World Class PSO: Daily Thought

Value! Value!! Value!!!

That's what is all about.

Every day, whether you a consultant or not, you should ask yourself, "What value am I going to add today?" Before you shut down for the day, ask yourself, "Did I add value today?" If the answer is, "no," ask yourself why not.

Plan your day, know what value you are going to add, and hold yourself accountable to adding value where ever you can. You will be surprise at what success comes when you focus on value and accountability.

World Class PSO: Daily Thought

One of my consultants recently commented that it is harder to build relationships with clients when working remotely than it is when working onsite. He makes a great point. One of my colleagues says that some of the best sales meetings happen after the sales call as he is walking out to the reception desk with the customer. That can be true with consulting, too.

I think we over look the importance of those short, informal, and non-threatening conversations we have with our customers as we are walking to or from the conference room, and it can be hard to have the same informal chats when we are on a bridge waiting for others to join. So what can we do?

On ideas is to use the information available to us. We have more and more information at our disposal online. Take a few minutes to see if the meeting attendees are on LinkedIn and try to learn about their experiences and background. Don't go all "Big Brother" on them, but see if you can use that information to make a personal connection that lightens the mood.

I recently did something a little more bold...ok, just a little more...In a meeting last night, I made a reference to doing a song and dance. The client commented on wanting to see a video of that. Now, I certainly wasn't going to send her a video from my cousin's wedding last summer, that's for sure. However, as a joke, I sent her the clip of Elaine from Seinfeld doing her crazy leg kick dance. We all had a good laugh, and I showed a little of my personality. Next time, we might have an easier time with the light chit-chat that helps lower the barriers...it also showed her that I was listening to her.

Having fun with your clients and exposing yourself for who you are is a good thing - as long as it is done professionally.

So, how do you break down barriers and build relationships when you work remotely with your clients?

World Class PSO: Daily Thought (Trying to get back on track)

Before the summer started, I was in a groove - I was blogging regularly and feeling good about it. Then...summer happened. We had the biggest quarter in our history, we hired new consultants - nearly doubling the size of our team, and we started to make huge strides in maturing the delivery arm of our practice. It's been a good few months!! Now I'm back...

Later this week I will pick up my series on the "Top 10 Qualities of a World-class Consultant." Before I do, though, I wanted to share a quote from the book, 50 Success Classics, edited by Tom Butler-Bowdoin. Tom quotes from Born to Win, by Muriel James & Dorothy Jongeward:

"It takes courage to experience the freedom that comes from autonomy, courage to accept intimacy and directly encounter other persons, courage to take a stand in an unpopular cause, courage to choose authenticity over approval and to choose it again and again, courage to accept the responsibility for your own choices, and indeed, courage to be the unique person you really are."

It may sound corny, but I think this one sentence summarizes the life that we as consultants and project managers need to live. We need to strike a balance between competing forces: The needs of our customers, the needs of our employer, the needs of the delivery consultants, and the contract between all parties. We have to really, truly engage with our customers - care about their successes and failures - and listen carefully to what is being said...and not said.

I have told my consultants that they need to develop the self-confidence required to confidently tell the customer what they need to hear, not what they want to hear. I have also told them that they need to be professional and diplomatic in how they do so.

We walk a tight rope every day. World-class consultants are able to find the balance and be a truly trusted advisor for your customers.

Running an Effective Meeting – A Checklist

The Checklist

Before the meeting:

• The meeting objective has been defined and shared with all participants.
• The meeting agenda has been defined and shared with all participants.
  - The agenda includes topics with owners.
  - The agenda includes time allocates for each topic.
  - The agenda is manageable given the time available for the meeting.
  - The agenda includes reasonable breaks.
  - The agenda enables participation, interaction, collection of feedback,
  decision making, and communication.
  - The agenda allows for Q&A.
• The meeting leader is aware of potential “off-topic” discussions that may happen and is prepared to address (or table) them.
• The meeting leader is aware of political or personality conflicts that may distract from the meeting and is prepared to address them (or reduce their impact).
• The meeting leader has determined the best, worst, and most-likely outcome from the meeting and has prepared for the worst in an effort to achieve the best.
• Critical participants have been identified and are confirmed for the meeting.
• Non-critical participants are aware that their attendance is optional.
• The meeting room has been scheduled.
  - The meeting room has the necessary technology (projector/screen, white board, flip charts, phone, Internet access).
  - The meeting room is suitable for the audience (size, layout).
• Conference Bridge has been scheduled and shared with all participants.
• WebEx has been scheduled and shared with all participant.
• For longer meetings, snacks and beverages have been ordered and supplied.

• Roles and responsibilities have been determined for the meeting (SME, Note Taker, Time Keeper, Judge)
• All participants are aware of their responsibilities in terms of Preparation for the meeting.
  - Assignments have been handed out.
  - Participants have confirmed that they have completed their assignments
• Hand-outs, slides, and examples have been prepared and reviewed.

In the meeting:

• Start the meeting on-time – do not go back for those who are late.
• Start the meeting with a review of the meeting objectives, the agenda, and roles and responsibilities.
• Allow participants to introduce themselves: “Does everyone know each other?”
• Ask participants if any other topics should be added to the agenda, if time allows.
• “Parking lot” items are captured for follow up meetings and discussions.
• Stick to the time schedule – allow “heated” discussions, but cut it off to keep on track with the agenda.
• Manage to the agenda, not personal agendas or politics.
• Encourage questions and discussions – the agenda should allow for this.
• Avoid “Death by Power Point.”
• Keep meeting notes, including action items.
• Capture owners for all action items and commitments for when the action items will be completed/delivered.
• Action Items and Next Steps have been determined and agreed on.
• Thank participants for their time and attention.
• End on time – respect everyone’s schedule.

After the meeting:

• Meeting Notes, with Action Items, have been captured and distributed.
• Meeting leader has followed up with participants and action items are complete.
• Follow meeting and discussions have been scheduled.
• Feedback from participants has been captured

Resources:

http://www.mindtools.com/CommSkll/RunningMeetings.htm

http://www.businessweek.com/smallbiz/content/sep2006/sb20060927_259688.htm

http://www.suite101.com/content/running-an-effective-meeting-a59348

http://sabes.org/resources/facilitationguide.pdf

http://www.meetingwizard.org/meetings/running-effective-meetings.cfm

http://spac.ucdavis.edu/forms/leadership_tips/running_fun_and_effective_meetings.pdf

World-class PSO: Daily Thought

Day 2 of the TSIA Technology Services World Conference has wrapped up, and it was another day of idea sharing and generation. Some sessions were, of course, more valuable that others. Here are my top five "key take-aways" from today's session:

1. Professional Services within a product team (and probably any PSO) should be in the business of "Value Creation."
2. PS should drive overall business results. $1 of PS revenue should have a multiplier effect on the business through additional product and PS revenue.
3. PS needs to be part of the overall brand of the company - No Second Class Citizens
4. PS and Sales managers need to develop "Deal Attributes" that indicate when/if PS should be included in a deal. The two teams should work together to review major accounts and key deals to ensure the sales team is included when it should be.
5. AVOID true Packaged offerings. Sales is responsible for finding and qualifying PS leads, PS is responsible for educating those leads and proposing solutions, Sales is responsible for closing the deal, and PS is responsible for delivering. At the end of the day, Product Sales will struggle with matching the right PS offering and sizing it correctly leaving PS to clean up a potential mess. Additionally, for publicly traded companies, Package Offerings create VSOE challenges that must be considered.

I look forward to sharing more tomorrow.

World-class PSO: Daily Thought

Day 1 of this springs Technology Services World conference is complete. The day started with a "Value" workshop in which we discussed ways to quantify the value a PSO provides its customers and how to develop a services portfolio designed to add value. While we all agreed that we need to define offerings and services that meet the needs of our companies, the focus of this session was all about the customer.

Marc Lacroix from RTM consulting discussed the Value Model. Additionally, we discussed our teams readiness in terms of delivering value-added services. A lot of the concepts discussed in this session came from J.B. Wood's book, The Complexity Avalanche, (which I haven't read, but I have bought it, and it is next on my reading list).

In the afternoon, Thomas Lah, President of TSIA discussed the implications of Cloud Computing on TSIA members. My first impression is that Mr. Lah is concerned that Cloud Computing is hype that may or may not have a marketable effect on what we do. I got the impression that he felt that, at a minimum, it is a distraction that will make all of our jobs harder. (For instance, he compared the Oracle business margins to Salesforce.com's without acknowledging that SFDC is a growing business forging new paths. They are in investment mode, where as Oracle is a mature business in the top spot in its space.)

After his presentation, though, Mt. Lah brought executives from NetSuite, Oracle, EMC, and IBM who all agreed that Cloud Computing is game-changing and PSOs are poised to capitalize on the change if they think strategically about the needs of the customer base: Business Process Changes and Change Management, Data Migration, and Managed Services.

Cloud Computing and the PSO

I am going to take a break from the topic of the "Top 10 Qualities of a World-class Consultant." I know you are all chomping at the bit, but you'll have to come back next week for Quality #5.

Instead, I wanted to post a timely blog as a follow up to a PS Village Executive Breakfast session that I attended this morning. The topic was "Surviving and Winning as the IT World Moves into the Cloud." Russ Klein and Dick Csapler from The Aberdeen Group presented on the topic.

Russ and Dick spelled out the value proposition for IT moving hardware and software to the cloud. In a nutshell, the cloud provides businesses to apply the "right amount of [system] resources when they its needed." According to the guys from Aberdeen, processing power of client-server environments is starting to rival that of Mainframe environments, total cost of ownership is lower given that the Cloud providers own the responsibility of keeping up with the latest and greatest technologies and the investments in cap ex for IT managers is lower with the Cloud.

Start-up businesses are more like to build applications in the cloud, and enterprise businesses are moving less mission critical applications, data back-ups, and fail-over systems to the cloud.

The major concerns that were discussed centered on Privacy and Security and culture - how does an IT manager measure success and budget for supporting the business when they have no cap ex budget - or a significantly reduced budget. As Dick said, though, Amazon EC2 probably employees more systems, tools, and experts to ensure the highest level of quality than most businesses could afford to do themselves. As enterprises find success with the less critical apps, they are likely to start to move the more critical apps to the cloud, as well.

So where does PS fit in. Russ and Dick mentioned a number of new consulting opportunities that are coming available due to the advent of Cloud Computing. Consulting groups can provide services designed to:

1. Support the migration from "on premises" environments to the cloud
2. Assist in business and IT process re-engineering efforts to support applications that are now hosted in the cloud
3. Ensure legacy hardware is disposed of in an ecological manner and to assist businesses in developing a "Green IT" strategy
4. Ensure effective data mining from the old to the new environments

SaaS is one model for Cloud computing. In SaaS business, the products are often positioned as "self-service." As businesses move to a Cloud Computing model, however, more and more will reduce the IT staff and rely on PS teams to ensure that they have the right methodologies, can implement the solutions - including training, and can optimize and evolve their use of the tools available in a way that ensures business success. The focus will become less about "implementation" services - the Cloud providers will do that - and more about expert services that provide our customers with focus, experience, and expertise required to use IT solutions to achieve business results.

4. Asks Questions sesigned to Uncover the "Real" Pain, Not Just the "Stated" Pain.

Jean DiGiovanna of ThinkPeople refers to this as "staying curious," and this is a common theme in many sales and consulting training programs and books, particularly those that espouse a "solution-selling" approach. Powerful questions are, generally, open-ended questions designed to get the customer talking. They often lead to the opportunity to ask follow-up questions, deeper discussions, and more information.

So what does a a question that is designed to uncover the real pain look like? Let's look at an example. A consultant may ask a question this way:

"Do you have a process for managing employee time off?"

Or this way:

"How do you manage employee time off?"

Which do you think is likely to result in an answer that provides the ability to ask follow up questions and deeper insights?

Questions that start with "what" and "how" generally open discussions, giving the interviewee a chance to answer in detail. They generally provide a lot of information on which the consultants can build his investigations.

The first question, in contrast, is a closed question, and there is a real chance that the answer could be a simple "yes" or "no." What have you gained in this case...one person's opinion and no understanding why they gave the answer they did. Depending on the answer, the interview could be over with one question.

In many situations, symptoms of problems are visible, even obvious. Still, the root cause is not. A manager may feel, for instance, that that problem is that the staff is not accountable for their actions..."we need to fix the accountability problem." She may feel that because the work isn't getting done on time or quality standards aren't being met. A consultant may ask:

"Has the team's manager set proper expectations with the staff about deadlines and quality?"

The answer may simply be, "Well, of course." However, if the consultant asks:

"How does the team's manager set proper expectations with the staff about deadlines and quality?"

The interviewee will start to describe what she knows, and the consultant can determine for himself if expectations have been set properly. More likely, the consultant will determine what additional questions need to be asked and to whom.

As the consultant meets with the staff, management, and customers - asking powerful questions and learning about multiple perspectives - if may be clear that the management team has not properly set the staffs expectations. While at face value the root cause of the problem may appear to stem with the work effort of the staff, the real problem may be with a manager's approach.

The lesson: Do your homework. Get multiple perspectives. Look inside and outside the organization for the root case of the issues and pain they are experiencing. Don't assume the client knows what is going on...they often don't. This is not a slam on our clients, but let's face it...everyone is over worked and has too few resources to really assess every situation. If your clients knew what the real problem was, they'd be in a much better position to fix it themselves.

World-class PSO: Daily Thought

I had the good fortune to sit in on two sales training sessions delivered by Jeff Thull (Prime Resource Group) today. Jeff is the author of The Prime Solution, Mastering the Complex Sale, and Exceptional Selling.

Throughout the session, Jeff spoke to the team about what he calls the "Three Eras of Professional Selling." In the first error, the sales process was scripted, and sales professionals were not encouraged to "think" as Jeff says it. In the second era, sales pros hung their hat on the process of "Needs Analysis" to get through the day. In the third era, the era we are in today, sales professionals are encouraged to "STOP SELLING." This is one of Jeff's "Key Thoughts," as he calls them.

While I am not a sales person in the traditional session, as a consultant I am a sales professional. As I mentioned in an earlier post, consultants are always selling. Some of us sell in a traditional sense. We conduct pre-sales discovery with the goal of understanding the customers needs, challenges, pains - what ever you want to call them. We develop standard and custom consulting solutions for our customers. We write proposals and SOWs, and we work to close the deal. Others of us are selling during every meeting. We are working to ensure that the customer buys into the engagement format, the approach, the action plans, and the recommendations - even after the ink is dry on the contract.

What became increasingly clear to me throughout the sessions with Jeff is that the role of the sales professional has to stop selling and be a consultant. Now, I know there are countless books out there on the topic of "consultative selling." I recognize that my realization is a bit old news. Still, I witness situations every day where consultants in a selling role forget to be a consultant in pre-sales situations, or the pressures of the sales process result in a sales rep falling back into the Era 1 or Era 2 ways of selling. So, its worth repeating: To be a successful sales professional, one must be a consultant.

WORLD-CLASS SALES PROFESSIONAL = WORLD-CLASS CONSULTANT (and vice-versa)

3. Seeks first to understand, and then to be understood.

Consultants come to the table with a lot of knowledge and experience. Clients hire us because of our expertise, and they want to have their questions answered quickly. How many times has a prospective client asked you for pricing information or a high-level overview of a proposed solution before you have completed your discovery? More importantly, how many times have you obliged?

It is easy for a consultant to rush to judgment regarding the nature of the problem and, therefore, the solution. We may start talking prematurely about all the things we know and what can be done to improve the client's current state. People are most comfortable talking about themselves than asking solid, insightful questions about someone else. For this reason, we all fall into the trap and start providing a solution before we really understand the problem.

While the fact is that people like to talk about ourselves and what we know, world-class consultants have figured out how to use this fact to their advantage. They conduct an appropriate amount of research and planning before a call with a client and have a plan for what they want to learn. They ask insightful and open-ended questions designed to get the client or prospective client talking. They may interject with an anecdote or story where necessary to give the client confidence that the job they are being asked to do is not foreign, and they use active listening skills to verify that they understand what the client is saying.

Even when clients push for the answer or the price, world-class consultants resist the urge to go down that path too soon in favor of continuing with the investigation.

Only after a world-class consultant feels that he understands the current state and desired future state does he begin to share his observations and recommendations.

2. Remains a client advocate and keeps the client's best interests and needs top of mind at all times.

A world-class consultant works closely with her client to uncover the real pain and assist them in developing solutions to the problem that allows the business to grow and prosper. Consultants should not conspire with their primary contacts to solve symptoms without addressing the real problems, and they confidently advise the customer to address the root cause of the issues that are being experienced.

Michael McLaughlin, author of Winning the Professional Services Sale, says that "top [professional services] sellers do share this goal: To deliver extraordinary value to their clients before, during and after the sale. To accomplish that, they uncover what each client really needs and use flexible, pragmatic strategies to chalk up wins for all concerned." He goes on to say that "packaged offerings" fundamentally change the consultant or consulting business from one focused on the client to one that is focused on the business.

While consultants must run a profitable business - without doing so we will not be able to work with clients to help them meet their goals - world-class consultants are insanely focused on meeting the needs of the customer. Some times that means telling the client things they don't want to hear, but in the end, it's all about the customer. This does not mean that we don't have to concern ourselves with what is in the contract or delivering a project on-time and on-budget. However, if a consultant determines at any point in the project that the scope of work defined in the contract is not going to meet the needs of the customers - maybe something has changed since the contract was executed - it is that consultant's responsibility to speak up.

You must talk with the customer about what has changed - ask them at key points of the project if anything has changed. When changes are significant enough to render the current SOW irrelevant, work with your client to redefine the project in a way to meets their critical needs, even if that means the project gets smaller.

Another way a world-class consultant can remain an advocate for the customer is to ensure that his company is aware of the client's needs and speaks openly about those needs that are critical. For instance, a consultant in a product company may learn that the client has needs that are not being met by the product or by another department, like Customer Service or Finance. The consultant should bring these concerns/needs to the appropriate people in his company. Do so in a manner that is non-threatening and helpful. Remember, these other groups could be hard at work solving the problem or may not even be aware that there is a problem - you don't want to accuse. Let them know, though, that the customer has a concern and help connect them to the client if they are not already working with them.

Consultants sell and deliver time, ideas, assistance, and guidance. Your goal is to be trusted by your client so they open up and want to work with you. Being their advocate and keeping their needs at the center of what you do will go a long way to showing them that you're on their side.

1. Communicates clearly and completely without bias, attitude, or judgement.

I introduced my Top 10 Qualities of a World-class Consultant last week. Next, I will start to dig into each of the ten qualities, starting with the first quality: A World-class consultant communicates clearly and completely without bias, attitude, or judgment.

Clear, proper communication is a foundational element to any relationship: Husband and wife, parent and child, friends, business associates, and consultants and clients.

All to often, the primary reason for a relationship's failure starts with the way parties communicate. In marriages, couples often blame money, work schedules, and simply "growing apart" for their failed relationships. Yet, I know many successful couples who stay married even when they have financial concerns, crazy work schedules, and different interests. Why are these couples able to make it? They communicate! Its no different in the world of consulting.

While effective communication is a two-way street, the consultants should set the example with regard to how communication should be handled. This doesn't mean that we should dictate how it will happen. Rather, the consultant should discuss with his client how different types of information will be communicated and at what frequency and format. (I recently attended a kick-off call for a project my team is running, and the client indicated that instant messenger is the best way to reach him.)

There are a number of different types of communication that must be discussed throughout the project:

1. Project Management Information: Common project management-related areas that require effective communication:
   
   - Project plans, including work breakdown major milestones, and escalation paths
   - Roles and Responsibilities
   - Project status versus the plan
   - Risk Assessment and mitigation
   - Action items & issues
   - Change Requests
   
   The consultant and client must agree on the format of project management-related communications as well as the frequency and who receives this type of communication.
   
   
2. Engagement Observations: As the client and consultant work together to solve the problem at hand, key observations will be made by the consultants. In some cases, it is appropriate to wait until providing the deliverables to share observations. In other cases, though, key observation should be shared along the way.
   
   Sharing key observations along the way allows a consultant to:
   
   - Confirm what she is learning and gather feedback
   - Ask follow-up questions to put a finer point on the observations when necessary
   - Let the sponsor know early if their is an observation that may be difficult for him (or the team) to hear for the first time in a larger audience.
   
   
3. Recommendations: In a few weeks, I will discuss Peter Block's idea that a consultant helps customers "find their own answers to their questions." While that is often true, the fact is, consultants are expected to make recommendations that the client will consider and, hopefully, implement. Some of my clients have requested sample recommendations during the selling process.
   
   Like observations, there are times when a consultant should share key recommendations with a client before the final deliverable is provided - often for the same reasons. In some cases, the recommendations are so important, the consultant is compelled to tell the client right away, enabling the client to make a key decision and start implementation sooner.

The way one communicates is as important as what is communicated. As my husband says, it is often "not what you say, but how you say it." That is not to say that one does not have to communicate accurate, relevant, and reliable information as long as what is said is with a smile. That wouldn't work either. What you say is important. It is important to deliver your message with authority and in a tone that can be received by the other person.

Speaking more to the "how you say it," though. Some consultants still enter a problem discussion or discovery with preconceived notions and biases about what the problem is and how to solve it. When that happens, they fail to drill into the problem deep enough. The worst case is when the consultant gets impatient with the client for "not getting it" and that impatience is expressed through the communications. Remember, if they "got it," they wouldn't need you.

Keeping an open mind throughout your discovery is one way to communicate completely and in an unbiased manner. Be confident and provide anecdotes and supporting information where necessary. Use your expertise, but learn from your client.

World-class PSO: Daily Thought

The two faces of professional services: Sales reps all over the world are signing from relief as they wrapped up the quarter, and potentially the year. Reps know if they made their number or didn't. They know what deals are left to come in that will - hopefully - give them a good start to the new quarter. Maybe they are sleeping a little late today before they get up and do it all over again.

Professional Services Managers are also going through a similar process. However, PS managers can't simply sleep late and start the selling all over again. Yes, that is part of what we need to do - start selling again, but now we need to start delivering on our promises - our contracts - and get the work done. We need to look at the backlog, schedule resources, prepare our teams, and schedule the work with the clients.

Hopefully, we all had a record quarter, and we can celebrate our recent successes. The celebration will be short lived, though. It's time to "get 'er done!!"

Good luck!

World-class PSO: Daily Thought

As Stephen Pierzchala, Senior Consultant at Gomez (and one of my direct reports) so eloquently said in his blog yesterday, "One of the things that all consultants have to accept is that selling is a part of the territory." In my comment to Stephen's blog post, I reminded him that "selling" doesn't stop when the ink dries on the contract. As a consultant, you are constantly selling your abilities, knowledge, expertise, frameworks, and recommendations.

Good consultants are always persuading their clients: We persuade them to share ideas, answer our seemingly irrelevant questions, humor us as we take them through an exercise or learning program, and execute the recommend that we make. We persuade them to work together to find creative solutions to their problems, and we persuade them to see a new and fresh perspective.

Consultants are not sales people, but there is an element of selling in everything we do.

World-class PSO: Daily Thought

A Lesson in Civility: There's an old adage: "We hurt the one's we love." So, I asked myself, why is it we take risks in our communications with those who are the closest to us?

I don't know about you, but I know that I find myself, at times, putting important, close relationships at risk when I don't take a few minutes to speak thoughtfully and without emotion when working with colleagues. I know that I, for one, find myself approaching certain internal communications in a way that I would never do with my clients.

So...what do you do when you need to properly set expectations with internal stakeholders, you feel you have expressed these expectations more than once, AND maintain relationships and/or build bridges? I say...treat every communication, particularly the really important communications or those that are with "challenging" stakeholders, like those stakeholders are your clients.

Top 10 Qualities of a World-class Consultant

A world-class PSO is an organization with effective sales, marketing, delivery, and operational processes, tools, and resources that ensure customer needs are met, can achieve 100% reference-ability among its client base, and is able to meet financial goals such as bookings, revenue, and profitability goals.

To truly be world class, a PSO needs to attract and retain world-class consultants. Yes, these consultants need access to world-class tools and best-in-class processes that enable them to do their jobs well, but they also need to have the passion and focus that allows them to learn new skills and technologies and grow within the organization. Truly world-class consultants develop both the subject matter expertise required to deliver world-class services, but they also build the consulting, selling, and customer management skills required to build deep relationships with their clients and deliver profitable, repeatable projects.

I spent some time on a recent flight from Boston to San Francisco thinking about what makes a consultant "world-class." What are the qualities inherent in those individuals who can connect with their clients in a way that ensures that the client's needs are met, their challenges are addressed, and the necessary change is effectively delivered?

The following is a list of the top 10 qualities that I think are critical for a consultant to possess in order to be world-class. Admittedly, not all of these ideas are original, although some are, and I have done my best to site the original author who spoke of the quality. I apologize in advance if I missed anyone. So here is the list of 10.

A world-class consultant:

1. Communicates clearly and completely without bias, attitude, or judgement.
2. Remains a client advocate and keeps the client's best interests and needs top of mind at all times.
3. Seeks first to understand, and then to be understood. (I know I heard this somewhere, although I can't recall when or from whom.)
4. Asks questions designed to uncover the "real" pain, not just the "stated" pain. Jean DiGiovanna of ThinkPeople refers to this as "staying curious." (This is a common theme in many sales training and books, particularly those that espouse a "solution-selling" approach. It is also relevant to consultants who work to effect positive change in a client's organization.)
5. Is not afraid to tell the customer what they need to hear, rather than what they want to hear. (This is often difficult to do without being perceived as difficult or undiplomatic - its not what you say, but how you say it - and it is a place where sales and other groups may try to sensor the consultant.)
6. Is able to boil complex issues and situations down to simple frameworks that can be easily understood.
7. Is able to work across different departments and levels in an organization, be perceived as a trusted adviser, and can filter "baggage" and "noise" from the reality of the situation.
8. Can find advocates and evangelists within an organization who can help navigate the political structure.
9. Is able to ensure the client that she understands what is unique about this situation and that she can bring the breadth of her experience to help solve the problem.
10. Whenever possible, works to assist his client in finding their own solutions to the problem. (See Peter Blocks, Flawless Consulting.)

I will dig into each of these 10 qualities over the coming weeks.

Vision and Stragegy in 2010

Building a World-Class PSO requires many components of a complex system to work together to meet the needs and objectives of the client base, consultants, department, and organization in which the PSO resides. Hiring the best and brightest consultants, developing relevant and repeatable services offerings, and developing a repeatable delivery model that enables projects to be delivered on time, on budget, and at the highest quality are examples of some of the components that must be implemented to ensure that the PSO is, truly, world-class.

But how do you know what resources to hire, what services to offer, and what the delivery framework should be?

As with any other business, develop vision and mission statements for the practice is a critical first step. Now, I know there are a lot of nay-sayers out there who believe that vision and mission statements are "fluffy" and meaningless. I disagree, however. In fact, the process used by managers and the team to develop these two very important artifacts for the practice is as important, if not more important, than the vision and mission statement themselves.

My company is moving through the Professional Services Maturity Model quite aggressively these days. There are a lot of changes we are managing. For instance, we were recently acquired, we are planning significant growth in our business, and we are even changing many of the services that are delivered.

As we sat down to plan the new year, which starts on April 1, 2010, we quickly realized that we were in the midst of an identify crisis given the changing environment. This crisis was preventing us from make key decisions and reaching our fullest potential as a world-class PSO.

So, we took a step back and started by defining a vision statement for the practice. We decided that the vision statement would define some future state - what we aspire to be. We also decided that it would be written from out clients' perspectives. In other words, there is no mention of internal metrics or growth numbers. What role do we want to play in assisting our customers through their own evolution to greatness? We held up in a conference room for a couple of hours, and we pulled something together that really speaks to why we get up every morning.

We are still working on the final touches of the vision statement, which includes reviewing it with key managers from across the business as well as with the consultants themselves. So I won't share the vision now. However, having this vision enabled us to make significant progress in defining our plan for the new year. We have identified a set of a dozen or so initiatives that align with the vision to assist us in improving how we go to market, work with sales and marketing, and deliver the services we offer.

Having a strong vision is a key component of SPI's Professional Services Maturity Model. Without it, PSO managers will not succeed in getting on the road to building a world-class PSO.

Managing Non-Billable Work Effectively, Part 5 of 5

I recently reached out to my colleagues at PS Village and reviewed a number of posts on the LinkedIn group, SaaS Professional Services Executive Forum, to inquire about how others deal with give-away work. It seems that many respondents experience the same challenges. The trend across all of the proposed approaches to dealing with this situation is that the solution will work if, and only if, executive management places value on the work of the PS team and on the importance of managing projects properly .

Here, then, is a summary of some of the best suggestions that came across the PSVillage and Linked In Discussion Boards:

1. Manage non-billable, client projects like a billable project by involving PS resources in the discovery and scoping discussions early and using the SOW and CR process to manage the agreement and work effort.
2. Tracking non-billable work in a number of categories. For instance, one may consider tracking and reporting the percentage of PS time spent on:
   
   - Non-billable commitments made by management (PS, Sales, and Executives)
   - Project overruns due to missed estimates on fixed-bid projects
   - Project Management approved no-cost CRs.
   
   
3. Charge back systems can be used to highlight the amount of non-billable work delivered (and on behalf of whom). For instance, if a sales manager commits to including five days of PS work at no additional cost in order to close a larger product deal, the Sales budget pays for the PS time. PS reports the booking and revenue like any other, but Sales takes a hit on its budget. In this model, Sales would be very aware of the value of the no-charge work and would understand the deal size that would need to be closed to make the PS work worthwhile.
4. Financial Reporting can be used to highlight the amount of non-billable PS work delivered to customers. One member of the PSVillage worked directly with the head of finance to change the way non-billable PS work is reported on the company’s financial statements. With this change, the financial statements reported both the “Gross PS Revenue,” the discount rate for the period, and the Actual PS Revenue. Gross PS Revenue equaled all time spent by PS on client projects at the normal billing rate (whether billable or not). The discount rate represented the value of the lost revenue of the hours that were discounted or given away. The Actual PS revenue is the difference between the two. This type of reporting put a spotlight on the value of the no-charge PS work that was being delivered.
5. A formal approval process ensures that all parties are aware of the need for and agrees to the no-charge work before the commitment is made to the customer. This approval should include the CFO, VP of PSO, and VP of Sales. The process should be well defined, and all parties in a position to give away PS work should be required to follow it. I would that approval should be required before any agreements on schedules and work effort are verbalized to the customer and should require an initial discovery by a qualified PS consultant or manager.
6. VSOE, or Vendor Specific Object Evidence, is what determines how a business can recognize the revenue associated with a deliverable or work effort based on the fair market value of that work effort when sold as a stand-alone item. Some members of the Discussion Groups suggested that VSOE can be used as a baseline to which discounts are compared. Any discounts that bring the deal size below the VSOE would be flagged for review by finance before there is a contractual agreement between your company and your customer.
7. Where the primary contributor to non-billable customer work is the Sales department (and assuming reps are paid a higher rate on product sales than PS sales), some suggested that the value of the discount come out of the license cost, in turn reducing the commission to the rep. it is thought that if the rep. feels the loss in his commission check, he will think twice about making the promise in the future. This often happens when VSOE is in place.
8. In most cases, participants in the discussions felt that executive-level support and structuring the PSO as a profit center are the two primary drivers for reducing the pain associated with unmanaged “give away” commitments. With both in place PS managers can reduce the number and frequency of those commitments and ensuring that proper project management processes are followed in the pre- and post-sales efforts. Additionally, many thought that determining a budget for non-billable client work was important to ensure that these opportunities were scrutinized appropriately during the review and approval process.

Conclusion
PSO managers need to expect that non-billable work as a nature of the business in an embedded PSO. Getting agreement from the top with regard to how and when work will be given away is critical. Showing executive and sales management how unplanned, non-billable work - without PS involvement - disrupts the apple cart, including short-term and long-term effects, is critical. Solutions for managing non-billable work exist, but they work best when supported by the executives.

Managing Non-Billable Work Effectively, Part 4 of 5

Well, it took a while to get back into the swing of things as Q4 ended and the holidays rapped up, but I'm back on track, and here is part four of my article on Non-billable work.

In parts 1-3, we defined the different types of non-billable work, who often "gives away" this type of PS work, and some of the challenges the PSO experiences when work is given away without the PS team's involvement. In this and the final post on this subject, I will discuss some of the ways in which non-billable work - and the chance that it will occur - can be managed.

How to Manage Non-Billable Projects and Commitments?
As I mentioned in earlier posts, most PSO managers with whom I have talked have, at one point in his or her career, had to find the balance between meeting revenue, bookings, and profitability targets with the need to support product sales or generate customer goodwill by providing customers with non-billable projects. While non-billable work can be managed in such a way to avoid the pain associated with missed expectations and missed KPIs, it often isn’t. My research shows problems arise most often when:

1. The PSO is not viewed as a profit center.
2. Sales does not truly understand the value the PSO provided
3. There is no agreement at an executive level of the amount of non-billable work that can be given away in a given quarter or year

So, how do you ensure that your non-billable workload does not become a problem for you or your customers? To start, there needs to be agreement at all levels of the organization that all projects are created equal. The PSO should be involved early to scope any PS project, even when a decision is made to deliver the project at no cost to the customer. In order to treat all projects equally, the following rules should apply:

• Non-billable projects need to be properly scoped by the PS team, just like billable projects.
• Even when a project is a no-cost project, an SOW is required - the customer and the PSO must sign the SOW representing the agreement. (This is the only way of which I know to effectively manage scope.)
• Customers only value those things for which they pay. If a decision is made to give work away, the value must be spelled out. The true cost of the project must be spelled out in the SOW as well as the discounted price and percent. (The value of this project is $50,000 USD, discounted 100% for a cost to Customer of $0.00 USD.) Showing the discount rate up front makes it clear what the customer is likely to pay next time.
• No scheduling of billable resources is confirmed until the SOW is signed.

This is all great on paper, but this process still has gaps. It says nothing with regard to how much no-cost work can be given away each quarter or year. It also says nothing with regard to who can agree to non-billable work or how non-billable work is approved. While it does, however, indicate that scheduling does not happen until the SOW is signed and that the PS team is responsible for scoping the work, it does not prevent individuals from outside the PSO from making commitments on schedules, even when they have no real sense of how much time is needed and when resources are available to begin work. Lastly, it does not provide a provision for the PS team to get “credit” for this work against key metrics like revenue, bookings, and profit margins. (The PSO's ability to achieve annual goals and get compensated for doing so is diminished without such provisions.)

I'll talk next week about how to close the gaps and what the eight (8) other components of a "give away work" process should be.