Using consultants to maximize your impact

I've been an external and internal consultant for all of my career. I've also been a consulting client. I've had some successes and some failures both as a consultant and as a client. I have learned a lot over the years and spent a considerable amount of time figuring out what works and what doesn't when it comes to consulting engagements that are successful from both the client and consultant's perspectives. Here are a few tips I'd like to offer to help you in considering when and how to use a consultant and how to set up a consulting relationship for mutual success:

1) When should I use a consultant?
Consultants are best used on specific projects with clearly defined outcomes. As humans, we sometimes know what we want but not necessarily what we need. I've seen many consulting project start with a request that doesn't really get to the root of what's needed. Although it will cost a bit more, it is often useful to work with a consultant in an exploratory phase to determine what the project goals are and how best to achieve them. This can go a long way in heading off trouble down the road.

Ideally, consultants should be used as resources to transfer knowledge into your organization. In other words, when the consultant leaves, your organization should have a bag of tricks and tools that it can use long after the consultant is gone. If you need someone to fill a skill gap for the long term or find you're using a consultant to do the same type of work over and over again, you may need to consider whether you need to hire a staff position or contract employee. It's great to establish a relationship with a consultant and use them for future projects. They know you, know your organization and the relationship and work is a known entity. However, your organization should be learning new skills with each new project, rather than having a consultant do the same type of work into infinity.

Also, attending workshops and conferences is a great way for your organization to gain skills. It's great to do this and then be more educated on how you can bring in a consultant to take what you've learned and go to the next level with it.

2) How do I set up a consulting relationship for success?

1. Define the project - understand what your goals, budget and timeframe are and what role you want the consultant to play and what project deliverables you expect. Also, provide an overview of how project deliverables will be used (e.g. reports to the board, communication to stakeholders, decision making tools, funding support) and what format will be most useful to you (e.g. a concise presentation, dynamic excel spreadsheet, written report).
2. Ask the consultant how they work - the consultant's skills are important, but so is their style. Does their personality fit with your organization's culture? Can they adeptly navigate the political and other sensitive issues that may arise? Are there any inherent conflicts of interest that should be worked through? Can they clearly articulate what they will do for you and what they expect from you as a partner in this work? What will happen if the scope of work or budget needs to change? What days and hours do they typically work and does that fit with the needs of your organization?
3. Clearly define roles and responsibilities - you will get the most out of a consulting relationship if you're willing to partner with your consultant. What do you expect from the consultant and what are you willing to bring to the table? Is there a main point of contact for the consultant? Is there a project team that will be focused on the project? If so, what is the agreement about how much of their time they can devote to the project? Is management and the board supportive of this work? Is the organization open to honest and potentially difficult feedback on what it can do to improve?

In my most successful projects, the clients and my company have set up the expectation and then worked together as true partners. I work to be sure my actions and work add value to them and expect that the client will provide me with the information, candor and internal attention required to get solid and useful work completed. Consultants really can be a valuable part of your organization - like any relationship, it takes time and attention to be sure it turns out positively for everyone involved. Best wishes.

Synergy....just another stupid consulting word or the key to social enterprise success?

Synergy. It's a word I was first introduced to during my days as a "Big 6" consultant for a global firm. I recoiled - it sounded like yet another made-up consultant word. But, as I've gotten older, I've learned to appreciate it and more fully understand what it means - and find it's one of the most important parts of a successful social enterprise.

The American Dictionary defines synergy as:
syn·er·gy (sĭn'ər-jē) Pronunciation Key n. pl. syn·er·gies
The interaction of two or more agents or forces so that their combined effect is greater than the sum of their individual effects.
Cooperative interaction among groups, especially among the acquired subsidiaries or merged parts of a corporation, that creates an enhanced combined effect.

Looking at the first part of the definition, what stands out for me is "their combined effect is greater than the sum of their individual effects." As a social entrepreneur, this peaks my interest.

I have noticed a trend with my clients lately - several (both non-profit and for profit) have hit the tipping point and launched into success. I have been looking at what elements are common across these ventures. The thing that stands out the most: they all have synergy. That is, they have all had a series of internal and external forces that have come together to make them launch towards success. In our upcoming Social Enterprise Group newsletter, we'll be highlighting a couple of these. In the mean time here are some of the success factors that have led to these synergies:

• Leaders who are passionately committed to moving the venture forward, yet can also objectively look at the internal and external situation to make sound decisions
• Conducted plenty of leg work to determine how to best move forward with the venture including input from stakeholders, thorough market analysis, in-depth business planning
• Solid business model that leverages their strengths socially, environmentally and financially
• Forces in the external market and internal organization came together simultaneously (e.g. the external market was ready, staffing fell into place, financing came through)

I think synergy requires that magic combination that successful entrepreneurship requires - solid data and planning coupled with being open to allowing things to flow and recognizing opportunities when they land on your doorstep.

Market, Technical and Financial Risk - oh my!

As the season of ghosts and goblins is coming to a close, I'm reminded of scary things that go "bump" in the night. For an entrepreneur - especially a social entrepreneur - there is no limit to the numbers of things that keep us up at night. These are the inevitable risks of entrepreneurship. But, just like other things that are scary, I find it's best to shine a light on these risks, objectively examine and develop a plan for addressing them. Generally, entrepreneurial risks fall in the following categories: market, technical, financial and people. In my Sustayne workshops, I conduct a module on these risks and counsel organizations to take inventory of their risks in each category and develop a mitigation strategy to address each. It's also helpful to get an outside opinion on what risks are the most real and what strategies might work the best. And, it's critical to do this as OBJECTIVELY as possible - try to take the emotion and the stress out of it - then, it just becomes information. To get you started, I've included a framework at the end of this blog from Sustayne to help you begin to think through the various risks you face. The next step will be to prioritize these and develop mitigation strategies. Let me know what you think. For more on risk & risk mitigation, either attend a Sustayne workshop http://www.sustayne.com/ in the Bay Area (intro. session Nov. 15 9-noon) or Seattle (intro. session Jan. 31 9-noon) this winter and spring or attend my session on Risk at the Social Enterprise Alliance Summit in Boston March 9-11 http://www.se-alliance.org/

For your social venture, explore and note the risks you face in each of the categories listed below.

Market Risk. Bad timing: too early or too late. Unexpected competition. Wrong product or service. Wrong price. Poor positioning. Wrong target market. Etc.

Technical Risk. Problems in product development, manufacturing, or sourcing. Schedule slips. Cost overruns. Unavailability of sustainable materials. Etc.

Financial Risk. Project funding doesn’t come through. Or comes through too late. Or isn’t sufficient. Or costs too much. Etc.

People Risk. Product champion quits. Sponsor leaves. Can’t find the right talent to fill out the team. Can’t pay enough to attract the talent you need. Etc.

Try not to get overwhelmed with your list of risks. Start by prioritizing them by the ones you think are the most likely to the ones you think are probably unlikely. Next, list at least one way you can reduce or remove each of the risks. Finally - breathe. Risk and managing risk is part of life. Afterall, it's easier to address the things you know than the things you don't.

Lessons from Sustayne: Idea Vetting

So, you’ve got a great idea for a social venture. Or, you’re the leader of an organization and your staff and board keep coming to you with ideas. What do you do with them? On one hand, it’s great to foster a culture where ideas are vetted and dreams are dreamed. On the other hand, you’ve got WORK to do and paying attention to every little idea can be time consuming. One of the first things we focus on in Sustayne is to ask a few key questions to determine if an idea is worth assigning any more resources to.

First, develop a brief set (3-5) or organizational goals pertaining to social enterprise. Is your primary goal to develop a job training program or is it to generate revenue? Or, something else?

Identify the key goals of your social venture:
1.
2.
3.

Next, for each social venture idea, rate the extent to which the idea aligns with each of the following organizational factors. Once you’ve rated a venture, take a look at where it scored high and low and consider:

1. Are the areas where the venture scored low problems that can be remedied either through modifying the business model or via the organization? Are any of these areas “show stoppers”?

2. What is the organization’s willingness to change or work on specific organizational factors?

Scores
1 = not at all, 2 = not much, 3= moderately, 4 = well aligned, 5 = great fit

Rate each idea yourself, then have others in your organization rate it. Score separately, then compare.

To what extent does the business idea align with the organization’s mission?


To what extent does the business idea align with the organization’s core values?


To what extent does the business idea leverage organizational assets? (i.e. relationships, brand recognition, reputation, facilities, financial, knowledge)


To what extent does the business idea directly address the primary goals of the social venture?


Consider the minimum level of profit required to make the business idea worthwhile. To what extent is it possible that the business idea has a market demand and profit margin that can meet the organization’s profit needs?


Consider the minimum level of social impact the organization needs to achieve in order to make the business idea worthwhile. To what extent does the business idea realistically have the potential to make this level of social impact?


To what extent does the organization’s history of risk taking align with the risk level of the venture?


Consider the capital requirements of the business. To what extent can the organization realistically raise or find other sources of funding to cover these costs?


Consider cultural impact and reputation. To what extent does the venture’s level of impact align with the organization’s threshold for cultural impact and effect on reputation?


Total Score:
(copyright Social Enterprise Group 2005)

I've found this tool to come in handy to quickly eliminate or further consider various ideas. I hope this works for you - feel free to comment on how you used this tool. This is one of many I'll be sharing as part of our "Lessons From Sustayne". Want to know more about Sustayne? Go to www.socialenterprisegroup.com for more info. on workshops and licensing opportunities. Good luck!

Keep on Keepin' On

Michael Meade is one of my favorite authors and happens to be a Vashon Islander like myself. I was recently listening to a CD of his on mentoring and came across this thought "to not live your dreams causes younger people to lose theirs." It got me thinking - hard. Being an entrepreneur is tough. Being a social entrepreneur is even tougher. There are days when I wonder what I'm doing. I'm a single parent. I try to keep my life simple, but I have a house, 2 young kids and a business to run. Why can't I just go out and get some high-paying corporate gig and quit worrying about cash flow, about trying to scale a methodology, about creating impact in the world? Because I can't. Because I have a dream - one I've been feeding for over 7 years. I deeply believe that applying the rigor of business to the framework of how we address social and environmental issues IS critical to changing the world. I deeply believe that all those intrapreneurs (entrepreneurs working within organizations) in the public and nonprofit sectors and all those entrepreneurs who are starting and running private business that have a social or environmental bottom line are making a difference one transaction at a time. And, I believe that the work I do in the world and the curriculum (Sustayne) I've developed with Bainbridge Graduate Institute is a highly effective tool in helping these ideas to get off the back of a cocktail napkin, get reworked into something feasible and get launched. I believe the work of Social Enterprise Group changes the world by providing an important toolkit for others who are changing the world.

We recently called several of our past Sustayne participants to find out how they're doing. This tool had a lasting impact for every single one of them. That matters. To me, to my company, to every single on of our clients and to all the clients and customers they serve.

So, when I ask myself why I can't just "get a real job"? It's because if I don't live my dream, there might be some fantastic social venture ideas that never quite get off the ground. And, my kids might not have the inspiration they need to live their dreams.

Hiring an Entrepreneurial Leader

I recently had a client ask me for suggestions on what type of questions to ask of their Executive Director candidates that would help them find someone who would be able to effectively lead their social enterprise efforts. I realized many organizations are in similar situations - going through leadership transitions and wanting to find someone that can lead the organization in a way that supports an entrepreneurial culture. Here are a few tips on questions to ask and answers to look for:

1) Ask what their entrepreneurial experience has been - have they started a business? Have they started major initiatives within a larger organization? Find out how these endeavors ended up. Listen for the mistakes they made and what they learned form those. If they try to sugar coat their entrepreneurial experiences, they may not really get that one of the most important aspects of being an entrepreneur is making mistakes, making course corrections and moving on.

2) Ask how they have or plan to integrate entrepreneurial thinking and support into the organization. Look for indications that they'll set up simple processes for allowing people's ideas to be surfaced and quickly vetted to determine if they should receive more organizational resources to study further. Try to get a sense of how they'll provide incentives for people to come up with innovative solutions to everyday problems.

3) Ask what their expectations are for earned income generation in the organization. If they are wildly optimistic and think the organization can be totally self-sufficient in a short period of time, they probably don't have a realistic sense of what it really means to run a social enterprise. On the other hand, if they are so down on earned income they don't want to have anything to do with it, they may have had a negative entrepreneurial experience they still haven't recovered from. In short, they should be looking to determine the most realistic, sustainable revenue mix (e.g. grants, individual donations, earned income) for that particular organization and develop a plan around how to achieve it.

Lastly, I think it's always a good thing to come across someone who knows what they don't know. If they know they have limitations around particular aspects of being an entrepreneur that's great - you're a step ahead in figuring out what gaps need to be filled through training, other staff or consultants. Best wishes on a successful hire! And, for all of you entrepreneurial job searchers out there - just be honest and be yourself. Really.

Determining the feasibility of a social venture - what is "success"?

Anna (my fantastic assistant) and I have spent much of the past few weeks working on the financial model for a new business venture for one of our clients. They are a wonderful organization that helps women through many types of big life transitions. They offer a comprehensive range of services to these women, from a daytime drop-in center to keep women off the streets to residential living to childcare to substance abuse & mental health support. they are now branching into the development of a social venture in order to add a job skills & training component as well as provide more visibility for the organization in the community and, hopefully, generate some revenue. We are assisting them with developing a model for a small bakery & cafe. In developing the financials, we needed to determine 1) how much the job training portion costs and 2) whether or not the bakery/cafe could be break even or better on its own, without the job training pieces. The main reason for breaking this out in this way was because I felt that it was extremely important for them to understand going into this whether they were just needing to obtain funding for the job training portion or, if they were developing a business model that, as a standalone, without the social mission piece, would also needed underwriting.

There has been a lot of attention lately on whether social ventures have to be "profitable" to be considered "successful". It is my continued belief that the financial feasibility of a social venture is determined by the intent and by what is reasonably planned for. For example, for this organization, running a business that is at least break even or, preferably, profitable but finding grant support for the job training portion would be successful. Running the business itself at a continued loss (understanding it may take 2 years or so to get to break even) AND needing grant support for the training portion would not be successful. However, for this particular scenario, it is not reasonable to assume that they can run the bakery/cafe and the training program profitably, at least for many years. Does that mean it's not "successful"? No. It means that this organization must go into this with their eyes wide open and with a full accounting of what the true costs are that are associated with a job training program (e.g. extra staffing, less productivity, higher cost of goods sold, per student training fees) and be able to locate a reliable source of funding for those costs. And, they must keep their eye on the business side of running the bakery/cafe, keeping COGS under control, understanding their market and phasing into this in a way that makes sense for where they're at financially and culturally.

Again, another illustration of why it's so important for organizations to get assistance and to really assess why they're entering into social enterprise, what level of enterprise they're ready for and what the true cultural and financial costs are. Then, it can be successful for the organization, the community, the clients and the world. That's where the real change happens.