Welcome back to another episode of The Profit Scale, friend! The focus of our conversation today is on strategic leadership, meaning taking some time to reflect on how to improve the strategy behind your actions to help you move your business forward. Here’s the fact. The consulting industry is shifting, and whenever there is a shift in the needs within an industry, it creates an opportunity for growth and success for the companies that align with the needs of their market as they emerge. Whether you’re an independent consultant, or you’re a leader in a large firm, the questions we go through today are going to help you align your strategy, and subsequently your systems, with the shifts in the market to increase your revenue in a sustainable way. Turn up the volume and lean in friend, let's get started.
🎯Top take away from today's episode:
It’s important to understand how changes in the consulting industry affect our everyday business strategies, systems, and operations, so we can adapt to remain relevant and position our firms for continued success.
📊 Statistics you need to know:
💡 The 3 questions to ask yourself:
🔗 Links:
📞 Schedule a free Discovery Call!
✍🏾 Take the Systems S.O.S. quiz !
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🌟 Leave us a review and a 5-star rating here: The Profit Scale podcast!
Salutations friend and welcome to The Profit Scale podcast. This is the podcast where we teach service-based experts, consultants and firms how to step into their next level of coins and confidence.
My mission is to equip you with the systems and strategy behind your coins, so you can build a business that's both profitable and sustainable.
I'm your host, Ruth-Joy Connell, a corporate consultant and sales operations expert, and around here, we live by the motto, "No coins left behind."
So if you're ready to create consistent revenue with ease using scalable and sustainable systems, then you, my friend, are in the right place. Turn up the volume and lean in 'cause we're about to get started.
Welcome back to another episode of The Profit Scale, friend. The focus of our conversation today is on Strategic Leadership, meaning, taking some time to reflect on how to improve the strategy behind your actions to help you move your business forward. Whether you're an independent consultant or you're a leader in a large firm, the questions we go through today are to help you align your strategy and subsequently your systems to increase your revenue sustainably.
Before we get into the questions, I want to start by talking about the challenge that today's episode is addressing. Here's the fact, the consulting industry is shifting and we as consultants need to shift along with it. According to a recent study done by InfoDesk, 2021 trends are showing that the consulting industry is moving towards virtualization, value-based performance and digital disruption. Whenever there's a shift in the needs within an industry, it creates an opportunity for growth and success for the companies that align with the needs as they emerge.
So what does that mean for us as consultants? Well, it doesn't mean that we blindly follow the trends per se or make shotgun business decisions based on the new trends either. What it does mean is that we are acknowledging that the needs of the market and the clients that we want to serve are evolving, and we recognize that, as leaders, we have to re-evaluate our strategies to make sure that our unique value propositions, the thing that makes you different from every other consultant, still serves a need within the market. It's important to understand how these changes affect our everyday business strategies, systems and operations, and how to adapt our business strategy to remain relevant and position our firms for continued success.
So in today's episode, I'm going to challenge you from a leadership perspective and present you with the strategic questions you need to be asking yourself based on the most recent industry research and insights.
I believe that as a leader in this industry, your strength is not solely measured by your ability to withstand the force of uncertainties and risk, but more critically by your flexibility, your ability to bend, stretch and transform along with your market without breaking and without compromising your values and what's unique to you. So this shift is presenting you as a leader in the consulting space with an opportunity to demonstrate your strength through flexibility. And I'm happy to help you do just that with today's episode.
McKinsey found that organizations that innovate during a crisis, meaning they put a focus on generating new growth and not simply weathering the storm, those firms significantly outperformed others over time, even after the crisis had ended. So they have found that these companies were able to generate almost a 17% higher total return to shareholders coming out of a downturn, than the businesses that just hunkered down and tried to wait the crisis out.
Remember that shareholders are people who have stakes in the business, so even if you're an independent consultant or a freelancer, you are the shareholder for your firm. I want you to think about that number. If you could pay yourself 17% more than you did last year, how would 17% more revenue benefit you? Remember, this isn’t 17% more revenue in general for your business, it’s 17% more take-home pay for you, specifically as a shareholder. What impact would that have for you? How would it impact your family?
The questions I'm going to be asking you today are meant to help you boldly innovate where no man has innovated before. Well, really, it's to help break down ideas like innovation and strategy, and to shift them from a theoretical concept into tangible constructs, but you get what I mean. You get the reference. Well, hopefully, you do.
All right, friend, if you're new to the podcast, I want to extend a very warm welcome to you. This is the place to be. And if you're returning, welcome back. And if you've been listening for some time now, then you already know that right about now is when you want to make sure you have something to take notes with.
Let's get started.
Question #1: How are you differentiating yourself as an expert?
Another way to ask this is, are you a generalist or a specialist? And there's really no better way to start this off than with a quote from the Liam Neeson movie, Taken. When his daughter is kidnapped in the movie and the kidnappers contact him for a ransom, Liam Neeson says this quote, "If you're looking for a ransom, I can tell you I don't have money, but what I do have are a very particular set of skills, skills I have acquired over a very long career, skills that make me a nightmare for people like you." That's the end of the quote.
Before we go on, I just think we should take a second to appreciate the quality of the research that goes into these episodes. Friend, I mean, what other podcast are you going to get industry-leading statistics and strategy, song lyrics, TV show references and movie quotes all in one place? I'm just saying that this podcast is legit.
Is this quote not the best way to define a specialist? Like literally. Interestingly enough, when actors in Hollywood become known for specific character types, it's referred to as typecasting, and sometimes it's seen as a negative thing, but I prefer to actually look at it like specializing, instead of typecasting. Actors like Liam Neeson from Taken, Jason Statham, or Gerard Butler specialize and are phenomenal in a specific type of character portrayal. They're usually the hero. It's usually an action movie. When you see any one of them in a movie, you kind of know what to expect, even if you don't know the full plot or the storyline, and because of this, their reputation precedes them.
So how does it relate to business? Well, one of the shifts we're seeing in the consulting industry is towards hiring consultants that are specialists instead of generalists. A generalist has a wide set of non-specific skills that can be applied to many fields, whereas a specialist has a unique set of specific skills within a specific field.
Establishing yourself as an expert has always been important, but even more so as research shows that in 2020 and beyond, organizations are looking for consultants that have established expertise, and this is across the board in the consulting industry, regardless of the segment of consulting that you operate in. Companies no longer want a jack of all trades, they want a master of one. And that being said, let's talk about some of the differences between a generalist versus a specialist.
A generalist can find a problem to solve, whereas a specialist solves a defined problem or set of problems. A generalist will tend to have a broad and unspecified niche, whereas a specialist has a targeted and specific niche. Another way to look at this is that you're not only clear on who you serve, but you're also clear on who you do not serve as well, and having that clarity on both ends is just as important to a specialist.
A generalist will typically deliver services that result in a general improvement in one or many areas, while a specialist delivers a service that results in a specific predetermined and measurable outcome. These are just some of the differences between the consultants who specialize and those who generalize. And I'm asking you this question to challenge you to reflect on the category that you fall into.
Would your prospects consider you a generalist or would they consider you a specialist? I want you to start moving away from generalized services and outcomes and begin to establish yourself as an expert in a specific process, result or problem. And the great thing is, if you've been operating as a generalist, then you have a lot of experience in many different areas, which actually makes it easier for you to choose what specialty serves both you and your potential clients best. So you're kind of starting from a good place.
While you're reflecting on this, I also want you to take a look at your unique value proposition to make sure that it supports your position as a specialist and not a generalist. So if you aren't really clear on your unique value proposition, one of the things that you can look at is the promise of your service, your program, or your offering.
Usually, your UVP is tied really closely to the promise that you're offering, so that's a good place to at least get started. So how does the promise that you're offering need to be repositioned or changed based on the evolving needs of your niche market? And if you've already made these changes to make sure that what you're offering is still relevant to your potential clients, then how are you communicating it to make sure that they're informed, whether it be through your content or your calls?
If you're still in the process of making this alignment, it doesn't mean you need to transition to an entirely new business model, but it does mean taking the time to make sure that your services are positioned and relevant for today's market, not just the market that existed when you started your firm. That's the first place to start.
I'm asking this question first because it ensures that you are, again, aligned with the needs of your target market today, not just where you started. It is crucial that you understand where your market is now, and you carry today's most recent research and understanding of the problems that you are trying to solve into your positioning, into your services, and into your offers.
So that's why I take the time to do the research and include recent up-to-date stats in these episodes. It's not just because I'm secretly a nerd and I love analyzing numbers and data, it's also to make sure that you have the information you need to make strategic decisions for your business, okay? That brings us to question number two.
Question #2: Are you leaning into what's working?
Leaning into what's working could mean even further niching down. We just talked about the fact that, as a specialist, you have a targeted niche that you're operating within. Well, leaning in could mean focusing on the revenue streams that are outperforming the others, or maybe a sector of your client base that's outperforming others.
To answer this question, I want you to go back and look at your revenue, your data, and your key performance indicators more specifically as it relates to things like conversion and revenue. This is a good time to look back on your data and see what income streams have remained stable over the last three to six months. Are there any income streams that have grown in that same period?
If you're familiar with the Pareto Principle or the 80-20 rule, as most people know it, this is a great time to see where this may be applying in your business today. Just in case this is your first time hearing about the Pareto Principle, it simply states that 80% of your results come from 20% of your efforts. In this case, that could mean 80% of your revenue is coming from 20% of your clientele, and even within that 20%, there could be another 20%.
I want to give you an example of what it looks like to lean into what's already working. I was listening to the podcast "Entrepreneurs on Fire," which is hosted by John Lee Dumas/JLD. I absolutely love that podcast, it's phenomenal, and I highly recommend it. So every month, they release an income report and they break down how much revenue they made and which revenue streams it came from. In his most recent income report, he was also launching and promoting his new book, "The Common Path to Uncommon Success," which again, I definitely recommend you order. I have ordered mine and it's on the way, and I'm very excited.
In this episode, he also shared the strategies that they've been using to promote pre-orders and sales for the new book. If you've listened to two or more of his income reports, then you'll see that consistently, the majority of his income comes from podcast partnerships. So what did he do?
He leaned into what was already working and promoted his new book through podcast interviews and partnerships, and not just through his own podcast, but also by being a guest on other podcasts. He actually stated that in February alone, he did 139 podcast interviews. That is crazy. I cannot imagine that many interviews in a 28-day month. That's crazy. That's an average of almost five interviews a day. They definitely also had some other strategies that they were using to promote the book as well, but the majority of his resources, time and energy were focused on this one channel. Again, the channel that was already working and it's proven to be successful for him time and time and time again, so why not?
I'm sharing this example with you to show you what it looks like to lean into what's working without reinventing the wheel. When you take some time to evaluate what segments of your clientele or what income streams are performing or outperforming the others, then it gives you an idea of where to refocus your time, your energy, and your resources, and even that of your teams.
If you see that particular strategies are working better than others for your team, then this gives you an idea of how to align your strategy and lean into what's already working. Taking the time to reflect on and identify what's working well in your business, helps you make sure that you're staying aware of what your market needs and positioning your business and your services to meet those needs at an even deeper level, especially as they continue to evolve.
A great first step towards answering this question is to first identify your Revenue-Generating Activities or RGAs, for short. And that actually brings us to the third and final question, question number three.
Question #3: What are your Revenue-Generating Activities and are they being prioritized?
If you've listened to the last episode of The Profit Scale, Episode 25, then you know we talked about five areas to put systems in place in your business. I talked about systems behind your sales being so important because they allow you and your team to focus on your RGAs. So I want to build on that, on the discussion that we had in the last episode, by first helping you understand and identify what those RGAs are within your unique business.
The term Revenue-Generating Activities means the tasks that you do that directly correlate to bringing in revenue. And this actually ties in really well with the previous question that we just went through, question number two, because your RGAs will be closely tied to the actions that are bringing in results for you. So reflecting on what's working is also going to help you more easily identify what the Revenue-Generating Activities are in relation to what's working.
So some examples could be things like discovery calls, hosting a webinar or doing a demo. It could be maybe going live on LinkedIn or booking podcast interviews, or it could be posting regularly on your social media on your most engaged channel, and spending time engaging with your prospects and with the people who are in your audience. Or maybe it's speaking at conferences and speaking at events.
For you, that's going to be a little bit different depending on your unique business. But I want you to think about the tasks that when you prioritize, generate warm leads, and a percentage of those leads actually turn into paying clients. A good place to start is by identifying which of your marketing channels is bringing in the highest amount of qualified leads. So when I say marketing, this could be social media marketing, traditional marketing, or content marketing, which includes things like doing live videos or speaking engagements, or interviews, etc., stuff like that. So however you get the word out into the industry about what it is you do and the problem you solve, however you reach your prospects and potential clients, that's marketing for you.
Ideally, you would have some way of tracking how people are finding out about your services, and it doesn't have to be complicated. In its very simplest form, this could look like having a question on your discovery call, asking people where they found you and then providing a drop-down list of options. Again, this is a very simple system that you can implement into your strategy that takes as little to no time so that you can start making sure you're tracking which of your marketing channels are performing the best. And maybe you already have your own sophisticated methods of tracking your inbound leads, which is fantastic, but if you don't, asking this simple question is a great place to start. Let's keep it simple for now, we don't need to over-complicate it. So that's step one; understanding which channel is performing best for you.
Once you've analyzed which channel is performing best, then the second step is to see how much of your team's time, energy and resources are actually being poured into that specific channel. If you're an independent consultant, then you're really only looking at your own time, which makes it easier for you to make that correlation between how much time is being spent on your most productive channel versus other activities, etc.
It's not uncommon to realize that your resources are not being focused on the things that bring in revenue into your business, and that's why we're taking the time to have this conversation, friend. Research from McKinsey Global Institute shows that only 39% of a sales representative's time is spent selling, meaning that less than half of their time is spent doing the one thing that actually brings revenue into your business and keeps your business alive. As leaders and consultants, it's easy to say that bringing in more clients is a priority for us, but when we actually calculate our time spent on said priority, the math isn't mathing friend, it's not adding up. Remember that even if you're an independent consultant or a freelancer, this applies to you too. You are the salesperson for your business.
More often than not, when I speak to other consultants and service-based entrepreneurs, and I ask them what's their biggest struggle, they usually say something along the lines of getting more clients, finding more leads, or bringing in more revenue, and maybe that's true for you, too. And yet, if I were to ask you, how much time are you spending on Revenue-Generating Activities specifically, would it match the statistic I just shared, or maybe it would be more? Would the way you're spending your time reflect the priorities that you say you have? You tell me.
As consultants running service-based businesses, it's critical that we prioritize the activities that bring in money and equip our teams to do the same as well. If your business is already at a place where you have a designated sales team and a separate team of consultants that actually deliver the service, then you as a leader, your job is to make it simple and easy for your team to focus on their RGAs. But if your consultants are still directly involved in the sales process, or you're running a small team and you yourself are directly involved in the sales process, then friend, you have to spend time doing more of the right things, and that's focusing on your Revenue-Generating Activities.
Start by looking at what's already working and then prioritize those activities over the others. Bringing in more leads, bringing in more clients, bringing in more revenue, those in themselves are not tasks, they are the result of prioritizing the right tasks and activities. So far, I've posed three questions for you to reflect on and take the time to answer about your specific and unique business.
So now, let's talk about how you can convert this conversation into coins. In addition to giving you the questions to ask and answer, I also want to help give you some ideas about how you can go about finding the best answers to these questions and applying the information in a way that serves you, your team, and your goals best.
So the first option is to review these questions, the three questions that we just went over, with the leaders in your company during your next quarterly business review. So we're just at the beginning of Q2. So if you're listening to this as this episode airs, then this is still a good time for you to hold that QBR and for you to discuss this with the leaders in your company.
The second option, and the one I highly recommend, is to set a team meeting and include the key people who are involved in your sales process. Send them the three questions we just discussed ahead of time and have them bring their ideas, observations, questions, suggestions and more to the meeting. Setting a team meeting with only these three questions on the agenda allows you to address them quickly and gives you an opportunity to implement any necessary changes sooner rather than later.
Working with the key people in your sales team also gives you a variety of perspectives and makes it easier to identify any recurring themes or challenges that may come up during your meeting.
And if you're running a team of one and you can do bad all by yourself, then the third option is taking a CEO day for yourself. Meaning that you clear your calendar of all of your calls and all other commitments so that you can focus on working on your business and not just in your business. During that time, you can answer the questions we discussed and map out a strategic plan to implement your changes over time.
Back in Episode 5, I actually talked about how to structure your CEO day and what it looks like to step into the CEO role if you're operating as an independent consultant or a freelancer. So I recommend going back to Episode 5 and listening to that if this option works best for you.
And the fourth and final option is to reach out to me and schedule a discovery call. I'd love to help you answer these questions for your business and to see if there's a way that we can support you to position your business for strategic and scalable growth. So if you're thinking to yourself, "RJ, I really need some help to think through this, I want to make sure that I'm making the right moves, not just for now, not just for this year, but for long-term growth and scalability," then go ahead and schedule a call using the link in the show notes or head over to rjcconsulting.com/call.
All right, friend, so your action item for today is to choose one of the four implementation options I just laid out and to answer the three questions that we went through in today's episode.
Just in case you need a refresher, here's a recap of our conversation today. We first started by talking about the changes that are happening in the consulting industry as a whole, and that we, as leaders, need to position our firms for continued success by aligning our services to continue to meet the needs of our market as they evolve.
To help with creating that alignment, we then went through these three questions.
But wait, we didn't stop there. I also gave you four different ways to actively find you the answers to these questions, so you can implement a strategic plan where needed.
If you found today's conversation helpful and you want to learn more about how we can help you set up strategic systems in your business that will help both you and your team focus on Revenue-Generating Activities, then click the link in the show notes to schedule a call with me, or head over to rjcconsulting.com/call. I cannot wait to talk to you, friend.
As always, I am grateful for this time with you. I truly, truly, truly look forward to our time together and to the conversations that we get to have here on The Profit Scale.
Before you go, make sure you're subscribed to the podcast, so you don't miss our next episode in two weeks. And while you're at it, please do me a favor and leave us a five-star rating and review on Apple Podcast. As small as that action is, it really does go a long way to help us reach more consultants and firms, just like you. All you have to do is click the link in the show notes to leave that rating and review, and I and my team thank you in advance for your support. We genuinely do. It means a lot to us.
I'll be here at the same time and same place next week, and until then, I wish you coins, confidence, and all the bags. Bye for now, friend.