confidence and humility are not mutually exclusive

In the last week of my full-time employment a co-worker (and former consultant) told me she thought I would find consulting harder than I expected. I didn't know her very well but I knew her well enough to know she was referring to the selling side of consulting, and I could tell by the way she said it she didn't think I had the "selling side" in me.

I told her I agreed that most consultants struggle with the selling side of the job, mainly because you are selling "you". What you personally bring to the table is all there is to sell, and part of what you bring to the table is confidence. But many consultants struggle with the concept that confidence and humility are not mutually exclusive. The opposite of humility is not confidence but rather cockiness. Cocky consultants are annoying, irritating, and often difficult to do business with.

When I talk with any customer I know I bring confidence to the discussion. Confidence that I know what needs to be done or that I don't.

Cocky consultants always know the answer, regardless if they really do. Confident consultants are humble enough to know when they don't know the answer, but instill confidence they can find it.

She was right that I'm not naturally a sales person. I have friends who are and they could convince you to buy the dirt off your own floor. As a consultant that is not the type of sales person you want to be. You want to be an evangelist.

If you are selling on the basis that you offer a service you're selling on cockiness: "Buy me because I'm here." You should be selling on the basis of a business problem that you personally can help solve: "Buy me because you have this problem and I have experience and knowledge to offer multiple solutions on solving that problem."

Seth Godin had a great post today on Self Promotion that spurred this thought. Thanks Seth!

the most important decision as a consultant

The number of decisions you have to make when starting your own consulting business are numerous. Decisions like choosing your niche, how much you charge, where you will spend money are all important. But one of the lesser discussed but possibly most important decisions is what business will you NOT take.

I have found this to be the most difficult decision because knowing when the next job will be is usually unknown. You are always in need of the money (lets be honest here), but every opportunity that comes your way has the potential to grow or limit your business (read income).

• will the contract increase your specific skill or expertise that makes you valuable?
• will the contract lead to on-going future business with a client?
• how sure are you that the project will end successfully?
• how likely is it that the potential client will provide you with a good reference?
• is the potential client the type that would recommend your services without request?

These are all important questions to ask when deciding what kind of projects you do or do NOT take. But I'm going to focus on one question where many consultants make the wrong decision.

Will the client pay you what you are asking?

This is an important question because it brings up two equally important questions. First, how much are you worth? And second, what type of personal life do you want?

The temptation to take a contract at a reduced pay is great, especially when the pipeline is small. But one of the most important decisions you will make is sticking to your guns and turning business away. Consultants are generally willing to take these jobs because they come with a promise of lots of work or because of nervousness that nothing else will come along.

But if you take a contract for either of these two reasons you are both decreasing your perceived value to current and future clients and sacrificing your lifestyle. You should be confident that you are worth your rate and your current and potential clients must see that. Taking a contract for a lower fee says that you believe you are not worth your stated rate. And if you do not believe you are worth your fee then you should not be charging that fee.

The second reason you should not accept a reduced fee is based on simple math. Let's say your normal fee is $100 per hour (just to pick a round number). If you take a 20% fee reduction at $80 per hour then you have to work more hours and harder to make up the difference.

Most likely you have a revenue goal for your company (if you don't it's time to get one). The more projects you take at a decreased rate the more you have to work to achieve that rate.

If you are still not convinced then look at it this way. Let's say your goal is to bill 30 hours per week at $100 per hour with four weeks of vacation. That means there are 48 billable weeks in the year. This is pretty aggressive goal if you are just starting out.

48 weeks x 30 hours x $100 = $144,000

NOTE: $144,000 may look like a lot (or may not), but when you factor in taxes and business expenses your take home quickly begins to fall.

If you take a 12 week contract at your 20% fee reduction there are only 36 weeks left in your "goal year".

12 week x 30 hours x $80 = $28,800
36 weeks x 30 hours x $100 = $108,000

Now your total revenue is $136,800. In order to make up the difference of $7200 to meet your goal you have to work 72 hours at your $100 rate. That equates to 2.5 weeks of work which leaves you with 1.5 weeks of vacation time.

But the better scenario is that you would only need to work 45.5 weeks at your normal rate to achieve the $136,800 revenue number. This means that you either have 2.5 more weeks of vacation time (imagine a job with 6.5 weeks of vacation), 2.5 more weeks to market and build the business, 2.5 weeks to blog and share your knowledge, or 2.5 weeks to try and find a small contract at your $100 per hour rate.

Be worth what you say you are worth. It will be better for you in the long run and you'll do business with the type of customers you want.

best-of-breed or one-stop-shop...what's best for me

For many this debate is a philosophical versus empirical one, but it is worth a discussion I think. It is almost impossible to set aside the philosophical side of the debate (i.e. those that hate strongly dislike big business), but I'm going to do my best based on my experiential side of the debate. In starting this post off lets take a moment and clarify what we are talking about.

best-of-breed
"Best-of-breed" vendors generally provide one or two technology solutions. They are 100% focused on these products and are thus considered to have more expertise in the needs of their customer (a debatable concept). Generally they are also considered to be more agile because of this focus (or so they say), allowing them to respond to development requests in a shorter time frame or at least with a more predictable software release schedule.

one-stop-shop (aka integrated systems)
(Pretty self explanatory I think) The Wal-Mart of technology vendors. They can fulfill most of your major technology needs and some of your minor ones as well (or so they claim). Generally they are very large organizations that offer products to a wide range of vertical markets. For this reason they are considered to have less knowledge of your specific operation (a debatable concept). Their release schedules tend to be further apart, but they also tend to perform custom work more willingly (possibly because of a larger resource pool) (also a debatable concept).Now that we are all on the same page lets talk about how to sort through the question, "What's best for me?" First, for the purposes of your time and my own sanity I'm not going to attempt to categorize all the vendors for every technology solution. It's almost impossible given the new companies that pop up semi-regularly and more importantly with the disappearing act by many of the formerly named best-of-breeds recently gobbled up by the one-stop-shops. And that quickly then brings me to the point...best-of-breed or one-stop-shop labels are a useless and very stupid business requirement when selecting your technology solution. It might have been a semi-meaningful requirement five years ago (of even two years ago), but not anymore.

Now, I'd like to just end here and have you believe me because I say so...but the probability is some of you reading this are staunch believers that best-of-breed or one-stop-shop is an important requirement when selecting a technology vendor. The rest of this post is dedicated to you. If you agree with me I'd love you to post a comment on what experience led you to the same conclusion. Below are some of points based on my experience, and why they are pointless when made as general statements.

ease of integration
This is one of the biggest points in the debate, and is often touted by the one-stop-shop as a major reason to chose them. But before you buy look closer, talk to existing customers, and make sure that this is really true. As with anything in technology your plug-and-play solution may leave you hanging. At face value it seems logical.

A single company can get their products to interface and integrate easier/better than different companies.

But changes in technology, the ever shifting product road map, and the acquisition engine proves in reality they most likely are not so integrated.

Most one-stop-shops did not start development of their products at the same time, which can mean the technology platform between the solutions is different (sometimes drastically). This can lead to some interface challenges that are often only overcome with limitations (and you end up with multiple technology platforms). The number of products gained through acquisition and the time frame of those acquisitions is also a good identifier for how seamlessly integrated a one-stop-shop is. My experience has led to the conclusion that the integration capabilities post acquisition is about the same as when they were different companies. Existing customers have lived with the limitations before the acquisition for years, so it is easy for a vendor to rationalize not making it a priority to enhance integration.

The willingness of one-stop-shops to work with other vendors is also a point to consider here. Where generally best-of-breed vendors thrive off partnerships with other vendors, the one-stop-shop may create integration road blocks. After all, it is in their best interest for you to purchase all of their products.

Now in fairness to the one-stop-shop I suppose I also need to point out that best-of-breed vendors also make this claim by touting their agility to enhance the product quickly. In some cases this is probably true. But do not be easily mislead. As a customer you want to be wary of this promise, because if it is being made to you it is also being made to someone else. You want a vendor that has a well established software development life cycle (SDLC) so they already (or at least should) have the next two to three versions of the product planned out. First, this means that new development probably cannot make it into the next scheduled version. Second, it means that your requested enhancement can easily be trumped by promises to the next customer. The temptation for best-of-breeds to "follow the money" is often too tempting and promises become easy to break.

Rather than basing your decision on claims to ease of integration do your research to document your requirements with order of priority. Select a technology solution based on your clearly defined and documented integration requirements versus claims to ease of integration.

small size = better relationship
I'm going to pick on best-of-breed vendors here. One of the claims made by best-of-breed vendors is their smaller size lends to a better vendor-client relationship. They claim to support their product(s) better and establish better relationships with their customers because of their size. Who made the rule that to be nice to work with you have to be small? In my experience a good vendor relationship is grounded in the type of people versus the size of the company.

As a side note it is too easy when choosing a technology solution to let your sales person do all the selling. And that seems logical...but your sales person is not who you will be talking to on a daily basis. You should be meeting with the group of people you will be working with regularly. If you will be assigned an account manager then meet that person. You should also speak with installation, support, and the person that handles billing disputes. Interview them because how they respond will give you a very good idea of what it will be like to be a customer. This group will often not have the skill or desire to "sell you", so they will act just how they act every day.

Nice dinners and golf outings are great, but I bet you would give that up for a support team that is knowledgeable on the product and a finance team that is pleasant to work with. Select a vendor based on their reputation in the industry and the people that you meet, not on the assumption because they are smaller they will be better to work with.

single support entity (aka one person to yell at)
The "one person to yell at" claim is generally made by one-stop-shops and it has some validity. It can be very useful to have a single point of contact for resolving problems with your technology solutions. But this is only a reasonable point if the vendor is responsive and helpful when you yell. If you already read the comments under ease of integration and small size - better relationship you should foresee the coming point.

Having multiple vendors that are very helpful and nice to do business with will always be better than a single vendor that is difficult to do business with. Base your technology decision on who you believe will offer the better support not based on the number of 800 numbers you have to tape by the phone.

in your back yard
This is one of those funny requirements that venues seem to think is a great benefit when choosing a technology vendor, and that technology vendors tout as a major benefit to the venue.

If the vendor's corporate office is close they will be more helpful and technical support staff will be available to swing by your property on a regular basis!

Unfortunately this is usually not accurate whether your vendor is a best-of-breed or one-stop-shop. If you yell loud enough and long enough they will send someone, but that is true if you are around the corner or across the country.

The vendor is not staffed to be at your beacon call and you will often get the freest resource (read least experienced) when you do need someone. If there is a big enough problem they will send someone regardless of where you are. In my experience your vendor's proximity to your physical location has very little to do with the quality of support you will receive.

Additionally, as a venue be wary of the in my backyard vendor. You have expectations but so will your vendor. You're site will become a frequent stop for sales calls, sales meetings, prospective customers, prospective partners, and bleeding edge technology solutions.

In summary if you choose to do business with a technology vendor because they refer to themselves as best-of-breed or one-stop-shop you will stand to be disappointed at some point in the future. It is naive to assume that your best-of-breed company is not looking to expand their product suite through "build it' or "buy it" plans. Even more likely your best-of-breed company is continuously being courted by one-stop-shops and will eventually marry for money (a poor relationship foundation by the way...in life and business). But for many that is goal. Build a company so that it is attractive enough to a potential suitor to sell and retire in the Caymans? Can you really blame the owner(s) for doing what almost every entrepreneur dreams of doing? I think not, so stop treating your vendors as if they were different than any other company with a different goal than your company. And for the one-stop-shop vendor the reality is they are generally not quite as seamlessly integrated as they proclaim.

The bottom line is hospitality venues did not coin the terms best-of-breed or one-stop-shop. They are terms creating by the vendor's marketing departments and ultimately should have little bearing on your technology decision.

Comment if you agree or disagree, I would love to hear from you. And as always, if you'd like to find out more about kevin sturm Consulting please visit my website or email me.

Pictures courtesy of DWQ, Crawfishpie, Dzwjedziak, Extra Medium, katiebate

the negative value of negotiated services

Normally I spend Thursday writing a post for htms, but today I spent it speaking at Santa Barbara Culinary School. I got to speak for a short while to the next group of leaders in the hospitality industry, which is always really rewarding. It was a great event hosted by the HFTP CA Central Coast Chapter, AND we had a great luncheon speaker in Bob Hazard (former CEO of Choice Hotels). I hadn't even looked at who the lunch speaker was so I was stoked to have such a huge name in hospitality. I also found out he is now the CEO of Birnam Wood Country Club just down the way. So COOL...

Anyway, since I was not able to spend much time writing I thought I'd shoot a quickie out about negative negotiation. If you're in the middle of purchasing a technology solution, or planning on it, it is likely that you have spent some time negotiating price with your vendor. If you are not, or have not planned to negotiate price you will probably pay more than you need to. Vendors expect price negotiation to occur and for that reason generally have decided on what pre-valued discount they will offer before they even meet with you. So negotiate away. But, there are areas of your purchase you should negotiate price and those you should not.

DO negotiate on hardware costs
Your prospective vendor has a price point for their hardware product(s). If a customer buys it at full price then they make great margin. But they expect that you will negotiate the price, and you should. Hardware is a fixed deliverable. You get the same hardware whether you get 0% discount or 50% discount. So negotiate and get a great deal. As a side note, end of quarter and end of year are great times to negotiate price with your vendor because they are pushing to meet quarter or year-end revenue goals.DO negotiate on software licensing
In the same vein your vendor has a price point for software licenses. Regardless of how much you pay for that software you get the same thing. If you negotiate a great price then you get a great price but the same product...great for you. The quarter and year-end purchase applies here as well.

DO NOT negotiate on services
I see this time and time again with customers where the quantity of services or total dollar value of services was negotiated down. DO NOT negotiate on services, because the old adage "You get what you pay for." applies here. Your sales person may try to make services the first place they negotiate on your order, and ultimately you don't think you care...but you should and you do. Often a sales person tries to cut services first because they are commissioned less or not at all on services revenue. Discounting hardware and software lowers their personal income, so discounting on services means they might not take an income hit. But discounting services will have a huge affect on your project!

The concept is simple really. In my experience almost every vendor quotes services accurately to what they believe it will take to do the project successfully. Services numbers are usually made up by the services group. Discounting or lowering this number may get you a lower price point, but it also means that the services group is doing the project for less than they think it will take. So you get one of two outcomes. One, you get a Change Order Request from the project manager after work has begun and pay the higher amount anyway. Or two, you get less or often poor service leading to struggles in the implementation and support of your technology solution.

Comment if you have a story on how discounting services hurt your project. I would love to hear from you. I'd also like to hear from you if you think I'm wrong. And as always, if you'd like to find out more about kevin sturm Consulting please visit my website or email me.

the pending death of "pay-as-you-surf" internet

FREE or pay-as-you-surf Internet in hotel rooms is a hot topic in hospitality conversations right now. So like any good sheep I'll follow and give my two cents. If you read this blog regularly you know I'm a big fan of FREE Internet. I believe with an unwavering constitution that Internet in your hotel room should be FREE (read this post to understand my stance). It's my technologically advanced right! I deserve FREE Internet! I HATE paying $9.99 when I want to get online...but I'd happily pay $15 to not care if I was paying $9.99.

I've had dozens of conversations about this topic, and inevitably there is someone making it out to be a complex issue that has many different factors contributing to if a hotel provides FREE Internet. I hear them, but to them I say Bologna! (pronounced ba-low-nee for those who speak no French) Lines have been drawn and there are three camps when it comes to "how should a hotel recoup costs for providing web access to customers".camp #1: the money-grubbers
I think that title says who this camp is. This camp believes vehemently that Internet access is not an inclusive service and should cost extra. They love the additional revenue pay-as-you-surf supposedly proves to generate and are not willing to discuss the possible or plausible revenue benefits of inclusive pricing and better customer satisfaction. This camp should be forced to pack up their tents one week per month and work from hotels that do not offer free Internet. Or, everyone in this camp should be forced to pay for Internet access by the day, hour, and minute at their normal work place and then be forced to submit justification with the receipt on what they accomplished during those charged Internet hours. Or, forced to pay for it out of pocket like the thousands of entrepreneurs who don't get to "expense" Internet access and feel nickle-and-dimed by the pay-as-you-surf camp.

camp #2: the corner drug dealers
This camp is like the corner speed dealer getting a casual user hooked. Stay at our hotel and we'll give you crappy casual speed for free. If you want to have web conference calls, host a webinar, give a demo, perform remote actions on a system via remote control software, or let your kids play games you have to buy the "good speed". The good speed is expensive, and they know you will always generally feel the need for speed. And once you get the good speed you can't really go back to the free speed...and they know it. This camp should be forced to perform their normal daily business functions for an extended period of time on the "free speed". And then smacked with a purse when they ask for good speed. This is also the camp that uses soft word rhetoric in calling themselves peace makers and collaborators by giving us a choice. "If you are a casual user then you get it free." In my world there is no casual Internet use, and my world generally doesn't include streaming video or online gaming. But as iTunes, Hulu, and ModernFeed become mainstream and talking with clients via Skype is normal, that is the casual user and then the corner drug dealer forces me to pay for speed.

camp #3: camp of the free, web surfing rave
This is the camp that wants all the speed FREE. If all you have is slow speed then I want that FREE, but if you have high speed i want that FREE, too! It is my Larry G. Roberts given right to have it FREE. This I believe is the largest camp, of which i am a card carrying member. Give me FREE or I'll give you pay-as-you-surf Internet death!

And that then leads me to the real point of this post. Unless something changes pay-as-you-surf hotel Internet will go the way of pay-as-you-talk hotel phones. Phone calls used to be a pretty good money maker for hotels. X dollars per call and then charges per minute. If you traveled regularly on business your hotel phone bill was hefty. First came the invention of 1-800 calling cards, so then hotels started to charge for the 1-800 calls and local calls to make up for lost revenue. Then came the mobile phone. Reception made it hard to only use mobile phones, so hotels still invested heavily in PBX infrastructure. But hotels quickly found their phone investment would never pay for itself because mobile phones became business phones and free VOIP via computer came about (i.e. Skype) and hotel phones are now a required convenience to call the front desk. Phones are now just a cost of doing business. Internet access is a requirement for doing business (both personal business and business business).

I've heard a few technology executives from some hotel and vendor companies say that satellite Internet will never be fast enough to meet the demands of the consumer. They may be right and probably are, but what I can promise is that if it doesn't meet the requirement someone will invent something that will. Being fixed to a specific location for highly capable wireless high speed Internet access will be a thing of the past in 5 years (maybe less). Internet access is already at the milestone hotel phones reached with the introduction of the early mobile phone where "good enough" is already applying. I'm paying for this cellular based wireless service and it is fast enough to do what I need, and it's FREE. Note it's not really FREE, I just already paid for it. So why would I pay $9.99 to use your Internet. Especially if I can't expense it. But if your Internet was already included in my room rate then it is FREE and I'd have the choice to use it or my Internet. And if I chose your Internet then you get to ask me who I am...bonus for the hotel.

I believe we are at cross-roads for hoteliers. Pay-as-you-surf Internet will go the way of the pay-as-you-talk phone and for many hotels, especially those without wireless. Infrastructure costs will either be sunk or take much longer to pay off as the hard decision is made on how to off-set those costs. It is time to make the decision that Internet should be FREE. If you cannot figure out a way to provide it FREE then I'll use my own and stop paying for yours altogether!

Photos curteousy of dana 2, miss rouge, rightee, and TheAlieness GiselaGiardino²³