I am back to one of my favourites: measuring value. One of my oldest Daily Thoughts told this story.
A rich American lady visits the most famous hat maker (milliner) in Paris. She sees a beautiful, exquisite, long ribbon and immediately falls in love with it. She asks the milliner to make a hat for her. The hat maker takes the ribbon in his hands, does a few twists with it and creates a stunning hat. Brilliant! The lady comes back the following day and grabs it immediately. Exquisite! How much is it? she says. Five hundred Euros, the hat maker says. Five hundred Euros! the lady exclaims, but, it’s just a ribbon! Madam, the hat maker says, the ribbon is free.
The consulting world, where I navigate today, is a terrible place for hat makers. I’ll explain. ‘Consulting’ has developed a market focused on the quantifiable delivery of ribbons (pink, red, small, big, 20, 200, 1 consultant, 3 consultants, 300 consultants, 300 hours etc.…) ‘Delivery’ has become part of the language.
I am a Procurement Department’s nightmare because I tell them that I don’t deliver anything. As in Pizza delivery. I challenge the daily rate, the number of days, the number of members of my team involved, the quantification of the ribbons. We provide the knowledge, the experience, the expertise and the skills to work together with the client focused on outcomes. We work on a whatever-it-takes-to-outcomes model. And when I tell them that a one hour keynote and a three hour extended keynote costs the same they look at me in disbelief.
Madam, the workshop is free. I can understand that if you sell boxes of biscuits, you would do so on the basis of the number of boxes and the number of biscuits, and, perhaps, the cost of the lorry to get the biscuits to you. But I challenge the application of ‘the delivery model’ to strategic advice, leadership development, organizational change, organizational strategy and working closely with a team to make it successful. But this is a 20 pages report! Madam, the report is free. But this is only half a day with the team! Madam the meeting is free.
Am I alone in this? I feel strongly: never sell your time. Why is it so hard to understand in the consulting world? Surgeons, schools fees, works of art, brand creation, executive search, there are examples of work done and priced on value, not on effort and ‘units of work’.
Would you like a 3 hour appendectomy or a 1 hr one? Would you like the full education or half education? Would you like any creative director needed for the new brand or do you want the brand to be created by one project manager? The real Matisse or a photocopy?
Just because the number of hours, number of days and number of anything is easily quantifiable, whilst ‘value’ is much harder to measure, it does not mean that we have to take the easy route. But Big Consulting has educated the market with a military manual: 200 MBAs will descend to you for 30 workshops, 15 countries, 10 reports.
Starting with ‘the value question’ is the right start: employees, partners, activities etc. When I got immersed in Decision Analysis many moons ago, I learnt that people can distinguish well between preferences, and that, in doing so, they are ‘measuring’ their reality with great accuracy. ‘I prefer this kind of value to that kind of value’ is as solid as a numerical comparison. What is the value of doing A vs. doing B; of doing X vs. not doing it at all. People get these things very well.
The Parisian ‘Madam the ribbon is free’ approach has always kept me on track to keep focused on value, to see it, to smell it, to decide on it.
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