Consulting Drucker

by William Cohen

  The hours in the day he preferred to work were another matter. I suspect that it was during the day and not late at night. In independent consulting, it doesn’t make any difference, because except for any unique requirements of the particular consulting engagement, you can select your own hours depending on when you work best. You can take off work when you feel like it, if no client interaction is required.

  I sometimes called Peter on the phone and we might talk for about an hour or more, which caused me to feel very guilty, as I just wanted a quick question answered and didn’t want to waste his valuable time. However, when I mentioned this, he would say something about thinking through an issue with a client or working hard on some writing project and distance himself from the issue briefly. He said he was glad I called because he really needed and appreciated the break. The point is, regarding independent consulting, taking a break and the time to discuss management, war strategy, or education (we discussed all three and other subjects at various times) was Drucker’s decision, and not someone above him that he had to please – with the exception, of course, of his wife Doris.

  It goes without saying that there are due dates, deadlines, and meetings with clients or others that must be accomplished for the good of the practice, and I’m sure Drucker considered this also when I, or anyone else, happened to call without previously making an appointment and interrupted him. However, few other professional occupations grant you so much latitude. In independent consulting, you are the boss and the decision maker in almost everything concerning how you practise your profession. As I once overheard a consultant tell a client, and this was not Drucker, “We’re going to do this my way, or we’re not going to do it at all.” That’s seems to me a little harsh; after all, one does succeed better as a management consultant with a good bedside manner, just as a practising physician does.

  Drucker didn’t accept every consulting assignment for a variety of reasons. I’m not talking about his schedule being booked or unable to take on an assignment due to ill health. That happens to all of us from time to time. As I mentioned in the last chapter, I remember once that he rejected an assignment because he felt that what the client wanted was already available and should have been known to him. So, Drucker told the client what he should have known. He even may have recommended a book where the client could find the information, whether it was one of his own books or not. These were all Drucker’s decisions, not those of any manager (except maybe when it concerned his wife Doris).

  The Advantage of Control over Your Life

  Like Drucker, as an independent consultant you can decide which assignments to accept and to reject those that you feel should not be accepted. You are not only a consultant, you’re an independent consultant; you are the boss! And this may be no small thing. To examine this advantage further, ask yourself, are you in a job in which you don’t like your boss? Must you work with people whom you just do not care to be around? As an independent consultant, here again the decision is yours. You decide whom you wish to work for and not work for, as well as the people you do and do not work with. Whether you do or do not work for a particular client or others who may help you with a project is entirely up to you.

  This control over your work life is valuable in many ways. Unless you accept too much work, it usually results in reduced stress. I read somewhere that individuals who have control over their work and work-life balance tend to live much longer and have fewer illnesses than those who are most subject to the control of another or job demands over which they have little say. Drucker lived until just two weeks short of his 96th birthday. I don’t know whether being an independent consultant had anything to do with this or not, but his long life, and long work life, are certainly facts.

  The Question of Compensation

  As an independent consultant, even income is in many ways much more under your control. Are you dissatisfied with your current income? Do you feel you are paid inadequately? Have you had a freeze on your compensation due to a recession, or even told that your salary would be reduced? In independent consulting you set your own fees; you decide how much you’re worth and in that sense how much you want to make. If you are worth more right now or your business has suddenly expanded, you can immediately give yourself a raise. You don’t need to wait for a salary committee to determine if you should be paid more. At any time that you feel that you are underpaid, you have the power to remedy this fact immediately. And if Drucker felt like it, he gave his services away gratis without asking for anything in return. Many consultants like to be in a position to do that.

  Location, Location, Location

  Do you prefer to work at home? In independent consulting you can earn a very high income working from your own home without worrying about parking, driving, or the expense of an outside office. In fact, the office in your own home will probably be tax-deductible. Drucker certainly did this. Drucker worked out of his home – except for visits to clients, teaching and lecturing – during his entire career. That’s an important lesson for anyone who thinks a prestigious address, an office with panelled walls, complete with a waiting room and expensive leather chairs, and more are needed. Even after all these years, it’s hard to believe that Drucker had no secretary, even before the computer age, and he had no receptionist and answered his own phone. Also, and I’m certainly not recommending this, but I don’t think Drucker ever used a computer.

  Risky Business

  Finally, are you concerned about taking risks associated with your own full-time consulting practice? Yes, there are risks. Drucker even taught his clients how to deal with the risks in their businesses, as we’ll see in a later chapter. In fact, you can minimize risk by following some of Drucker’s practices. There’s no need to risk your time, career, or a large monetary investment. You can start in consulting part-time and ease your way in. That’s what Drucker did, and others have done the same, working part time after their full-time jobs, at nights, and on weekends. You won’t need to quit your full-time job until you are ready and even already successful. Essentially, and maybe unintentionally, that’s precisely what Drucker did.

  The Importance of Goals and More Serendipity

  In our analysis of why individuals become independent consultants, we cannot overlook the importance of goals. Drucker made a great deal of money as a consultant. Yet he chose not to adopt the lifestyle of the “rich and famous”, and at some point decided that hefty consulting fees should go into a foundation he supported rather than into his pocket. And as I reported before, he would charge nothing if he were so inclined. These acts are all good evidence that great wealth was not the primary goal driving his consulting work. There are clearly many reasons to go into consulting other than attaining wealth. Later in life, he explained that except when there was a real need for money – such as during a recession when one might be unemployed and work is hard to find – all workers are volunteers because if they don’t like what they are doing, they can easily go elsewhere.

  I believe this absolutely. I discussed one of our director’s trips abroad for my graduate school, with the intent of some sort of mutual programme for undergraduates at their schools and the MBA at ours. This director receives no compensation, although we do allow relatives of all our administrators and faculty to enrol in our programme at no cost. I congratulated him on a successful trip and told him we could start paying him soon. This individual, a highly decorated retired Air Force colonel said, “Bill, don’t worry about it. I don’t need the money. When you are having fun in a job, that’s pay enough.” So perhaps Drucker was correct. I’m going to pay the director eventually, but I thanked him for saying, “Don’t worry about it,” because I did.

  Part-time Consulting

  However, some volunteers and some consultants come to independent consulting to supplement earnings from other sources. In one sense, this was what happened with Drucker. He was earning money as a freelance writer and as a part-time professor at Sarah Lawrence College in New York. His wr
itings on politics and society culminated in his book, The Future of Industrial Man, and brought him first to Bennington College in Vermont as a full-time professor of politics and philosophy in 1942 and the following year to General Motors to do a top-level management audit. This was a major two-year consulting assignment, which led to his book, Concept of the Corporation, to more consulting, and to his academic appointment in management at New York University in 1950. One can see how independent consulting supplemented his writing and professorial income up to this time.

  Part-time Consulting by Students

  If you think students don’t make good part-time consultants, you would be wrong. Our students at the California institute of Advanced Management learn and are required to perform consulting in teams of four, and once solo, for companies large and small, in every course. They do this primarily to demonstrate the application of the theory they have learned. They gather testimonials for their work from satisfied clients as if they are going out of style.

  All our clients are entitled to a second engagement after six months, free of charge. Recently we completed a second engagement for an unusual client. It was an old, but small and successful, international consulting firm, with about a dozen or so consultant-employees who all held graduate degrees. The client told me, “Your MBA students are excellent consultants. Can I hire your students for pay?” I thanked him, but declined. I thought that the possibility of a conflict of interest was too much. However, we did cut a deal that our MBA graduates could be hired for pay and we wouldn’t take a cent.

  When to Transition from Part Time to Full Time

  At the point that the part-time consultant makes as much or more money than in his or her “day job”, one of two totally different options are available. The lure of consulting may completely draw the part-time independent consultant into full-time consulting activities such that academia or the previous profession is completely abandoned, or consulting may continue as a financially supporting activity. The latter is what occurred in Drucker’s case. Drucker built a renowned, top-rated consulting practice, but no matter how large it grew – and it did grow very large – or how famous his consulting became, it was still only one facet of Drucker’s central profession, which he called being a social ecologist.

  One More Consultant’s Tale

  I should throw in my own story here, which occurred before I met Drucker. I left the Air Force for a time to work abroad in my wife’s country of birth, Israel. When I returned, I took a job as head of research and development for a small company, Sierra Engineering Company in Sierra Madre, California. However, while in Israel I had written an article published in the US about a product I had become involved with before I left the Air Force and went to Israel: personal body armour for aircrews. Unknowingly the article caught the interest of a vice president of an aerospace company, Garrett AiResearch, which was located in the Los Angeles area. AiResearch built turbochargers and turboprops as well as other defence-related products. It eventually merged, was acquired, merged again, and in about 1999 acquired the Honeywell name.

  Several years before I met him, when his company was still Garrett AiResearch, this vice president had been in charge of a programme to replace the US Army’s protective steel helmet – used in World War II, Korea, and Vietnam – with a titanium helmet. Titanium was lighter, stronger, and more protective, but of course more expensive. He had been promoted to vice president, but somewhere along the way his pet project had been abandoned, even though he felt it still had potential.

  Then he read my article in Ordnance and thought he had found the right man to conduct some research and recommend either to continue the project or to let it die. He wrote and asked if I were interested. He used my address in Israel that he had obtained from the editor of Ordnance Magazine. Unfortunately, I had left Israel and returned some months earlier to, of all places, Los Angeles, exactly where his company was located. However, the story doesn’t end that quickly.

  His letter was forwarded to my in-laws, who lived in a different city in Israel. Mail could not be forwarded abroad in those days. My in-laws spoke, read, and wrote only Hebrew and everyone corresponded internationally only on very lightweight, special air-mail paper. Larger paper packages, which this was, went by ship and took about six to seven weeks to arrive. You could send packages by air, which is what this vice president at AiResearch had done in the first instance, but in those days that cost a fortune. Israel was still a developing country back in the early 1970s, and my in-laws couldn’t afford to waste money. So they held on to the letter, hoping that sooner or later my wife and I would return from the US to visit.

  And I did, but without my wife, and under very unexpected circumstances. In 1973, Syria and Egypt launched a surprise attack against Israel in what is known today as the Yom Kippur War. When living in Israel and under Israeli law, I served in the Israeli armed forces and because of my prior military experience was commissioned in the Israeli Air Force as a major. I returned to Israel because of the war. After the armistice, I was given a couple days off and decided to visit my in-laws, where I was handed the letter, which had been written several months earlier. I contacted the writer on my return and he engaged me to do some research as a consultant. It was my first consulting job. My motivation was a combination of supplementing my income (as a research and development director of aviation life-support products) and satisfying my curiosity about consulting and what it was all about.

  It was not as an extensive project as Drucker had with GM for his first project, and it only lasted a few months. I discovered that the army’s new Kevlar helmet, the one in use today, was under development and was lighter, more protective, and above all less expensive than the titanium helmet that I had examined. So my recommendation was to abandon the project, and it was abandoned. This definitely whet my interest in consulting, and I was now an experienced, if not a very experienced, consultant. It also was a lesson that any mail still arriving in Israel and addressed to me should be airmailed to me and I would pay the airfare. It is also a lesson for all who want to begin independent consulting today. The connection with Drucker’s serendipitous entrance and my own was clear: writing books or magazine articles was an indirect but powerful method of marketing consulting services.

  What Makes an Outstanding Consultant?

  Simply being a consultant and being an outstanding consultant are two different things. After observing Drucker for more than 30 years, as well as speaking with many highly respected consultants around the country, I identified seven areas that make the difference. They are adapted from my book, How to Make It Big as a Consultant (AMACOM, 4th edition, 2009). Drucker exemplified every single one of these seven areas.

  The Ability to Interact with All Participants in a Consulting Engagement

  It’s not so much what you say, but how you say it. Doctors with great medical knowledge but poor bedside manners often find that their patients prefer to go to doctors with much less experience or ability. Therefore, developing a pleasant “bedside manner” while maintaining your integrity gives your clients and others confidence in what you say and do. This can be as important as your technical knowledge. Drucker deemed the courteous treatment of others – especially clients – essential, and though he might respectfully disagree with them, and even chose to turn down work, he always showed others courtesy.

  The Ability to Diagnose Problems Correctly

  To stay with the doctor analogy, we know that a doctor has access to all sorts of medicines to help cure a patient. But if the physician makes an incorrect diagnosis, the medicine may:

  • Not help the patient and, in the consulting context, be a waste of time, money, and resources

  • Hurt the patient more. Drucker emphasized the Hippocrates injunction to physicians for those in management: “above all, do no harm”

  Your ability to diagnose a problem correctly in a consulting situation is extremely important. Otherwise, your actions may hurt the organization rather than help it.
Prescribing the right medicine, that is, giving the correct advice, is one of the most significant criteria of an outstanding consultant. I have seen consultants get carried away with the use of their own sophisticated methodologies such that they forget about the central issue they’re supposed to investigate, solve, or resolve. As a result, they get their clients and themselves in trouble by failing to prescribe the correct cure, although they displayed their expertise wonderfully.

  The Ability to Find Solutions that Work

  Of course, having diagnosed a problem, you are expected to recommend the proper actions to correct the situation. Drucker’s methods for dealing with problems can be found throughout this book. Perhaps his most innovative strategy was to ask his clients questions of a type that led to their uncovering potential solutions themselves. This unique methodology in itself set Drucker apart from other consultants who emphasized their own mostly quantitative, analytical methods. I will refer to this again.

  Technical Expertise and Knowledge

  Perhaps you expected this would be the most important skill for a good consultant, and it is true that technical expertise in any field is important.

  Expertise comes from education, experience, and the personal skills you have developed. It may be in any one of a number of areas, and it may develop in a variety of ways.