The consulting market has enjoyed a period of strong growth over the last decade with a number of professionals entering the market, offering their services and expertise in many diverse and challenging areas of business. Mike Johnson of Futurework Forum is a leading consultant with a long history and a wealth of knowledge in the field. Mike shares his thoughts, lessons and opinions learnt over the years about the consulting business with GBN.
The FutureWork Forum is a global think tank of more than 20 independent consultants devoted to reviewing, researching, reporting and responding to issues around the future of work. FutureWork Forum partners use their knowledge, experience and unique access to help organizations in both the private and public sector solve tomorrow’s work problems today. One of the organisations Mike is involved with is the University of Business and International Studies (UBIS), a Swiss private university which is part of the US Hamilton White Group. UBIS is centred in Geneva, Switzerland, arguably one of the most influential business capitals of the world. Quentin Randaxhe from UBIS also explains his university’s work with Mike.
What is the relationship between you, Mike Johnson/FutureWork Forum and UBIS ?
MJ: Futurework Forum is an Independent Group made up of 26 independent consultants, mainly in Europe and the US, all with a wealth of experience in multinational corporations who had an interest in starting something for themselves. They bring a wealth of experience around people; how they work, why they work, where they work and what motivates them. Futurework Forum joined with their partner, UBIS, as they have the ability to bring people, build conferences, handle registrations and do all the things that Futurework Forum do not do. Futurework Forum provides individual and speakers with individual expertise and talent.
QR: UBIS is a private university linked to a private equity fund that invests in education (they have also invested in three universities in the US). UBIS want to be different to other universities as often MBAs are not linked closely enough with the business world and the preparation of students for the job market of not just today, but tomorrow. The tie up UBIS has with Mike Johnson and Futurework Forum helps ensure they provide the right education for when students enter the workplace.
Originally starting in 2006, UBIS currently has 200 students and a total of 30 international partners. The UBIS educational program is a distance learning model, and is constantly evolving with the majority of the students coming from emerging countries. Programs are also run inside emerging countries, including China, Ghana, Russia and Vietnam as that is where the future is.
Futurework Forum has been set up for 10 years now. What steps did you go through to get into the business?
MJ: Futurework Forum is really a loosely connected network of professionals, who formally meet 4 times per year to discuss business opportunities and share ideas. There is no formal office as such and really each person is involved in their own projects, but sometimes 3 or 4 of us do work together on certain projects. I am the chairman and will continue to be so until someone else volunteers ! We are also conscious of getting younger people involved and having a balance in the business. Consequently, the youngest is 29 and the oldest is 75.
I originally worked for a large US Multinational and wanted to get back into journalism, but this never transpired. I left the company and they gave me a contract to do some work. This contract led to something else and after four to five years, I had 14 or 15 people in an office in Brussels doing work for US multinationals. I first started to work for myself in 1982, so I have been doing this for a long time, employing small groups of people on specific projects.
What have been the key lessons you have learnt over the last 10 years ?
MJ: There is one very important thing. Everybody that tells you that they will give you work when you go out on your own, does not do it. You are very much on your own. Forget these promises….it does not happen!
Other key pointers are to have some money in the bank. I would suggest that you have enough money to survive for 6 months, with a year even better and you need a contract from somebody. The most successful people I have seen entering the field are those able to take what they were doing from inside a company and leverage this into a contract for 18 months, 2 years, etc as a consultant. This gives you the basics to operate from. That is the “bank”. Anything else you make is a bonus that can be used or saved away for the ‘inevitable’ quiet or slow times.
In my book “Starting up on your own”, there is a chart and a test. Some people are simply not suited to setting up a business. Some people cannot multitask, for example. You must also be able to sell stuff. If you are an engineer, do you have the ability to sell that product? Some people don’t like to sell, etc….but it is important. Also, suddenly you have to do all manner of things as there is no support function. For example, you might run out of ink cartridges. You have to go down to the store yourself and purchase these things. You have to book your own travel and so on and you need to develop these skills.
Also, don’t forget to send invoices. Cash flow is still the biggest killer. All these things are critical and people are often not that good at them. I believe these things should be taught at school. Entrepreneurship should be taught from an early age. We all need to learn to be more independent. In business, you can be a genius and still fail if you are awful at working for yourself.
QR: UBIS also see a lot of students with good ideas and who want to start a company. They are taught and helped to understand, appreciate and benefit from expert knowledge from individuals such as Mike Johnson to make their businesses successful.
In the current challenging economic environment, what has been the impact on your business and is the consulting business changing as a result ?
MJ: The current environment is more challenging than it has ever been.
I would say that if you have been in big business and want to be a consultant to big business, that is very useful as you understand the dynamics and how things work. If not, it can be very hard to pitch to these companies as you do not easily appreciate budgets, how systems are structured etc. This is vital to know otherwise you can lose a lot of time.
In some cases, consultants actually make a better living working with smaller and new enterprises which don’t have many staff and therefore need people from the outside world. For most consultants, it is often a safer and more creative place, e.g. Germany is a good example as 90% of companies are small / medium size enterprises and often they don’t always have all the resources required.
Personally, I am not doing anything I was doing 20 years ago. This is the other key. You have to reinvent yourself. You must change as the markets change, so you must move with what the client wants. Sometimes, they do not know what they want to buy – that is the trick of the consultant. These days there needs to be a bottom line impact also. For example, if you are an HR consultant and say “if you do this…”, then you also be better able to say,”… this will save you 10%”. Just doing something because it is a good idea does not work anymore.
Competition is endemic to the market and there are cheap people and expensive people. Cheap people are not really cheap, of course, as they take longer to do things in the end. If you are good and there is pressure on your fees, then it is also key to justify these by fighting back very strongly, because once they are cut, you cannot normally put them back up again.
In the past, when staff were made redundant, they became headhunters. These days they go into coaching, but what they are really doing is marking time until another corporate job comes up. This can be disruptive in the market, but they are a fact of life.
Finally, companies are getting better at employing consultants. They know what they want and they know how to bargain as they don’t want to have the fixed staff base and cost. In my new book, I also look at how companies get and need to get a lot better at working with outside suppliers as they cannot afford to do things on the inside, so need to know how to get hold of the right people.
In your experience are you able to work part time as a consultant? Would you recommend this to start ?
MJ: No. I don’t think I would. I don’t think it shows you are serious and often, neither will others. It takes a lot to get yourself going.
What is very successful is two people wanting to do something together who are aligned toward a goal, with one working for a corporation so that you have the income security.
I have also seen a lot of great partnerships that look good on paper, but then something changes the dynamic. I saw one partnership where one individual inherited a lot of money and decided he wanted to play tennis every afternoon. He lost interest in the business.
Also, if you want a 9 til 5 job and don’t want to be disturbed on a Saturday, then you are not going to make it as an independent. You can’t do it as there are too many things going on. A lot of the things I have seen also come down to the individual. One guy works hard and takes regular breaks overseas, but will readily call on a Sunday as he may, for example, have an idea. To start with though, I don’t think you can do that…..not until you are established.
How long does it take to get established in the consulting world? Is it best to focus on one country / region to start with?
MJ: I really believe it depends what you are doing. You may be working in a very specialised market with just 10 companies globally, which means you will have to travel around the world. The more specialised you can be, the better the chance of success. The actual country/region does not matter very much.
I would also say that 20% of your time needs to be spent on marketing and developing yourself for the future and for positioning yourself for future business. Even if you are the biggest genius in the world, there will come a moment when it is budget-cutting time .
A lot of people also make the big mistake of getting 90% of their income from one client. Personally, I suffered when a big company client was involved in a big merger (which means in reality some form of takeover) and I was on the wrong side. Two weeks later this huge chunk of business disappeared, which we had had for 6 or 7 years. You get complacent. Sooner or later something happens, the CEO moves on and a new guy comes in with his team and the dynamics change.
What are the real costs of starting up a consulting business ? What aid (financial and resource wise) is provided by the state / authorities in Switzerland ?
MJ: You could be very basic about it and say costs are close to zero. You just need a place with a telephone and a place to hang your hat. It can be as simple as you want to make it. You need to think about IT of course, but you may not need to register the business to start with, meaning you can focus on getting the first client and then register / structure yourself afterwards.
It is a question of commitment. I said that in my view, I don’t think you can be a part time consultant. In terms of costs, it is what you make it. You may feel you need a suite in the Beau Rivage hotel as you need the cache. That’s fine, but it may not be necessary for your business.
I started in the spare bedroom. I then rented an apartment next to my apartment, so commuting was zero. I then had a big town house in Brussels, living on the top floor and working on two of the lower floors. Now, I have a purpose built office across the driveway from my house. I also make sure I have a good chair and a good work environment to inspire me, with a good view if possible (even if it costs more!) So, for 30 years my commuting has been basically zero. Firstly, the amount of money and time saved has been enormous. Secondly, when everyone else is on the tube/tram, you are there and can work. Of course, some people also need strict house rules if working at home.
Knowing now what you do, what would you do differently when setting up a consulting business ?
MJ: It depends on who you are and what you want to do. It is a question of individuals. I like the flexibility and also having different clients as my boss. The fun has been the interaction with different people and getting to know different people, coupled with the international aspects of business. One of my consultant friends has all his business within a 10 mile radius of where he lives.
Make sure what it is you want to do and make sure everything is clearly defined before you start. Things also have changed dramatically from when I started and will continue to do so.
What are the golden rules of starting a consulting business ?
MJ:
Everybody knows 50 people. Start with those 50 people. If you cannot make a business out of those people then there is something seriously wrong and you won’t make it. Our 25 consultants may know 100 good people, so instantly, we have 2,500 people to connect with. As a rule start with people that know you and who trust you.
How are you marketing your business ? How is social media (Facebook / Linkedin) influencing your business ? What is the conversion rate: prospective vs. actual clients from these platforms ?
MJ: I find social media platforms a waste of time and quite annoying. I have a headhunter friend of mine and Linkedin works as it suits the model of what he is trying to do. In my case, it does not. Again, it depends on what kind of business you are in.
In terms of marketing, I write articles and some books on occasion. Those things raise your profile and get published through your publisher and social media anyway.
Your website has become your corporate brochure. The number of people I see with stale information and old entries is high. Often stock images are prevalent. People don’t refresh their websites enough and they should. Websites are a cost that you need to invest in.
You need a good IT guy as otherwise you will waste time doing stuff that distracts you from your core business. I have worked with two brothers for 15 years and they are very good. I call and they come in and help me. I can’t afford not to have them available.
Secondly, I also believe that you need a good accountant. I don’t want to lose time on this area either, so I get professional support. Spend as much money as you can afford to on these two things! If you are a professional, then hire the right type of professionals and get the right guys for your type of business.
What is the strategy going to be over the next 10 years ? Are you perhaps working on a new book that you could tell us about ?
MJ: I have a new book coming, yes. Frankly, we will be collaborating more. We are a loose group of people collaborating together, but we will not coordinate as such and build one “brand”. Our current brand works quite well, while staying decentralized and flexible. All of us have our own organisations that work quite well, so the majority are successful in all different types of things.
One other area we have been approached on is being able to look at and contribute to employment debates at the European Level. This includes areas such as getting people into work, expert witnesses and some work with the OECD. We also have done some pro bono work in AIDS and also with some other organisations, including the International Red Cross.
In conclusion, what are the key lessons or sayings that you would share with someone going into this market ?
MJ: There are none particularly in addition to what we have gone through already. I would also urge you to rate yourself by completing the short questionnaire at the start of the book “Starting up on Your Own”. This will give a quick assessment as to whether you are suitable to start up on your own or not. One area we have not touched upon also is physical health, which if you are unwell may impact you and your environment, making things difficult or some fields of work inappropriate. If you are travelling, you will need the stamina to travel, for example. If you have four children and live in a 2-bed apartment, you probably aren’t going to be very good at doing this. It’s about your reality and environment.
Finally, try and get a contract to start off : 12 -18 months if possible !
The WorldWide WorkPlace : Solving the Global Talent Equation - Mike Johnson
Book description:
As you read this, the concept of work is changing. In Western societies (a number of them plagued by mass unemployment) many college age kids are being trained for jobs that just won’t exist by the time they graduate. Extreme employment problems are forcing many would-be workers to totally rethink what their “career” will be. Elsewhere, in emerging “tiger” economies like India and China, massive social forces are already causing ripples in the national fabric. Indeed, in China the new skills council already worries about who will have jobs and what those jobs will be. Elsewhere, newly emerging “catch-up” countries in Eastern Europe and beyond are seeking to find new ways to gainfully employ their people while avoiding making “copy-cat” mistakes of those in the West. In Africa, new opportunities are emerging that will change how the world sees and relates to this vast continent. All this turmoil is stirred further by an ongoing, ever expanding technological revolution that is shrinking the physical world and making it easier to interact with people we may never physically meet. This means that the 21st century WorkSpace is just that – a “space” that we occupy somewhere for some time. Most of all, this “space” is global in its scope and impact. Indeed, the only permanent thing in this “WorldWide WorkSpace” of tomorrow (that has already arrived today!) is our ability to reinvent that “space” to meet changing needs and circumstances for ourselves and the organizations we associate with (as full-time employees, contract workers or outworkers and suppliers).
Taking these fast emerging developments as a backdrop, this book describes how individuals, groups and organizations need to plan and prepare for the complete and ongoing evolution of the “WorkSpace.” The aim is to give readers a practical understanding of how to capitalize on these changes for themselves and their organizations.
One thing I always say is that if you are not going to go into this with real energy and enthusiasm, don’t start. Enthusiasm will get you through most things. If you are just doing it for the money it probably won’t work.
There is only one reason for this Introduction - to save you money, time and a load of grief. All I want you to do is quickly work through the short test below. If you score under 60, put the book back and go out and seek a different career path.
Be as honest as you can in answering the questions – they are the key to what happens in the following chapters. We get into more detailed questions later in the book, however, this quick test will tell you three critical things about working for yourself:
If you don’t match up to this, there is a very serious risk that you will fail. Countless people try to go it alone and don’t make it. They may struggle for a few months or even a few years but in the end one of those three legs of success above collapses under the pressure.
THE `GET UP AND GO-IT-ALONE` QUIZ
This is to be completed by those wanting to go into the industry.
Of course, there are lots of other criteria to base a decision on, but these 12 above will give you a quick guide to whether you have the personality, effective support and the required skills to make a go of it. If you did score in excess of 60, then let’s move on and begin to outline all the steps you are going to have to take to make sure that you succeed. Not only succeed, but actually have some fun doing it.
Pre-Order Mike's New Book Now! The WorldWide WorkPlace : Solving the Global Talent Equation Published Spring 2014
