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⚡️ Today’s level up ⚡️
Consultants earn outsized fees by effectively using frameworks. Today’s system is about using framework thinking to help you win bigger deals faster and simpler.
Read time: <7 minutes
Why do consultants get paid so much?
Consultants, like those at McKinsey, Accenture, Deloitte and other big firms command large sums from big companies for two reasons:
1. Their experience
2. Their point of view
Experience is gathered from solving a variety of difficult problems over time, while their distinct point of view comes from codifying their experience into frameworks.
Those frameworks are “designed to abstract experience into principles that can be broadly applied to a variety of situations,” as explained by Sean Johnson, author of SIP and professor at Kellogg School of Management.
Johnson goes on further to explain: “By operating within frameworks, they’re able to quickly navigate complex problems and arrive at novel solutions.”
Although it will be challenging to match the experience of a Big 4 consulting firm as a seller, you can at least begin to think like them. This will have a significant impact on how you work through solving complex challenges with senior executives.
Let’s dive in to learn how.
The power of framework thinking
The goal with understanding and using frameworks is to disseminate complex situations down into simple, key levers that you can help them clarify, and eventually pull.
A framework is a simple way to put things together in some ordered form.
When you are in conversations with executives and they are sharing the complexities of their business and desired outcomes, it can be tempting to stay in your comfort zone and stick to a talk track that better suits your needs and leads them to your product.
That’s an instant credibility killer, especially with high up executives who are sizing you up with every word you speak.
If it’s early in an engagement, and you have little rapport built with them – say you’re meeting for the first time at one of your company’s quarterly executive leadership events – it’s important you develop the skill of framework thinking.
Let’s use a basic example:
“How do you help a company make money?”
Distill it down into a simple framework:
Revenue = Units Sold x Price
So no matter how complicated the discussion around increasing revenue gets, you know you have the only two basic levers to come back to (sales x price).
This allows you to get down to the core root and build up your transformation thesis from there.
Say for instance it was a major big box retailer who’s under pressure to increase bottom line revenue by 17% before the end of the fiscal year. The head of digital marketing was curious about using cookie-based dynamic web pages to drive personalized recommendations to boost sales, something your platform specializes in.
Instead of going “straight to bed with them on the first date” and sharing the unique way your platform can boost sales using a key feature that everyone touts as your competitive advantage, take a step back and deconstruct revenue based on the simple framework:
Revenue = Units Sold x Price
Design up from the framework
Once you’ve zoomed out to the framework level, you can then zoom in by asking questions beyond the basics like: “What happens if you don’t meet the 17% revenue increase by end of year?” or “where do you currently sit against that target?”
You start to get more strategic (this is where your homework will come in handy):
“I noticed you were offering the Apple Watch Ultra at a 20% discount to other major retailers that sell Apple products (price). Is there a specific reason for that?”
She goes on to explain that they are sitting on excess inventory because of the supply chain volatility and over-ordering Apple Watch Ultras for the fall launch and holiday season. After some shipments were delayed out of China, they received a big shipment in February (units).
This backlog is forcing them to discount a premium product, eating into their margins which are already thin considering Apple’s position with partners.
There is a huge revenue increasing opportunity by solving this problem.
Now you have a completed framework to build from.
This could be turned into an instant persona-based story you will talk them through as you walk the exec over to the demo station to get a demo from your top SC.
You proceed to walk them through a demo pinpointing the exact targeting your platform can do using AI that displays dynamic pricing based on the customers digital ID using the company’s own stored data from disparate sources.
A likely Apple Watch Ultra buyer would get shown normal pricing (for example, someone identified as perennial Apple product purchaser + a Garmin Watch purchased 3 years ago, signaling time for an upgrade) and an option to easily bundle in additional fitness products (like Beats sports headphones).
You highlight this will not only increase the price on something the company was blindly discounting, but also help sell additional products that increase the overall order value.
Then you ask the killer question: “How many Apple Watch Ultras are you sitting on?”
She goes on to say several millions.
Jumping on that, you suggest that she assemble the rest of the team and hop into one of the private meeting rooms to whiteboard out model outcomes with one of your lead consultants who manages the room for these very reasons.
These are the types of engagements that move to a 6 – 9 month sales cycle, all because you disseminate everything down to frameworks to ask your strategic questions and deliver your impactful insights.
It’s about using simple concepts to unearth and solve big challenges, and the goal is to build a library of these frameworks so you can expand your consultative capacity.
Need help? Here are some of my favorite framework thinking resources:
– IDEO U
See you next week!
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