I was interviewed and quoted in this SHRM article. It appeared on March 9, 2010 on SHRM On-Line
HR Consulting: How to Make the Seven-Figure Leap
What HR consultant hasn’t dreamed of making it big—establishing a growing firm that achieves phenomenal success? Who wouldn’t like to achieve the status of a Patrick Lencioni or Marshall Goldsmith? But for every one of these upper-echelon consultants, there are literally hundreds toiling away, virtually unknown, and certainly not pulling in the millions of dollars that the big dogs are. It is not that the typical HR consultant lacks knowledge of the business. So, what is it?
Kevin Berchelmann is a leadership expert, entrepreneur and management consultant specializing in human capital, organizational development and corporate strategy. His description of himself and his services is telling—and appropriate—says Alan Weiss, author of Million Dollar Consulting (McGraw-Hill, 2003), and a seven-figure consultant himself. Berchelmann doesn’t act like an HR consultant; he’s a management consultant. His firm recently placed ninth on Houston’s Fast 100—a list of the fastest-growing, privately held companies in Houston.
Berchelmann notes that building a successful consulting business “requires hard work, some skills and a measure of good luck.” In addition, he said: “It requires doing some things that don’t always come natural to corporate HR folks just starting out—or to those who have stagnated in their businesses.” He has three chief recommendations.
It’s Not Just About Consulting
Most of those in the business are good, said Berchelmann. But consulting or project delivery is the easy part of the business. “This is about growing a business, not consulting,” he said. “If 80 percent of a consultant’s efforts aren’t directed toward developing new business, not only are they unlikely to grow significantly, they are damn unlikely to even be around in 18 to 24 months.”
It’s About Client Expansion
While developing business is important, you can’t reach high six figures and seven figures by relying solely on new clients, said Berchelmann. “Consultants must get good at educating existing clients on all they can do and creating significant relationships with real buyers—not recommenders—who will come to them for many things,” he said. In addition, past clients need dedicated care and feeding. “You cannot allow someone who has paid you money—ever—to allow you to become out of sight, out of mind. Monthly, personal contact is not too frequent.”
Repeat business with existing and past clients and the expansion of offerings to those who know you are essential, said Berchelmann. “Maybe they hired you to help with compensation planning. If you aren’t on the ball with your buyer, you’ll become their ‘comp consultant.’ Not bad, but they’re unlikely to hire their comp guy or gal to do leadership development—unless you’ve educated them specifically on what you can do for them.”
They Must Know to Ask for You
Market presence is vital, said Berchelman. Independent HR professionals need to foster relationships with media experts so their names appear in known publications—print and online. Write voraciously, counseled Berchelmann. “I have nearly a hundred articles on my site, a blog, Twitter presence and a monthly newsletter with over 3,000 subscribers,” he said. At least two or three times a year these indirect efforts yield real, paying clients, he said. “The ROI is definitely there, but not just for new clients. These works create a presence if you will, and current clients enjoy reading them as well.”
Roberta Chinsky Matuson is president of Human Resource Solutions in Northampton, Mass. Becoming a recognized expert is critical, agreed Chinsky Matuson, and a book can definitely help you along in that direction. But, she cautioned, “none of this self-published stuff; that’s not going to get you there. It may be a nice thing to give to some clients as a gift, but it’s certainly not going to get you on the “Good Morning America” show.” Chinsky Matuson’s new book, Suddenly in Charge! The New Manager’s Guide to Influencing Up and Down the Organization, will be released by Nicholas Brealey in 2011.
The biggest barrier that holds HR consultants back, said Chinsky Matuson, is charging by the hour—something that she learned from Alan Weiss, who she said has been a source of inspiration and counsel to her. Million-dollar consultants, said Weiss in his book, describe results, not tasks—or time.
Said Matuson: “How are you ever going to hit seven figures if you’re still charging $150 an hour?” You would have to work 6,667 hours a year to reach that mark.
Success, agreed Rick Dacri of Dacri & Associates, LLC, in Kennebunkport, Maine, requires moving from an hourly fee basis to value-based billing. “Base your fees on the client’s perceived value of your assistance,” he said. “The higher your value, the higher your fees.” In addition, advised Dacri, those who wish to move to the next level, should:
- Be visible—write and speak continuously. Like Chinsky Matuson, Dacri believes that writing a book “is the gold standard.”
- Be different. “Vanilla ice cream is nice, but people buy Cherry Garcia,” he said.
- Always write proposals with an eye on the second and third sale. “Get to know the organization and understand their needs. If working in one department, ask if your services may also be needed elsewhere. Make yourself indispensable.”
Consultants often hold themselves back, said Dacri, by:
- Not talking to decision-makers.
- Being self-limiting because of low self-confidence, inexperience or the inability to move outside of comfort zones.
- Focusing simply on client wants and not client needs.
- Not charging based on value.
While not every consultant wants to be at the seven-figure level, most would like to continue growing their practices. The rewards, financial and personal, can be substantial.
Berchelmann said he’s “having a blast” reaping the financial rewards that he’d never been able to attain previously and enjoying successes available only to successful businesses. “It’s a daily rush, and I feel sometimes like I’m just along for the ride,” he said. But, he added: “It takes effort—purposeful effort, and a relentless focus on the business of business.”
Lin Grensing-Pophal, SPHR, is a Wisconsin-based business journalist with HR consulting experience in employee communication, training and management issues.