What The Research Says About Building A Successful Consulting Firm With Elizabeth Harr: Podcast #318

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You may find consulting success just by employing general marketing strategies and casting a wide net on your target audience. But if you want to build a high-growth consulting firm, you must make your tactics more laser-focused and well-targeted. Michael Zipursky sits down with Elizabeth Harr, Managing Partner at Hinge Marketing. Together, they discuss the importance of being a visible expert, building around your brand, and empowering your digital footprint to become a highly trusted firm. Elizabeth also explains how to keep your key talents by shaping yourself into an inspirational leader.

Welcome back to another episode of the show. Joining Michael on the show is Elizabeth Harr who is the Managing Partner at Hinge Marketing, a branding and marketing firm that specializes in serving professional service firms. She’s the co-author of three books and speaks regularly around the country on professional services marketing.

As you’re about to read, Liz is adamant about first learning to become a great leader and second, surrounding yourself with successful leaders and consultants to help you improve and ultimately grow your business. If you resonate with Liz’s sentiment and know how difficult it is to grow your business, the good news is that you don’t have to go it alone. The Consulting Success team is offering a free no-pressure growth session call.

Here’s what we’ll tackle together on the call. You’re going to dive deep into what makes your situation unique. We’ll have a real talk about your business and whip up a success plan that’s tailor-made for you. We’ll help you dodge those frustrating, costly blunders and save you from the headache of trying to figure it all out on your own. Lastly, you’ll get ongoing support and accountability that you’re going to need plus join a buzzing community of successful consultants, because let’s be honest. Growing a business by yourself can be pretty tough at times. To book your free consulting growth session call, head over to ConsultingSuccess.com/Grow.

Let me tell you a little bit more about what you’re going to learn in this episode with Liz. First, you’re going to learn how to find your niche and become an expert in your field and how to identify the right time to add technology to your company. You’re going to also learn how to attract and retain top talent within your business and how to build out a successful content plan for your firm, develop yourself into an inspirational leader, and ignite growth within your business by ensuring you are laser-focused plus so much more. Here to share with you her story and insights is Elizabeth Harr. Enjoy.

Liz, welcome.

Thank you. It’s great to be here.

I’m excited for our conversation. Every time that you and I talk, I learn something. I’m a fan of what Hinge does in terms of the research that you all have been doing over the years. It’s been fun to collaborate on a few things. Let’s get into it. I thought we’d start with the idea of the visible expert as a phrase or a term. You have a new book out as well on that topic. I feel honored to be part of that book and featured in a section of it. I’d love it if you could start off and maybe share with everybody what is a visible expert. What does that mean to you? Why write a book on it? Why do you feel that’s so important?

Thanks for asking about it. Ditto. We love talking with you. We learn something tactical and practical every time we talk. I appreciate that about you. The Visible Expert book is about a specific type of persona that is very successful in professional services. When we say visible expert, we’re not talking about a generic expert. We’re talking about somebody who has attained high visibility for a specific area of expertise in the industry that matters to them. It has to have those three containers, if you will, in order to meet the criteria of being a visible expert.

Why this book and why now? It is because we wanted to provide some insight to leaders out there who are trying to grow and scale personally within their firms or their firms. The answer is to build brands around expertise because this is how buyers are buying. We can make your expertise visible. We’ll build your pipeline and help you grow and scale in a profitable manner.

I love that. It’s very important. It’s an area that people often struggle with. I do want to get into your experience and time over the last couple of years at Hinge and how you built it up. You said when you started it was ten people and then it was much higher. Now, you have about twenty people at the firm. The research that you do, I want to dive into that.

Pay attention to how buyers are buying to get to the next level in a predictable and sustainable way. Click To Tweet

When you talk about specialization or expertise and how important that is, especially because that’s how buyers are buying, I know that’s not your opinion. It’s based on research and data because that’s the foundation of everything that you do. I want to play the devil’s advocate for a moment for somebody who’s saying, “Do you really have to be an expert?” My question is have you seen examples of firms in the consulting space or professional services that are more generalists? They don’t have deep expertise or at least they don’t put the spotlight on their expertise and are still able to be successful. If so, are they rare? What are your thoughts and experience on that?

I love that question because it’s yes, yes, and no, no. I see generalist firms that are successful. In fact, a lot of firms that become our clients are growing at a pretty good clip when they come to us. It’s not like they have tanked or anything and are like, “We got to hire an agency to help.” It’s not that. The reason to think about building visibility around your expertise is that in order to really get to that next level not in an accidental way but in a predictable, sustainable way, that is where you have to pay attention to, “I got to grow my firm in a way that aligns with how buyers are buying.”

You can be a generalist. You can get to a certain point, but at a certain point in time, you are going to compete with specialists. When you only have a price to differentiate because you can’t compete on the specialist and you’re in a different camp, it is important to know that, to your other question, a lot of firms come to the table with a generalist capability. With authenticity, they’ll say, “We’re a jack of all trades. That’s how we’ve won business.”

What I’m talking about with expertise is there’s got to be a reason you exist. Within that realm of why you exist, there’s got to be some unique angle or some unique perspective you have on tackling the problem that you solve. That’s where expertise comes into play. It doesn’t have to be technical expertise. It really is about that piece that I was talking about.

With clients, I often ask the question, “What do you want to be known for? If you’re not clear on what you want to be known for, then you can’t expect the market to be clear.” Your point is a really good one and one that is worth mentioning again for everybody. You can grow as a generalist, but it’s almost like having a business that relies on your network and connections. It can take you pretty far, but at some point, you’re probably going to wake up and realize that in order for you to grow in a more stable manner with more predictability and you being able to be proactive with it, that’s where the expertise comes in. I appreciate you sharing that.

Let’s shift then to one of your studies, one that you’ve put out. It’s called the High Growth Study where you’re looking at consulting firms that are growing at a higher rate than the typical firm. There’s a lot inside of this to unpack, but I’d love it if we could maybe go over a few areas that stand out that you mentioned to me prior.

CSP Elizabeth Harr | Consulting Firm

One thing that I want to note here is that the way that you define these firms is that they’re twice as profitable as their no-growth peers. They’ve figured out not only how to grow at a faster rate than the typical consulting firm, but they’re also growing more profitably, which is that dynamic duo or that combination that everybody wants. It’s not top-line revenue growth and saying, “We’re making a lot of “revenue”.” They’re very profitable, which is money in the bank. Let’s get into the four. The first area that I have written down here is technology. How does technology play into and factor into growth and profitability?

When we talk about technology, we’re talking about the adoption of technologies that allow companies to be proficient in a digital landscape. That’s how we’re all operating, communicating, and forging relationships. We found in our study that almost 1/4 or 23% of high-growth consulting firms have already gone through what the industry largely thinks of as a digital transformation. That means they have a high level of maturity in their technology adoption and digital proficiency. It’s the difference between operating on paper and spreadsheets versus all your core business systems and marketing and business development sales. It’s all tied into the same system or systems. Everything is talking to each other.

Leadership is making solid decisions based on easy access and visibility to key metrics. That’s the difference. 1/4 of firms probably doesn’t sound that impressive to people, but if you think about this number, 6% of no-growth firms have done the same and have gone through digital transformation. That’s a huge delta. Digital transformation is no easy feat. It can take years. That’s an interesting advantage that those firms have.

I would maybe add to this that for those that are joining, for some of you, you’re going to be at the stage with your business where this makes a lot of sense and it’s something that you should be looking into if you haven’t already. C orrect me if I’m wrong. I don’t want to put words into your mouth. From my perspective, I would not encourage somebody who’s a solo consultant or at an earlier stage to try and invest a ton of time and a ton of money into having all the latest technology tools.

I know that in our case, if we go back in time, we got to our first $1 million as a business with, pretty much, spreadsheets. We didn’t need a lot of technology to do it. We continued to grow from there and added tools and systems as we built our team. If we may simplify that, bringing in better systems, processes, and technology to scale, grow, and make a consulting firm more profitable, in your mind, when does that become necessary? When should somebody start thinking about that?

The answer when it’s right is going to be different for everybody out there. I love that you asked this question because you’re right. I’ve been there myself. In one of my startups, we were all spreadsheets and that was perfect for us. To your point, the takeaway for small firms would be to not over-invest in different technologies with all these whizzbang features that you’re never going to use. Even larger firms shouldn’t do that.

When leadership shows authenticity, it gives permission to everybody else and creates a healthy workplace culture. Click To Tweet

What we’re talking about here is making sure that to the extent that you do use spreadsheets, everything is connected. Your sales information, for example. If you go to an event, don’t have business cards piled on your desk or your head about who you met. It needs to be visible and centralized somewhere. Spreadsheets are great for that. That’s really the takeaway. It is centralization, easy access, and visibility. Whether you’re 1, 5, or 15 people trying to make decisions, you’re looking at the same data.

One example, and hopefully, this helps people maybe to see this if it’s not connecting for them, is taking your example of the conference, the event, the business cards, or even a spreadsheet by itself. Those are fine. The problem or the challenge is if you don’t have a way to use that spreadsheet. If we think about business development, one of the biggest opportunities or missed opportunities for consultants is they don’t do enough follow-up. They contact somebody once, twice, or maybe three times, but they often then don’t do much after that.

This is where the value of technology, let’s say a CRM, can help you with reminders to do more follow-up or to take an action that is necessary. Even if you’re a smaller firm, there is applicable and appropriate technology for you. If you’re a much larger firm, there are economies of scale and ways to become more efficient. That’s fantastic. Let’s go to number two, which is talent. How does talent play into the picture?

I don’t like blanket statements, but you always hear war on talent and all this drama around talent. It’s true. It’s still pervasive across professional services where there is this lack of key talent with specialized skillsets. Firms need to be very aware of that because what are buyers buying? They are buying expertise. Who delivers that expertise? Your people. It really is important to find good people, retain those good people, and avoid lots of turnover.

We noticed when we were doing the analysis that we asked some questions about things like firm culture and internal practices. We didn’t set out to say, “Let’s explore talent.” We found by accident that 8 out of 10 employees of high-growth consulting firms reported a very high satisfaction with the overall firm and the culture whereas only 5 in 10 of the no-growth. When we’re talking about that kind of scale, that’s a big delta.

That’s huge. It makes complete sense if you pause and think about it. How can you be a high-growth firm? Maybe it’s possible to be growing quickly, but not for the long-term or not sustainably. If you have people who are buying into the culture, have shared values, and they’re happy where they are and you as a leader create that environment, they’re going to perform better. Whereas if people aren’t bought into those things or that culture isn’t connected or aligned as well as it could be, then it makes sense that it would suffer. There are a few areas inside of that that you talked about on how they’re able to pull that off. What are those?

CSP Elizabeth Harr | Consulting Firm

You might say, “Pay your people well. There’s a great culture. Everyone’s happy.” Happiness and satisfaction at the workplace are way more than how you’re compensated. We found that high-growth consulting firms are really proficient in three areas. One is transparency. They’re having weekly meetings. The leadership is sharing numbers with the appropriate people. We talked about technology and how that enables people to see things together. Transparency is a big thing.

The second one that high-growth consulting firms are focusing on is authenticity. There’s none of this formal, “You can’t see behind the shield.” That is gone. That’s yesterday’s thing. Talent wants to be seen. They want to be more than a cog in the wheel. When leadership shows authenticity, it gives permission to everybody else, and the culture starts to absorb that. That’s a very important dynamic and lesson we’ve all learned post-pandemic of how much-appreciated authenticity is.

I’m thinking about how this connects to what we do at Consulting Success. We’ve been growing. We’ve been adding more members to the team. Even having some conversations with new perspective people, one of the big things that we keep hearing from people resonates with your values or what seems like your culture as I talk to other people on the team. That’s so critical. On the sharing numbers part, we have a scorecard that we go through every week as a team. We go over those key numbers so we have a good pulse on them. I love seeing that the data supports this because it helps me to be like, “We’re on the right track here,” which is great.

That’s right. This will probably resonate with you and some of the people on the show. The other area where high-growth consulting firms in particular are really shining when they’re developing talent is in what we call team development opportunities. We’re not talking about team-building games. It’s not that because most teams are distributed.

What we’re talking about is something very interesting. That is in the way you hold meetings within the firm and have cross-functional teams meet together and be able to hear each other. They gain a new level of empathy with each other. They’re like, “I’ve never met with this team before.” Sales then know what marketing and BD are doing.

It’s this whole new way of building empathy for each other so that when we start the day, we know our colleagues. We understand what they’re grappling with. We know what their goals are. We know where we fit in in those overall achievements. Those are the areas where high-growth firms are showing proficiency. There are a lot of lessons in there that’s not a hard thing to do. This is something that firms can take and adopt.

Generating leads digitally costs less than traditional means. Click To Tweet

That’s coming over to number three, which is marketing and business development. I saw here when you sent some of this over that highlights that high-growth firms are leaning a lot more into digital and seeing success there. Could you elaborate a little bit on that? What are they doing? What stands out on the digital front compared to those that maybe aren’t growing as quickly?

In the world of professional services, we all know that we get a lot of business through referrals and relationships. That is never going to go away. There is another channel, and that is the digital channels or online leads. There’s a whole strategy around building that. We find that high-growth consulting firms get 1/3 of their leads through only digital sources. They are paying attention to building their brands in a way that has a relevant digital footprint.

They’re not going out, writing a blog, and sticking it anywhere. It’s, “What’s relevant to my audience? Who do I need to be visible to? What do I need to be known for?” We are talking about all the brands around that so that you can generate those leads. This is insightful because these firms are not just growing. It’s profitable growth. In another study, and we’re certainly not the only ones who have said this, generating leads digitally costs less than in the traditional means where you got a flight, stay over, and all the things that you have to do in that traditional world.

I remember seeing a study that you all did in 2022 or the year before. I believe maybe it was the 2022 data compared to the previous period of time. I recall that it shows something along the lines that the way the buyers are making decisions about investing, for example, and working with consultants and so forth is that buyers are spending more time on online platforms and are more likely to make decisions based on reading somebody’s article or listening to a podcast. I don’t know if there’s anything that you could touch on there, but I remember thinking that makes a lot of sense. That’s interesting to see.

The point in that specific data was that clients and prospective clients are judging and vetting firms like yours and mine, whether it’s there or not, through our websites, our LinkedIn profiles, and articles before they ever pick up the phone. Do you know what is scary? Let me tell you a really scary statistic. We talked about referrals. Let’s say that someone gives me a call. It says, “Who does X?” and I say, “You got to talk to Michael. He is amazing. I’ve never met a better consultant. You got to call him.” Only 2 in 10 people I refer to you according to the data would give you a call. 8 out of 10, you’ll never speak to.

You’re a bad example because your digital footprint is great. For those firms whose websites are not up to snuff, who don’t have educational content anywhere on their website or LinkedIn, and whose messaging is very bland and generic, they’re the ones who don’t hear from 8 out of 10 referrals. That’s a ton of business that’s getting left on the table. I say that because it underscores how much buyers are relying on self-education. They’re using websites, LinkedIn, and all of that, so we have to pay attention.

CSP Elizabeth Harr | Consulting Firm

Thanks for sharing that. It’s really important for everybody to know. Let’s then hit the fourth topic here before we move on, which is strategy. It’s a big word. It’s overused. However, in the context of a high-growth firm, what stands out? For a smaller or even a solo consultant or mid-size firm, what should they be thinking about? Where’s the advantage for them inside a strategy?

By strategy, all we mean there is how you decide how to talk about your firm. What’s your positioning? What’s your messaging? How do you decide what marketing techniques to employ? How do you decide what channels to be visible in? That’s strategy. What high-growth consulting firms do is they do not sit their smartest people around the boardroom table and make those decisions. What high-growth consulting firms do is study their audience. They’re like, “How do people learn?”

We were talking about learning digitally. It is getting some data and some intel around how these people learn. What events do they attend? What articles and blogs do they read? What publications do they read? What terms are they using to search for what keeps them up at night? That intel is what high-growth firms take into the decisions about how to talk about themselves and what channels and techniques. That is huge.

Larger firms with healthier budgets can hire third-party agencies that specialize in that. That’s easy. If you’re small and you don’t have those resources, it doesn’t matter. You can do what I refer to as social listening. Go on LinkedIn. It’s where your audience is dialoguing. Go to competitors. See what they’re posting and what has garnered lots of attention and dialogue.

Go to each of your connections that are your prospective clients and clients alike. Go into their LinkedIn and see where they tend to be liking articles and commenting on articles. What questions are they asking? What language do they use? That Intel is free. It does take time, and that’s a cost, but it’s free and it is gold when it comes to understanding what makes your audience move.

That’s fantastic. I appreciate you sharing that example, especially for the smaller firms or solo consultants that are joining us. There’s a lot there. I want to encourage anybody that wants to go deeper into that. We’ve touched on four highlights, but there’s a lot more in that study. Check it out on the Hinge website.

High-growth consulting firms do not sit their smartest people around the boardroom table. Instead, they study their audience. Click To Tweet

Let’s talk a little bit more about you. I know you said you’ve been at Hinge for twelve years. You did not find Hinge, but you played a key role over a decade-plus. You did take over Hinge in a positive way. You’re the managing partner. What does that mean? What has that been like for you? For those who might be in similar situations where they’ve been working in a firm for a while, what has that been like for you?

It has been quite the journey. It has been fun. It has been challenging, and probably anybody can relate to that. I’ve been so lucky to be surrounded by partners who adopt a mentor approach. That’s, in fact, how I like to interact with my own colleagues. I grew through the ranks of being mentored by the founding partner, Lee Frederiksen. I went on pitches with him. We have stories of running through the streets of Manhattan, me in stilettos because I’m 5’1” and he had cowboy boots on. He is 6’1” and I still beat him. I really learned from him not just by listening but being with him as he grew Hinge. I take a lot of that with me as I’m taking on this new role.

I’ll tell you the other things that I have learned not just from other leaders at Hinge but from my own as I’ve grown. It is as a leader, if you are always the smartest person in the room, you have failed miserably. The true success of a leader is when you are no longer the smartest person in the room. What have you done? You have mentored all these people. You have allowed them to grow into their own areas of expertise. You have given them the platform for surpassing you in very specialized areas. That’s the philosophy I take with me every day as I’m going into this new era of Hinge.

I have to imagine there have been some challenges or something that’s been hard in terms of that transition. What stands out for you maybe as something that’s been a little bit hard or the hardest part or most challenging part of that transition into the managing partner role?

Prior to being a managing partner, I was in this nice little lane of business development. I ran that team and that was what I love. As a managing partner, I have to wear multiple hats. Certainly, before I was a managing partner, I was a partner. I still wore a lot of hats,  but I had this little lane that was so nice to stay in. This time, I have to take on the role of managing different teams and learning what makes them tick.

We talked so much about culture earlier. It’s not about taking over responsibilities and checking the box and you did it. These are the people that I’m managing. I’m learning about what keeps them up at night and how I can create efficiencies internally so that every day, they feel like they’re doing their best. That’s challenging because when you don’t do that all day every day and you step into these new roles, it takes time to learn all of that. That’s much more difficult than learning a new technology or figuring out the hard stuff around financials or pipelines.

CSP Elizabeth Harr | Consulting Firm

In your role, you’re not necessarily wearing a lot of hats, but you need to be involved in a lot of different things from understanding the finance to the team dynamics, the culture, the values, and the business development. You’re having your hand in the research. You’re involved in a lot. I would imagine especially at the earlier stage of the transition, there is a lot of that stuff that might be viewed in a bit of a new light. How do you manage all that? I’m wondering. Is there some kind of framework, process, or way that you go about tackling a given day or a given week? Do you block stuff out? Is there anything tactical or even mindset-wise that you’ve found to be helpful?

I look at my blocks as a weekly construct. I make sure that Monday mornings, for example, at least the early part of the day before I ever meet with any teams is reserved for reviewing reports. It is so that I come to meetings knowing where we stand. I know what questions. There’s not a bigger waste of people’s time when you haven’t done that and you’re asking questions that the answer is, “Go back and look at this. Go back and look at that.” That’s one thing I need to be disciplined about. It is carving out early in the week early morning time to make sure I’m reviewing important KPIs.

The other thing is I have had to really factor into my schedule one-on-one time to meet with people. I didn’t have to do that before. That’s another thing that I’ve found is critical. If I’m going to be successful in this role, I need to have that one-on-one time with different teams. It’s no longer meeting with this big team, getting the high level, and you’re out.

Is that a one-to-one with direct reports, or is that a one-to-one with all 20 people? How do you structure that?

Twenty people is pretty small at the end of the day. It has tended to be with everybody. I have one-on-ones with my direct reports for one reason. I have one-on-ones with my other partners for another reason. I have one-on-ones with critical resources at Hinge who are our specialists. They don’t necessarily report directly to me, but I need to understand what’s challenging them with deliverables, what’s easy with the deliverables, and what they are hearing from clients when they’re delivering XYZ. What about the pitches? What are they hearing there? I’ve found that, at least in the beginning, I need to have that one-on-one with everybody. That’s a big part of the week.

I imagine that as you’ve transitioned into this role, you’ve probably been thinking a lot about growth and improvement inside of the company. It’s not that there was anything wrong with the company before, but naturally, you have control. There’s a lot more that you can get your ideas in than before. I’m wondering. What do you think about growth and scaling the business? Where are you putting your energy and emphasis? Do you see opportunities to adjust the pricing strategy? Is it sunsetting and removing maybe a certain offering or adding something new? Is it building the team and going after larger clients? Where is your mind present day when you’re thinking about growing the business?

If you are always the smartest person in the room, you have failed miserably. Mentor all those people until they can grow into their own areas of expertise. Click To Tweet

I’ve spent a lot of time talking about that with my other partners. One of the key decisions we made is to avoid going after new things that we’ve never tried before. That’s hard because Hinge is a very entrepreneurially-minded company. Probably a lot of people on the call can relate to that. We have to be disciplined there and stick with what we know. That’s one thing, which is to be disciplined about what we go after.

The other thing is about the people. I’ve seen over the years that I’ve been at Hinge that the employee count has ebbed and flowed, and that’s with any company. One of the difficult and disciplined decisions we needed to make was what’s the core group of people around which we’re going to grow. At some point in time, we will need to go back out and hire specialists. That may be on a contract basis. That’s another habit of high-growth firms. They have a core and then they use outside specialists. That’s the direction that I see because specialized talent is very difficult to attract, retain, and then utilize as much to the percentage that they should be utilized to make it worth it.

That makes a lot of sense. It reaffirms something that I’ve been thinking about the market, which is for consultants, there are more opportunities than there have ever been before. Probably the pandemic and COVID accelerated a lot of that with companies being more willing and open to bringing in outside expertise. With the specialists, if you get a very high-level specialist and that’s a full-time person, it’s probably going to be a significant investment. Not everybody’s willing to make that, and it’s not always necessary. Having that ability to tap somebody who has the expertise that you need for when you need it can also add probably to the profitability of the firm because you’re not necessarily making a much larger expenditure or investment right away. That’s great to hear.

We could keep talking for hours on so many different things, but I want to be respectful and conscious of the time that we have on the calendar. I know we also have a few things coming up that we’re going to be collaborating on, which I’m excited about. Where should we direct people if they want to learn more about the High Growth Study or some of the other studies that you all have? I know some may be paid studies and some are free. What can you say? Where should we direct people?

I would go to HingeMarketing.com and go to the Library section. The executive summary of the High Growth Study is free. You’ll see that. I would download that. There are also lots of free executive-level guides that we have written. Go to HingeMarketing.com. Go to Libraries and Guides and peruse. We aim to write in a very practical way. People always say, “I read that on the one-hour plane ride that I had today.” Do that. Connect with me on LinkedIn too and ask me questions.

Thank you again so much for coming on. I always enjoy our conversations. Thanks again.

Thank you so much for having me.

Thanks for tuning in to this episode between Michael and Liz. If you enjoyed this episode, then be sure to hit that subscribe button wherever you tune in to your favorite shows. If you want to help support the show, I’d encourage you to share this episode with a colleague. Also, a reminder, if you want to work directly with the Consulting Success team, they are offering a free, no-pressure growth session call. To book that call, all you have to do is head over to ConsultingSuccess.com/Grow. That’s the end of the line for us. We’ll be back soon with another episode. Until next time.

 

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