How to Price Client Engagements
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Daniel: So we’re here today to talk about, “How do I come up with a price for client engagements? If I’m a consultant, an individual contractor, et et cetera.” And Steve, I believe you have a story to give us some guidance on that.
Steve: Well a little while back I was looking for a designer, like thousands of people do. In my case, I was looking for a high end designer, somebody that’s up there, at kind of the enterprise level of the expertise. I had two constraints, and three requests. Two constraints were, no change to the layout, and no change to the text, or the written information that we had, which was pretty severe. We were looking to change stock photos, and looking for recommendations on the color palette. And, recommendations for fonts.
So, I found a designer whom I was enamored with. Loved her work, thought it was a great fit, and so I’m all excited to reach out to her, “Yes, yes, we can talk.” And, we get into the conversation, you know, the usual exchanges. And after I’d explained what we were looking for, just kind of a recap of what I said in an email, the question which came back was, “What’s your budget?” Microphone drop. I was crushed. “I don’t know what my budget is, that’s why we’re talking.”
Now, let me be clear, she’s a very professional designer. She’s got a lot of experience with enterprise clients. But I didn’t … It just killed the flow of the conversation, and I was feeling the uncertainty of, “Well, you know, now I’ve got to kind of figure it out and this isn’t my expertise. I don’t know what stuff costs, that’s why we’re talking. I need advice, I need guidance.” It really stopped, full stop in the conversation. I’m thinking, “How do we do this?” ‘Cause I was still interested in her. But it told me a lot that, she doesn’t really know how to launch this kind of a project when there’s a lot of uncertainty.
And so, we talked through it, and kept dancing around it for two or three more loops. And she did finally come around. We’d almost given up on each other, and she finally came around, and she did what attorneys did. And I didn’t think of this, but as soon as she said it, it made sense. What attorneys do when it’s kind of an open ended project is they’ll say, “Listen. To get started, my retainer is this much.” And hers was pretty hefty. It was a few thousand dollars. But it made sense, relative to the quality of work that she does. And that’s how she reconciled the uncertainty. She said, “Listen, if you do … We can launch with this retainer, and then from then on we can chunk it up with payments for pieces of work.”
So that’s how we managed to resolve the question, but holy smokes, there for in the middle of the conversation, that was tough.
Daniel: Yeah, I’ve seen this a lot actually. And I think your point is that we need to be able to lead clients. It’s us that needs to step up to lead the clients to a pricing model that matters, or that matches. Even in the face of uncertainty. I work with another company that’s recently redefined their pricing models, and they’ve kind of cracked this nut. For them, they listen to the nature of what the client needs, and they offer either a project fee for a one time project. It’s best when there’s a very defined need, and a very defined time frame. Or, they offer a subscription fee for a recurring thing when they’re defining needs. But, there is a recurring defining time frame also, like monthly.
And then, when there are undefined needs, the needs are unclear. It could be a variety of different things we need over time, we’re not sure yet. And perhaps and undefined time frame, it’s sort of, “We need it as the need arises.” They go with the retainer model. And the way they explain their retainer model is, “We’re not going to break out what each thing costs, and we’re not going to charge you by the hour. You’re going to sort of trust us, that you’re going to load us up with a few thousand dollars, and we’re going to draw it down at the rates we normally do. And, we’re going to tell you when you need to reload.” So one point that they sort of brought out about that, is the retainer model sort of works best when you have an established relationship, you’ve gotten to know each other, and there is some of that trust. But beyond that, it’s gotta be subscription, or project based, or something like that.
So, my question to you then Steve is, how do you solve this? I mean, because in a lot of enterprise projects, I think a lot of companies are used to hiring consultants by the hour. There’s a certain sort of billable hourly rate, because there really is that uncertainty about needs and time frame, such as in a software development project.
Steve: Right, and I work a lot of projects that are on an hourly rate. And, they’re usually larger clients that have substantial budget and can afford it. But, even in those, there are certain parts of the project, especially initially during kickoff, where they’re trying to decide that they have to sell it internally to get acceptance. So, large or small, there are often parts of the project that needs sizing. And, an hourly rate just doesn’t cut it. And in a lot of cases, even a retainer, “Well you know, let’s start with so many thousands of dollars and see what happens.” You’ve got to be better than that.
What I find with a lot of consultants, and I’ve been there too, is you don’t want to get yourself into a position where you’ve accidentally low balled it, and you’ve set expectations too low. But, you also don’t want to blow it out and protect yourself so much that it’s just not interesting. “Look, the price that you just said, that’s a non starter. I can’t sell that internally.” So, the answer is, break it down into chunks of work that are fairly clearly. And this is the way
Agile Frameworks work anyway, in projects. Which is, let’s take what we know, and estimate that. And so, then you can present to the client things that are known, “This is generally what this piece of work costs.” Or, “This is generally how long it takes.” I usually provide both. I provide a price, and I then also give an estimated duration.
Not how many hours of work, but how much elapsed time. For example, if I think it’s going to take me three or four days, I might quote 10 days, or 14 days of elapsed time, because I’ve got other projects going on. And so, I leave myself some wiggle room, and to set expectations. Now, it also depends on their interests, and how fast it needs to be done. But, elapsed time is not actual working hours. So, I do those two things, and then I also leave open the uncertain part. “You know, these other parts that you asked for, I really don’t know, and I need to get in there and look.”
Or, I might do a semi firm estimate, which is, “A little more uncertain about this piece, generally it’s going to take this much time, or this much money. But, I’ll tell you what. If I get in there and it turns out there’s a lot of variability, say it’s more than 30% of what I thought. I’m going to stop, I’m going to back to you and say, ‘Listen, this is a lot more than I originally thought, and we need to revisit.’ And, same thing on the downside. If it turns out to be a lot easier, I’m also going to not keep the original amount that I talked about.” Now, these are, I’m not … These are choices as a consultant. But, what I’m conveying is, this is how you deal with uncertainty, to get the client to a point where they can discuss it rationally internally, and consider value for money.
Daniel: Yeah, I like that. So, it’s sort of, you break down what the client is asking for into parts you can visualize, and parts you can’t. Now, this is a premise of Agile Project Delivery, in that the way it works is we want to take the shortest path to delivering demonstrable value, and not start on all the things that we don’t quite know how to get to yet. And so, if you look at a proposal, a pricing proposal as your initial act of delivering value. The proposal itself has value. Then of course you want to visualize, break down, and put pricing to the parts you can visualize, and maybe leave open some of the parts that you can’t.
You and I have both done those kinds of proposals, where we say, “Well …” It kind of creates a proposal timeline. So instead of, “This is what I charge per hour.” It’s, “This should be done by April first, and this part will probably take us into mid May,” et cetera.
And you know, you’re almost guaranteed not to get that initial proposal right. In some of, in a couple of areas, there’s going to be some negotiation, or some back and forth, or some questions, some areas of flex. But, that gets us to an initial proposal right away, instead of an endless process of discovery and asking them to commit. Or, sort of, “Here’s a proposal where I do try to represent those unclear things as though they are super clear,” and now I’ve asked them to over commit to something rigid and fixed.
I wonder though, what you do Steve when someone sort of asks for a price on the phone. I realize this doesn’t come up with larger companies who sort of get it. But, as the size of the company sort of goes into below mid market, you do hear that a lot. People are sort of saying, “Can you ball park it for me?”
And I know that one solution that we’ve done is to give people sort of a price if they insist, “Hey, I need more clarity, I need it right away.” We give them a price for an initial assessment, which also gives them a stop point. If they don’t like the relationship, they can break out. But in the meantime, we’ve got a way to get to value, the assessment has value because they can take this on to another vendor. Is that how you solve it, or is there another way to handle it when somebody’s sort of saying, “Just give me a range of pricing.”
Steve: Well an initial assessment works when it’s a larger project, unless you can do it over the phone. It depends whether we’re talking about remote, or on site. In a smaller project when the client really needs a price, and they ask that on the first call, I may not have enough information. And I often, just by the nature of the way I think, I often need to pause. So, what I’ll say, and I just did this is, I was on my first call, initial evaluation, and we both liked each other. And what I mean by like, is that it was a fit in terms of what I can do, and what they needed. And I said, “Let’s talk again in three days,” and that was based on my schedule. I couldn’t have talked sooner.
And I came back around to that second call with more specific questions, having thought about the conversation. And I wanted to do it in two calls. I knew there was no way I was going to have enough information, but this isn’t a big enough project to justify endless conversations. So, in that case I did it as a two step, and then also was pretty open, like I said about, like we said before about the parts that were clear, and the parts that weren’t clear.
Daniel: Yeah, so I wonder though what we do with dysfunctional clients. And sometimes it takes us a while to figure out their dysfunctional, and it’s in sort of the debriefing conversation afterwards. But, everybody has this. I should say dysfunctional prospects, because ideally they don’t ever become clients if we determine their dysfunctional.
They’re dysfunctional prospects. But, some will say … You’ve heard this with me in proposals we’ve done, where the phone conversation is, they want every single [inaudible 00:12:19] broken down. They’re asking the right question, which is, “Show me where I get value out of this.” But they’re dismissing anything that’s fluid, that requires gathering information or anything like that. So, in a proposal we might say, “Well if we need to travel,” and we recommend that we’re on the ground once a quarter, and that’s this fee. Then we’ll say, “Well, I need to know exactly how many times you’re going to need to travel, and why you would need to travel, and what you’re going to do when you’re here, and how many hours you’re going to put in.” And you start to hear a very dysfunctional approach to pricing. How do you handle that?
Steve: Yes, and I want to be very clear, that these descriptions we’re giving of techniques are not fixed bid pricing, not firm pricing. They’re approximate. And even, for example let’s imagine with an attorney, somebody who has a lot of particular experience in a particular field. They are rarely going to commit to what your situation is going to cost. So, what do we do in that situation, when the client, prospective client starts getting specific, wanting to quote a locked in firm price? I might indulge that conversation one or two times, loops through, “Well, we’re not really going to commit to a specific price, because there’s too many variables to know on this one conversation.” So that, when you see a prospective client start driving toward a fixed price, and in your line of work there’s too much uncertainty to quote a fixed price. And, there’s no sub part of that project that you could quote on a fixed price, then that tells you what kind of client you’re dealing with. And you have to ask yourself, “Do I really want to do business?”
There’s a lot of spirit of cooperation that goes into these initial conversations. You want to give them enough certainty that will resolve the question, “How much is it going to cost me about?” But leave enough room that when you discover these new things, that you can change it. When the client isn’t accepting that, or … I keep saying client, prospective client keeps saying that, “I need specific price, I need you to commit, you’re the expert.” You know what to do. You get that feeling how it’s coming down, it’s not really collaborative anymore. You want collaborative relationships, that’s the best way to deal with uncertainty, is when you have a client relationship of collaboration and trust. And, so when the tone violates your intentions, what you’re looking for in clients, in prospective clients, then you know what to do.
Daniel: So to sum up, lead the conversation around pricing, don’t put the burden on the prospective client. Hear the nature of the client’s needs, and apply appropriate pricing models to those needs. And in the face of uncertainty, identify what you can define, and price that. I’d like to remind you to visit ClientPipe.Com. Of course, stay tuned for the next episode, but you’ll find a lot more at ClientPipe.Com. Thank you Steve.
How Long Does It Take to Get Clients?
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Daniel: So we’re here today to talk about how long does it take to get new clients, or if you have a couple of clients as an independent consultant, then how long to get more clients? And Steve, I think you have a story that’ll help us unpack this today.
Steve: I do. I’m an ex-airline guy. Not a pilot, but was involved in just about everything else on the ground, and that included some time at airports. Now the interesting thing at airports, for those of us who have been hooked into the business and loved it, is this orchestration of roles and the way everyone works together to get the flights going out and usher them in and so forth. That’s the context in which we as airport managers would hire people in or, for example, transfer in from other airports, and I wanted to talk about that decision. When we were doing it, it was very easy to establish, this is what the role is, customer service agent. You are going to be doing primarily boarding, and it was easier for the person who was putting in for the job to understand what the expectations were. So we had clarity on both sides, and therefore, even though it’s an important job, pretty fast decision. That’s the way we did it, because everything was all clear. Not only did the day-of operations go smoothly, but those kinds of transfer in and out decisions also were pretty smooth and fast.
Daniel: I actually find, yeah, that’s kind of a feature of having a regular W-2 job. You have a defined job description and everybody sort of knows what the role is, whether it’s butcher, baker, candlestick maker, pilot, ticket counter person, it’s like Legos. There’s a clearly defined job description so you can pull them out and drop them in, but Steve, when I went out into the independent consulting field, one of the first things I discovered was while I went out there to add value, and that process of adding value over and above what people could attain interacting with W-2 employees in a company, was more elaborate. It was more complex than what that company offered. My value was more difficult to explain, and so it was not so easy to treat me like a Lego, and just drop me into a spot. Oh, you need a new ticket clerk, I’m a ticket clerk. So I had to even invent job titles for myself or invent descriptions in elevator pitches that were as short as I could get them to try to convey that value and win clients. I think that may be part of what you’re touching on, is it’s really easy when, “Oh, you’re a pilot. I need a pilot.” It’s harder when you’re more like, I’m an HRIS systems consultant who specializes in X, Y and Z.
Steve: Yeah. That’s really what I’m trying to say. I gave almost an unfair example of the fastest decisions happen and our basis for comparison is in the regular world of work, traditional employment. Once we’re out in the wild as an independent consultant, there’s a little less clarity at least in the eyes of a prospective client. And so yeah, it only goes up from there in the way that you described. In my case, we all do several different things, and a couple of the things that I do, on the one hand, I’m a software implementation consultant, so there’s a particular software app that I work on in time and attendance for very large clients, but that is a role that several people in our community who need this work, it’s very clear to them, and so often even though it’s advanced consulting work, often clients, once they have a need, they understand what I can do and those decisions happen, again, very fast. But the bulk of my work as a solution architect and also when I do a workforce agility assessment, some people say “What? What is that?” And so that’s a much longer discussion, and it doesn’t happen in any timeframe that is similar to the story that I gave, which is a quick decision with a well-defined role.
So that’s the distinction I’m trying to draw is that depending on what your skills are and what you offer as an independent consultant, that will drive some of the timeframes that it takes to pass that information over and develop an understanding with your prospective clients.
Daniel: Well, it’s exacerbated by the complexity of what you have to offer and the actual sales cycle of the type of client you’re going after, whether it’s small business with a typical short sales cycle or enterprise with a longer one. I know what you mean, Steve, I bill myself as a corporate storyteller. That’s not something that you see recruiters going “Hey, we need a corporate storyteller, drop them into this slot.” Even when you might poke me in the ribs and say “You’ve got practice areas, Daniel, marketing and education,” I’m like yeah, but what I do doesn’t exist in the W-2 world. The way in which I build marketing teams or educational programs isn’t a standard W-2 job in the first place, it’s something you typically hire a company to do.
That’s what threw me, is when I went out on my own, companies are kind of on their own to craft their own branding and value propositions and positioning in a way that individuals very often aren’t. You can craft a resume and match it to a job description much easier than you can craft an entire presentation to fill a b-to-b need. It seems like when we go out and we leave the workforce and we become independent consultants, it’s like we’re still p-to-p, we’re person-to-person, but now we’re b-to-b. We’re talking like we’re a full-on business, even if it’s just us by ourselves as independents. That’s been the struggle for me, is to continually refine that because the closer I can get to clarity, the shorter the sales cycle, but I still have to struggle with whether or not the sales cycle of my prospective clients is months long already.
Steve: Yes. When I came out and started work as an independent consultant, I was always comparing myself to accountants and attorneys who it seemed like, if these people can find their clients, why can’t I find mine? And it’s this thing that we’re talking about today, because the answer for me was, well, because I wasn’t defining it clearly enough. We’ve talked about that before, and also the thing that I did wasn’t quite as simple to understand as maybe some other jobs. And I didn’t understand that point, that “Hey, Steve, you’re gonna have to invest a little bit in this conversation for people to get it.” But there’s another dimension that you and I have talked about also, which is not only is this question of where do you sit as a consultant on that continuum from pretty simple to describe, say a tax accountant or an attorney or some other thing, or something more elaborate, like you said, a corporate storyteller. There’s that, but then there’s also, at least for me, I consistently underestimated the amount of time it takes to develop those relationships, whether it’s for work that’s pretty easy to understand, and it’s a fast decision, or longer. In all cases, I found myself underestimating how much we need to be working those relationships.
Daniel: Yeah, so there are really three things in play. One is where your product or service is on the spectrum of complexity or newness, and that determines how long it’s gonna take for you to attract clients, and of course I hear the charge of “Make it as clear as possible, just make it clear.” And the examples people use are consumer products. “Well, a broom. You know what a broom does,” and it’s like, all right. That’s not a fair comparison to a software developer who specializes in HRIS systems, for example.
So I’m a little disappointed with some of the marketing and sales advice I’ve heard out there, Steve, that keeps hitting me over the head with clarity. But when you say, “all right, show me. Take my stuff and make it clear.” “Oh, that’s your job.” “Well, yeah, so thanks for the principles.” So it’s an ongoing struggle to make it clear, but to a certain degree, what we’re saying is you can’t really expect for an attorney, a developer, and a housekeeper to all have the same length of sales cycle. Any sales and marketing advice or program that really conflates those things and doesn’t deal with the true place you are in the spectrum misses the point. So the first step is sort of identify where you are in that spectrum.
The second is, of course, get as clear as you can possibly be, and we talked about that in a previous show, which is the pathway to clarity is what problem do you solve? How clear can you get about what problem you solve and how you solve it? There’s a limit to the clarity you can get to, but that limit is somewhere in that camp.
And the third is the one you just hit on, which is the time developing relationships. How long does it really take to develop those relationships, and the answer is usually “Start yesterday, because it takes longer than you think.” In a way, the answer is developing and cultivating relationships is gonna be a continual and always long-term thing that serves your sales cycle, whether you are the housekeeper or the software developer or the attorney, there is no substitute to developing relationships, so start as early as you think you might be wanting to have clients.
Steve: Yes, and this, you and I working out these ideas, solved some problems that I was having, which was I thought that some of the work that I wanted to do related to workforce agility and solution architecture should have been as easy to find clients as some of the other engagements I’ve done that were really specific related to employee time, enterprise time systems. So the miss was no, this other work actually is a little bit more difficult for people to understand, because I’m not being clear enough about it, and it’s a broader concept. It’s not a real specific problem. That then told me this is how much longer it’s going to take you to find those kind of clients. So I actually, of course am looking for both kinds of clients all the time, but I have different expectations now depending on which type of solution or offering I’m trying to put forward.
Daniel: We’ve all gone down this path of how do I cultivate those relationships that lead ultimately to those clients, how many relationships do I need to cultivate to get one client eventually? And so on. We end up sometimes joining networking groups, some of which have been really powerful for me, and good, but one of the things that a lot of that networking advice also skips is just this issue of your particular role, again, it’s not the same thing as a software consultant and a mortgage broker. In fact, when you need a mortgage broker, you usually need them pretty quickly and you don’t bother contacting them two or three months in advance. You either need them this month, or you don’t really need them is generally how it works. So in that kind of environment, turn that question around to you, Steve. I know you can’t put real numbers on it, it’s gonna vary by everybody, but what do you think? If your sales cycle takes an average of three to five months to land a gig once you start talking with that corporation and you’re going through their decision making process, how long ago have you developed the relationship? Or maybe another way to ask it is all right, if I need to get one client, do I need to develop 100 relationships over the course of a year to land one client that year? What advice can you give us?
Steve: Right. We’re talking about a couple of different dimensions. This is subjective, based on what I’ve experienced, so I think we’re up in terms of how many do you need to have active relationships with in order for one new engagement to fall out, and for me, I need to have a lot, like 25, 50 active relationships ongoing. These aren’t people who I just know, these are people who I need to develop ongoing discussions with, so it’s a lot. That’s what I meant by we often underestimate what it takes. Secondarily, how long does it take? If their problems are really broad and poorly defined and I’m not really sure which I’m gonna go for and how I might plug in, it’s gonna take a long time to do that dance, to work through the whole conversation. I’m not a person who will try to work for a client if I don’t truly believe in the value. I only want to do it if we can make their life better. But in cases where suddenly a client has a really clear problem and I’m really clear on yes, I can solve what you have, those go really fast. I’ve done $100,000 engagements in just three conversations that were about an hour each, and that ends up being multi-month engagements, but that’s because both parties really understood what they needed and we found each other.
Those are the two dimensions, but the main thing is the volume needs to be a lot bigger than most of us think, the volume of contacts.
Daniel: So we talked about how to develop relationships for the long term, to hopefully expedite the sales cycle, how to make sure you know where you fall on that spectrum on long versus short sales cycles based on the complexity of your particular role, and we’ve talked about as well the one way to get clear about it is what problem do you solve. We’ll cover more in future shows. Be sure and visit ClientPipe.com. That’s ClientPipe.com.
A Friday Quarterback Call
How to Execute the Side Hustle
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Daniel: So we’re here today to talk about the side hustle, and people talk about the side hustle but if you’ve never done it, how specifically does it work? And Steve, I believe you have a story to start us off.
Steve: Yes. This is a story about a guy who went from working small jobs on the side by himself to pitching corporate clients as a team and having nearly $40,000 in the bank, all the while keeping his regular job. So let’s call him George, as in George Jetson. He had a regular full time job in the IT department of a well known large company. I met him while I was working on a project there, and the thing which connected us, why we were both on the same project, is we had experience in the employee time system that we were implementing there. And it turns out, we had both worked for that software company in the past at the same time, in the past, but we didn’t realize it. We didn’t know each other until we met on this project.
Well I had a problem while I was working on this particular job, and it was that I had a client on the side who needed a system administrator to implement this app. This is a smaller client than the full time project that I was on, and I knew that George had experience in this app. And the client really didn’t need somebody full time, they needed somebody part-time, and I didn’t have the system administrator skills that they needed to install the software. So one day over lunch, George starts telling me about some of his own side hustle gigs. I didn’t know he did that. He does some software development on the side, he does a little one on one training for up and coming programmers, and all of a sudden for me, bingo. George is really doing side hustles now, side hustle jobs, and he had the mindset for it.
So, I tell him about my client, and my pain, what am I’m gonna do? How am I gonna find a system administrator? And so I just hit him with the question. “Would you be willing to set up server environments for this client on the side?” Here’s the rub, it would probably take a day or two initially to get the environments up, which is kind of a big hit, but everything after that is pretty easy, not urgent, one to three hours at a time, pretty flexile. Man he didn’t hesitate. He was totally up for it.
Now the interesting thing is, he ended up working for this client for about three years. On and off, small requests, things like that. And he and I went on to pitch other clients doing the same thing, and I remember looking at what he had earned on the side after that three year period. I just happened to be looking one day. Turns out he had pulled in about $120,000 over a three year period, all while maintaining his day job.
Daniel: Well you know it’s interesting, I listen to that story Steve, there are a few things we can kind of extract from it in the way of sort of best practices for initiating a side hustle. And so, you might say that number one is, start your consulting practice on the side before you leave your job, obviously then you’ve got a source of revenue, you’re not jumping without a net. Number two might be to get comfortable with that feeling of working on the side over time. Number three might be looking for businesses who only need you part-time, obviously don’t need 40 hours a week. And fourth is get that first small engagement and get started. But I wanna ask you if, do you think that’s right, and also what does it take to really get comfortable with the feeling of working on the side, you know, what does that mean, since that’s kind of an open ended concept?
Steve: Those are all right, those steps. And to get comfortable, I think you have to have kind of a hunger. A hunger for more independence, “I’m gonna do what it takes to develop my own endeavors, my own professional freedom, and I’m talking about financially as well as professionally.” And George had that, he definitely had it going because he was already doing things on the side. So that was really key, but some of the missing parts was he didn’t have the opportunity until we serendipitously met, and then it kinda clicked together, so soon as the opportunity popped up, he was all over it.
But the other thing in terms of mindset that I think is really important and it shows in this story is, he was willing to take a couple of days of vacation on the initial setup for this other client, and not everybody thinks that way. I would encourage them to if you’re thinking about going down this road. But in his case, he right away, I didn’t have to tell him, he said, “Yeah, I can take a couple of days of vacation. I can take days off and go on sight to this other client, get them set up.” ‘Cause he understood, it’s his line of work, he understood after that it’s all smaller pieces. So yes, all of those factors start to come into play, but you gotta, the thing I wanted to convey, is putting it together. Thinking it through like we’re describing here.
Daniel: So I got a couple of questions about this process. Let’s go a little bit deeper. Because it all sounds good on the surface, but item one. What about this? Are we worried about spies or rats, you know when you say to somebody else, “Hey would you like to do some work on the side?” Or “I’m doing work on side,” do we worry that somebody will essentially tell and cause us a problem? I mean Steve, when I went, when I started to side hustle, I sort of protected myself. I put an entity in place. I put an LLC in place, and I told them when I came on board to my next company, that I have my own company and I doing work in the evening, and weekends and stuff, and it won’t distract from my business or the company. So that kind of gave me cover. But do you think that’s necessary, or how would you approach this?
Steve: It’s useful, and I think it’s really smart to do, although it’s a gamble during the interview process or early on in the job. You know some companies, where they technically can’t prevent it, some companies are going to shove you aside of look for an opportunity to get you out if you say you’re going to do that kind of thing. So, and in George’s case, he was already in the company. I don’t believe he was actually working jobs on the side, or maybe when he started this company, but along the way, he’s thinking, “Yeah I want to start doing this.” At least that’s what the impression was that I got from him. So one you’re in it, and you want to start doing it, you’re in your job, you can’t exactly then say, “Oh, you know now I’ve got this company on the side, I’m going to start doing this.” It sends the wrong signal in most cases.
The other thing that was a hesitation for me is, not everyone has this mindset, and I’m using this phrase, and maybe this will illustrate point, is even as a contractor, I don’t want to go walking up to people who are working in the client company in regular jobs who are interested in career survival. They wanna enhance the career, they don’t want to do anything that might cause them to be shoved aside. And so this, it works both ways. I wouldn’t want someone to be approached with this kind of question and feel threatened to even to have had the conversation, and I wouldn’t want them to go telling a project sponsor, “Oh Steve actually approached me about this, and I’m not so sure he’s a good fit for this particular project.” In most cases, this isn’t a big deal, but in some client situations it can be, and so I was definitely uncertain and that’s why I didn’t approach George right away, but then as soon as I found out he was already doing some things on the side, I like, “Okay great, this will work.”
Daniel: Well I think we kind of smell our own a little bit, so you can kind of tell the difference between a careerist and someone who probably has some game. You know I live in New York, and in New York, everybody’s got a game on the side, because you gotta pay your rent and if you don’t have something, you know a standard salary usually doesn’t do it, no matter how much they’re paying you. You’ve got goals, man. But full disclosure, you and I are partners in Free Agent Source, which is a company that allows independent consultants to work on the side, and have sort of a company entity umbrella over them, and provides some of that cover. But I wanna ask you another question about that.
So is it harder for employees, standard W2 employees, than for people who work on projects? Because you and I both did it Steve. We launched our side hustle while we were already doing project work, although I was a project employee, meaning I was actually W2, but it was understood that this wasn’t my career future. It was a 10 month project that like most projects, turn into two years, or you know double the time. But it was still a project. So what’s the answer to that? Is it harder for W2 employees than project workers?
Steve: Yes and no. So let me give the yes, it’s harder part first, and then the no it’s not harder part second. Yes, it’s harder in that if you’re a full time salaried employee, there’s an expectation that you’re basically giving it your all, and why would you be working anything else on the side. And so, whereas a project employee, or project based employee, or a contractor in both cases, it’s kind of on the table, that “Yeah this is a limited engagement,” and thinks we could end up parting ways at the end of the project. In the case of a contractor for sure. In the case of my work, it’s all above board and people understand that I’m looking out for the next engagement and sometimes there’s additional clients and all kinds of things like that.
So for full time salaried employee, there is still that sort of cultural expectation of giving it everything. Not only your mind but your emotional commitment and all of that. Now we’ve talked about in other conversations that, but that’s not actually an economic safety net, and everybody’s kind of starting to look out for themselves on the side, and I think that’s a wise way to go.
Now let’s talk about the no part, that it’s not harder. It’s not harder once you decide, “I am gonna do things for myself on the side. And there are multiple ways to go about it. We’ve already talked about it. Look for clients who need skills that you have, but not on a full time basis, and find ways that you can serve them. For example, one of the things that I’ve told people, it’s kind of useful if you find clients in a different time zone. So if we’re on the west coast and we have an east coast client, very easy to get on the phone with them in the morning before regular hours and vice versa, if you’re an east coast consultant and you happen to pick up some clients out west, then that’s awesome too, because at the end of your regular day, you can just schedule all your calls with your client in the evening. So there’s some practical things like that.
No we do have this issue of entity which you talked about. A lot of people spin up their own LLC on the side, and that’s a good experience. In George’s case, he didn’t have one but I did, so he just came in and used the entity that I was already using for this client, and that was easy, and of course he loved that too, ’cause now he’s getting into an enterprise client as a team member, you know we’re pitching together, working together, and he doesn’t have to think about incorporating. So that’s what I mean, the no part. There’s some very simple steps that are possible.
Daniel: That’s why I preferred contract work actually over W2. When people would ask me, “Well don’t you worry about benefits and permanency and all of that?” Because by choosing contract work when I had a choice between working contract and W2, it implied that I was sort of less than full on approach and that I would have other irons in the fire, and of course I intended to and so, that helped me achieve my goals. In the time we have remaining as we wind down Steve, I wanna ask you what happens if you get a bigger fish on the hook? You know you go fishing for guppies and you catch a shark? They want more hours than what you can do, so it’s not two or three hours a week, it’s they want 30 or 25 hours a week and it’s not possible. What do you do with those guys? Do you throw them back in the water?
Steve: The answer is always yes until it’s really no. We often filter out those opportunities when it might work out, and so now I don’t meant deception, I mean let’s explore this when that big fish opportunity comes up, because a few different things can happen. Number one, it might turn out to be such a good opportunity, you might end up be willing to leave your current job or your current situation or somehow wind down your current client. You always have a chance to also introduce a colleague or a peer, either to the new big fish, or to replace yourself on your current client engagement or your current job with someone else.
A lot of times a client, and this is sort of a third point, a client will come in and say, “I’ve got this really big need,” and you can sort of talk them down off the ledge if it actually isn’t that big a need, and once they hear your side of it, how this project might be executed, they might do a, “Oh, now I see, maybe it’s not such a big deal.” So there are many options that might come into play, and I would say, just keep talking until you figure out, “Oh I really can’t do this.” It’s yes, the answer’s always yes until it’s no.
A Wednesday Quarterback Call
A Wednesday Quarterback Call
The Ethics of the Side Hustle – Moonlighting and Conscience
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Daniel DiGriz: So we’re here today to talk about whether or not it’s unethical or at least ethically dubious to work on the side when you have an employer, especially if you don’t tell your employer. And Steve, I believe that you have a thing or two to say about that.
Steve Pruneau: Since today’s all about the ethics of the side hustle or what used to be called moonlighting, brought me back to the TV show. It really got me thinking about what is it that has this lingering feeling in many of us of, we should be loyal to, we should commit to, the company. Where did it start? And I think a lot of it starts in the interview with questions that sort of probe around what kind of personal sacrifice can you make? How dedicated will you be? For example, scheduling, travel, after hours work, all the things related to, what am I going to commit? What can you do for Steve? So somehow the socialization starts early.
Daniel DiGriz: Yeah, I remember when I was a younger man and I got tired of doing job interviews. They always felt like I was going somewhere with my hat in my hand, and so I started going into places and when they would ask why I’m there I would say, “I’m interviewing companies I’d like to work with, I’m here to conduct an interview.” It’s funny, actually. I got a position that way that lasted a while. They even created a job for me because they thought it was audacious and they were honored that I wanted to work there. I was like, “Yeah, this is great.” So it works. Flip the script on them. But the assumption is, no, of course we’re an impenetrable fortress and you take your hat off, come in with your application, and it starts the process. It’s the beginning when we become excessively loyal.
Steve Pruneau: Yeah. In my opinion, it goes way back to the fifties. The age of the organization man, which is William White’s book written in 1956, talking about the commitment that people make of themselves to the company. But that was at a time when we had economic expansion, long product life cycles, you could have a long run of a career, and even had pensions. So yeah, it comes from that, I think, and all those things that you talked about, the impenetrable fortress, the concepts of what can you do for us?
Daniel DiGriz: I like White’s book, The Organization Man. It kind of asserts that we assume that collectives make better decisions than individuals do, and therefore we tend to prioritize the advancement of the organization over the advancement of the individual and his or her own creativity. That becomes the source of loyalty. If that assumption is not true, if it’s not true that collectives make better decisions than individuals, and that certainly is being called into question today, then it’s not true. Then it’s certainly not unethical to shift the balance a little bit.
I want to say that not only do we see sort of the growth of flat hierarchies in corporations, and the realization that more management and more organization doesn’t make it better, but even the military, the most hierarchal traditional organization on the planet, is finding this out. General Stanley McChrystal, during the Iraq War, he wrote this book that talks about the fact that our sort of traditional hierarchy of control actually hindered the conduct of our American operations. Al Qaeda would disrupt the organized American military and win, so the solution was decentralize the authority down to highly trained individuals and teams. Again, that’s sort of what made us effective. So again, this assumption that the collectives are better at decisions comes from the same time when, okay, we could accept that assumption just because, in fact, we do get all of the benefits and support of, like the military, of the corporate organizations supporting us. We got the pension and we got the long term forty year career, so we didn’t have to question.
Steve Pruneau: And as you say, those themes have faded away and we’ve evolved over decades, so where that foundation of the relationship is kind of gone, yet we still have CEOs and the annual report, and their press releases referring to their organization how? The corporate family. All our associates are part of the corporate family to grow and thrive. And it’s that continued socialization, but not really acknowledging, “Yeah, but we don’t have the careers and the pensions from the 1950’s.” So I’m making the case, you can tell, it’s shifted. It’s no longer a two way street, in my opinion, and that changes the ethics of, “Is it okay to work on the side, is it okay to look after yourself instead of the organization?”
Daniel DiGriz: Oh, yeah. It used to drive me crazy when I would go for a job interview, and I would hear the phrase, the statement, “We are family, we think of ourselves as a family.” I’m like, “Wow, so you’re asking for an incredible level of commitment.” It was all about fit and about being selfless, like you would for your mom or your kids, your family, and what was funny about it is, I never felt that the organization was that selfless and loyal to me. It was a request that I sort of act as though I’m only as good as … It’s sort of like a Mafia family. I’m only as good today as what I’ve earned. But they want my loyalty in the same way a family would be loyal,
It reminds me, Steve, of how natural ecologies work. In a natural ecological system, it’s all about mutual exchange of value, and you can’t have it be very lopsided. You have to have similar degrees of value. It’s got to be balanced. And part of the value we give each other is commitment. So if one party is super committed, and another party not very, we sense the imbalance. It almost feels unethical. But ethical from an ecological standpoint is when both parties are either equally loyal, as one could say the organization was back in the 1950’s when there was all these extra supports build in, or equally loyal as they are now, as they are today where the relationships are more tenuous. We need to adjust our sense of loyalty, including our commitment to what hours we give the employer, and where our brand loyalties lie, et cetera, to the fact that the relationship really is more tenuous on both sides.
Steve Pruneau: Yeah. Well, there’s a veneer over that, those realities that you’re describing. And even today we have corporate events, annual parties, get togethers. My brother called this forced fun. It’s not optional, right? Even though it’s a non-work activity and we’re socializing, getting to know each other and so forth, trying to build a team ethic. If you don’t go, you’re kind of looked at as the black sheep. It’s required. So I love this phrase, forced fun. For people … When I get into a conversation with people who still have this sort of lingering doubt about, “Well, you know, I’m not sure. Is it okay?” Here’s where I put a stake in the ground, and it’s this. Just about all of our employment agreements and all fifty states recognize a legal concept called at-will employment, which basically is this. It’s the legal arrangement, it’s a term used in U.S. labor law for contractual relationships in which an employee can be dismissed by an employer for any reason, that is, without having to establish just cause for termination, and without warning. So that’s the underlying legal basis for our employment relationship in spite of however many Christmas parties or however many social events, team building exercises. Bottom line is, the relationship says, sorry Steve, we can release you at any time for any reason.
Daniel DiGriz: I actually have left employers when I needed to. I always try to give a couple weeks notice, even a month’s notice, and sometimes that was good for me, but when I needed to make a move, you need to move suddenly across the country and tackle a project that’s in process, sometimes two weeks is a lot, so I actually would say … Look, people would question the ethics of leaving without much notice, and I would say, “They can terminate me at will, without any notice and for any reason, so if we’re really being ethical that means being equal. Being fair. So that means I can leave at any time for any reason as well. And if I give something over and above that, it’s grace. It’s not a requirement.
But I think this brings us back around full circle to the point of, is it ethical to work on the side? And it’s one thing to have the ethics of whether you can leave a job without notice, or the ethics of loyalty itself, but it’s another to determine yes, you can take multiple … You can take your own sort of clients while you’re working at the company. And of course, in a previous episode we talked about the side hustle and what it is, and how it works, and how to make it practically manageable. But on the ethics side I would say that what we’re concluding, Steve, is from an ecological standpoint it’s not unethical. It’s ethical. It’s ethical to balance the commitments we make to each other and have them be equitable. From the standpoint of a philosophical premise that the organization is more effective than individuals, we don’t find that’s true. Even organizations don’t find this true anymore. And so there’s no philosophical basis for it being unethical.
Then from a legal basis, as you just cited, it’s not unethical. So when it boils down to it we’re talking about, that you’ve got to feed yourself. In a bacterial environment where every part of the ecosystem depends on exchange of value, everything has also got to eat. And you’ve got to eat. So working on the side becomes ethical to yourself. It’s like, put the oxygen mask on yourself first. I would actually reverse the question, Steve. I would say not only is it not unethical, or ethically dubious to work on the side, and not necessarily telling your employer I don’t think is required, but I would say it’s unethical not to. If that’s what you need to take care of yourself and advance your own personal creative vision, don’t assume the organization is going to do that.
Steve Pruneau: Yes. I love that. There are a couple of tips that I want to draw a distinction between the ethics of it and rules of play, or legal issues. In the employment agreement there are often clauses, non-compete clauses and non-disclosure clauses. So there are some rules of play that make working on a side hustle feasible, and so let me just mention them very quickly. Number one, non-compete, which means don’t go after clients that your company has, for your own side business. And don’t try to conduct a business or a consulting practice that is in direct competition with your company. It needs to be something a little bit different.
Secondarily, non-disclosure, which means don’t use proprietary information that your company is in possession of to conduct your own business. Both of those are legally sound. Let’s forget about ethics. That is protected. That said, those aren’t very difficult boundaries to get past and there’s a whole open field out there to conduct your independent consulting practice. With those boundaries in mind, released from any lingering, what I would say, inappropriate ethical considerations. Inappropriate meaning, you just explained why it shouldn’t be a consideration. Then off we go to, “Well, how do we do the side hustle, and how do we get on with it?”
Daniel DiGriz: With that we need to wind down the episode, so Steve will be talking in the future, more about the side hustle and some of the other issues that come up when considering it.
May contain transcriber errors.
Side Hustle Like a Secret Agent – Treating Work Fractionally
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Daniel DiGriz: We’re talking today about how to be a secret agent, and we don’t mean spying on foreign governments, but rather, how to side hustle when you’re in a traditional job. So, if you’re an independent consultant or you would like to be, how do you get work, how do you get consulting, professional consulting work on the side, so that you’re not completely reliant on a single paycheck from your employer, or you’re completely reliant on your employer and their good will.
Steve, you and I have both done this, but I think you have a story of when you were first starting out?
Steve Pruneau: Well, I do. I’d been out in the world as an independent consultant for a while, yeah, but it was my first engagement at an apparel manufacturer. It’s winding down, getting ready to take my next big engagement. In my work, they’re often full-time projects, so it really consumes your time, and it’s hard to spin up a portfolio of work. So, all that’s looking good, but I also, as you point out, wanted to develop some other clients on the side. That’s all the intellectual side, and it was working out. There was a third client, and we were just getting ready to kick off.
Now, I’m moving into this next gig, which is at a fairly well-known movie studio. One day at the apparel manufacturer, the CIO kind of could see, I was having some anguish. She was aware of the side hustle, because she had been a reference for it. “Oh, how’s it going?” “Well, how’s this all going to work out? These guys at the movie studio are pretty conservative. They really like to dictate your time and things.” And She’s, “Oh, come on. You can work this out.” Basically said, “Look, you’re not working non stop from 8:00 to 6:00 every day. You know, you’ve got lunch breaks. You can take calls in the morning, do emails on afternoon breaks, do the work at night.” That was kind of the thing that broke me free emotionally. It was a really quick conversation.
After that conversation, I’m like, “Yeah, that’s right.” Then the logistics were pretty easy to work out. I could figure that part out, but I sort of needed a kick in the pants to get it all done. The embarrassing part is, you know, really, I’d been out in the world as an independent consultant for quite a while, and I was still having this hang up. Anyway, after about a month or two at the studio when I started that engagement, it was all starting to fall in place. Even the manufacturer, the apparel manufacturer, was having some ongoing work sometimes. I actually had two side hustles during my main gig, and that really got me into the rhythm of how this works. I’m really glad I got that kick in the pants.
Daniel DiGriz: Well, you know, I think as we listen to that, you’re kind of saying, it’s not like juggling 40 balls in the air at once. It’s more like being a dog walker. You’ve got two or three leashes, but it’s something you can steer, and something you can easily control. You know, as I’m listening, I found that the question that comes up for a lot of people is, wait a minute. There’s a practical or tactical issue about using company equipment, telephones, computers. You know, some companies ban use of email for personal purposes, et cetera. You can kind of get in trouble for that. You might even sign a contract. For me, Steve, I found that I’ve done it both ways.
When I was in an organization where that was the case, I would do 30 minutes before the commute, take some basic calls or do some basic calls, send some emails. Then lunches off site, and then simply my PM hours. It kind of worked out. When I was doing, even in the same organization, more sort of travel and remote work, you know, I might give a two hour presentation or something like that. There’s lots of down time. There’s lots of, you know, three hours in between, and I’ve got my own laptop. Where I’m there, sort of sitting in a hotel bar waiting for the evening version of the presentation. What am I going to do? I’m going to make some money, because the company doesn’t need me sweeping floors right now.
I wasn’t engaged all the time. I think it is possible to be the dog walker and not the juggler, and still take into account those issues of company equipment and resources, and your accountable time where you’re on deck, versus sort of your down time.
Steve Pruneau: This is what I admire about you, is because you have that hustle in you. When we talk about hustle, you know, I know you look at it this way too, it’s a positive thing. It’s not like we’re hustling to cheat someone. It’s that we’re moving quick, we’re thinking fast, we’re taking care of multiple things at the same time. I didn’t have that mindset. I was slower to come up to speed, and that’s kind of why I say it’s sort of an embarrassing story for me, because I’m out there for a couple of years as an independent consultant. I still haven’t got this wired emotionally in my head. Once that started coming together, how it works, rather than just blindly saying, “Oh, you shouldn’t be doing this,” is blindly saying this to yourself.
Once I got past all that, yeah, it all comes together. You know, you had … I really liked your approach to it, you know. For you, it really was just a logistical thing. You didn’t buy into the whole, you shouldn’t do this, I don’t think even from the get-go.
Daniel DiGriz: Well, we’re going to do a show about the ethics of it, probably the next episode. For those that do have that sort of hang up, of is this even right? Stay tuned. We’ll be covering it. In the meantime, yeah, it breaks down, if you have that question, and you don’t have the answer. The first thing to do is … It’s kind of mood, if it’s not mechanically possible, right? We’ve all sort of, probably mixed scrambled eggs on the counter while we’ve had bacon cooking in the frying pan behind us. It’s a little bit like that. If you look at the average executive … and this is kind of touching, but not going deep into the ethics issue. If you look at the average executive in the American workplace, there is a lot of that time that it’s not like, if they’re in between phone calls or reports, they’re required to go down to the mail room and sort of pitch in and help out.
This is not restaurant work, where don’t be standing around. Go in there and wrap silverware. We’re talking about professional level work. When your brain and your talent is not being used, it just becomes a mechanical thing of, well, you’re going to be doing something anyway. It’s incredible, the number of people at work that are sort of playing Angry Birds and on their Facebook accounts. To use a more executive level, the guys that go out for the two hour martini lunch, or that sort of walk around and ask you if your TPS reports could be in a different format. There’s a lot of down time. It’s just not documented as such. I think really, it’s about being clever. If you were to add up the amount of time that a university student spends learning versus other things … If you were to add up the amount of time spent on work in the average workplace versus other things, the answer is, it’s not a 100%.
Can you take the 20% that’s left over and do something with that to ensure that … and for me, I’ll say one other thing, Steve. I was a better employee because I had a side hustle. I was more confident. I was less worried about money. I was learning business skills that served me very well in business. That’s why I was able …
Steve Pruneau: Yeah, you know, the pivotal part for me … You were talking about logistics, and how do you make it work out? You were making the argument of, there’s time in there. The conversation I had with the CIO from the apparel manufacture was this. There’s always a way. She kind of went down the road like you only kind of kicked me in the pants pretty good. I’m grateful for it, because it really opened up, like pulling back the curtain. Look, there is a way. There is a way every day. You should never say no. She went through a few examples, just tactical things of how you look at it, and what do you say to both parties? For example, “Hey, you’ve got a lunch break. You don’t have to account to anybody where you’re going or what you’re doing.” All kinds of little tactical things, so it was a real eye opener.
She didn’t lay out the whole thing, of this is what you should do. It was just that initial conversation that kind of started the dominoes in motion for me.
Daniel DiGriz: It leads somewhere as well. You know, if you have one project on the side, you really need three. You need a pipeline of future business, so if it’s going to be sustainable, you need enough that if any one person stops, whether it’s your existing employer … I was a W-2 employee when I did this, not a contractor for my main gig. If they move on at any given time, I completed the project we had early, they may not have a role for me. Also, any one of my side hustles. I knocked out web development for their major project. It took eight months. We’re done, and now I’m back to the open market unless I’ve got a couple in the pipeline to sort of sustain me. For me, it was all about, not just filling the time issue, because we’re kind of emphasizing time, but it was also just making sure that I always have a paycheck. I always know that I’m going to be okay, regardless of where that income is coming from.
Steve Pruneau: This kind of goes into the why a little bit. The side hustle is important for whether you’re a traditional employee, or whether you’re an independent consultant already. If you’re a traditional employee, a side hustle is important, because even if things are nice, and comfortable, and steady now, something always changes. Our economy ebbs and flows. Individual industries ebb and flow. Businesses within those industries shift. Eventually, something’s going to change. You’re going to get a new boss. You’re going to get acquired, or you’re going to acquire some other business that’s going to move your job around or kill it.
The second reason, so not only in income diversity, but the second reason is to learn to hunt. As employees, we tend to get really comfortable, and well, how do we keep the money coming in? We become dependent on the job, because we don’t know how to hunt. For me, it’s important to do the side hustle, if for no other reason, then to learn how to hunt. As a consultant, the economics of it are even more important, because by definition, you are engaged by your client because they can end the engagement. You got to be working on a pipeline in that case. For me, like I was saying in the story, I still had some of the old habits of not really thinking in terms of a hustle.
There was always a risk for me in the early days that I was going to show up at the end of the gig, and, okay, now I don’t have the next one. So, I still needed that mindset of, I’ve got to develop my hunting a lot better. Those are some of the whys for me, on why should you have a side hustle.
Daniel DiGriz: I would add to list of whys, so one is that you know, doing a side hustle for me really broke down the artificial division between contract work and W-2 work. I started viewing my boss more like a client, and I started picking and choosing, realizing that some of the requests that I was getting were optional. Because now it’s not about unlimited time and unlimited authority, it’s about do I want to take that on. I was able then, to do things like propose additional things that aren’t on my roster of duties, for which I got to travel more, and get paid differently, and so on, and re-negotiate the payment. It really helped me to break down that division, and it led to my ultimate why, which is freedom.
I ultimately left W-2 employment life and became completely independent. That’s what I always wanted, the freedom to define my own vocation and sort of not have a boss. The road map to me getting there was taking clients and beginning to break down that distinction between clients and employers, and the type of work that I do for each. It may sound radical, but it’s kind of an emotional and practical thing that comes up. I mentioned that there were two different contexts when I worked in a particular hospitality chain that I started out, sort of, got to be in my cubicle, and got to use company equipment. It was because I was contracting on the side, that I went in and said “Well, we’re kind of at the end of this project. I know and you know, that in couple of months, we’re kind of done with my role. So what I would like to do now is travel the world around for you, and deliver presentations.” That extended this project.
I sort of did a try out, and got that. It was just like winning a contract gig. I had all that confidence to propose an additional relationship because I was taking contract work. I got paid nicely for it. It worked out really well, and I worked there an entire another year because of that, before I have built up quite an [inaudible 00:13:15] and went on my own.
I think your end result has to do with partly, Steve, picking and choosing the projects you want, because of lifestyle you want, but I’ll let you comment on that.
Steve Pruneau: Yeah, but I needed the mindset to be able to do that. It’s interesting, things you’ve said, it’s consistent with some of my favorite career advisors who are podcasters and coaches. They say the same thing. If you are traditional employee, you got to look at it the way a consultant looks at it. So they are basically saying there’s no more distinction between an independent consultant and being a regular employees. Look at it exactly the way you’ve described them, which is, “Hey, how can I help you? How can I view you as my client?”
Daniel DiGriz: So we are going to cover more about the side hustle in upcoming episodes. We’ll do an episode about the ethics of it, and kind of dig deep there. We’ll do an episode about how specifically one does it, little bit more detail and we’ll probably plumb some examples in another episode. So stay tuned for more.
May contain transcriber errors.
What Goes In The Consultant’s Profile – Solving a Problem
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Daniel DiGriz: We’re here talking about what we should put into a professional profile such as on LinkedIn or anywhere really we list our credentials as independent consultants, even a resume. Steve, I think you have a case study of something going on right now.
Steve Pruneau: Well, I was on a project, my last project where one of the consultants it was her first time as an independent professional and she sent me her LinkedIn profile and her resume on the side because she knew I’ve been in this world for quite a long time and thinking about okay, how am I going to get the next engagement. I took a look and wanted to share with you the feedback that I gave to her.
First of all, a little bit of a background on her. She has over 18 years with one company but it’s all consulting experience. She was perfectly positioned for her current role and she was super at the app that she’s working on which is Kronos as an Employee Time App. It’s the most widely used enterprise employee time app in the US.
What I saw in her profile contrasted a lot compared to what I knew of her, which was all good. On her profile, it was mostly work history. I actually had to work to see the little nuggets that reflected what I knew of her. I called her up and spoke, shared this that okay, I’m seeing all history but I want to turn it around because I know what you can do and what you’re doing for this current client project. The rest of the conversation was all about flipping her profile and her resume to be oriented to the problems that she solves and her consulting experience, which conveys extensive consulting experience like she has conveys, “Hey, you’re getting somebody who’s going to walk into the office and know how to solve your problems.” The rest of that conversation was about that.
Daniel DiGriz: It’s interesting you know so often it feels like we’re conditioned to do this, right? I mean we create a profile and almost there are these forms. If you log into LinkedIn it’s list your previous job, list the date and we go into this passive mode, almost like we’re filling out a job application. I always tease people you know it’s like you’re applying for your own job.
But, as an independent consultant you already have the job. You just need the client. I think what I’m hearing you say is move from that passivity of simply listing your history and a list of your skills to an active approach of connecting the dots and telling us the story a little bit about why you and what problem and what solution you connect together.
Steve Pruneau: That’s exactly it. That’s exactly why I wanted to talk about this is I think it’s unintentional that so many people basically fill out their history and then it shifts the burden to the reader to figure out well can this person solve the problem that I need to solve? So many times you hear even in regular employment, people move on. They don’t pause to read through and figure it out if it’s not clear in the first sentence, the first paragraph, first few seconds then they just move on.
In the case of consulting and contracting, even more so. Really got to be straight to the point of this is what I do, this is what I solve, this is why you want to engage me and all this bit about history and what you’ve done in the past becomes almost irrelevant except for the occasional follow up, okay tell me a little bit of what you’ve done but that’s conversational, that’s not so much on your profile. So absolutely, that’s what I conveyed with her is let’s amp up everything I know about you, all the good things that you can do for people and I want to minimize eliminate a lot of your history.
Daniel DiGriz: Well it’s interesting you look at the average LinkedIn profile and all of the length, the longest portion of it is the work history and descriptions of what you did at certain jobs. I find that the title and the initial blurb and the introductory paragraph are about as short as can be. I think we’re saying it should be the other way around.
When I look at how to write a LinkedIn profile, I think of it as the same way that you would write a case study. A case study starts with a visionary goal. What did this client want to achieve? You can conjure up a visionary goal of what your potential clients want to achieve. This is the basic story arc in any story. Professional storyteller and corporate storytelling starts with the way we want things to be. Then you go right to a pain point but this is what most people struggle with and why you need me. This is the set up of the problem. You go from visionary goal to the pain point and then there are hurdles, why can’t you just solve it in the most knee jerk just do it yourself or just hire a freelancer, just do something simple.
If you get through that you’re halfway through the story and then you get to the why you chose us, which is or why you choose us if it’s a LinkedIn profile instead of a case study. That has to do with things like you pointed out with her. Eighteen solid years of consulting experience, I know how to step in and solve your problem. Eighteen years of experience on this rather obscure app. That leads you into the information and the work history as part of that why but not the sine que non, have you done this history. You’re now connecting the dots. You’re creating a presentation of where this information fits in the narrative because you’ve started the narrative and it brings you full circle back to that visionary goal just like when you’re completing a story and you come to rest.
Steve Pruneau: Yes, yes and there are so many people out there that I see who have value to deliver. The world needs what they have but it’s not coming across and so it’s not even a mistake really, it’s just a shift in the way we think about it. I don’t know what the actual reasons but I have a hunch about my own reasons, when I presented myself this way. Partly cultural, partly 20th century corporate paternalism of letting somebody else figure it out. They’ll take care of us if we’re an employee but yeah for me it was a big shift in thinking. Let me solve it for them. Let me be very clear so that it’s easy for the reader to figure out where I’m going with it and everything else is just secondary. Everything else being your work history.
Daniel DiGriz: That’s why I’m so interested in corporate storytelling in my own practice area because it really is a way of just presenting ourselves as problem solvers. I really like the idea that any of us can do that. I think Steve what you’re attempting to do here is just carve out in the series of podcast episodes, what are the initial core skillsets for an independent consultant to have.
We started first with how do you get out of your job and find work for yourself. Then we went into the first hurdle, the first trap or mud pit that happens in The Princess Bride. Why are we trained to be dependent on other people suddenly you find out you need clients. Then in the last episode we did well is selling really a specialized skill or can we all sell? Can every consultant connect these dots? Now, we’re on the final bit, which is for … Not that we’re going to stop the podcast by any means but this completes a sequence of all right so I know how to connect the dots, now how do I present that? How do I tell that story arc to the public in terms of the branding that I put out there? This is the marketing feather on that sales cap.
We should point out before we close the episode soon that doing this way, if you just write your job history you’re not very searchable in LinkedIn but writing out the narrative in a way that’s compelling and covers these points of the visionary goal and the pain points and the hurdles and the why somebody chooses you, then it gives them the information. It gives you a greater number of search terms that tend to come up in those searches that are highly relevant to how you want to position yourself in what you do. Right away, my experience has been, I don’t know about you Steve but when I redid my LinkedIn profile I started getting a lot more views per day and I was lucky to get that many views in a week when it was just a resume.
Steve Pruneau: Yes, it was a big shift for me and one of the internal, just to close it out, the one of the things that I put aside about myself is this. My LinkedIn profile, my professional profile, how I present myself to the world is not my whole self. It’s certainly not comprehensive about me. I don’t need it to be comprehensive in order to have a professional livelihood that allows me to thrive. I only need to convey what is helpful to other people and I think at least for me, that was a distinction that really freed me up, allowed me to be truly searchable on professional terms that other people find useful.
Daniel DiGriz: Well same here. I had a bit of an OCD obsession with being complete in my profile and it was actually you, Steve, that made the point to me that really this is your brochure. In your brochure, you don’t necessarily have to put the square footage of the closet. You can leave that information out and let the information that is the high point, how you solve the problem and what the immediate result and that visionary result is for the client, how that rises to the top.
By having the right information featured, it just lets you cut out all of the trivial information that by including it reduces all the information in your profile to the status of equal.
This has been a really good episode Steve and we’ll close it out early. This’ll be a short one but I think we’ve touched on the key points.
Steve Pruneau: Thank you, Daniel.
May contain transcriber errors.
Why It’s So Hard for Consultants to Find Clients – Part 2 – Learning to Sell
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Daniel DiGriz: So we’re here talking about whether or not selling is a specialized skill for sales people, or a core skill that every independent consultant needs to develop and learn. Of course, this comes on the heels of a couple of our other episodes and Steve, I think you have a thought or two about this right at the top of the conversation.
Steve Pruneau: Well I did think sales and selling were specialized skills that only certain people, certain personality types or somebody who had magically been ordained into the society of professional sales people. I bought into that whole myth for a big chunk of my career, both inside corporate life and also when I was only my own as an independent consultant.
As you can imagine, believing that, I went through some petty lean years and, eventually, [inaudible 00:00:50] got lean experience, not finding clients easily or often enough that finally broke me and I said, “This has got to stop. I am going to become a professional, proficient in sales and selling.”
At that point, I went to see a friend of mine who had made his entire career in corporate sales. He led corporate sales, worldwide, for a multi-national corporation, that was his last substantial corporate job. And he was able to exit the world of traditional employment early as a result of his success.
So he understood my situation and heard my case and he pulled back the curtain right away and said, “Look, there is no magic to it. It’s a myth. There is no personality type.” And he went on to tell me about one of his best sales people at one point was a former engineer. Right away you had this image of a nerd, analytical, you know, all those adjectives we use for people who have spent their lives figuring things out.
His point was, this person was proficient in selling because they could watch for problems and understand them and summarize them back to their prospective clients and, interestingly, that made a connection with clients more often than people who didn’t have the background that he had. And his point was, that establishes a relationship of trust and understanding and that’s the basis of selling, is trust, understanding, between each other and then the sales person understanding their problems so they can then go on to solve it.
That was it. That nailed it for me. That was the emotional side for me. It basically gave me the release, the permission, I don’t know, that’s what I needed to hear. Essentially, they didn’t actually say this but, essentially, he was saying, “Okay, you can do this because you’re that kind of guy so now go forth and sell.” and that’s what I’ve been doing ever since.
For me, sales and selling is a lifelong journey of continuous improvement and so, basically, there is no magic to it. Just watch for problems, give the other person our full attention and listen to what’s going on with them and repeat back what we think it is and then solve it.
Daniel DiGriz: It’s interesting, Steve, that I hear a couple things in that. I think we talked a little bit in the last episode about this problem solution approach being the core idea in a sales relationship, that it really isn’t the province of professional sales people. It really is anyone who solves a problem. So an engineer is a perfect example.
But you talked about taking somebody’s problems and customizing a solution to them creates a relationship of trust, but that hinges on having a direct relationship. And what I find most telling is that you’re also saying that being a salesperson is merely about indicating having an authentically meaning, that there will be a direct relationship between you and the other person.
And actually that hampers a lot of corporate sales guys. Am I still going to deal with you when the project takes off and the answer is often, “No, you’ll be dealing with somebody completely different.” And that’s often the point where we lose the sale.
I know that from my own experience as a corporate sales guy. It’s like alright, sorry, Daniel, I’d love it if we were still talking with you during the whole project, but if you’re not going to be there, I would like to talk to the people I’m actually going to be talking to.
The other point that I want to make is just that I also hear a little bit in your initial framing of the problem that a lot of people say, “I’m not a sales guy.” It almost implies a dislike of salespeople and that I really think is going on there, and I think you have some thoughts about this too, is almost a moral qualm with selling. Almost a perception that selling involves some kind of thing that morally we can’t countenance if we are straight shooters. And I wonder if you could address that.
Steve Pruneau: Well, I’m not in the camp of disliking or having some concern about salespeople, but there was a time in my life when I wrongly believed, and this is why I emphasize the word “myth”, I wrongly believed that selling was about getting people to buy things that may or may not be good for them, but it’s good for the salesperson or the company. And that’s not it at all. That’s what the conversation with my friend was about.
True professional selling is finding people who need what you have and showing them how to improve their personal life, their professional life, you name the problem. That’s genuine selling and that is, if you talk to any sales professional worth their money, it’s that, that they are truly genuine.
Because they know if they talk somebody into their product or their sale and the other person really doesn’t need it, that’s not a longterm loyal customer and that’s not a genuine sale. That’s just a con. And so yeah, absolutely, I think, if anything, we should unpack this point, this belief for some people, that it’s all about a genuine exchange of value and nothing about talking someone into something.
Daniel DiGriz: It’s interesting as I hear you talk about it, I want to pull out this concept or phrase that you used, which is showing them how to improve something. I actually, I think that’s brilliant. I wouldn’t have thought of that. We use this term of pairing somebody with a need. They have the need and I have the answer. They have a problem, I have the solution. But this gets down to the nitty gritty. Showing them how to improve something. And I suppose, I would say to somebody who was struggling to be effective as a salesperson, without becoming a professional salesperson, I would basically ask two questions. What do you know how to improve for someone else? And can you show someone how you can improve that? If you can answer those two questions, you’re selling, essentially. That’s really the core of it. All the rest of it is fluff and everybody knows there’s a formula. Like let me uncover your need. Let me find your pain points. Let me understand the hurdles of why you didn’t go with somebody else and what concerns or objections do you have?
Of course, I’ll answer those and belay those concerns and overcome them, but that’s just a dance we do. Like a formal dance. If you really just want to get out on the dance floor and boogie, it’s what do you know how to improve and can you show someone how you can do that. If you can answer those two questions with I’ve got something and yes, I can show them, you can totally sell, and, in fact, that’s better than 90% of the people who attempt to be professional sales people.
Steve Pruneau: And here’s the thing. I would suggest to you, whether, of all the people on LinkedIn who have a professional skill of some sort and that would fall into the category of consulting. It doesn’t matter what it is. Whatever your industry is. Pharmaceuticals, some sort of manufacturing, services, health care, just about every person is in a professional skill of some sort can solve a problem. You can see it in their LinkedIn profile. Whether they’re an employee or an independent consultant. The difference is simply, like you said, conveying it. So it’s more an art of conversation and learning to listen, but all of us can sell because we know how to solve people’s problems and that’s a big shift. And that’s the reason I wanted to talk about this today, is because there are a lot of people who either want to be independent consultants or already are who may not yet have accepted that mindset of, “Oh yeah, I can solve people’s problems.”
Well, if you can, now it’s just about finding those people and listening to them and then translating back what you heard their problems to be.
Daniel DiGriz: I think that’s where we solve that main moral qualm. People think there’s a fakery in selling. You have to couch what you really want and figure out a way to persuade the other guy and really, you want to be able to ask the other person “Do you want to partner together?” “Do you want to work on this?” I think the answer to that authenticity, how are we authentic as sales people, as consultant sales people is that we do really focus on what can we improve? What can we help with? And then can we communicate it clearly? It’s the choice of the language. So we don’t have to learn a specialized sales vocabulary.
Now there’s another aspect of this that I like, which is, you know, when I was a kid, my dad always worried that I wouldn’t cut it in the world and I think this is the fear of a lot of dads. “I’m sending you out in the world, son. You’re nearing 18, are you really going to be able to take care of yourself?” And I remember that he said to me, “You need to learn to do some basic things. Boil an egg. You need to learn to be able to buy something green and balance your diet. Don’t live off Kentucky Fried Chicken and boiled eggs. You need to be ale to change your oil. There’s a few things that are basic, you need to know how to measure something and cut something, that are going to serve you well. Let me teach you how to hammer a nail.”
And, in essence, I think, for me, that’s where selling comes in, is you don’t have to be a professional salesperson to learn how to do the basics, how to hammer a nail and boil an egg from a sales perspective. But it is something that we all need to learn the basics of. I think that’s what we’re talking about today.
Steve Pruneau: Yes, I wish, I hope, this becomes part of our national conversation. Right alongside the whole question of jobs because many of us are still in the habit of putting up our work history and letting someone else figure out whether we’re a fit. And as independent professional consultants, our job, that basically shifts the burden to the other person and our job is actually to solve people’s problems. Don’t make the audience figure out whether you’re a fit. Tell them, explicitly, this is what I do. Nowadays when people phone me up, and occasionally there will be an intermediary, some other salesperson who wants to get a commission. I’m okay with that because I haven’t met their client and there’s an opportunity to be introduced. And I tell them all the time. Let’s just have a conversation with your client. I don’t want to work on a big project where I’m not a fit. They’re often disarmed and surprised by that, but it’s true. I don’t want to be a part of a project that’s not a genuine sale. It’s awful. It’s a terrible way to work.
So yes, coming back around to what you said, in my opinion, this is a prerequisite skill, just like cooking for yourself. It’s part of our livelihood, how we take care of ourselves.
Daniel DiGriz: Yeah I love … It’s almost radical what you’ve said, that the national conversation needs to include more about how to get clients for yourself, not just how to get a job and then we rely on all these … I mean, and, in fact, it’s becoming less and less effective.
I mean, you upload your resume to some kind of database along with 30,000 other people applying for the same job. Without something beyond that, the job’s pathway is a little bit hopeless.
You’re underscoring that sales is key to personal empowerment. Not passivity, but expressing this is what problem I solve and this is why I’m uniquely positioned to solve it. And this is a point I often make to people when we’re writing a bio, for instance, a professional bio from somebody, whether it’s on LinkedIn or on their website or whatever, that a bio is a proposal, that what you’re really explaining is not really where you grew up and what your favorite color is, it is what problem you solve for people and why you are uniquely positioned to solve it. Why you and not somebody else. So in that sense, even from that basic standpoint, if you can explain that, you can sell.
Of course, the point of our podcast today is that everyone can sell. And as we wind down, we just want to underscore that our answer to this question is that this is not the province of professionals. This is rightly the “how to boil an egg” for every independent consultant out there.
May contain transcriber errors.
Reduced Support Hours for Holidays
We’re going on a much-needed trip to hike among the redwoods. We’ll check support daily but, keep in mind, a response might take the full 24hours we aim for.