The Nuremberg Defence

I love it when I am able to speak with a client about a problem and use an example from the news. 

I have spent a day and a half or so training a group of people who will have to do sales (rather than sales people) in the dark art of pricing and costing. One of the areas we covered was in disbursements - charging on expense to the client. One of my bright young things suggested that this was one area in which there was no need to search around for the best price. "The client's paying - if they want the best price, then they should buy the tickets", was his case (although not argued in a very articulate manner - I do worry about young people today).

Hmm. We engaged on a long discussion about this, using the focus of our lovely MPs. I explained the Nuremberg defence which most had been using (and, being the intelligent readers you are, I have no intention of explaining it again) and we looked at our own reactions to that defence. Sadly some of the team still didn't quite see that this analogy meant that they had any requirement to shop around on their client's behalf. I decided to try a more near-to-home example and asked one of the trainees to give me (it is possible that, as an oversight for which I apologise, I used the phrase "lend me...". This is, of course, not fraud. I have apologised and, if necessary, will pay the money back. A little parable for you.) some money for lunch. "How much do you want" she said (somewhat suspiciously, I thought). "£20 please", I said with my had out. "But you can get lunch for about £5 just around the corner!" "Yes, but it's not my money..."

That started another debate - partly, unfortunately, about the inapplicability of the example. Oh well.

I have a colleague who says that Ethics cannot be taught. Most of us who went through a top-notch MBA will have studied Ethics as part of the course, and having gone through that programme, I'm siding with my colleague. People will either act according to a set of socially-approved ethics, or they will not. I don't think that the requirement to "do the right thing" can be taught. It can be explained, but only as a concept. 

This seems to have been the problem with some or many of our MPs (some or many depending on your level of cynicism). Some of them just don't seem to get it. 

Let's hope that our shiny new Speaker in late June "gets it" and can help to engender a new ethical approach to expense claims on our behalf. Let's also hope that at least some of my group "got it" and will go on to treat every expense as if it is their own.

SC

Foreign climes

I had a few days in Moscow last week. I've worked out there on and off over the last few years and still find it a somewhat worrying place to work. My clients and contacts seem to have a different set of rules by which they live and work - rules that I either don't understand, don't agree with, or don't notice. All of which can cause problems.

This time out, I was working on the European structure of a Russian technology firm (that's enough detail). After a fairly long day - a day during which I had tried to give an understanding of European ethics - I was invited out for dinner with the MD. Being Russia, it wasn't that simple. I was collected from my hotel by a driver who spoke no English (and my Russian is terrible) and so was unable to find out where we were going, something I find always makes me nervous. We arrived outside a fairly non-descript restaurant where I met the MD and his "people". He was a lovely man in general and I amused him in so many ways. He thought it was funny that I worked on my own (and so had no "people"). We sat at a table and drank for about 3 hours. By that time my head was spinning and I was fairly sure I was making little sense. Given that the MD was making no sense at all, this seemed to be a good assumption. Finally we stood up and went through to a different room where we, at last, started to eat. More drinks came with the food, as did a procession of different people, some of whom I was introduced to. To be honest, I'm not sure what was going on, other than that the food was reasonably good, there was far too much alcohol about and that almost everyone seemed to be laughing a lot.

At the end of the meal, the MD took me in a bear-hug, called me "friend" and escorted me to his car. "A night-cap" was one English phrase he was very keen on, and proud of using. 

It took me about 10 minutes to work out that the "bar" we ended up in was, in fact, a brothel. In my defence, I was rather drunk by this time. There was an assumption that I would, ehm, "indulge". Now I'm all in favour of cultural differences and of pleasing a client. My degree of client-pleasing, however, stops some way short of sex. Politely, I hope, I declined a statue-esque blonde and asked for a coffee. Fortunately, the MD thought that this was hilarious - and called for more vodka. The rest of the evening is rather fuzzy, but I know that I avoided any horizontal activities - and that I had a spectacular hang-over then next day. When I met him in the afternoon, the MD congratulated me on a great evening out.

Each time I go to Russia, I think I understand it, and the people, a little more. And then something happens to remind me that I really don't know that much at all.

So - the Secret Consultant's advice about working in Russia: keep your moral compass to hand, practise drinking, eat before you go out. Those should help.

SC

Politicians, spin and stupidity

More political scandal. More politicians exposed as manipulating a system and "forgetting" certain expenses (and tax)  - have a look a this from the BBC.

Two things. Firstly isn't amazing that with all these revelations, not a single act of omission or forgetfulness has been to the benefit of the tax payer rather than to the benefit of the politician. Surely the law of averages would suggest that, if these really are mistakes, then there should be cases of under-claiming coming to light too...

Secondly, would this really be allowed in business. I don't mean so much the "claim everything you can" mentality. I suspect that we've all worked with people who thought like that - and with their opposite who would not think about claiming for a newspaper or other small expense and who have to be reminded that they paid for a team lunch. In general this is private money and so long as the owners of the business know what is going on and are content, then fine,

My concern is with a group of people who are being exposed - not as fraudsters or cheats - but as penny pinching tight-wads who seem to spend a huge amount of time working out how to ensure that they spend nothing of their own while claiming as much as possible from us - the tax payer. As one of the "owners" in this circumstance, I do now know and I am not happy. Mostly I'm not happy with the view that, although a particular politician has been exposed as making a number of "errors" and, as importantly, as a person determined to screw every penny possible out of a job in which they were supposed to be serving the people, feel no inclination to resign.

This is a system which desperately needs an overhaul if public confidence is to be restored. A wave of sackings or resignations would help too. Why not simply use the same rules that the rest of us have to cope with so far as tax is concerned - is the the expense wholly and appropriately attributable to the business being undertaken? No need for a new set of rules - why not just treat everyone the same.

The Secret Consultant for Prime Minister, I say...

SC

Political spin

Today (so far - don't you just love mobile blogging) has been spend in the Albert Hall at the IoD Conference. To be honest, I now can't remember why I wanted to come along - I think I expected a bit more networking. Perhaps later.

I have had the joy of listening to our delightful Chancellor having to defend what presumably even he knows is a ridiculous proposal to have a top tax rate of 50%. Rather than taking notes (which I stopped doing when I left B-School) I can quote from the BBC (who presumably were taking notes since they report things much as I remember them):

"I want to ensure that people inside this country can aspire to do as well as they can for themselves and their families - people want to ensure that if they do a hard day's work, they get a reward for it," Mr Darling said.

"But sometimes, and every government in the world is going to be confronted by this, you do need to make difficult decisions.

"And frankly I think it is fair to ask those with the broadest shoulders to shoulder some of the strain because every one of us, at the end of the day..."

Never believe those people and politicians in particular, when they use the expression "...at the end of the day...".  I found it enjoyable to listen to someone saying both "...aspire to do as well as they can..." and "...those with the broadest shoulders to shoulder some of the strain..." without appearing to see any form of conflict. He did at least have the grace to look a little uncomfortable - but that might always be wishful thinking.

There was no way the 50% plan was going to be anything other than a car-crash. It seems to have been fairly quickly thought out (if think is the correct expression). Perhaps we have enjoyed a reasonable tax base for so long that no-one remembers the last Labour attack and the joy of 90+% super-tax. What happens, of course, is that all those (all right - all of us) earning more than £120k or so can afford to employ cunning accountants and advisers who can find equally cunning ways to ensure that we pay less tax - probably even less than before. 

Let's hope that the rest of the IoD conference makes up for this bit. I doubt it, however.

SC

Stood Up

Not the first time and won't be the last...

There I am, sitting on the 6:55 to Paris just settling into the FT when my phone goes off. It's the client. "Ah - glad I caught you", says he...

No call that starts like that can ever be good. He was calling to say that I wasn't needed since some of the people I needed to see wouldn't be there. I explained I was already (a) on the train and (b) that the train was moving. 

"No problem" I said. I went on to explain that I'd either turnaround and come home or spend the day in Paris. We would re-schedule. Then the fun started. "You won't be charging us for this will you?" said my now favourite client. "'Fraid so. We'll call it half a day, though, since I could always just turnaround when I get to Paris".

We then went on to have a longer discussion about the subject that I either expected to have or felt was necessary. 

I've been too long in this job now and so will be binning the client. I don't mind so much about being stood up. That will happen. But I had given up a day - at short notice (for those of your who have been reading these blog posts) - so to find that the client was going to whinge about the cost is too much to be bothered with. The client will have to live with the written report since I'll be damned if I'm going to mess about again with them. Anyone want a client...?

I've calmed down now. I had a lovely day in Paris, although the weather wasn't up to much. I had a bit of a wander and a wonderful meal. In the end it was a good day.

The lesson is - don't be bothered with clients if they are both going to be difficult and penny-pinching.

SC

Forethought - nothing like it

I like to think that I'm an organised sort of person. I like plans, and like to feel that I know what is coming up.

Not everyone is like that. I was at business school with a man who was the opposite - he would do everything last minute (as far as I was concerned). I remember that he started his final Management Report (something that most of us spent 4-5 months on) about 2 weeks before it was due. He then spent about 20 hours a day and produced a great piece of work.

Not many of my clients are like that either. I've just completed a large piece of work which involved a final written report which ran to about 50 pages or so (there is quite a lot of technical stuff in there, so it's not quite as boring as it sounds). I happened to mention that I'd be happy to present the findings to the Board at some point - to find that they want me in Paris on Monday! As it happens, I can move a couple of things around and get out there easily for an 11am start - and be back in the office in the afternoon. It does, however, mean a long weekend of preparing the slides.

Oh well - I didn't want to sit in the sun anyway!

SC

Let's talk about money

One of the problems with being British is that we don't talk well about money. It's all very embarrassing. In some sort of cultural throwback, most British people think that talking about money means that you are engaging in trade.

Sadly this makes operating as a consultant somewhat difficult since we need to talk about money at the beginning of the relationship - and that rarely is either easy or goes well. Let me give you an example.

My usual daily rate is £1,250 per day. There - I've said it. These days, I rarely charge out on a daily rate, preferring to offer fixed price work based on explicit deliverables - but I'll calculate my fixed price on that basis. I know consultant who charge much less than that and had coffee the other day with someone who charges over double that. In the end we all charge what we're comfortable with - and in my defensive British way, I will say that I do quite a bit or either heavily discounted or pro bono work!

I met with a new client to talk through a project which sounded quite interesting. The client mentioned 30 days' work, which was a rather strange (and far too high) estimate. He managed to find a number of ways of trying to ask me how much the project would costs without actually managing it ("what sort of resources will we need at our end" and "....so we'll have to see if it fits into the budget" were two I enjoyed). I was obviously feeling mischievous so I let him dangle - waited until he actually asked outright. Interestingly his first question was "How much do you charge a day?" - blurted out as if he didn't want to soil his mouth with the words. So I told him - and then started to talk about a fixed price for the work. He interrupted me with: "Over £1,200 EVERY DAY?" (he shouted). "That's over £300,000 a year!".

Now I'm quite used to this thinking and patiently explained that I didn't work every day and so it wasn't necessarily a good comparison and that I provided good value by offering external insight, international credibility and a good deal of experience. He couldn't get by the number, however.

So I asked him how much he wanted to spend. It seemed like a sensible question to me - but he wouldn't tell me! Isn't that odd. I tried to explain that it might just be easier if he would give me a figure - which I might reject - rather than me trying to guess it.

In the end the meeting ended in a very unsatisfactory way with the client feeling that I was unreasonably expensive and me thinking that the client had been rather silly.

This reluctance to talk about money - or to value people - is, I think, be a very British characteristic. I have French clients with whom I have many difficulties, but with whom I can have an adult conversation about pricing. Interestingly some of the easiest clients are those in Professional Services and Lawyers in particular. They understand valuing time and thought and have little difficulty in understanding that a 20 minute telephone call costs one hour's money because of preparation and write-up.

It's not the value of my time that I hold dear - it's that my time is valued.

SC

The competition

Well it happened in the last recession and it's happening now. Every single person who is about to be made redundant or has recently left their job thinks they can be a consultant.

I have lost count of the number of friends and acquaintances who have spoken with me over the last few months and I can summarise the conversation as follows:

"Yeah - I suppose I might consult for a bit. You know - just until I get a real job".

Consulting is a real job. It's not something you can do for a bit. I patiently (well sometimes not all that patiently, to be honest) explain that it will take 6 to 9 months to start to build a customer based and at least 3 months after that to start getting some money. I usually advise (those people who seem serious about working for themselves) that you should have alternative funding available for about a years' worth of expenditure.

Thinking more about it, the view of the recently unemployed (that they can just pick up in my industry) is rather insulting. While I have a very healthy ego, I don't think that I can start work tomorrow as an accountant and start earning on Friday. 

So that's the first thing that people can say to irritate me. The second is:

"So if you get anything interesting come through, give me a call"

Wow - now a I'm working as their marketing department. And for free! 

Being an independent consultant can be a difficult life. I do work in partnership with a number of other consultants and firms - but only ever in complementary areas and never in competing areas. Why on earth would I (a) go out looking for work for someone who should be doing their own marketing; and (b) cut my own throat by introducing an new player to a busy market.

Think about it people...

SC

Welcome

Welcome to the Secret Consultant. 

Over the last 20 years, I have worked in small and large corporations; consulted to very small and very large organisations in a number of different continents; and both worked with and as an independent consultant.

Ah the tales we could all tell... Sadly we often don't. I say sadly because there is so much that both organisations and consultants could learn if we spoke with each other more. There seems to be a tremendous jealousy between the two groups. Consultants envy the corporate's pension, holiday pay and security (although to mention security in this economy is perhaps unfortunate) - while the corporate people envy the consultant's freedom, flexibility and avoidance (usually) of corporate politics.

This blog is my way of addressing this lack of communication. It may, however, come across every so often as a rant...

SC