Consultant Leverage

The fundamental strategy behind consultancy is the sale of your expertise, knowledge, or skills in the form of services. The price charged is set by calculating the value to the individuals of the time spent, plus an additional amount to cover the costs of running the business of the consultancy, and a further amount to ensure an acceptable amount of profit is achieved.

If you are a single, individual consultant, there are natural limits to how much time and effort you can spend on work, and therefore there are limits to how much the business can grow, and how much profit can be made. Some consultants are happy with this state of affairs, being content to spend time on activities they enjoy. They perform the roles they wish and turn down those they do not, not concerning themselves with growth beyond the personal. However, if you do wish to grow a business beyond these limits, then you have to work with others to magnify your skills. A small amount of personal effort in the form of direction, can be turned into a large amount of team effort when other individuals are used as levers to magnify the output. Within consultancy, this is the concept of leverage.

The Consultant Leverage Spectrum

The Consultant Leverage Spectrum is a framework developed by Jack Gabarro that outlines the different levels of value that consultants can provide to organizations. The spectrum is divided into four categories: Leverage of Expertise, Leverage of Networks, Leverage of Resources, and Leverage of Processes. Each category outlines the different ways in which consultants can add value to organizations, from providing specialized knowledge and expertise to leveraging their networks and resources to help organizations achieve their goals., the Consultant Leverage Spectrum provides a framework for understanding how consultants can add value to organizations.

Within it Consultancies fall on a spectrum that includes four types – rocket science, grey hair, procedure, and commodity. The amount of leverage you require or can apply, depends on which of these four consultancy types you favour and aim to provide.

Rocket Science

A rocket science practice addresses idiosyncratic, bet-the-company problems that require deep expertise and creative problem-solving. This requires large amounts of your time and the least amount of leverage.

Grey Hair

A grey-hair practice provides seasoned counsel based on experience. It is possible to leverage this type of consultancy but only carefully and with lots of collaboration.

Procedure

A procedure practice offers a systematic approach to large, complicated problems that may not be cutting-edge but require attention to a plethora of considerations. More leverage can be applied to this type of consulting, focusing on the repeatable elements performed by more junior consultants.

Commodity

A commodity practice helps clients with relatively simple, routine problems by providing economical, expedient, and error-free service. Large amounts of repeatability mean the least senior oversight and the most leverage possibilities.

Gabarro argues that professional service firms need to have a mix of these different types of professionals in order to thrive. However, however there  is a risk that is that in seeking to serve all of them, a Firm jeopardizes its identity. Rather than be a jack of all trades and master of none, successful firms focus on one or two of these profiles and commit to being “famous” for value delivered and clients served.

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