of KIT, what these firms do is they train you on their way of 31:59.080 --> 31:59.540 doing business. 31:59.660 --> 32:03.600 So you learn the McKinsey way, you learn the BCG way, etc. 32:03.800 --> 32:06.500 Or the Rollenberger, they will train you on their way of doing 32:06.500 --> 32:09.860 business because they believe that the way they do business is 32:09.860 --> 32:10.340 distinctive. 32:11.500 --> 32:13.300 At least they're trying to convince their customers of that. 32:18.540 --> 32:22.160 So you have to learn those methods and analytical tools and be able to 32:22.160 --> 32:22.520 use them. 32:23.060 --> 32:27.280 I think that's actually relatively easy compared to the other two. 32:28.120 --> 32:32.520 You may not think so because you may not be so oriented to science and 32:32.520 --> 32:32.980 technology. 32:33.820 --> 32:37.640 I'm generalizing, I know, I may be wrong, but we tend to think of the 32:37.640 --> 32:42.340 two boxes down below as, well, that's HR, that's easy stuff, who cares 32:42.340 --> 32:42.760 about that? 32:42.820 --> 32:45.780 It's the real science of what we're doing that's important here, 32:45.840 --> 32:45.980 right? 32:45.980 --> 32:47.980 That's what the customers are really buying, that's what the value 32:47.980 --> 32:48.540 really is. 32:48.980 --> 32:51.400 And that's what you were saying on some of your earlier slides. 32:51.580 --> 32:52.360 And it's true. 32:52.940 --> 32:54.380 Tremendous value in those things. 32:55.500 --> 32:59.620 But as I like to say, consulting is a people business. 33:00.980 --> 33:04.200 It's not a technology business, even if you're a technology company. 33:04.480 --> 33:04.840 Why? 33:05.180 --> 33:07.060 Because customers buy from people. 33:08.540 --> 33:13.280 And unless you are the sole supplier on the planet where you can 33:13.280 --> 33:15.980 basically do anything you want, you're going to have competitors. 33:16.560 --> 33:18.280 So how do you distinguish yourself? 33:18.700 --> 33:22.840 You can work hard to come up with good analytical methods, and really 33:22.840 --> 33:26.900 good procedures, and have consultants to do those really well. 33:27.320 --> 33:33.100 But I think what really distinguishes you, that is a value to the 33:33.100 --> 33:40.760 customer, very hard to copy, and a unique activity, actually lies in 33:40.760 --> 33:41.280 the bottom two. 33:42.700 --> 33:45.500 So one of the things that I would advocate that you think about, if 33:45.500 --> 33:49.380 you're the slightest bit interested in being an entrepreneur and 33:49.380 --> 33:56.360 starting up a consulting business of any kind, think about working on 33:56.360 --> 33:56.920 these bottom two. 33:57.100 --> 34:00.540 Think about what kind of a person are you, and who do you want to work 34:00.540 --> 34:00.800 with? 34:01.580 --> 34:04.300 The middle box says professionalism of the staff. 34:05.580 --> 34:09.940 One of the major firms, the big accounting firms like KPMG or 34:09.940 --> 34:13.520 McKinsey, are so good and have been around so long, it's because 34:13.520 --> 34:15.280 they're very professional in what they do. 34:15.800 --> 34:18.940 We could discuss for half an hour what we mean by professionalism. 34:19.340 --> 34:22.440 I'm just going to give you six Es. 34:22.680 --> 34:23.460 They all begin with E. 34:25.340 --> 34:27.280 And I wonder whether you have some of these qualities. 34:28.860 --> 34:31.900 A really good professional consultant is ethical. 34:32.860 --> 34:34.780 All right, who in the room is not ethical? 34:37.180 --> 34:38.140 I'm the only one? 34:40.800 --> 34:43.060 So we all think we're ethical, right? 34:43.780 --> 34:45.320 We all believe we're ethical. 34:45.400 --> 34:46.420 We all want to be ethical. 34:47.540 --> 34:51.160 But the nature of the way the world is in a world of globalization is 34:51.160 --> 34:58.080 it's very easy to come right to the edge, and you want to keep being 34:58.080 --> 35:03.360 ethical, but my God, the money the gift, the opportunity is so, so 35:03.360 --> 35:07.140 enticing that you just might cross over and it looks innocent. 35:07.320 --> 35:12.040 And it might be just a small amount of money or something, or promise, 35:12.560 --> 35:17.320 or a gift, but you cross the line. 35:18.940 --> 35:24.540 At least where I live now, there's federal legislation about ethical 35:24.540 --> 35:27.460 practices of what you're allowed to do and not allowed to do. 35:28.800 --> 35:32.980 And companies have to abide by these ethical standards now as they do 35:32.980 --> 35:34.120 business around the world. 35:34.720 --> 35:38.320 I don't know if there's anyone here from India, but in the Indian 35:38.320 --> 35:44.480 culture, it's a... I've been doing it a long time, and my wife is 35:44.480 --> 35:45.820 Indian, so I know a little bit about India. 35:46.080 --> 35:48.840 It's a big gift-giving culture. 35:50.100 --> 35:51.460 They like to give gifts. 35:53.240 --> 35:54.260 Oh, really? 35:54.940 --> 36:00.320 So, you can see how a gift coming from one side here might lead you to 36:00.320 --> 36:04.840 do something for this person in a particular way because of the gift 36:04.840 --> 36:05.440 they're giving you. 36:05.500 --> 36:09.040 And it's not just cash, by the way, the gift could come in many forms. 36:11.920 --> 36:15.160 I don't want to spend too much time on that, except that it can be 36:15.160 --> 36:18.740 seduced, if you know that English word, you can be seduced into doing 36:18.740 --> 36:22.520 it because it looks so, so good. 36:22.880 --> 36:24.680 But, have you crossed the line? 36:25.280 --> 36:26.780 What kind of a person do you want to be? 36:29.000 --> 36:29.900 So, that's ethical. 36:30.000 --> 36:30.640 You've got to be ethical. 36:30.960 --> 36:32.280 And it's not always easy to be ethical. 36:32.520 --> 36:32.820 Edge. 36:33.320 --> 36:34.520 Which, what do I mean by edge? 36:34.700 --> 36:36.260 You have got to have an edge. 36:36.360 --> 36:37.320 What's your edge? 36:38.420 --> 36:39.140 Do you have one? 36:39.300 --> 36:39.920 I don't know. 36:40.660 --> 36:41.300 Well, think about it. 36:41.400 --> 36:42.540 I never thought about it before. 36:43.420 --> 36:43.740 Edge? 36:44.600 --> 36:45.880 You mean this edge? 36:46.560 --> 36:47.520 No, no, no, no, no. 36:47.780 --> 36:48.640 Some other edge. 36:49.020 --> 36:50.280 Think of it as expertise. 36:50.920 --> 36:52.480 What expertise do you have? 36:52.500 --> 36:53.340 What do you know? 36:56.360 --> 36:59.620 Maybe that stands out or is really different from all of your 36:59.620 --> 37:00.000 colleagues. 37:00.640 --> 37:02.860 Or something you can develop that stands out. 37:03.220 --> 37:03.900 What's your edge? 37:03.960 --> 37:04.720 What's your expertise? 37:05.740 --> 37:08.920 And link it to something that's really, really, really interesting to 37:08.920 --> 37:11.080 you because you'll work on that and you'll get better and better at 37:11.080 --> 37:11.260 it. 37:13.780 --> 37:16.600 And by the way, it could be something like software development. 37:16.720 --> 37:18.740 Well, there are millions of software developers out there. 37:19.040 --> 37:23.860 But is there some expertise concerning your software development that 37:23.860 --> 37:24.660 gives you an edge? 37:24.920 --> 37:28.280 So you can say to a lawyer or you can start a consulting firm around 37:28.280 --> 37:28.840 that edge. 37:30.220 --> 37:32.540 Whatever is after cloud computing, whatever that is. 37:32.580 --> 37:33.460 I don't even know what it is. 37:33.760 --> 37:35.360 Maybe it's being invented here at KIT. 37:35.720 --> 37:38.080 But maybe that's something that gives you the edge. 37:38.460 --> 37:41.540 Kind of post-cloud computing or something. 37:41.600 --> 37:41.980 I don't know. 37:42.460 --> 37:42.940 Making it up. 37:43.420 --> 37:44.540 So edge is very important. 37:45.600 --> 37:47.280 The third thing is energy. 37:47.740 --> 37:49.080 You've got to have some energy. 37:51.420 --> 37:52.580 Consulting is hard work. 37:53.720 --> 37:54.620 Long hours. 37:55.160 --> 37:58.780 You're going to be working 60, 70, 80 hours a week. 37:59.660 --> 38:00.580 Every week. 38:01.560 --> 38:02.440 During weekends. 38:05.640 --> 38:06.920 And you may not like that. 38:07.320 --> 38:09.240 But that's what consulting is. 38:09.440 --> 38:12.540 And in the big firms, they demand this of you. 38:12.840 --> 38:16.160 It's in, up, or out. 38:16.480 --> 38:19.480 If you can't contribute and move up, you're out. 38:19.900 --> 38:20.900 And that's understood. 38:21.920 --> 38:26.140 And they simply replace you with someone else that they bring in, move 38:26.140 --> 38:30.360 on up, see how well you do and your responsibility and capability, and 38:30.360 --> 38:32.500 see if you can really perform for them. 38:32.960 --> 38:36.280 With the payoff of becoming a partner. 38:36.620 --> 38:37.800 Which is kind of the goal. 38:38.220 --> 38:39.160 The big payoff is. 38:39.800 --> 38:42.180 In order to be able to do that, you have to have lots of energy. 38:43.780 --> 38:45.680 You've got to like the work that you do. 38:45.820 --> 38:48.520 That's why I say link it to the expertise, the edge that really 38:48.520 --> 38:49.060 interests you. 38:49.320 --> 38:50.860 Because you'll work very hard at that. 38:52.220 --> 38:52.740 We all do. 38:58.980 --> 39:01.360 If you start your own business, you're thinking you're going to have a 39:01.360 --> 39:02.160 35 -hour week. 39:02.280 --> 39:02.640 Forget it. 39:02.940 --> 39:04.160 You've already failed. 39:05.900 --> 39:10.200 But if you're starting a business that you really like, you will work 39:10.200 --> 39:10.500 at it. 39:10.600 --> 39:12.520 You'll put in 60, 70, 80 hours a week. 39:13.520 --> 39:13.920 You will. 39:14.480 --> 39:14.840 You do. 39:16.120 --> 39:17.640 Energize is slightly different here. 39:17.840 --> 39:19.420 I mean something slightly different. 39:19.900 --> 39:23.580 Great consultants have the ability and they develop the ability to 39:23.580 --> 39:24.560 energize other people. 39:25.460 --> 39:26.340 Why is that important? 39:27.240 --> 39:29.720 Because consulting is all about change. 39:30.620 --> 39:33.140 We are instigators of change. 39:34.320 --> 39:37.180 And when you are trying to change an organization as a consultant, 39:37.320 --> 39:38.440 what do you run up against? 39:39.260 --> 39:39.660 Resistance. 39:40.180 --> 39:41.300 People don't want to change. 39:42.380 --> 39:43.560 They don't like to change. 39:43.660 --> 39:46.840 They kind of like it the way it is and prefer to keep it that way. 39:46.980 --> 39:48.280 I've got one more minute left. 39:50.480 --> 39:54.280 So you've got to be able to energize them, to overcome resistance, to 39:54.280 --> 39:57.360 keep it going and keep it moving forward against the resistance. 39:57.360 --> 40:00.500 You can't sit behind your laptop and hope it's going to happen. 40:00.620 --> 40:02.340 You've got to get out there and work with the people to do it. 40:02.900 --> 40:07.240 Execution is you've got to figure out how to really implement whatever 40:07.240 --> 40:09.560 you're implementing really, really well. 40:11.900 --> 40:12.340 Implementation. 40:15.660 --> 40:16.860 Can I have another five minutes? 40:18.640 --> 40:24.640 I know you may have to go but... So in the realm of business strategy 40:24.640 --> 40:29.280 thinking, companies formulate strategies, right? 40:29.460 --> 40:32.420 And all the competitors in the industry will formulate strategies and 40:32.420 --> 40:33.500 they will try to implement them. 40:34.500 --> 40:37.460 But what makes some really successful and some not? 40:38.020 --> 40:41.380 It's not the strategy because the strategies can be copied. 40:44.120 --> 40:47.480 The consultants will learn about the strategies, write articles and 40:47.480 --> 40:50.180 books and the best practices will get written out. 40:50.300 --> 40:51.800 Everyone will learn about the strategies. 40:52.280 --> 40:55.120 Everyone knows what Starbucks strategy is. 40:56.320 --> 40:57.060 Everyone does. 40:57.500 --> 40:58.840 What makes them so successful? 41:00.000 --> 41:01.000 It's not the strategy. 41:01.140 --> 41:01.520 What is it? 41:03.000 --> 41:03.480 Implementation. 41:05.760 --> 41:06.760 It's the way they get it done. 41:07.700 --> 41:11.080 Every day throughout their entire system. 41:11.200 --> 41:13.320 So you need consultants who are really good at that. 41:13.480 --> 41:15.180 And the last one is enterprise. 41:15.180 --> 41:19.160 When you work at a consulting firm, the expectation is you're going to 41:19.160 --> 41:19.820 bring in revenue. 41:19.960 --> 41:22.520 At some point you're going to bring in revenue and kind of build an 41:22.520 --> 41:23.420 internal business. 41:23.840 --> 41:26.680 So you have revenue, you can hire other consultants and build a whole 41:26.680 --> 41:30.220 practice area and therefore help the whole firm grow. 41:30.580 --> 41:34.080 If you're starting your own consulting business, you better be 41:35.160 --> 41:35.600 enterprising. 41:35.600 --> 41:36.240 Entrepreneurial, right? 41:36.300 --> 41:36.740 You have to be. 41:37.160 --> 41:42.660 So I put these six E's up here because it's possible to think about 41:42.660 --> 41:47.420 yourself and hiring staff that has these qualities of professionalism. 41:47.800 --> 41:52.760 And if you have them, it will give you a distinctive capability that 41:52.760 --> 41:56.400 will last for a period of time and therefore give you, in the field 41:56.400 --> 41:59.580 where you're doing the consulting, competitive advantage. 42:02.000 --> 42:04.760 Until someone else figures out, oh, that looks good. 42:04.760 --> 42:06.040 There's money to be made there. 42:06.320 --> 42:07.520 Let's try to do it. 42:07.800 --> 42:09.040 And you'll have competition. 42:09.420 --> 42:10.300 It's the nature of it. 42:11.220 --> 42:15.020 And then what relates to the second box is the third box, 42:15.600 --> 42:16.880 interpersonal skills. 42:18.740 --> 42:20.340 Building rapport and trust. 42:20.720 --> 42:22.740 Are you a person that likes people? 42:24.140 --> 42:25.020 Or not? 42:25.900 --> 42:27.300 What kind of a business is consulting? 42:27.480 --> 42:29.980 It's a people business, not a technology business. 42:30.340 --> 42:34.760 You have to be able to work with people, work on teams, get along with 42:34.760 --> 42:37.240 people, build rapport, build long-term relationships. 42:37.420 --> 42:41.060 Customer relationship management is one of the distinctive features 42:41.060 --> 42:43.820 that separates competitors in an industry. 42:45.720 --> 42:50.240 And this is one of the things of value that the customer sees right 42:50.240 --> 42:50.500 away. 42:50.840 --> 42:55.280 Do I like interacting with you, talking with you, discussing business 42:55.280 --> 42:56.220 with you? 42:57.400 --> 42:58.140 Or not? 42:58.940 --> 43:01.460 Are you someone that is able to build trust? 43:01.660 --> 43:02.360 Are you trustworthy? 43:02.960 --> 43:04.760 Well, of course you're trustworthy. 43:06.340 --> 43:10.820 But you may believe that, but the customer may not experience it. 43:10.880 --> 43:13.800 So one of the ways you add value in the value proposition of your 43:13.800 --> 43:17.540 consulting firm is we are a firm that you can trust. 43:18.980 --> 43:23.240 I'm going to give you a very quick little formula in the few minutes I 43:23.240 --> 43:23.620 have left. 43:25.580 --> 43:29.920 So here's a little formula that each of you can use in your 43:29.920 --> 43:30.520 relationships. 43:31.420 --> 43:35.860 So think about the important person in your life and see whether this 43:35.860 --> 43:37.840 person is consistent with this formula. 43:38.080 --> 43:46.640 Trust is a function of C times R times I divided by S. 43:48.820 --> 43:52.000 There's science in the human resources field. 43:52.400 --> 43:53.180 There it is right there. 43:55.680 --> 43:59.140 So trust is a function of something in English that begins with C. 43:59.340 --> 43:59.860 Was ist das? 44:03.390 --> 44:04.250 Was ist das? 44:04.290 --> 44:05.570 Begins with C in English. 44:10.350 --> 44:11.030 Was denken Sie? 44:11.750 --> 44:12.190 Care. 44:13.450 --> 44:13.890 Care. 44:15.230 --> 44:15.870 Oh, that's nice. 44:16.070 --> 44:16.290 No. 44:18.570 --> 44:19.010 Confidence. 44:19.470 --> 44:19.910 Confidence. 44:20.010 --> 44:20.630 Oh, that's nice. 44:20.790 --> 44:21.210 No. 44:22.690 --> 44:23.330 One more. 44:25.250 --> 44:25.690 Character. 44:27.210 --> 44:28.690 That's also nice, but it's wrong. 44:29.730 --> 44:31.550 No, it's not as if these things are not important. 44:31.650 --> 44:33.730 They're very important, character and caring and so on. 44:34.270 --> 44:38.670 But what I want to share with you and have you think about, the C is 44:38.670 --> 44:39.790 actually credibility. 44:40.730 --> 44:42.210 Don't we trust people who are credible? 44:43.130 --> 44:48.530 If I've never done a day's worth of consulting in my life and I stand 44:48.530 --> 44:53.610 here talking about consulting, some of you will be thinking, you've 44:53.610 --> 44:54.070 never done it. 44:54.130 --> 44:54.870 You have no expertise. 44:55.090 --> 44:57.370 I mean, who are you to explain or talk about consulting? 44:57.450 --> 45:00.870 But I've done it for many, many years, so it gives me credibility. 45:01.230 --> 45:03.530 So your expertise, your knowledge, your experience gives you 45:03.530 --> 45:04.030 credibility. 45:05.090 --> 45:05.710 That's the C. 45:05.810 --> 45:06.330 What's the R? 45:07.930 --> 45:08.970 Nice, but no. 45:16.400 --> 45:16.760 Nice. 45:16.760 --> 45:17.120 No. 45:19.000 --> 45:19.360 Yes! 45:19.720 --> 45:22.080 Give the man an A for the course. 45:23.140 --> 45:24.160 What you've said is important. 45:24.280 --> 45:25.600 Of course, we need those things, respect them. 45:25.720 --> 45:26.780 But it's really reliability. 45:27.160 --> 45:28.300 Can you rely on the person? 45:28.380 --> 45:30.400 Don't you trust people that don't cheat on you? 45:34.470 --> 45:37.810 And they say, honey, I love you so much, I'll never cheat on you. 45:37.890 --> 45:39.330 And then you find out they're not reliable. 45:40.030 --> 45:41.570 Your trust, boom, is gone. 45:44.270 --> 45:47.690 So, reliability, having integrity, living by your word. 45:48.090 --> 45:48.690 That's the R. 45:48.950 --> 45:51.270 The I is a bit more difficult to figure out. 45:51.670 --> 45:52.590 I mean intimacy. 45:52.830 --> 45:56.930 That is your ability to build relationships, to open up, to share, to 45:56.930 --> 45:59.570 like people, to have them like you because you're opening up and 45:59.570 --> 46:02.650 sharing and building a bit of a relationship that deepens over time. 46:03.670 --> 46:04.510 Divided by S. 46:04.650 --> 46:06.450 So the numerator increases trust. 46:06.790 --> 46:08.910 The denominator reduces trust. 46:09.030 --> 46:09.810 What is the S? 46:11.630 --> 46:12.050 Selfish. 46:12.610 --> 46:13.030 Selfishness. 46:13.510 --> 46:14.590 Do you trust people who are selfish? 46:17.330 --> 46:18.310 Maybe, maybe not. 46:18.470 --> 46:19.570 But it's always a question mark. 46:19.810 --> 46:22.190 People who have a big ego, take credit for everything themselves. 46:22.690 --> 46:24.610 You know, I'm on a team and it's all about me. 46:25.110 --> 46:25.530 No. 46:25.850 --> 46:26.910 You don't trust those people. 46:27.430 --> 46:33.170 So, it's a simple little formula and building rapport and trust is a 46:33.170 --> 46:34.330 very important attribute. 46:34.970 --> 46:40.250 So, you need consultants that build value with the customer because 46:40.250 --> 46:44.310 the customer perceives them as being credible, reliable and intimate 46:44.310 --> 46:48.170 in the sense of building a relationship and not full of ego. 46:49.190 --> 46:50.130 And only ego. 46:51.090 --> 46:52.050 Listening and questioning. 46:52.250 --> 46:58.230 You have to be able to listen very, very, very, very, very well. 47:00.190 --> 47:04.030 And it's a challenge for experts because experts want to tell, tell, 47:04.170 --> 47:04.750 tell, tell. 47:04.930 --> 47:06.310 I want to tell you about my expertise. 47:06.770 --> 47:10.390 But consultants figure out, no, I have to understand the customer's 47:10.390 --> 47:14.330 needs and for that I have to ask good questions and listen very well 47:14.330 --> 47:15.010 to what they say. 47:16.170 --> 47:18.070 It's an easy, easy thing to say. 47:18.170 --> 47:19.690 It's quite hard actually to do. 47:20.070 --> 47:21.830 I wish I had more time I could demonstrate that. 47:21.830 --> 47:22.730 Team building. 47:24.590 --> 47:27.850 Technical people often like to work by themselves. 47:28.730 --> 47:35.950 And they have an important, deep, emotional relationship with their 47:35.950 --> 47:36.370 PC. 47:36.690 --> 47:37.370 I just love it. 47:37.790 --> 47:38.750 It talks to me. 47:38.830 --> 47:40.130 I make it do things for me. 47:40.970 --> 47:41.770 Who are you? 47:42.210 --> 47:43.850 No, I go back to my PC. 47:44.110 --> 47:45.490 I just love my PC. 47:46.230 --> 47:47.390 It's a Lenovo. 47:48.230 --> 47:48.630 Who are you? 47:49.090 --> 47:49.550 Oh, I don't know. 47:49.550 --> 47:50.630 I'll get back to you later. 47:51.030 --> 47:53.370 This is who I really want to have a relationship with. 47:54.650 --> 47:58.530 Well, I'm exaggerating just a little bit, but some of you are sitting 47:58.530 --> 48:00.150 on your cell phones right now. 48:02.490 --> 48:03.790 Why do you sit on your cell phones? 48:03.850 --> 48:04.750 Why do you look at your laptops? 48:05.110 --> 48:06.070 Well, because you can. 48:06.170 --> 48:07.370 It's addictive and all that. 48:07.910 --> 48:13.530 But it means that technical people often find it hard to work with 48:13.530 --> 48:15.170 others on a team basis. 48:17.270 --> 48:20.210 And teamwork, team building is essential because one of the ways 48:20.210 --> 48:24.790 organizations have reorganized themselves now is much, much more team 48:24.790 --> 48:25.050 -based. 48:25.210 --> 48:27.930 Multi -level, cross-functional teams to get the work done. 48:28.270 --> 48:30.870 So consultants, by golly, better be doing the same thing. 48:31.310 --> 48:32.990 And they must have emotional intelligence. 48:34.450 --> 48:39.870 That is to be able to respond to difficult situations in a way that is 48:39.870 --> 48:44.250 more intelligent so that you don't make the situation worse by having 48:44.250 --> 48:47.170 the emotions that you are experiencing control you. 48:47.410 --> 48:50.310 Rather, you manage your emotions in a way that gives you a much better 48:50.310 --> 48:54.150 response that builds the relationship in a sensible way rather than 48:54.150 --> 48:54.510 hurting it. 48:54.770 --> 48:55.830 So, what am I saying here? 48:56.270 --> 49:01.070 I'm saying these are three areas that a consulting firm, a 49:01.070 --> 49:05.470 professional service firm, can work on to create distinctive 49:05.470 --> 49:11.870 capabilities through who it hires, who it trains, who it develops, and 49:11.870 --> 49:15.050 the kind of culture it builds in these areas. 49:15.950 --> 49:19.230 And once you have these things, the consultants will go out into the 49:19.230 --> 49:22.770 world, interact with customers, and the customers will see this as 49:22.770 --> 49:26.850 being part of the value proposition that they're getting from the 49:26.850 --> 49:27.510 consulting firm. 49:29.590 --> 49:32.770 And it's one of the things that distinguishes the major brand leaders. 49:34.610 --> 49:39.130 So, that's the connection back to professional service firms that are 49:39.130 --> 49:42.390 full of, if you think about it, primarily knowledge workers. 49:42.570 --> 49:46.210 We're just using our brains, and that gets converted into behavior. 49:46.490 --> 49:47.350 But we're knowledge workers. 49:48.990 --> 49:51.310 We're not actually making anything in that sense. 49:51.630 --> 49:52.530 We're knowledge workers. 49:52.890 --> 49:58.010 So that's why we can create distinctive capability in the lower two 49:58.010 --> 50:01.650 boxes that is really very powerful once you've got it. 50:03.910 --> 50:06.550 The value proposition that I have... 50:06.550 --> 50:07.170 This is my last slide. 50:07.490 --> 50:11.130 The value proposition that I have for the consulting course Consulting 50:11.130 --> 50:12.550 Business Essentials is at the top. 50:12.970 --> 50:16.570 It's acquiring the skills, values, and tools to accelerate our journey 50:16.570 --> 50:17.950 of becoming a trusted consultant. 50:18.490 --> 50:19.610 That's what you get. 50:19.750 --> 50:23.470 That's what you buy when you go through the training. 50:23.610 --> 50:29.950 Acquiring, getting the skills, values, and tools to accelerate the 50:29.950 --> 50:32.310 journey of becoming a trusted consultant. 50:37.110 --> 50:39.610 So, with that, let me end. 50:40.210 --> 50:41.630 I think that's my last slide. 50:42.290 --> 50:45.490 Let's see if you have questions, comments, observations. 50:46.270 --> 50:49.910 First of all, as we know, David gave his speech at one o'clock. 50:50.610 --> 50:52.650 Thank you. 50:54.250 --> 50:55.070 Appreciate that. 50:57.230 --> 51:00.590 I don't know if you have a few more minutes or not, but any questions 51:00.590 --> 51:04.030 before you rush off to something else? 51:04.570 --> 51:04.750 Anyone? 51:09.890 --> 51:13.210 As you spend the rest of the day and evening, think about what is your 51:13.210 --> 51:14.090 value proposition? 51:14.490 --> 51:17.550 What are you bringing to the world and to all those important people 51:17.550 --> 51:18.090 in your life? 51:21.790 --> 51:22.190 Alright. 51:22.390 --> 51:22.730 Very good. 51:22.850 --> 51:23.730 Thanks for your time today.