By Megan R. Miller
Think about the operational areas that are most critical to your consulting firm's growth: client management, financial oversight, service delivery and resource management, to name a few.
Top firms in the industry leverage benchmarking to gauge how their performance measures up to their competition, identifying strengths and areas for improvement. But, using benchmarks to drive action is no easy task. As your firm begins planning for 2017, do you have what it takes to move from where you are today to where you want to be in the future?
In a recent webinar with Consulting Magazine, management consulting leaders—including Joe Kornik, Publisher & Editor-in-Chief of Consulting magazine; Tom McClune, Regional Managing Director at Protiviti; Holly Kay, Chief Financial Officer at West Monroe Partners; and Tom Rodenhauser, General Manager at ALM Intelligence & Managing Director, Advisory Services – explored how benchmarking key metrics can give consulting firms a competitive advantage.
During the discussion, these experts shared how consulting leaders should use a data-driven approach to support goal-setting, in addition to which benchmarks are the most important to monitor and how to create actionable steps to get started. Building on their conversation, read on for three key steps that your firm can take to harness benchmarks and move from strategy to success in the coming year.
Develop a Specific Plan When creating a strategic plan, firms must identify key areas of their business that need attention, determine where their numbers should be, benchmark against other firms in the industry and set realistic goals.
To accomplish this, you'll need trusted sources for consulting benchmarking metrics. ALM Intelligence and SPI Research provide critical benchmarks for consulting firms regarding financial and operational performance, service delivery, client management and consultant compensation.
Once armed with specifics about the consulting industry, leaders should consider:
- What are the numbers related to your firm's key performance metrics today?
- Where do you want them to be by this time next year?
- What is holding your firm back today from reaching these numbers?
For example, look at the average for one key metric: bid-to-win ratio—4.92 bids won for every 10 bids submitted, according to SPI's 2016 Professional Services MaturityTM Benchmark Report. What is your firm's win rate? If below 4.92, what do you need to do to increase it by even a few points? Small increases in win rates can translate to large revenue boosts for your firm. Does your firm need to develop a better opportunity evaluation process or improve responsiveness during proposal development?
Create goals that are strategic, measurable, attainable, realistic and time-bound. Then, follow up with specific action items and owners to hold people accountable and reinforce focus.
Schedule Regular Check-Ins After your firm has developed a specific plan and key metrics to monitor it, keep those metrics in front of your leadership team by regularly reporting on the progress of your goals.
Don't wait until the end of the year to find out your firm is way off course. Instead, schedule monthly, quarterly and yearly check-ins for each key focus area – including management of client relationships, finances, service delivery and resources – to see where you stand. Are your numbers improving? Do you see any red flags? Has your team followed through on the action plans?
At each check-in, determine the progress towards your goal and identify any potential problem areas or bright spots. Be sure to share this with your colleagues to highlight successes and keep teams accountable.
Successful firms have implemented project-based tools to monitor progress. With these tools, you can ensure proactive management of your consultants, clients, budgets and project schedules—and anticipate coming challenges.
Plan for Course Correction Even the best laid plans can go awry. Fortunately, regular check-ins and project-based tools will support proactive course correction, empowering your firm to make necessary changes before it's too late.
Identify what isn't working and take the necessary steps to get back on track. In some cases, course correction may be as simple as holding teams accountable for delivering on previously assigned tasks. In other cases, your underlying goals may require an adjustment.
The result? Satisfied clients, happier employees and more profitable projects.
In summary, your firm can move from strategic plan to reality with three simple steps – prioritize key metrics and create action plans to move the numbers; schedule regular check-ins to determine if you are on track; and have a plan in place for course correction, if needed.
By taking this approach and staying committed to it, your firm will improve margins and, ultimately, be well-positioned to achieve your goals in the coming year.
Megan R. Miller is a senior product marketing specialist for Herndon-based Deltek, the leading global provider of enterprise software and information solutions for professional services firms. To learn more, visit www.Deltek.com.
© Arc, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to TMSalesOperations@arc-network.com. For more information visit Asset & Logo Licensing.