Kendall Consulting Group - Consultative Selling Innovations Article

 

Customer Consulting Initiatives
A hope for the future

What do you do when you believe that your company is underachieving its potential and that the future may not be as rosy as the present? How do you successfully expand the value you are adding to your customers? How do you shake things up in your company and get people thinking and acting in a new way?

Recently a Japanese business executive and long term client visited our consulting office. We had successfully led his company’s business teams through a reengineering process during the 1990’s. He turned to us again when he was appointed CTO and was struggling to define his new position. He knew he had only one year in this position and wanted to use his position to do something that would help ensure his company’s future success.

He began our discussion with a status update on his company. The company has done very well since the late 90’s and he attributes some of that success to the efficiencies that they achieved in reengineering. However, this executive knew that his company’s managers could not afford to be complacent. They needed to start now to identify and develop new business for the company. Competition was building and business would soon be negatively impacted.

However, he told us in frustration, the salesmen were not seeking any new business. They were only taking orders for existing products and services. When he pushed the salesmen, they gave him many excuses why they could not get new business ideas. Some said that their customers thought of the salesmen only as order takers and would not talk to them about their business and its problems. Others said that the customers did not welcome outsiders into their business. When probed further, the salesmen admitted that they lacked the knowledge of their customers’ business and did not have the confidence to do more than their current role.

From our work with the company, we knew of other hurdles the company faced. Most employees had been with the company for their whole careers and did not have experience in companies that had close relationships with their customers. In addition, most of the employees were risk adverse and didn’t want to risk changing their current roles that were delivery today’s business success. For most of their products, salesmen took an order; R&D and Manufacturing developed and made the product to the order spec. Only when there was a problem with an order did the functions gather together to discuss the customer’s situation. Thus the salesmen did not have sufficient knowledge of their customers to identify new products and services that would add value to their customers’ business.

Our client was struggling to determine how as CTO he could change this practice and mindset so that the employees would routinely study their customer’s business and work together to identify ways that they could help the customer with his business problems. What he really wanted was an organization that thought and acted more like consultants to the customers. However, he had no idea how to make that change.

A Common Problem

Unfortunately, this situation is common and found in many other companies. Today with competition so intense, products quickly becoming commodities, and with business often going to the lowest bidder, companies are seeking to differentiate themselves and add more value in serving their customers. Most are expanding the services they offer their customers in order to increase their value add. Some have begun to offer their best people and industry-leading business practices to assist their customers in solving their business processes. These people are being deployed as consultants to the customers. But are these people ready to be consultants? Do they have the skills, knowledge and techniques to be successful in that role?

GE, United Technologies, IBM, Xerox and Hewlett-Packard, to name some, are trying to turn their expertise and best practices into new services that can benefit their customers. They are, in fact, directing their employees to act as consultants to their customers. GE’s customer initiative is called ‘At the Customer, For the Customer’. CEO Immelt has set out to change “how GE operates, including how its different units interact and how its profit driven salespeople are measured. These days, everyone must answer up the line exactly what they’ve done for customers lately.”[1] As Immelt says, “There is not one person in GE who is not going to know how to do this.”[2]

GE chose the Six Sigma process to begin its ‘At the Customer, For the Customer’ initiative. GE recognized that its expertise in its Six Sigma program would bring value to its customers. “In 2001, more than 6,000 Six Sigma 'At the customer, for the customer' projects were completed, enabling customers to have Six Sigma implemented at their sites.”3 Denis Nayden, Chairman and CEO, GE Capital, wrote in GE’s annual report, “Our ‘At the Customer, For the Customer ‘ teams work with dozens of client companies on location. For example, we've improved customers' accounts payable and receivable processes, driven revenues for a major retailer by developing a real-time pre-approval process for its credit card, and helped a private-equity fund customer by sharing our expertise and formula for acquisition integration. The more than 500 projects we launched in 2001 are just a preview of how we'll apply Six Sigma to add new value to our customer relationships in 2002.”4
In addition to Six Sigma programs, GE offers other programs that it has excelled at internally: ‘Change Acceleration Process’ (CAP), ‘Leadership for Customers’, and ‘Work-Out’ training, either at the customer site or at GE's Crotonville training facility. GE also offers access to its best practices in the fields of mergers and acquisitions, and digitization, as well as meeting facilitation and insurance/reinsurance specific consulting.[5]

To achieve such a customer initiative as GE’s, employees must become experts in customers’ businesses and processes. ""The more we can understand, the better," said Roger Seager, Vice President Marketing and Sales, GE Aircraft Engines. "You've really got to understand the customer and think like your customer as you start approaching them with some of these improvements. It can no longer be 'what's good for me,' its got to be win-win, and we can only achieve that when we truly understand how each airline operates."[6]

GE acknowledges that this initiative requires a sizeable investment of GE’s time and people, but it is prioritizing where it devotes its resources. “The bulk of GE’s initiatives focus on companies that matter and projects that can be directly measured in terms of fewer breakdowns or higher customer profits.7 This measurement allows customers to understand that GE’s consulting services offer significant value to them and thus be willing to reward GE in significant extra business, market share, and revenue.

With so much at stake and so much invested, will these companies succeed in this new service business? Will the organization’s processes and culture support consulting? Can their employees change overnight to be consultants to their customers? Will they be good consultants or the type of consultant that is the basis of so many bad consulting jokes?

The Challenge

Not many companies have GE’s prowess and history of driving management initiatives throughout their organization. Nor do most companies have the culture, the resources, or the processes to offer such services. In addition, most employees are not natural or trained consultants. Instead, most companies have ingrained management and compensation systems that focus on functional divisions and sales practices that do not include working with customers in a consultative way. However, because there is the potential for a significant payback from such service initiatives, companies are under pressure to introduce these initiatives regardless of how prepared they are to succeed.

So where should you begin if you too want to expand the services that you provide your customers and get your employees to act more like consultants in their dealings with customers? Here are some steps that we recommend from our experience in helping our customers developing consulting services and their employees consulting capabilities..

1. Build a case for action - As GE found, your executives need to develop and communicate a strong case for action. Your organization must understand that business as usual will not be sufficient in the future. Something extraordinary must be done to win new sources of business and revenue. A strong case for action will help drive the change in your organization the customer initiative requires.

2. Understand the customer - Undoubtedly the most important task is building a better understanding of your customers’ businesses. Launch an initiative to gather information on your customers’ businesses. Put together a team of your best people who have customer relationship skills and some consulting ability. Start with a focused effort visiting your most important customer. Identify where the customer is experiencing problems.

3. Assess your strengths - Armed with the above information, your company should assess its strengths and skills in order to understand what it has to offer its customers. Be realistic. These strengths should be different enough from your competitors’ strengths so as to differentiate your offerings in the eyes of the customer. Identify areas that your services would add value to your customers. Keep an open mind and also consider non-traditional service opportunities.

4. Build a new business model - As our Japanese client experienced, mobilizing your company to offer customer-consulting services is difficult. It will require a significant change in your company’s business model including the culture, employees’ jobs, and performance measurement. It also requires a fundamental change in how your business functions interact, and how information on customers is collected and shared in the company. Companies with a process versus functional organization find it easier to make this change.

5. Train in consulting skills - Most employees are not natural consultants. They need training in the consulting skills and opportunities to practice these skills in a low-risk situation in order for them to be a success in their new roles. Staff need to have consulting frameworks, techniques and a tool kit that they can use in their consulting. Your company can’t afford to have your employees learning to be consultants at your customers’ sites and perhaps, at your customers’ expense.

6. Orchestrate success with your customers - Finally, for your customer service initiative to work, your customers must become willing participants and allow your employees access to information and insights on their business processes. GE’s customers were reluctant to participate at first. Immelt says that up to 40% of clients already want to be on board GE’s ‘At the Customer, For the Customer ‘ initiative.8 Success like this requires careful planning, preparation and orchestration of the introduction of consulting services.

The Solution

For the past ten years we have been working with a number of companies to help them plan and prepare for their customer service initiatives. We have trained their business teams and many of their employees in consulting skills and practices. Our training has helped the employees develop competency in consulting and their confidence in their consulting role.

We developed custom programs for some of our clients, creating consulting skills development programs that fit with the services that they planned to offer. We provided them with a set of consulting skills and tools that they could use with their clients, and through case studies, we gave them an opportunity to practice their new consulting skills.

A typical multi-day programs consists of such topics as:

• Understanding and assessing a client’s situation and needs
• Consulting roles and why clients use consultants
• Professionalism and image building
• Proposal writing and delivery
• Basic tools such as interviewing, meeting facilitation
• Change management and stakeholder management
• Customer expectations management
• Business process assessment techniques such as assessing client needs
• Conducting research and best practices for your clients
• Consulting frameworks and idea or solution generation for your clients
• Communications skill such as developing and delivering presentations, story telling
• Project management basics plus special focus on staffing, team building and getting into and out of trouble

We have used a combination of presentation and case studies in many of our classes. We keep the classes small enough to ensure lots of interaction and practice by attendees. What differentiates our programs is that senior consultants who have worked as consultants for many years teach our classes. This consulting experience makes our classes credible and more useful to attendees.

Our programs also include our consulting to the leaders of our client’s service initiatives. As we have built consulting groups both in the USA and in Europe, we can advise our clients on what it takes to set up a consulting group and what they need to do in their own companies to establish the organization required to deliver on their service initiative.

If your company is considering developing a service initiative and providing consulting services to your customers, please call us or email us to discuss your situation and whether your employees would benefit from our seminars.

Brief case study

The systems engineers of a large company were struggling in preserving revenues and share as other companies entered their markets. The company decided these systems technologists needed to have consulting skills so they could better understand their customers needs and match the information technology they were creating to those needs.

We built a significant program that over 250 managers and systems engineers of this company attended in small groups. One of the early successes involved an attendee at our first class of this program. After he took our class, he had an opportunity to sell a job to a new customer. He did his research on the client, following many of the ideas he’d learned in our class. He not only sold the job in the face of stiff competition, but he was able to deliver a major transformation for his client that made the client much more competitive and successful than the original simple systems job would have done without his consulting interventions. After his success, he became a vocal advocate in his company for our program, urging many of his colleagues to also become company consultants.

Bibliography

1. Business Week, Will Jeff Immelt’s New Push Pay Off For GE?, Diane Brody, 10-13-03
2. Business Week, Will Jeff Immelt’s New Push Pay Off For GE?, Diane Brody, 10-13-03
3. GE’s web site
4. GE Annual Report 2001, Denis Nayden, Chairman and CEO, GE Capital
5. Six Sigma – The Way We Work, Global Property and Casualty, ERCGroup.com
6. On The Record, ShowNews On Line, Roger Seager, Vice President Marketing & Sales, GE Aircraft Engines
7. Business Week, Will Jeff Immelt’s New Push Pay Off For GE?, Diane Brody, 10-13-03
8. Business Week, Will Jeff Immelt’s New Push Pay Off For GE?, Diane Brody, 10-13-03

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Innovations

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Kendall Consulting Group is an international general management consulting firm specializing in strategy execution, change management, and executive education. We invite you to contact us for how we might help you and your company grow and prosper.

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