LEADERS IN CONSULTING
The “LEADERS IN CONSULTING” show is dedicated to helping Partners and Managing Directors of Consultancies grow their business faster.
If you want to learn best practices from other Leaders in Consulting, this show is for you.
Each episode features an interview with a consultancy Partner, Managing Director or Thought Leader, discussing topics like:
1. How to set up a winning strategy for your consultancy
2. How to upsell and cross-sell more
3. How to win big whale leads and convert those to clients
4. Hiring and keeping valuable team members
5. How to become a thought leader by building your personal brand.
LEADERS IN CONSULTING
Ep. 140 – 16 Years Of Building Recurring Revenue: An Ex-PwC Director On Why She Stopped Selling People – with Jill Foley
Use Left/Right to seek, Home/End to jump to start or end. Hold shift to jump forward or backward.
Jill Foley, Founder and Chair of On3 Partners, built a licence-based revenue line that now makes up 40% to 50% of her business, without growing headcount to do it.
Her diagnosis: most firms trying to build recurring revenue start with the technology. Jill started by identifying the unmet business need and building a methodology to tackle it. Only then did she invest in technology enablement. She began that journey with clear investment parameters (at worst, how much she was prepared to lose; at best, the timescales for ROI). She split her business into two companies to ensure clear and focused performance management.
In this episode, she explains why she made the technology side the answer to the consulting business rather than the other way round, what that discipline cost her, no profit in the technology business until year 3, limited scale until year 4 or 5, and what it eventually bought her.
You'll learn:
1. Why starting with a technology instead of a client problem is the most common way to fail at productisation
2. How to structure a product bet so a failure can't spread into the rest of your business
3. Why the order you build in, method first or technology first, decides which side makes the money
4. What a realistic timeline to profit actually looks like when you're building recurring revenue
5. How Jill decided in advance what she was willing to lose before she risked anything
Jill is open to connecting about building recurring revenue in consulting without losing control of the risk. If you'd like to exchange perspectives, reach out on LinkedIn: https://www.linkedin.com/in/jill-foley-9a6100/
Sarah Edwards is Chief Product Officer at Kantata and has spent over 30 years helping professional services firms scale, transform, and deliver measurable business value across the US and Europe. She is passionate about how AI is reshaping the consulting industry, from how firms win work and deliver outcomes to how they empower talent and strengthen client relationships.
Get in touch with Sarah on LinkedIn: https://www.linkedin.com/in/sarahedwards3/
More episodes and insights: https://www.leadersinconsulting.com/podcast
When I set up the business, I managed to get three or four people, three or four businesses interested in that from the get-go. As yeah, I think this is something different. It might offer a solution to the problem that we share, but it does need a piece of technology underneath it to really supercharge it and do the analytics. So what I did to, in fairness, to protect the risk was I split the business in two right from the get-go. You know, when we were sub-five people, we were two entities.
SPEAKER_01Welcome to the Leaders in Consulting Podcast. I'm Sarah Edwards, your host and president of the London chapter of our community. In this show, I speak to CEOs, partners, and MDs of consulting firms about their best practices and hard-won insights. If you're keen to join the conversation, visit leadersinconsulting.com to find out how you can connect with peers at our monthly confidential forums in London, Munich, Hamburg, Cologne, Düsseldorf and Frankfurt. And now let's get started with the show. Welcome everyone. I'm happy to welcome Jill Foley, founder and chair of On3Partners and also co-founder of OD Collective. Jill, welcome to the show.
SPEAKER_00Thank you very much. Nice to be here.
SPEAKER_01Let's just start with perhaps you can tell people a little bit about your background, your experiences, the companies you work with, and what you're doing.
SPEAKER_00Yeah, sure, sure. So I have now clocked up some 30 years experience in organisation design and organisation development. And I've done that in a number of different places. I started my career in the technology sector, implementing technology solutions into mid-size organizations. I then spent about nine years at PWC. It was Cooper's in Librand where I joined. It was PWC by the time I left. I moved from there to spend three years as head of organization effectiveness at Nortel, who were a global telecom supplier, going through a kind of hyper-growth phase, very acquisitive. So that was more like an extreme sport than a job, actually, but I learned a huge amount. And then 16 years ago, I set up on three to offer organization design, consulting services, and technology solutions to a range of different sectors. Most recently in the last year, I've stepped up to chair that business, which has given me space to do some other things. I do some teaching now at LSE, and I've most recently co-founded the OD Collective with my colleague Carla Henry. And we might touch on what that's all about as we go through the so if that's the chronology, if you like, it might be helpful just to understand what has driven some of those decisions and so on. So when I uh when I started on three, I wanted to create a hybrid consulting business that had consulting revenues, but also annuity revenues because I wanted to be able to scale a business without growing the headcount too much. And the kind of rationale for that is, and I guess I have to declare this right up front, is that I'm not really a fan and never have been of the pyramid consulting model. My observation, my kind of frustration when I was at PwC was um, my sense was not all of the business problems we're trying to solve for require a big team of consultants um to be on site for 12 12 months or more. But if that's the model that you've got, you kind of you have to weave that into whatever business problem that you're trying to solve. So for me, there was a there was a kind of fundamental limitation of that business model. Um and and the other thing I'm kind of acutely conscious of is that a bit that the consultants build is only ever a small, a small part of, or only ever a part of driving the outcomes that a business needs to deliver benefits. And most fundamentally, all the knowledge that you build up about the business as you build that solution walks out the door when the consultants leave. So I I've never been a fan of that model. And and at a kind of very personal level, um, I think that slob of starting to build your revenue each year from zero with no annuity and no security as you look forward is hard. It's hard on the soul. So the way that we set up on three was kind of based on a few really important principles that we I wanted it to be a product IP-led business with a technology solution so that we could create a hybrid revenue stream. So we're now about 40 to 50 percent of our revenues come from technology licenses. So we've got, at any given point, we've got kind of a secure revenue stream three years out, which you know helps me sleep at night, but it also gives us choices as a business. We can, you know, we can be quite choiceful about the consulting work that we take on.
SPEAKER_01I think when I I look at what I'm hearing across you know the industry, and I think we're all hearing it, is I want to grow revenue without growing headcount. There's lots of talk about the pyramid is crumbling, and then I think that whole idea of absolutely how do I build a business that's got that, you know, uh annuity-based revenue. What does that mean in terms of, you know, and obviously you're you're working and look you're working on organizational design? So how does that impact how you design your organization? If you're not designing your organization around the sort of traditional sort of consulting work and consulting pyramid, yeah. What are you seeing about you know what's changing in the organizations that you work with and also you know, as you set up your organization, um, what's what's changed um and and you know, what do leaders now have to think about as they set up their organization?
SPEAKER_00So um for me, what what has uh there are a few things that I learned along the way, some by accident, some by design, but I had been working on some IP whilst I was at Northel to solve some quite systemic succession problems. So I've been uh all of the kind of traditional approaches to building to managing talent were not driving the right outcomes. So I started to play around with a different way of doing that work, kind of working future back. So, where do you need to be three years from now? What's the work you need to be good at, and therefore what's the talent pipeline that you need? And uh when I set up the business, I managed to get uh three or four people, three or four businesses interested in that from the get-go. As yeah, I think this is something different. It might offer a solution to the problem that we share, um, but it does need a piece of technology underneath it to uh to really supercharge it and do the analytics. So um what I did to, in fairness, to protect the risk was I split the business in two right from the get-go. You know, when we were five sub-five people, we were two entities. There was a technology entity because I wanted to limit the investment and the financial risk. And I uh brought in a partner who was a technology specialist to help me run that project. And then I kept the consulting side of the business different because the two require different kinds of governance, different kinds of skills, totally different sales and marketing efforts. So for me, the model that has worked is to set is to keep those two things very separate. Yeah. Um, and and so I think there are I think there are kind of insights in there that are helpful for bigger firms. But um for me, the the put the IP and the product at the pointy end of your boat um has has worked for us. And we didn't go out looking for something to technology enable. We had uh um a kind of nascent product and some IP that we knew we had kind of early proof of concept, and that justified the kind of investment in the technology to then turbocharge. I've seen lots of consulting businesses who are after the nirvana of acute uh annuity revenue, and they say, What can what's the technology that we can build? It's the wrong place to start. You start from what's the unique business problem that nobody has yet been able to solve? Is there a way that we might be able to do that? And what's the technology enablement that that that requires? That's the in you know, my learning has been that's the right, uh, that's the right way of tackling it.
SPEAKER_01Yeah, I think you're absolutely right. I mean, I think everyone that's the nirvana, isn't it? I want annuity-based revenue and I want to sort of you know package and price my IP. But and I think saying it's about how do you actually go about that, and I think that's some great advice in terms of you know, how do you you you do that? Anything else you would offer, anything else you've learned away there?
SPEAKER_00Patience and tenacity, right? Technology projects, as lots of people told me, and I, you know, and I knew because I spent my early years there, you know, there are they're they've got among the highest failure rates of all. So just be really clear about what's ring fence the investment and be ready to be patient. We didn't make money out of that business for probably until probably about year three, and we didn't really scale that side of the business until year at least four or five. So, you know, across the 16 years, the spoils are very definitely in the last 10. Yeah.
SPEAKER_01What about how is AI changing that? Because I mean, everyone's now saying, okay, that should make it easier. I can go a lot faster with technology, I can build products a lot quicker, I could package up my IP.
SPEAKER_00Yeah.
SPEAKER_01Are you what are you seeing not just within your own business, but I guess across other organizations around maybe where they're misreading some of that AI or how they're keeping AI in that process?
SPEAKER_00Yeah. I I think I mean, let's start from the obvious, which is we're all learning, right? We're all stepping into something that is not yet formed and is emergent. And I think lots of leaders are doing that in a at a time when they're already overwhelmed with the scale of what they're trying to lead and the speed of the way that the context is changing around them. So I think there's high anxiety around it. But I think the obvious misread is that AI is a technology solution and it's an efficiency play. And that for me is the wrong starting point. I I think the starting point is how can you how can you leverage AI to take away the low-value work, but do that in a way that is in service of elevating the human input and the human value creation. So it's a rather than treating it as a technology that's all about efficiency and cost saving, it's a technology that does do some of that, but in service of creating the space to elevate the human connection in whatever way that that marks out your business.
SPEAKER_01Yeah, it does. And when you think about that, I mean, I guess your your business is all about organizational design. And I think you talk about like organizational design being probably the most uninvested area, but probably the most urgent area. And what why do you say that and why do you feel that stands true today more than perhaps ever before?
SPEAKER_00Yeah, and I it's a really great question. And it it speaks to the belief that I'm now holding most passionately and with most energy, if I'm honest. So after 30 years of doing OD work, I am convinced that it should be a fundamental leadership skill, right? But we don't teach it. We teach leaders how to build a strategy, we teach them planning, we teach them how to manage finances, how to manage their people. We don't teach them how to manage the operating model, which fundamentally is the engine that is going to enable them to deliver their strategy. And and I so I think this is a long-standing problem, but but I think the the advent of AI is making that even more urgent because my experience has always been that leaders put off doing OD projects for as long as they possibly can, right? And that will partly be driven by the fact that they they're not confident that they've got the skills or they know how to tackle it, or they think it's all about the structured chart, right? We know all of that stuff. Um and um we have to be truthful and honest that organization design is a risky business, right? It disrupts the business, it it there's always a performance cost to pay, it's distracting for people and it tests leaders and it tests the culture. But actually, with the advent of our AI, we now have organizational health data at our fingertips and dynamic data at that, or we have that possibility. So the things that used to take you months and years to collect and aggregate and join up about the way the organization is performing, we now have the ability to have that at our fingertips. So we can't any longer say, we can see the organization debt building up, but now is not the right time to do it. That's that so our view is that the skill of being able to, the leadership skill of being able to design and manage and maintain and improve your operating model is a fundamental skill that leaders need to have. And that that's if you know, kind of in a nutshell, that's the mission behind what we're doing with OG Collective.
SPEAKER_01I like that concept of organizational debt. How do I, as a services leader or our services leaders out there today, know if they've got organizational debt? And what do you mean by organizational debt and what how do you spot it and how do you know what to do about it?
SPEAKER_00So at the at the simplest level, organization debt is the tidying up and the maintenance work that you should have done on your operating model that you've delayed and you've put off, or you've chosen that now's the not time, not the time to spend money on it. So it normally ends up in you you you started with an operating model, and over time you've bolted things onto it. The the way that plays out in an organization is um is usually things slow down, you a loss of capacity, so new opportunities and challenges emerge, and no one's got the capacity to deal with them because it's harder to navigate the model that you've got, everything's creaking, slowing down, it it just becomes more so. At one level, it's a kind of a visceral crisis getting hard around here, you know, didn't used to be this difficult. Um, and uh, you know, at the other end, there will be performance metrics that show you your numbers that are drifting in the wrong direction. At the moment, the org health data that I'm referring to, I think is the bit that bridges those two. You know, that's what we now have the possibility to access that show us right where is where is the difficulty arising, where is the debt at its greatest, and therefore, because we can't do everything, where are the places that we should intervene to give us biggest work?
SPEAKER_01And there's definitely situations that I see, and the businesses that I've worked in and and the organizations I talk to where they know there's a performance problem, their metrics are sort of showing you that actually they're not thinking more deeply about you know, organizational, how their organizational change and actually the organizational structure, governance, you know, etc. to change. Can you bring that to life in a either maybe you know your past experience or one of the clients that you work with, like, you know, what have you seen in terms of that? And then how what's the transformational journey that you've seen customers go on about it? What could our our leaders listening to this podcast learn from that?
SPEAKER_00So I think this is a universal consequence of leaders not understanding how to do organization design, because most situations that we step into at its crudest, the kind of least experienced leaders, um, when confronted with a performance or a business challenge, want to change the structure. So they want to go straight from the business challenge to the structure. And structure is very rarely the solution, right? Structure is not strongly correlated with business performance. There are lots of other things that are much stronger drivers of a healthy organization. But that's very often the starting point for us. I'm working with a very large construction problem at the moment who are very anxious about declining safety standards. So the incidences of accidents and cyclosures and so on are increasing. So their ask, if you like, the task that they've set is we need to redefine the safety standards and put some much stronger KPIs and consequences in place for what's happening. So they're kind of taking a policy and a governance route. When we dig down to look for the root causes and validate what really is the problem, as opposed to the presenting consequence, what we find is that the people on the ground and their supervisors, they know very well what good standards of safety are. They know very well what the policies are, what they should be doing, and the KPIs they should be meeting. But there's a tension in the organization between productivity and safety. So the on the ground urgency is to get the job done. And when those two things are in conflict, it's productivity that's winning out, not culture. And that is not, that is not a governance or a KPI problem. It's a mindset and a leadership accountability problem. Um it's a kind of behavioral solution.
SPEAKER_01Yeah. When we think about like um, I guess our audience being consulting leaders, like how do they translate some of those lessons into, you know, um their business? I mean, you talked at the start. I mean, I think we're all battling with the challenge that I've got to grow revenue, but I've got to grow revenue without growing headcount. You know, I think there's lots of competing challenges within the business. How do you translate some of those organizational design um challenges and lessons into the world of sort of as a consulting leader?
SPEAKER_00That's the $64 million question of the company.
SPEAKER_01Well, maybe it is, and maybe it comes back to your even your starting point. I'd love your point around like the challenge of the pyramid, because that is the challenge, isn't it? The way we've designed our organizations is is that it's changing it needs to change.
SPEAKER_00Yeah. And and I do believe that. I have believed that for some time. I don't think it, I don't think it optimizes value for the client for all the reasons that I've described. And I think it's now with the advent of AI. I think it's just an untenable model. And you can see that happening, you know, all of the big firms are reducing their graduate intake, they're taking their juniors out. So I think there is an there needs to start from an acknowledgement that that is not a sustainable long-term model. So let's let go of that and then let's examine what the alternatives might be. And um I I think the alternative is really doubling down on your expertise. So what are the what are the deep expert skills and experience that you're offering your clients? Because they're not any longer, that's not your value proposition. It's not any longer I can give you 50 brilliantly sharp young brains to analyse and diagnose this problem. We can find different ways of doing that. So I think the I think the real issue is what's the right commercial model that enables deep expertise in a kind of um advisory capacity. It's probably, you know, going back to where the consulting firms first started, you know, when they were auditors and they saw the opportunity for advisory services from top to top, and they kind of layered in the junior um kind of work to leverage resources and make more money. So I think the answer is going back to examining what is the expertise that's unique to you that you're offering to clients, acknowledge the fact that the rump in the middle of the diagnostic and the analytic work, you don't need people to do any more, and then kind of relook at your business model through that lens. I I think the I think the other real um conundrum that it presents is if you if you're taking out that junior layer, you're blocking the development path for the partners of the future who are going to be the rainmakers and the senior advisors and so on. So I think that's a very real structural problem. I'm convinced that the clue to resolving that is uh is an in-out in approach, which is we may bring some in to understand what consulting is and what advisory services are about. And then we let them go out, get some industry experience because what you learn on the inside of an organization is very different from consulting. The accountability for delivering a consulting solution or services is very different from the accountability that you have as an internal leader for driving the right outcome and delivering the long-term benefits. I mean, those two things weigh differently, you know, the then none neither is better than the other, but from a consultant's point of view, you don't experience the really hard yards of, you know, the slow political grind of getting alignment, shared understanding, you know, a kind of an agreement about risk tolerance and what we're prepared to give and get, you know, from a leadership team before you even start work. And it and it doesn't train you about the kind of relentless, repetitive work that you have to do at implementation to protect the integrity of the solution and not allow it to die do. I don't think you learn those things. Until you do that work inside an organization. My personal view is the best consultants have experienced that from both sides. They experience the consulting delivery, but they've also experienced the grind of the other stuff that you do before and the after the consultants. And I think that's what sets you apart as a senior expert advisor. You can travel all of that road with your client.
SPEAKER_01Yeah. So I guess what you're really saying is I think you're right, the talent of the future, we need to be going at getting those experiences on the client before really coming into sort of, you know, the consulting world and how you build that sort of your deep expertise is actually out there in the world learning, being on clients.
SPEAKER_00And I think that implies for consulting firms, they have to, they, they will almost inevitably have to be a little bit less pressure about precious about their culture. Because if you're bringing in a much more diverse set of people at mid-career and senior career, they are molded, they are shaped, they have a set of beliefs, assumptions about their value and their worth. And your job then becomes about how do we adjust to accommodate that those the skills and the value that those people bring? Whereas if you're funneling, if you're kind of building from the bottom up, you have years to shape the assumptions and beliefs and the behaviors of those people. So I think it I think it presents some real cultural challenges, which to be honest, some of their senior partners may not have the appetite to deal with.
SPEAKER_01Are you seeing organizations that are getting that right? Or where where do you see what do you think people uh consulting firms are changing or adopting to get keep that culture and to drive that right culture based on that model?
SPEAKER_00I think you have to start from a position of real clarity about what do you stand for and what are you trying to achieve. And then everything else you hold lightly because in a small growing business, every new person who joins changes the dynamic in the business and plays a part in evolving the culture. So I think the thing that holds you together, it's almost like a tight, loose model. Let's be super clear, like inextricably clear about what are the small number of things that are most important to us. And they will be about your proposition, what you're trying to achieve, and why you're trying to achieve it. You know, what you're putting at the pointy end of your boat, and then in the middle of your boat, you bring in the people who can help you get there faster and you allow, but you you need to maintain a really constant dialogue about how are those new skills and perspectives changing the way we're operating and be ready to have an honest conversation about how the culture is evolving and the dynamic that's emerging.
SPEAKER_01What about like how organizations are designed and how your operating model works? I mean, I hear a lot about things like moving to more pods and networked organizations and things like that. What's what's your take on that? What are you learning and seeing?
SPEAKER_00I think I think working in small networked or pod-based organizations, I think it's phenomenal for dealing with complex, difficult issues because it's like creating a startup either on its own or within a bigger organization. So pods work because there are no rules, right? You pull together a diverse group of people who've got all of the pieces of what you believe will make up the jigsaw of the solution, and you set them free. So you're temporarily saying all of the normal rules, with with some exceptions, but you know, the rules don't apply. I'm freeing you up from the rules, go build the solution and we'll figure out how do we implement. And you know, great work comes out of pods. I think the difficulty comes, which when you say, right, this is an amazing way of working, let's spread it through the organization. So one pod or two pods, two startups are fantastic. When you put 50 pods, 50 startups in a bigger organization, it's chaotic. And I think that's where, if you're going down that route, that's where I think this notion of what's tight and what's loosed really comes into play. So what are we asking you to achieve and why? Don't lose sight of the mission. But what are the boundaries that we're going to put around you? So what are the non-negotiables so that you don't end up with two organizations within one that are competing and um pulling each other down?
SPEAKER_01Yeah. I guess it's yeah, I mean maintaining that discipline, I guess, and that governance within a you know, pod-based model is something, you know, as you say, it's freeing on one hand, but I guess you've got the how do you scale that and how do you work that across your business.
SPEAKER_00Yeah, because at some point you have to plug that stuff back into the hierarchy of decision making and the measures of the system. So I I think it's I think it's a real conundrum. I haven't, I haven't seen single organizations who have yet done that well. I think there are sectors, like the media sector, who we could learn from because um they're they're very well versed in pulling together groups of people who come from organizations to create something. I think the creative industries are are good at that. Um, but then they're made, they're typically made up of lots of collections of freelancers rather than sitting on a corporate platform.
SPEAKER_01Yeah. So in terms of what you've seen maybe in the media industry or creative industry, what would you say are the some of the key lessons learned from that that you would apply to a consulting business today? So not necessarily thinking about the big consulting firms, but if I'm out there as a leader and I'm growing and scaling a 100, 200 man sort of consulting business, are there uh things that you you think you could take lessons learned from that that they could apply?
SPEAKER_00Well, I mean, I guess that one I might question the notion of why do you need to grow a 200, 300 man consulting business? What's that in service of, right? What what are you what do you stand for? So I might start from the very notion of what are you trying to grow and for what? Because if you're trying to grow wealth, revenue, profitability, who's to say you need 200 people? You might need 200 people working on the endeavor, but you might source those from a range of different places, and then your job becomes as the aggregator and the direction setter and the investor in those things. So I think that might be my starting place.
SPEAKER_01Yeah, and I guess that comes back to what you said. How do you define where your deep expertise is and how do you double down on that? And I still see firms that are, you know, are trying to do a bit of everything called aren't you know doubling down. Um what have you seen? I mean, how do you get to, or how could an organization go about really understanding, you know, where are the areas that I should double down and how do I get to what is my expertise and where I need to focus at? But at the same time, I do want to drive growth as a business. So how do I battle those two things?
SPEAKER_00I think you're you're absolutely right that too many consulting firms are still trying to do everything and be everything. The businesses that I see that are very best in this against this context are the ones who are saying, right, let's get really clear what we are good at and what we're not good at. And let's go and find the right partners to do the things that we need brilliant, we need access to brilliant skills, but we're not going to try and build them ourselves. So I think that's the that's the model that consultants need to apply to their own businesses, be willing to let go of the work that they don't need to be brilliant at, will never be, if they're very honest, world class and partner with the people who are world class, right? Yeah. And I think therefore you have to, you almost have to wash the work that you do through a filter of what work is value creating, what work is going to unlock new value in service of us reaching our mission? What's the essential enabling work and who and where is that best done? And what's the middle ground that we need to have access to, but it might not be the best use of our resources to try and build those pipelines. So I think about it in those three levels of value creating, value enabling. And in the middle, there's a kind of how do I optimize all of this lot and where's the best place to do the work?
SPEAKER_01How have you personally gone about that in the journeys you've been through? I mean, if you think about on-three partners, but also I think OD Collective, or maybe you can tell us a little bit more about that. But how do you make sure that that aligns to those principles, that you're really doubling down on where the true expertise sits?
SPEAKER_00I do remember when I was at PWC, the notion of a product-led consulting firm, we were really sniffy about, you know, we were still in that era of no, the magic of this is that we're all so enormously bright. You know, we can tackle any business problem, we don't have to lock ourselves down. And I I never kind of subscribed to that. And actually, at the point then where I was starting my own business, when you have a brand that's unknown, you have to stand for something. And therefore, the the most obvious thing is to say, we have something that's unique and different, and we bring deep expertise in this narrow field. So my own kind of approach to this has always been stay narrow, stay deep. And what I've learned over time is it never ever boxes you in in the way that you might fear. If you, you know, if you go to market and say, but you know, we're good at this and we've got experience in this, if we say that we only do this one thing over here, succession planning, that will rule us out from being involved. It doesn't play out in that way. It just makes it easier for people to buy things from you because they know what you stand for and they know when to ring you. And when you have a conversation with them, they're left in no doubt what's the thing that might happen to me when I need to ring that person. So there's something for me about staying, staying really clear and narrow, and then being really discerning about what am I going to try and build in this business versus where am I going to bring in partners who can who can do those things for me. So we've never done, we've never done any of our own marketing. Um, we for a long time we outsourced our software development. When we got to scale, we then bought it in-house because economically it made sense. But we are we're pretty pure in what we do. And everything that sits around the edges in an enabling sense, we do with virtual assistants or partners that we work with. And so we're we're kind of always we stay very tightly kind of connected to the what is it that we do and why, and let's not try and dilute that or let our egos take over, you know, and and start to promote the other things that we love to do and that we think we've done brilliant things with. Yeah, stick to that narrow niche.
SPEAKER_01What do you think the view is? I mean, I work for a product-based company, we have a consulting team within it, but we're clearly very much a product company. And I think there's this idea of, you know, I guess, um, as you say, a consulting firm having IP that they've packaged up in their cell, but there's still a you know a consulting firm at their heart with, you know, a product or IP that they sell. Where do you think that line is drawn? At what point do you become a product-based company? Or do you think, how do you think organizations need to think about you know their organizational design and what you need in a business that's not just got consulting but also has you know a product uh within it?
SPEAKER_00So I think it I think it stems from what's the product or the proposition that you're leading with, and then how are you making how do you make money from that? So what what leads? Is it the technology that creates the consulting revenue or is it the methodology that then opens up the possibility of building a license? And I do think the differences between those things are nuanced, but I think they're very real. So in in my business, it is the methodology that creates the technology need. So we we lead with consulting with a unique proposition and IP, and once we've got to proof of concept with a client, they will they will always then take a technology license. Yeah, right? We don't lead with the technology. So that that kind of influences the the value contribution of each side of the business or each part of the business.
SPEAKER_01Are there things that you've learned along the way? I mean, in your journey, you started out as a traditional, more sort of consulting, and you you explained the reasons why you actually wanted to move, as you say, even for yourself and sort of you know, lifestyle of why I want to sort of move to having that assurance of annuity-based revenue. But what have you learned along the way? Are the things that you learned actually you got wrong and you have to pivot and change, or are there lessons that you've learned or experiences that you could share with the audience who may be thinking about going down a similar, similar um journey to yourself?
SPEAKER_00Wow, that's a big question. Lots of things I've learned. I mean, I I we've just talked about one of them. Get get clear what you stand for. Um, create if you're small and you're you're you know you're starting up, get super clear what's the proposition that you're taking to market and um build everything behind that. Whatever that proposition is, it must meet an unmet business need. So when you try and do, you know, there's lots of things that we could have built into our business because we're good at them and we have experience of doing them, but there's a ton of people out there who are doing it. So um, unless you can say there's some material reason why we are four times better than the other 10 people who do this work, um, don't go there. Focus in, you know, hone in on what's the unmet business need that I am seeing everywhere. And if I have something that's credible, either a product or an a perspective or a solution for it, that no leader could possibly say, I'm not interested in that. They might say, I can't do it now, but what's the problem that no leader would ever say, actually, I'm not interested in that? You know, so for us in the very beginning, it was how do you predict the talent pipeline that you need in the future? So how do you map, you know, it stemmed from the universal um succession dilemma that all businesses face. Every leader will tell you, I'm not confident, I've got the talent pipeline I need for the future. No one will ever say, I'm absolutely, you know, we're on it, I have nothing to worry about in that space. So figure out what's the unmet business need that you can make a contribution to and leave the rest. I love teaching, right? There would have been a day when I said I'd really love to lead lead a teaching organization, but I'm not going to do that because there's too many of them out there. I can't stand up. But but actually, that is where I've come full circle now because the OD collective is all about capturing what we have learned, the methods and the tools that have worked, and making that accessible. And we have a we have an audacious mission, which is to get to a million leaders who need to understand how to design their organizations. And that's so I'm I'm I'm kind of that's my slightly self-indulgent version of what we're doing.
SPEAKER_01Um that's exciting. I mean, actually, even within my business, we talk about like expertise. How do you multiply that expertise? And I do think that to me is at the heart of actually, I think, the opportunity, even with AI, is that as you say, traditionally people walked out your organization and that knowledge went with them. But actually, how do you amplify that? I'd love to hear more about that. I mean, that's a bold ambition you've got in terms of getting that expertise out to a million leaders.
SPEAKER_00And how are you going about that? Well, and that might be my other big learning is if you can't set a really audacious, hairy goal for yourself, no one else will. So you know, create the moonshot. You might need not need to shout it from the rooftops until you've got the credibility, but go for something big because that will it will fuel your momentum. So we Carla and I both start, we've we've worked together in different forms back at PWC and more recently in my business. Um, so we've done OD projects separately and together, and we're, I think we've both intellectually gone down the same path, which is we're just working with leaders who should know how to do this stuff. They shouldn't need us every five years to do this stuff. They should be doing it quarter by quarter, and yet nobody's teaching them. It's not, it's never part of their professional development. So that's the that's the kind of mission that's driving us. So phase one, we're we're kind of codifying and capturing the sum total of the methods and the tools and the models. It will be deeply practical. We're offering that there's a series of different development interventions. So um a kind of fully virtual, self-directed, um, in the classic online learning sense, a kind of tailored for an intact team, or a virtual model but open to the public, the public with some qualifiers, because you you really need to bring a business challenge to get the best out of the programs. Um we've piloted the first two, so we're launching the we're launching the version um that we open up to the world in September. Um, and then what our ambition is from that we create a community of people who can help each other, who who we can help, who in time can deliver some of that work for us. So it's um it is a commercial enterprise, but for both of us, it's um we're we're kind of nearer to the end of the commercial part of our career than we were at the beginning. So it is, you know, there is a um there's a difference that we want to make, um, which is less about making oodles of money for us and more about really building capability in this space, which I think is underserved or or badly served.
SPEAKER_01Yeah. Applying that to the consulting world at the moment, like, why should um uh someone in our audience who's maybe running or growing a consulting business, why should they make it a capability they need to have in terms of organizational design? Like, why is that, do you think, fundamentally really important to a consulting business?
SPEAKER_00I think it's the same for a consulting business as other businesses, which is if you're leading something and growing something in the context in which we all operate today, the your context will be changing at breakneck speed, right? So the operating model you have for today, you can be absolutely certain will not be right for you in a year's time. And therefore, part of the art of running and growing that business successfully and profitably will be knowing when you need to tweak, when do you need to maintain, and when do you need to kind of upgrade some element of it. You know, I think about the operating model as the engine that you drive to get to your mission, you your destination. And you know, like all engines, there are bits of it that go out of alignment or you know, they need replacing or they slow down a bit. So I think if you're if you're leading a business in today's context, you have to be able to spot, not just in a historic way, because the the problem has been to this point, the the measures of organizational health have always been historic, right? We see the the measures and the metrics show you what's gone wrong and the outcome of what's going wrong. What we now have the possibility to create is visibility of the lead indicators, you know, which might be things like speed of decision making. Um, they might be things like the time it's taking for a process to deliver the effective outcome. So we've now got access to the lead indicators. If you don't know what to do with those, if you can't make the connection between those lead indicators and what it is in your operating model that needs tweaking, you're simply going to build organization debt and become less effective over time.
SPEAKER_01I think when I look at even the measures that we run our consulting businesses for, weird, I totally agree that I think we're just relying on these sort of um looking backwards rather than looking forwards. What are the leading indicators? I think you gave some good examples there, but like how are we measuring and um measuring the health of our businesses? Yeah.
SPEAKER_00And in a consulting business, you know, you you'd be looking at the rate of lead generation, the rate of lead conversion, the profitability is a lag indicator, not a lead indicator. But you know, what what who's coming to you for a conversation? Who is responding yes when you reach out to have a conversation with a prospective client? Who are the partners that are curious, you know, the outside organization? So there's there's lots of lead indicators. There is there is no shortage of lead indicators, in my opinion, and AI is giving us the possibility of being able to see those dynamically kind of at off indicatives, and then the art becomes what do those lead indicators tell me about what is starting to go wrong in my operating model so that I can go look and intervene early if needs be.
SPEAKER_01Yeah, and how should organizations think about you know having that art? Does that come back to what you were saying in terms of actually we need to fundamentally enable and build the expertise in our leaders around organizational design? Is that sort of a problem?
SPEAKER_00Yeah, and I and I think that at the heart of that is what you know, and there is a model at the heart of the OD collective that we base all of our teachings around, which is if you're going to do organizational Design really well. There are eight sets of questions that you have to answer. You know, so, and those are the eight dimensions of your operating model. And they kind of go from the foundational strategic part, like, are we clear about our purpose? Are the leaders genuinely and authentically aligned in what we're trying to achieve? Um, do we have shared understanding of what our risk tolerance is and where the boundaries are in terms of how we move the business forward? Then you can start to look at. So, if we're clear where we're heading, what's the work that we need to be doing in the future? So we work that future back and how is that different from what we do today? What are the processes that enable that work? What then are the capabilities that we need? What's the best way of organizing those resources? So that's where you get to kind of the beginnings of the structure chart and what do you do inside versus where do you pull our partners? And then the final two steps are around and and what's the impact of all of that on our culture? So, how does our culture need to shift to accommodate all of those things? And it's the bit that most people just they're so exhausted by the time they get to that point, they they kind of like, thank God we're done. Let's now announce and implement. But actually, if you you try and implement a solution that's at odds with your culture, it's the culture that will renounce. And then the final ultimate thing is, and what do we pay attention to? What's in the rewards and measure this box? That's fundamentally the skills of being able to discern between those elements and know what indicator is pointing to which of those elements. Um, that's the the art and the science that we're trying to teach people.
SPEAKER_01Great, thank you. Jill, I guess we've um you've been in the industry, I think you said 30 years. I've been in the industry about 30 years. Like as leaders in this industry, what do you think is a belief that we need to give up on? We need to change. Maybe it goes back to some of the things we've already discussed, but if you were to summarize, what do you think we need to change in terms of how we're thinking about you know, leaders in this industry um and um, you know, how we need to grow and drive success moving forwards?
SPEAKER_00I think there is a is a call to you have to let go of the pyramid model. And I'm I know we're all talking about it. I I'm not sure whether there's a difference between letting go intellectually and letting go emotionally. So maybe the question is, you you you may already have let go of it intellectually, but have you let go of it emotionally? Have you done the mindset work which says, okay, as a partner in this firm, what is the new contribution that I should be making? What you know, what what's what does that mean for me and the assumptions about my value and my worth, and how do those things need to shift? Um, you know, what what is it my job to lead now? And what is it my job not to lead any longer? So I'm answering a slightly different question, but I when I look at it, I think the things that we have to let go of in some ways are somewhat obvious, and yet people are not letting go of them. I think in the small startups and the medium-sized consulting firms, I think, I think they are and they have. That's why they're doing what they do.
SPEAKER_01Yeah, absolutely. How have you shifted, maybe just as we sort of wrap up here, but even thinking about you personally, as you've sort of gone through your journey over the last sort of 30 years, and you talk about letting go and how you, you know, this world is rapidly evolving. We're learning things every day. How do you keep yourself at the forefront of that and make sure that you can let go of maybe things that you know are no longer relevant to the way we're going to be working as we move forward?
SPEAKER_00Yeah, I think I'm running to keep up along with everybody else in terms of AI. I mean, one of one of the things that I have learned, uh, and it's been a really important lesson and one that requires some courage, is if you do the right work, you know what you're good at, and you do that work brilliantly well, and you hone that skill continuously and you offer it to others with generosity, all of the financial consequences and the financial success will follow. I've worked in a system where we chase the money and it's a miserable place to be. And so one of the kind of um luxuries I afforded myself in setting up entree is I'm gonna I'm gonna follow the things that I think I do brilliantly and are different from other people. If there's not a business to be had in that, I'll have to think again. But I I am convinced and I'm I'm willing to be the experiment, which says if you do the right work in the right way and you stay ahead and you offer that with generosity, everything and and it does. That's been my most profound learning. Hard to do in someone else's system.
SPEAKER_01Yeah. I think it's a great learning to sort of wrap up on. I guess as we wrap up, Jill, any um podcast guests or topics that you think you would love to hear on the podcast uh moving forwards?
SPEAKER_00I'm always curious about the mid-sized consulting firms. And the there's an inflection point, isn't there, with every business when you go from I'm a startup to I'm scaling. And and I think this is true of every bit, where the things that have allowed you to create footprint and build a brand and put all hands to the pump and the leaders can get their arms around the whole business. I think how you get from that to scale in a consulting business, I think that's a difficult transition in any business. Um, I think it's incredibly difficult in a consulting business because of the the personal nature of the work and the intimacy of offering C-suite advice. So I that's an area that I am always curious about.
SPEAKER_01Great. Thanks, Jill. And obviously, um, you've shared lots of experiences today. If people want to get in touch with you, if they can, you know, they want to share experiences with you, where can they get in touch with you?
SPEAKER_00Jill.fony at theodcollective.com.
SPEAKER_01Jill, it's been a great discussion today, really topical. I think everyone's thinking about what how do our what does our organization design look like moving forwards? I think some great lessons learned in terms of how you've been shaping and growing some of your businesses. So thank you for taking the time to talk to me today.
SPEAKER_00No, thank you. Thank you. It's been it's been a really um it's been a really nice exercise to think about some of the questions that you pose.
SPEAKER_01Yeah, absolutely. Thanks, Jill.
SPEAKER_00All right, thanks, Sarah.
SPEAKER_01Thank you for listening to the Leaders in Consulting podcast. To learn from and grow with fellow consulting leaders in person, apply to join our monthly confidential forums and peer to peer coaching groups in your city. Visit leaders inconsulting.com for details.
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