by Michael Zipursky
I recently had a chance to interview Alan Weiss and we’ll be sharing the full interview with you on the blog. enjoy....
Mike: We are here with Alan Weiss, author of over 40 books on consulting, many of them bestsellers, including “Million Dollar Consulting”. Alan, welcome to the Business Consulting Buzz Consulting Interviews.
Alan: Thanks Michael, good to be here.
Mike: Alan, you’re probably the world’s most recognized name in the consulting field. I want to go back to the early years. What were you doing before you got into consulting?
Alan: I started my career out of undergraduate school at Prudential Insurance. I was there for four years and I was recruited away to a training firm in Princeton New Jersey. That’s how I got into the general profession.
When the owner fired me, I said that no moron will ever have control over my destiny again.Mike: Was it a tough decision to go out on your own and become a consultant?
Alan: No. It was inevitable because I was recruited to become president of a consulting firm in Providence Rhode Island. I served as president for two years and the owner fired me. When the owner fired me, I said that no moron will ever have control over my destiny again. I told my wife I want to go out on my own. She said, “Okay but you better get serious”, and I did. That was 1985.
Mike: Why did she say that you better get serious?
Alan: She knew that I tended to be lazy. I’m lazy today. The ideology I’ve developed is because I don’t like to work very much. She said to me, “You’re not going to sit by the phone and expect to get business”.
I told my wife I want to go out on my own. She said, “Okay but you better get serious”, and I did.I said to her, “You know I better go get an office?” She said, “Why?” I said, “Well, I need an office. I want my own.” And she said, “Why?” Her point was that people aren’t going to come to me. They do today, but they wouldn’t then. I go to them, so why do I need an office? She said, “If you need one you can get one then.” That decision over the course of 20, 25 years saved about $400,000 which was exactly the amount it cost for me to send two kids to private school up through college.
Mike: How did you get your first client?
Alan: My first project was a brief day with a consulting client in Connecticut. They had contracted with Victor Vroom, an authority on leadership who I met in a prior life at the training firm when he sold some of his intellectual property to us. I became very adept at his leadership program. A situational kind of leadership approach. A guy that Vroom worked with, named Phil Yetton couldn’t make a seminar that Vroom was involved in. When he couldn’t make the GTE appearance because he was somewhere else in the globe he said, “The only other person who could deliver this almost as well as I can is Alan Weiss.” And so GTE asked me to do that and then became my first client.
Mike: You’ve been known to say that “you can’t help others until you help yourself.” What do you mean by that?
I’d say that hourly based fees are unethical because the consultant is best paid and is in a better position when the project takes a long time.Alan: I mean that wealth is discretionary time. And unless you create discretionary time you can’t help other people. I do a substantial amount of pro-bono work. I do a substantial amount of work in the community. And unless you’re able to do that, unless you have the income that supports discretionary time, you’re not able to. Moreover, successful people want to be around successful people. That’s absolute. So you’d better be well dressed. You’d better drive a nice car. You’d better use expensive accessories. You don’t pull out a 39-cent pen to take notes in an executive’s office. You should be well groomed and so forth.
Consequently, if you need to be able to support all these things, you need to help yourself first. It’s the same thing as what they tell you in airplanes. Put your own oxygen mask on first and then you can help others.
Mike: Right. One of the biggest issues consultants deal with is the subject of pricing and fees. You literally wrote the book on that with value based fees, and I want to dig into that. What would you say to consultants that are charging an hourly fee for their work right now?
Alan: I’d say they’re amateurs. I’d say that hourly based fees are unethical because the consultant is best paid and is in a better position when the project takes a long time. The client is best served, however, when the project is resolved quickly. And so that’s an ethical conflict right out of the box. Large firms – the large consulting firms that charge by the hour – are really production capability driven. They’re paying somebody $300 an hour in terms of overhead and salary and so they’ve got a bill amounting to $500 an hour to make a profit. It’s like a paper company or a steel company. The point is that value based fees are far, far better for the client and far, far better for the consultant. It’s the way you make real money in this business. You’ll never make much money charging by the hour.
How much can you charge? And who wants to work 40 hours a week? Not me.