A Cure for the Common Consulting Engagement
I’ve been asked on many occasions, by many people and in many ways, “Why did you start Kenway Consulting?” With Kenway having been started over eleven years ago, through self-awareness and with the benefit of 20/20 hindsight vision, the evolution of my answer has resulted in a shorter, more succinct, albeit vaguer, version. The answer? I started the company for which I always wanted to work.
To fully dissect that statement, one needs to understand the context from which I was coming. Before founding Kenway Consulting, I had been witnessing working environments that were violating some of my core principles. Tenure was rewarded over performance, so we created a company culture based solely on merit (year to year), and past greatness is just that, in the past. Managing upward was more important than collaboration, so we created Theta Teams, comprised of every level of the company, in which there is no hierarchy, and the agenda is focused on innovation, collaboration and accountability. Doing what you were told was more important than doing what was right, so we emphasize that the longevity of client relationships is merely an outcome, and it’s the means to how you approach that relationship that matters, and it’s the means that we measure. Challenging the status quo was perceived as rocking the boat, rather than being rewarded for innovation, so we perform SWOT (Strengths, Weaknesses, Opportunities and Threats) Analyses on ourselves and applaud constructive, timely and diplomatic feedback. So, yeah, with the help of the most amazing group of individuals with whom I have EVER worked, we have created a company for which I am extremely proud to work.
But, as I mentioned above, my answer is still evolving…
Another “one of those things” that used to bother me about the structure of traditional consulting engagements was the pricing methodology. Sure, I was appalled at the prices at which I was billed out. Trust me, I was extremely proud of the value I brought to my clients, but I KNOW I wasn’t worth that kind of money. But more than just the dollar amount, something didn’t sit right with stating a price for my time, and, regardless of the value I brought to the client (or lack thereof), the dollar amount stayed the same. For example, if Kenway convinces you that your company can obtain a revenue increase resulting from our proposed work in the neighborhood of $110,000, and the cost of having Kenway perform that work is $10,000, it doesn’t take a mathematician to see that the return on investment (ROI) is $100,000. But what happens after the project? What if we perform the work, and you pay us $10,000 for doing it, and you only see a revenue increase of $5,000? Was it worth the $10,000? I don’t think so. Conversely, what if you see an increase in revenues of $1,000,000? Was it worth the $10,000? Absolutely!
Last quarter, I had the privilege of watching extremely talented Kenway employees draft a narrative that depicted a day in the life of Kenway Consulting in the year 2020. We appropriately call that narrative “Kenway 20/20.” In that narrative, with zero involvement of my own, it is stated that Kenway will be known for its creative pricing structure, where Kenway will share in the risk and the reward of its client engagements. Now THAT is a company for which I want to work! We are committing to, where possible, designing pricing for our engagements that allow us to share in the outcomes of the project.
So, how do we do that? Let’s look no further than our newest client, Paulina Meat Market, a landmark Chicago institution since 1949. Paulina Meat Market had a need to update their eCommerce site. However, from a financial cost perspective, we did not believe it would be feasible for them to hire Kenway unless we found a way to minimize its impact to the cash flow. Here is a case in point that a short-term project could be expensive (upfront) but could have a huge ROI down the road. But if a client in question doesn’t have the money for the upfront expense, they lose out on that opportunity, and miss larger returns on that investment. With our new focus on creative pricing strategies, we approached Paulina with what we believed was the ultimate win/win pricing structure. We significantly reduced our hourly rate, and priced in what we collaboratively agreed was an appropriate percentage of the ROI. Now, we share in the ROI. If the result of the project shows the ROI that we communicated we could deliver, we share in the reward (and make more than our normal bill rate). If the result is that we miss the mark, we (Kenway) lose money on the project and the client is not out a huge price tag, which is our way of sharing in the risk.
Kenway is like most consulting firms. We communicate a willingness to truly partner with our clients. We just want to take it one step further, and truly partner in the benefits and risks of every project.
What project do you have? And would you like a discounted upfront price so we can share in the outcome? Contact us at firstname.lastname@example.org.