Fees | Horizontal Change Management

Tidbits from the Job Boards

Job boards and portals (Dice, Indeed, Simply Hired, Linkedin etc.) offer a window into upcoming corporate moves, changes in the contracting world and even a glimpse at consulting itself. Peek at them consistently enough and you can tell who is installing, who is merging and who is transforming. Best of all you can see how they view those changes. You can also see how the third parties are fairing and where the supply and demand curve is moving.

Here are few snippets from one day:

“4 or more years of organizational change management design experience (within project consulting)”

The year number is one way to differentiate new against mid level and senior. Four or less is junior, 4-8 mid and 8-10 and above senior. From a consulting perspective I would say the numbers are pretty arbitrary (HR likes to give everyone divisions and procurement likes to dictate rates hence a subjective scale).

“(within project consulting)” is nice. It might show they understand the difference between tactical and strategic change management- this one is tactical. Design for this type of role always seems like a strange word to use. Tacticians do not really design anything they usually follow some dictated set of directions…

“Change Management Analyst”

This usually shows the organization wants as little outside influence as possible. Just analyze for us, we will take it from there. Analyst is also a way to knock down rates. In those cases they are hoping they can get the practitioner skill set with an analyst cost. This role also tends to be one that must follow a set of directions. The less subjective the better from this type of clients perspective. (Good luck with objective analysis when it comes to people).

With my client

(likely a requisition)

This one comes up a lot and is, I think, funny. With “my client” really means is a requisition and this firm happens to get the blanket announcement for a role. I know this because I personally get contacted by all of them the day the requisition is posted. NONE of them know who the client is or much about the role, but they insist it is their client. Or maybe they are just on the mailing list…

I tease here and think it is funny, in that uncomfortable laughter sort of way, because just 5 or 6 years ago the buyer REALLY was a client- as in they can call you on your cell phone anytime because they know and trust you. HR, procurement and the Microsoft case, along with a nasty cost cutting environment, have put multiple walls between client and deliverer/consultant.

At least two (2) years’ experience using course accelerator tools (e.g., Captivate, Articulate, UPK)

Apparently these tools are accelerators compared to the early training tools Authorware and Director. Do they mean acceleration of the development of the training? Or accelerated learning (which is an oxymoron)? One of the three definitely speeds up development and it shows in the quality of the deliverable (as in poor).

Some more tidbits:

I have already had 5 instances this year where a third party contacted me for a role (obvious hornets nest judging by the expectations and the matching rate- scary client and likely scary change) and I gave them a rate 40% higher. There are two reasons for consultants quoting higher rates, to NOT get the role and to signal to clients (and likely the third parties) that their rate is not marketable. What happened with each of those 5? They came back at my rate. Third party skimming too much? Client understanding the recent change in the supply and demand curve? Both?

Posted rates have jumped up at least 10% this month.

Rates are being posted. That likely means good consultants are balking.

In the “what rate do you charge dance” (consultants never give the first number) clients and third parties are willingly taking the first stab (and it is a higher start than last year).

Both clients and third parties are telling me things have changed and they can’t even get senior consultants to talk to them without an up front number much higher than it has been the last three years.

Recruiters are also telling me the cookie cutter practitioners with their shiny certifications are not making the grade. That coupled with the fact that we are moving into a strategic environment rather than rote tactics is good for genuine experience and higher degrees.

Just consulting stuff I thought might be interesting.

Technorati Tags: Buyer, change management consultant, External Consultant, Fees

Cycles- what went around will return

It has been an interesting couple of years for change management- quite the contrast to 8 – 10 years ago. Consulting, to some extent, is dead, replaced by the strange wave that followed the Microsoft case. (Treat people like employees and you have to give them benefits and consideration for effort- so now we have contracting scenarios that are an arms length worst case scenario, low rates and no benefits and still treated like an employee).

Things go in cycles (this one a little too long for just one career). What will happen is demand will pick up, corporate money will free up and suddenly consulting will return, along with respectable rates (if the consultants are smart enough to raise their rates together).

What is ironic is that all that money locked up in corporate accounts when freed up will land in the worst environment for cost savings. If it had been spent in the last couple of years to move change and shore up structure a lot of companies would be ready (and already have those consultants in place with some loyalty). This is not hindsight it is lack of foresight and strategic planning.

Those who underpaid (I could give you the list of firms in the Bay Area considered chintzy and last resorts for clients….) will find that no one is interested in working with them even if the rates go up. Those firms already have revolving doors (I was contacted 13 times for the same role over a two year period and I know for a fact they went through at least three consultants).

The more firms are stripped of their talent through cost savings the more valuable senior consultants will become.

I see corrections in the future. If you are a senior leader I would say now is the time to get a head start- grab a senior consultant while you can- but do not think about it too long, that could get expensive.

Technorati Tags: Buyer, CEO, change management consultant, External Consultant, Fees, Garrett Gitchell, Value, vision

Change Management Models

A while back I did a tongue in cheek look at models.

Thanks to all the certification machines out there and the unemployment rate there is a flood of new, inexperienced (you can tell by the questions they ask in Forums) “change management practitioners”. It seems the first thing they want to know about are the different models to use. Big indicator that they really do not understand Change Management.

Because there are a lot of horns out there tooting as loud as possible- one that insists Change Management falls within project management (recipe for failure for anything big). I have never been one to blow my horn loud and for the sole purpose that someone listens to it (or spends money to hear it again). I shout when something does not make sense and no one seems to be saying anything (even though it is right in front of their eyes and they agree).

Well isn’t that a little like true Change Management? It is about calling out things so you can get to make sense end states. PS most of the models out there, on purpose, by design, do not do that. Most of the clients out there LOVE those kind of models because they really do not need to change much. You are not that kind of client/leader or practitioner, right?

So here (the actual model with hyperlink explanations for each piece) is the Vision to Work model:

I created it as a representation of End State Focus and Makes Sense Change. I did not, like many modelers, create a model that illustrated how change was being approached already. It amazes me how many models are created to support status quo- pretending otherwise.

Call me out marketers, but I have never touted the model specifically- the perspective yes, maybe the approach, but not the model itself. Leaders, hesitate when a consultant you are looking at whips out their model and pushes the deliverables within- they are playing to your status quo. (You do not want that, remember?)

Here is another funny thing about models. They seem to be frameworks to teach someone how to practice change management. Senior practitioners often end up creating similar paperwork (say stakeholders assessments), but it is more record keeping of the things they have found rather than a map for what to look for.

Prosci is the perfect example. A mid level practitioner could follow the model to a tee and get to the end (and I don’t mean END STATE) befuddled, confused and surprised at the failure. Anyone can sit down and draw a picture, but few of those creations end up at Christies. Anyone can go through the steps for change management; few can get to the things and people that must change for end state attainment.

The Change Management Arena has gotten a little scary this year. The emphasis on models and the strange evangelism (by, judging from their profiles, new and junior practitioners) for the companies that market the hardest is not a good sign for big transformational change. If you are a senior leader looking for a consultant be wary and ask yourself if you and your organization are REALLY capable of the change you seek. If not go with the models and the cheap rate. If so be informed and talk to those practitioners who speak with a softer voice.

Technorati Tags: Big Picture, business objectives, Buyer, C level, CEO, Change Design, change failure, Change Strategy, External Consultant, Fees, Garrett Gitchell, horizontal change management, vision to work

A little bit more about Rates

A previous post about rates consistently gets hits.

Good news for consultants. The market is picking up.

Maybe bad news for clients that means rates are rising.

Knowledgeable, reasonable clients barely lowered the amount they would pay during our nasty economic streak. So this impacts those who worked a bad environment to their own advantage. Rates are finally moving back to the “consultants get paid a lot more than employees” level.

Here are the signs things have changed (at least for change management consultants):

Rates are now being posted by third parties (they kept it secret the last two years to pull down the desperate).
A rate posted yesterday (ridiculously low for what they were asking) had the note, “we absolutely cannot go higher” (and likely they ABSOLUTELY will be waiting a long time to fill the role).
Low ball rates are sitting on the job sights on a permanent basis- unfilled.
I have been contacted by third parties (two to three times a week in the last month or so) who quote me the lowball rates, I give them my rate which is usually 30%+ higher, they submit and the client asks for a conversation. That means someone is paying more or losing margin…
Third party firms are merging. Economy of scale or a tightening market?
Positions are being reposted 3 to 6 months later. Which means they paid low, got what they paid for and are now searching for a fix (PS senior consultants start charging an arm and a leg for these roles).
I have been personally contacted months later for roles I refused, because I charged 30% or so more, at the rate I quoted plus built in flexibility (I still turned those down see “fix” above).
The rates I quote now, very close to the “high” (wages have been depressed for at least 10 years, 30 by some measures) of 2008 have suddenly become reasonable for both direct and third party arrangements.
Posted rates (rare see bullet one) are rising. An $850 a day rate appeared yesterday (the high so far for posted rates- senior consultants you can charge more than that direct).
Clients are using consultants to find other consultants. Unfortunately, at least here in California, those clients are still using sourcing/payroll firms to process consultants (a needless expense on the consultant side and often on the client side too).
Short engagements with a strategic focus are appearing. This one gets a giant cheer from me. Strategy and innovation have really been squashed the last couple of years.

Here is my take on market rates:

I base this on the fact that lower rates make the role reappear (or have the client revisiting the consultants they thought charged too much). If the role appears they likely paid too little and got a junior/less experienced consultant. I will give you converted rates in hourly compensation even though I think that arrangement makes absolutely no sense for consulting. Rates are direct/third party and are California rates (subtracting 10 – 20% seems to fit for Midwest roles). Clients you will notice if you are using the big firms that you are paying a LOT of money for your resources- this is a list for INDEPENDENT consultants.

Junior consultant (will work mostly on training and communications)= $80/70 hr.
Mid level consultant (does above and can come in early [for those enlightened clients out there] to build plans and assessments)= $90/85 hr.
Senior consultant (does above if needed for smaller projects, but usually has other internal and external resources dedicated to those roles)= $110/100 hr.
Lead consultant (guides above with dedicated resources and plans long term change strategy. Also works to connect projects/programs/initiatives into a seamless work stream)= $130/(should not be third party)/105 hr.
Guru (I really do not like that word…they can design a Corporate Change Entity, they can do all of the previous if needed, they can teach and mentor someone else to do all of the previous and they are thought leaders [preferably innovative thought leaders] in their field. They are educated, experienced and very empathetic to client wants versus needs)= hard to put a price on this. This arrangement absolutely has to go around procurement processes and be direct. This person can save you a TON of money. They can also help to make others happy (which boosts productivity). Their compensation should be based on the value they will provide (immediately in seeing savings and in the future for dealing with root causes that cost money). If you have to convert that into an hourly rate I would say the range is $130 – 200. The first I would take for a great role with impressive executives. The second would be a value based conversion (and the client is likely still getting an incredible investment on their money). This person works directly with people who make millions of dollars a year (in case your jaw dropped at the yearly conversion- a good consultant can still make high six figures and more, only a few go above that on their own without creating a professional services firm and gaining compensation through others).

The next thing to come up (maybe this is a 2012 prediction) is the reappearance of one and two day internal seminars about change, project management and communications. Those were $5,000+ per day back in 2008. I like to tie them into larger retainer packages for clients for my own work, but they are also good introductions to the consultant, their perspective and their style. And clients, they are an excellent way to start socialization and stakeholder connection!

Rate ranges, of course, can be all over the place. They can be hourly, project, time or value based (the last makes the most sense on both sides- see Alan Weiss). This is an “I have watched and interacted with the market” perspective. Apologies to anyone trying to hide these numbers for gain.

Technorati Tags: business objectives, Buyer, CCM, CEO, corporate change management, corporate strategy, engagement, External Consultant, Fees, Garrett Gitchell, horizontal change management, Insights, rates, Value, vision to work

Contracts and Handshakes

The perfect scenario between client and consultant is a direct relationship, pre-paid (with the appropriate discount), sealed with a legal “paper” (electronic keeps the file cabinet neat) contract and bolstered with a handshake (and the informal contract from the conversation). Yes consultants this is entirely possible. Yes clients this is to your advantage too.

What has developed, thanks to the Microsoft case defining “employee”, is a less than perfect scenario. Now there is a contract between the client and a sourcing firm, another between the sourcing firm and third parties and finally a ridiculously (and here in California usually illegal) worded contract between the ACTUAL second party and this recruiter. Payments are often delayed, sourcing firms and the recruiters come and go (and merge and dissolve faster than a lump of sugar).

What has happened to honest one to one business relationships?

The Microsoft case
Commoditization
Short Term Focus
Performance Measures

The Microsoft case

“The IRS determined that permatemp employees were common law employees of Microsoft and the staffing firm’s role was simply that of payroll processor.” (Wikipedia), sums up the effect of the 1996 Vizcaino v. Microsoft case. If only it was as simple as just a “payroll processor” in between. This in between broken cog has worked to get their footprint higher and higher into the ranks of contractors up to, and unfortunately including, senior roles that SHOULD be truly consultative.

This wall makes it easier to let a consultant go on a moments notice (so much for contracts actually helping both parties). The wall is an excellent excuse to never actually have conversations with the consultant (and contractor for that matter) about expectations (certainly not in BOTH directions- what happened to client responsibility?). This wall means an individual given pseudo-control of the consultant can dictate hours- and often get away with the extra hours forced dance that goes on regularly with employees.

The case was supposed to right wrongs. All it did was redirect the wrong to much less solvent and responsible entities.

Commoditization

At what point did experienced, educated, knowledgeable outside influences (consultants and even high level contractors) become line items?

If I find, with my external eyes and fearless collaboration, an easy correction somewhere in your organization that can save millions of dollars (yes these golden nuggets still exist), how much should you pay me? If you make us line items you take away the ability (and desire frankly) for us to find those nuggets that pay for our stay with you.

This is a blog post in itself that requires some thought- if everything is a line item what happens to innovation?

Short Term Focus

Short term focus and commoditization are like the chicken and the egg, which comes first?

Short term viewpoints, measurements and actions, I think, are quickly going to have some serious effects on the US economy. It started long ago for consulting. Tactics rule. Strategy delays. No point in planning, just quickly assess and then get going.

A good consultant can fly above the current situation in their head and see all of the things going on in the periphery that will effect this particular short term situation. The other players are not only oblivious to external factors they do not even have the competencies to consider them anymore.

I personally work tirelessly to include a higher and broader perspective from informal handshakes.

Performance Measures

The Performance Management system in organizations is the ultimate sacred cow. No one wants to change it. It is the one factor in organizations that is connected to everything- every action, every perspective, every approach. So it is the one place where everything could be changed with a few tweaks (better an erased slate and start from scratch…).

External performance measures, everything based on stock price, have just as much influence. It takes more than a few contracts and handshakes to overpower.

My own best engagements- for challenge, for results and for business entwined with people- started with a handshake and a conversation. That was the contract. The paper stuff was just the first check box for the actual work.

Technorati Tags: 94526, business objectives, Buyer, CEO, change failure, Executive, External Consultant, Fees, Value

A Magic List of Project Prerequisites

The nice thing about blogging is that you can dream.

Here is a list of Magic project prerequisites (before I wake up):

An early date to start (within days of the idea for the change).
The owner (where the money starts) as client.
Peers of the owner interested in meeting you and discussing the change.
A PMO looking for strategic assistance.
A PMO that understands anything bigger than a project HAS to have a senior change management consultant.
A PMO that realizes number 5 is even more effective when external.
Middle of the organization leadership competencies.
No Gatekeepers.
One person review of communications (and not an internal communications person).
Willingness to do an early talking heads video.
Realistic compensation (not what procurement people call “market rate”) at least twice the salary this senior level of talent would get paid if an employee.
A DIRECT relationship- no second, third and fourth party barriers (to compensation and contracting expectations- in both directions consultant and client).
Budgeting for the roles of training, communications and tactical change management (for at least each program if not project).
Willing and eager to learn internal resources.
The right tools or at least the chance to use your own computer (loaded with the right tools).
Aversion to the statement, “that’s the way we do things around here”.
Comfort of, and curiosity for, the word, WHY.
Empathy (from the owner down or from the line stakeholder up).
Scheduling flexibility- this is a head role not a hand role, the consultant does not necessarily need to be on site all the time.
Performance measured by the smooth flow of change (not hours put in- that was our high school job).

Twenty is a good start.

What this magic list is about is respect for a seasoned, reasoned external perspective. What this magic list is about are leaders who take responsibility for their roles as both visionaries and guides for change journeys. What this list is about is people doing work that connects to something important. It is a list about something important being the lever for shared work.

And then I wake up…

Technorati Tags: Buyer, C level, CCM, CEO, change failure, change management, change management consultant, change management strategy, Change Strategy, Context, corporate change management, engagement, executive communications, External Consultant, Fees, horizontal change management, PMO, Value, vision to work

Deliverables

On a typical project a consultant may deliver an assessment, a stakeholder analysis, lots of individual communications, video(s), training and months of leadership development. That is at least four specialties. In a perfect world an engagement has a Change Management Consultant, a communications person, a training person and video assistance of some sort (internal or external). CM does not live in a perfect world so the Change Management Consultant often does ALL of these things.

It struck me the other day that every one of these deliverables (minus a core set of generic CM deliverables) should either have a separate charge or should raise the CM rate considerably. A client who gets all of these things for the going rates is getting incredible value.

If you are an external consultant you might want to consider charging for videos, extra communications (especially the instant firefighting kind- usually because the client skimped on change management or project resources), any regular reporting (written down- the dialogue kind is good for CM) and, definitely, training. It still surprises me how little some CM’s will ask for in compensation.

If you are a client consider the broad range of skills many senior consultants have and pay higher rates to bring that capacity (and knowledge) into your organization.

If those things were line items you might have $50,000 to a 100,000 (or plenty more) before the change management even started. Which means that a consultant actually makes about $50,000 to $100,000 a year for their real skills. Not exactly a professional salary…

Technorati Tags: Buyer, CEO, change management consultant, compensation, consulting rates, External Consultant, Fees

Getting things done vs. Making things happen

I think I might have come upon the distinction between internal and external, project management and change management, tactical and strategic, big firm and small. The first in each series gets TONS done… and nothing ever really happens.

The second in each pair can make things happen.

Those external strategic change management consultants from the small firms (to take the extreme of the make things happen side) get blamed for not getting enough done. If they hold their ground they continue take things happen. If they cave, the endless cycle of “covering your tracks deliverables” overwhelms them and they give up on ever truly accomplishing anything (they do get tons done though…).

What if one of the “happen” people makes a suggestion that speeds up a time-line, or gets the right leader involved, gooses some energy into a project stream or reveals program to project level overlaps (which can be invisible to internals and expensive)? Do they have to hand in a summary paper to get credit? They have no tracks to cover (and they are still measured by clients for what they can make happen).

However irritating it may be to those in the middle who are “doing” in a frenzy of stationary activity, the combination of experience, willingness to push buttons, all of those competencies that get things to happen is worth the expense.

A few hints for those internal project managers doing tactical work in a big firm:

Ask why for everything you type and write down that is expected to be “turned in”.
Beware made up templates that profess to measure readiness (aside example: I have seen “readiness” templates that require filling out 10 – 15 different sections with a score to represent business/people readiness, subjective of course, in order to spit out a graph on the other end that illustrates readiness. Hours spent filling it out will be completely negated with one saboteur- who could of course been a stakeholder to reach out to and… you know… make things happen).
How much time do you spend at the computer for things that need to happen?
You do realize PEOPLE make things happen not deliverables?
Is your organization or project filled with young people banging out deliverables with “leaders” spending their time in meetings reviewing and OK-ing?
Did I mention asking why…? for everything.

Keep in mind that change is about getting things to happen- likely different than anything your culture is used to. That requires interaction, collaboration and teamwork that will always be reduced with “paperwork” piles that someone insists need to be done.

Technorati Tags: Big Picture, business objectives, Buyer, CEO, change management consultant, Fees, Internal Consultant, Value

How much should it cost to own a change management consultant?

Because clients get to frame the change management connection (until they are smart enough to take the advice of a senior consultant and look at things in a different way) most engagements are long term. A year is normal; two not out of the question. In that situation clients tend to think of the consultant as an employee. The legal spin on that is to create a stable of contractors. The client still can’t, legally, tell the consultant when to show up, but they can put a lot of pressure on the sourcing firm that brought them in (and sourcing firms care little for the consultant).

So now we have hourly expectations, likely deliverable expectations, no vacation, no benefits and an increased expectation that things will get done (even if the employees who SHOULD be doing that work are on their way home to their families).

I hope this resonates for the practitioners reading.

I hope it hits a nerve (not the irritation one, the compassionate one) for clients and internals reading.

Which leads me to…

If you are going to have those expectations then you should have to pay for it. Likely you can get away with this because there are a lot of consultants that will practically work for free. There are a lot that are unemployable (which may be true for most consultants- the successful ones leverage that). And there are a lot that think somehow this imprisoned contract role has more flexibility than employment. Hey they are on their own!

My estimate for owning a senior consultant for a year is at least (for California) $350,000. A senior consultant (yes even in this environment, which, by the way, is good for change management) can make that number with multiple clients, speaking, seminars and writing. A scenario much more exciting than a 9 to 5 (plus lots more) arrangement.

This little rant comes to you because clients keep telling me they can’t get good consultants. As a client keep in mind the good ones work direct and are expensive- especially if you expect to “own” them over a period of time.

Technorati Tags: Buyer, CEO, change management consultant, External Consultant, Fees

Internal vs. External- why is it either or?

Bev Scott and Jane Hascall have a short little write up on Google docs, “Inside or Outside: Internal or External Consultants” that has a great chart comparing the strengths of each. To sum up:

The external is good for high level, broad transformational strategy, coaching executives, can add expertise, can bring in comparisons, can validate stretch ideas etc..

The internal is good for speaking the jargon, knowing the culture, staying power (since they are likely “cheaper”- my quotes), are tactical and have a sensitive inside focus.

I have to agree with each of the items.

But then I look at the chart and think… bring in the external and you can likely build the capacity of the internal.

An external can mentor everyone, not just executives and especially internal change practitioners
Many externals know culture well since initiatives last long periods of time- they can help change sensitivity into empathy (empathy tends to be faster on the business side)
Human nature is pretty consistent (knowing that may be why externals have substituted empathy for sensitivity)
An external can help the internal language specific to this initiative not necessarily the culture as a whole
An external can help the internal see status quo and then create a new version

Just an internal limits your options. There is no such thing as just an external (at least with independents, I can’t say as much for big firms- revenue does not come from transfer of knowledge). External, if they know their stuff, guide rather than create deliverables, they mentor and support rather than assuming the responsibility of an internal role. The internal organization must own, be responsible for and deliver.

So I say Bev’s chart is just one column entitled, “When to use consultants, both internal and external”.