21st Century Economics

The intense competitive business environment is often the motivation for a careful and extensive cost-cutting effort within a business and it is also often part of the motivation for consideration of any mergers or joint ventures with other utility organizations. Since labor costs are often seen as one of the most expensive items on the budget, it is natural to look to cutting the size of the payroll as one of the first areas to review to lower overall expenses. This is a very common practice, especially in a merger situation of two organizations that each have a full operational and support staffs, since it is often not necessary to retain everyone to meet the needs of the new, combined organization.

There is, however, an additional important consideration. Many business researchers now view the labor force of an organization as a critical, perhaps, the most critical strategic resource that can affect competitive advantage. When viewed as a critical strategic resource that should be evaluated on the same scale and level as other strategic elements, labor takes on an entirely different perspective. This can be even more important in a merger situation, which is, by definition, a critical strategic decision.

This is called the “resource-based view” and is the object of a serious field of theory, research and practice called Strategic Human Resource Management (SHRM). More and more companies are looking beyond the results of managerial efforts to determine the knowledge, skills, abilities, even traits and motivations critical to achieving strategic objectives.

Corporations have long sought to identify their “core competencies” - those things that the organizations do that contribute to their sustained competitive advantage. Human resources have always been included in competitive analyses, but focus until recently was more on the results of people’s efforts, not the behaviors contributing to them. Now that has changed.

Rather than take the view that the deregulated environment or the new merged organization can best be addressed by offering the lowest electric rates by cutting costs and that cutting costs equates to downsizing the staff, SHRM dictates that the prudent objective is to achieve sustained competitive advantage through the strategic use of all available resources, including human resources. This approach may result in downsizing the staff, if it is done to achieve sustained competitive advantage, however, an organization would be ill advised to downsize potentially valuable staff just to cut costs or to increase product sales.

Solutions, Not Products

I believe that customers most often buy or look for solutions to their problems, they do not, in general buy products or services. If you address a “solutions-based” marketing objective, there will be slight differences in your approach to business development and in the preparation and investments required. For example:

1. If you sell solutions, you do not necessarily have to walk into every potential client holding out a specific product or service. Rather you maintain a “toolbox” of a variety of tools to use on whatever is determined to be the client’s problem. Once the problem is analyzed, you apply the “appropriate” tool to fix it. This fix may be a product or a service. It can be consultation on applying a particular methodology or process. The larger your tool box, the more clients you can appeal to. You must create a diagnostic and repair capability, at least this is the image you project to the prospective client. Like any repair shop, you need a number of diagnostic tools to find the real problem and then you need to be able to select from a variety of tools to fix it. This requires the ability to be agile, flexible, adaptable and responsive to the client’s needs and circumstances.

2. Since you cannot fix every problem for everyone, like any repair shop, you must specialize in some area of diagnostic and repair services. You do not want to be too limiting but you also do not want to market in areas in which you are clearly not qualified. “Business Management Consulting” is so large and generic that you should narrow the field to some aspect of this large subject area. Areas that allow us to project an image of expertise while not being too confining include the following:

Risk Reduction
Business Improvement
Decision Support
Organizational Development
Business Process Engineering
Downsizing/Rightsizing
Program/Project Management Optimization
Contract Development

What is remarkable about these marketing areas is that the “toolbox” for every one of them is remarkably similar. Some may require a few extra tools that the others don’t have an obvious need for but the ability to see other problems and offer solutions can be a powerful business development advantage.

3. The “toolbox” concept is useful because it denotes a wide variety of potential solutions. To that end, you must stock the toolbox with tools. Tools in this case are not only software and hardware products but include methodologies, procedures, analytical techniques and management concepts that can be selectively applied. It sounds like a big and difficult toolbox to fill but you already have most of what you need.

You just are not calling them tools or putting them in one box. The attached figure titled, “Management Consulting Services” gives a breakdown into “tools” that are more familiar. The upper diagram breaks down business management consulting into subcategories that would make for good marketing areas. These are broken down further into more familiar “tools”. For example, “CBT” or “Paradigm Change Support” are products being sold to a client AFTER you or they have decided that these products will address their problems.

It should also be noted that the corporate staff can simultaneously be the repair people AND the tools. The skills, experience and knowledge of the people are among the most powerful tools that can be applied to a client’s problems.

4. So how do you fill the tool box? By simply defining what you already know and adding a few new capabilities that will fill in the gaps. For example, a previously developed training product is a product but if you are marketing Strategic Marketing Services, a previously developed training product becomes one of several tools you can draw upon to support your marketing thrust. In fact, the previously developed training product itself, represents this concept. The organization may not actually have a single product called a previously developed training product - it is a combination of methods, techniques and simple software programs that allow survey, analysis, assessment and improvement. Isn’t this just a toolbox concept with a specific focus? The corporate’s training capabilities, as defined in any of a number of prior proposals, can be similarly viewed as a toolbox consisting of a variety of tools (training program design, course development, curriculum design, assessment and evaluation).

It is the collection of these individual tools into a larger toolbox that gives us strength, credibility and competitive advantage. Suppose you group what you already know, add a few new tools to the box. The new tools might be new people or consultants that have skills that can be added to the corporate toolbox to round out a targeted repair/service/marketing capability.

You then label the new toolbox and repair capability with a new title or titles. The new name(s) will be the conceptual marketing direction and allow us to focus on refining a larger and more powerful corporate capability than when you are trying to sell individual tools, one at a time.
I do not know what the new name should be but let’s just use an example to see the synergy:

Suppose you wanted to go after a super hot ticket in government right now called Acquisition Reform - the improvement of the way that both the government and the contractors do business. This involves two very different markets with different goals- the government and the contractors.

On the government side, they need to improve their organizations (training, assessment, team-building, conflict reduction, etc), they must reduce their contracting risks (BPR, TQM, ABC, ACMA, etc.), and there is a very large requirement to improve the project and contract administration (B&P R&D, Contract Administration, automated RFP/SOW).

On the contractor side, they too have to improve their organizations (training, assessment, team-building, conflict reduction, etc), reduce their contracting risks (BPR, TQM, ABC, ACMA, etc.), and improve project and contract administration (B&P R&D, Contract Administration, automated RFP/SOW). In addition, they are concerned with their market image and customers (customer loyalty, Intrepreneural Development, Image improvement), their technical capabilities (software, networks, database design, etc.) And their competition.
Interestingly, these two diverse markets need virtually the same services provided by the same tools and marketed under the same general categories within the market concept of Acquisition Improvement. Corporate’s toolbox would simply have a new sign on its side.

5. You need an identity. This serves several purposes. One of the most important is to build internal teams and cooperation toward some common goals. By defining a collective marketing strategy, and involving a number of different people with different skills under s common vision or marketing strategy, you begin to focus on not only the market but on how you can interact to improve the synergy of your combined talents, skills, knowledge and experience. Such common visions and fully integrated teams can address a huge potential market while gaining a reputation for having the right answer and the best solution to the client’s problems.

Another important purpose of the identity is to set us apart from your competition. If you gain a market identity that denotes credibility, it will improve your ability to get past the first barriers to a contract. This market credibility can be enhanced by simply carefully selecting what you call yourselves and how you present yourselves. I would rather hire a training coordinator than a retired teacher. I would rather have a management consultant than an personnel advisor. An engineer is preferable to a technician. It all is in those first few flashes of recognition and impression.

One other benefit of an identity is the effect on the organization’s people that have to use the title. As with many consulting businesses, the company probably uses very few titles. The stated reason is that it is hard to keep up with the changes and it allows flexibility in dealing with a variety of clients. This fools no one, least of all the customers. A title denotes more than identity, it gives a basis of discussion, a reference for skill levels, an indicator of experience and an indicator of relative position. If it also serves as a source of pride and prestige for the barer, then it improves employee morale. If it supports the marketing theme has some commonality with other corporate staff, it also serves as one more support element in team building. I believe you can achieve all these benefits by the simple act of a carefully selected identity.
Suppose you call your repair people Business Engineers (BE). Just like the hard science engineers, you can have:

BE’s that specialize in technology (software, networks, database design, etc.)
BE in Organizational Risk Reduction (change management, cultural diagnosis, Diversity)
BE in Organizational Improvement (training, assessment, team-building, conflict reduction)
BE in Business Operations Optimization (BPR, TQM, ABC, ACMA, etc.)
BE in Strategic Marketing (customer loyalty, intrepreneur and image development, etc.)
BE in Business Development (B&P R&D, Contract Administration, automated RFP/SOW)

As noted above, this title can denote a certain amount of built-in credibility. It specifically is not a technician. These are not entry-level people. It is not a scientist. These are not esoteric think-tank analysts. It implies a knowledgeable skill in business. These are people that know how to apply business solutions.

6. As you can see, this process does not cost a lot of money. You simple wrap some intelligently selected marketing strategies around a set of carefully chosen themes for collectively selling your services to target markets. You can see from the attached graphics that the roll-up of mundane skills, easy technology and common methods into themes and services is just a matter of perspective.