I was reading Seth Godin’s post, “Profitable, Difficult, or Important?”, and it struck me: that’s a tension I’ve felt throughout my consulting career.
Although the tension was inside my head, it showed up in my business model,[*] which means it eventually showed up somewhere else. You guessed it: In my bank account!
For example, early in my second consulting practice (I’ve had three), we focused on what we thought was important: serving small nonprofits. That proved to be both difficult, and, as you might guess, not very profitable.
But we thought we were brilliant. We secured third-party funding, which made our services almost free. We reasoned, who wouldn’t want that? Well, as it turns out, a lot of small and very fragile organizations wanted that. They killed our key performance indicators. And, unfortunately, the process of working with them proved to be exhausting as well.
I’m not dumping on small or fragile nonprofits. It’s just when you’re getting your practice started and your business is small and fragile too, that’s not exactly a winning combination. At least it wasn’t for us. We, or at least I, needed to get over my Mother Theresa complex.
“Difficult” was baked into our business – chief executive search and transitions. CEO turnover involves a challenging organizational change process on top of the difficult task of finding the right candidate. Call me crazy, but I read an article about a guy who reduced the process of building backyard swimming pools down to just 22 steps. I thought, “if he can reduce something as complicated – at least to me – as building a swimming pool to a relatively few replicable steps, dang it, we can simplify this executive search and transition process!” So, we did a whole lot of process mapping, streamlining, and putting strong systems in place and improving them constantly so that we were getting the best possible repeatable results.
And then there’s “profitable.” It wasn’t until my business partner and I (me anyway) wrapped our heads around the idea that profit isn’t an evil (or “just” a necessary evil!) that the business began to thrive.
That was a hard lesson for a couple of nonprofit guys. This was after a business coach introduced us to the idea of paying ourselves first: making the business work for us instead of us just working for the business.
I sense that the business of consulting works best when these three elements of tension are balanced. Focus too heavily on profit, and you could look sleazy. Focus too much on the difficult, and you end up killing yourself working. (That’s how it showed up for me.) And too much focus on the important can take you down any number of rabbit holes, depending on how you define “important.” In short, focus too heavily on any one of them and your business can become misdirected. You can end up with a business model created by default rather than by design – a business model that’s shaped by your assumptions and circumstances rather than consciously created by you as the leader of your business. And a business model that ends up driving you instead of you driving your business.
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[*] At the simplest level, a business model is a link between the value or impact that your business creates, who it creates that value/impact for, and how it gets paid to create that value.