How to build digital platform

For online platform businesses, customer mobilization challenges loom large. The most successful platforms connect two or more types of users—buyers and sellers on a shopping portal, travelers and hotel operators on a booking service—and a strong launch usually requires convincing early users to join even before the platform reaches scale.

Customers find Skype worth installing only if there are people on the platform to talk to. Who would join PayPal if there were no one to pay? Every platform starts out empty, making these worries particularly acute. For multisided platforms, which need not only many users, but many users of different types, the risk is even greater. It’s not enough for a ride-sharing platform to have a large base of customers who want to book taxis by smartphone. It also needs drivers willing to accept those bookings.

Despite these challenges, the number of online platforms has spiked in recent years. It’s not hard to see why entrepreneurs are drawn to these businesses: They create significant value by enabling communication and commerce that might not otherwise occur. They have modest operating costs because they don’t usually manufacture tangible goods or hold inventory. And network effects protect their position once established; users rarely leave a vibrant platform.

I have been studying the dynamics of platform businesses for 10 years, and, with colleagues including Peter Coles, Chris Dixon, Tom Eisenmann, and Andrei Hagiu, I have documented and analyzed case studies on dozens of platform sites and products. In the following pages, I draw from this research to offer a framework to help aspiring entrepreneurs make the right strategic decisions as they build their own platforms. The framework involves asking five basic questions:

Can I Attract a Large Group of Users at Once?

The first question entrepreneurs should ask is whether they can quickly attract a large group of users. Getting a mass sign-up at the outset can almost eliminate uncertainty about a platform’s prospects because it effectively builds critical scale into the platform’s network from day one. But in my experience, a new platform can do this only if at least one of two conditions is true:

The company already has the users it needs on another platform.

Consider Google’s 2003 launch of the AdSense contextual advertising service, the now-ubiquitous “Ads by Google” that appear on myriad websites. At the start, advertisers were hesitant to buy these placements. They worried that website publishers might click ads on their own sites (increasing the site’s revenue but depleting advertisers’ budgets) and that their ads might be placed on inappropriate sites (such as those with adult content).


But advertisers had already joined Google’s popular AdWords platform, providing advertisement text and payment details in order to obtain search engine advertising. By enrolling these advertisers in AdSense, Google set the platform up for a successful launch. With many advertisers, Google had relevant ads to place on most publishers’ sites, ensuring high revenue to publishers. Of course, this approach raised legal questions: Could Google provide advertisers with a new service they hadn’t asked for? The company had written its contract to retain great discretion over where ads could be shown, and to date advertisers have not succeeded in challenging unwanted Google ad placements.

User data is publicly available.

Consider Zillow’s early efforts to present profile pages for most houses in the United States, including “Zestimate” prices, information about neighborhoods and school districts, and more. Zillow was able to gather this information from government records, circumventing the impossible task of soliciting information from property owners for a site that was, at the start, unproven. Zillow’s initial information was good enough to attract consumer interest, at which point property owners happily contributed corrections, photos, and other information. Indeed, real estate agents were soon willing to pay to show their advertisements in and around Zillow’s property listings.

Zillow’s approach typifies a three-step process for launching an advertising-supported platform: (1) Collect data from public sources, and organize it to create a useful service that attracts consumers. (2) Encourage users to submit improved data directly to the platform. (3) Charge companies for preferred ad placement. Even Google’s widely used search engine is grounded in this approach. Initially, the company collected page contents by scraper; then it accepted structured data feeds from sites; and now it charges advertisers billions of dollars to appear adjacent to search results. It’s a proven path to success—one that overcomes the mobilization barriers that initially challenge so many platforms.

Can I Offer Stand-Alone Value?

If signing up large numbers of users is not feasible, platform businesses should look for ways of providing value to individual users even if no one else is on the platform. Consider the VCR in the 1980s. The challenge was that owning a VCR was useful to viewers only if they could get enough videocassettes to watch—and content owners would bother to make the tapes only if enough people had VCRs to watch them on. The problem was exacerbated by competition among incompatible formats.

The VCR could have been a flop, but its recording capability came to the rescue. The device could tape television broadcasts—and this benefit didn’t require that anyone else own a VCR or that any studio offer content on videocassette. Thanks to the wide popularity of the recording function (its legality was confirmed in a 1984 Supreme Court decision), VCRs avoided the mobilization problems that hinder many multisided platforms.

Creating stand-alone value can present difficulties, of course, especially when extra features require costly hardware. But it’s easy to add functionality to a software program or an app. Suppose you find that your taxi-booking app is unpopular with passengers because few drivers accept bookings through it. Perhaps the app can provide train and bus schedules too, or give phone numbers for traditional taxi dispatchers. With the right additional content, the app could attract enough passengers to make the platform appealing to drivers, who would then pay to be included.

As you try to figure out what kind of stand-alone value to offer and which customers you should be offering it to, consider two strategies:

Start with an industry niche.

A good approach for many platforms is to target customers in a relatively narrow market where the platform can more readily gain traction. The Yelp review site now evaluates almost every small business in the U.S. (and many international businesses too), but initially it focused on a much smaller sector: ethnic food in San Francisco. With that base, the company attracted dedicated reviewers and interested readers. Word of mouth and participants’ travel facilitated growth—first to covering other cities and then to reviewing sectors other than restaurants. As it grew, Yelp naturally expanded from reviews to other functions, such as accepting reservations, forwarding online orders, and offering discounts.

In a world focused on getting big fast, it’s all too easy to overreach. Having built a general-purpose review platform, Yelp could have tried publishing reviews of all businesses everywhere from the outset. Instead, it stayed focused on a narrow sector until it had attracted devoted fans and higher-quality content, which paved the way for subsequent success.

Find or build small social groups.

For some platforms, success comes through identifying and serving the social needs of small groups. Two people can use Skype and immediately enjoy its free, high-quality calls; they get these benefits even if no one else ever joins. Skype spread exactly this way—a student calling parents, far-flung friends staying in touch—with users often joining in pairs who call only each other. Of course, Skype becomes even better when most people have accounts.

Skype expanded naturally because users were motivated to spread the word and encourage others to join in order to get the most out of the platform. But not all platforms are inherently social, so businesses may need to build that capability into the value proposition. Computer and video games, for example, are not necessarily a social activity; historically, gamers have played alone. Zynga reimagined online games as “games with friends.” In running an imaginary farm on Zynga, a player might run out of key supplies and need to borrow from a real-life acquaintance playing the same game. Social features like this accelerated Zynga’s spread; having friends to call on helped people perform better, giving them an incentive to recruit more friends to the platform. Another approach to building in sociability is discounter LivingSocial’s offering of a free restaurant meal, spa visit, or other local service if a customer can find three friends who will buy the same thing. The approach has helped expand the service while reducing the high marketing expenses that have strained competitors.

These strategic choices are all largely within the control of a platform designer. As first envisioned, a platform might require thousands of diverse users—hundreds of taxi drivers in every city, or a full suite of movies playable on a new device. But the right adjustment can make it attractive when used by just a few people—or even by a single person.

How Will I Build Credibility with Customers?

When there are competing platforms in your space, users need some reason to believe that your platform will be worth joining, especially if doing so involves a significant investment, as is the case with game consoles. To attract initial users, a new platform must satisfy those concerns by building credible expectations for its future success.

The basic strategy for credibility building is to attract a marquee platform contributor. Gaming console makers, for example, need to demonstrate that highly sought-after games will be available, so they often pay a well-known game developer to provide a given game on the console. In some cases, console makers have bought the developer outright: Once Microsoft acquired Halo, for example, there was no doubt that its eponymous game would be available on Xbox. For the greatest effect, the marquee contributor’s participation should be exclusive. That’s why Microsoft pays some game developers a premium to provide their content on Xbox only. If devoted gamers want those games, they have to buy an Xbox console.

Exclusivity with a marquee user can drive growth; however, a platform must compensate that user for the profit it could have made by joining other platforms. The costs can be prohibitive, giving incumbents a big advantage.

While the high costs of attracting such users may tempt platform businesses to build their own capabilities, there are downsides to relying too much on in-house development: Prospective users may see it as competition. For example, starting in 1984, Apple’s hardware lineup included printers. Suddenly other printer manufacturers thought twice about making them for Macs, figuring (not unjustifiably) that Apple was bound to give its own devices some advantages. After weighing the modest printer profits against the risk of losing key partners, Apple exited the printer business in 1997.

9 Protection Mechanisms available for businesses

1. Device or Mascot ( Like the bird of Twitter )
2. Brand Name ( Coca Cola or Pepsi )
3. Heading or Slogan Mark ("I am lovin' it" or "Just Do It")
4. Label or Packaging
5. House Name ( Ford or Tata )
6. Signature ( Actual rendering )
7. Letter ( K of Kellogs or M of McDonald)
8. Shape of Goods ( Bottle of Coke or shape of iPod)
9. Color combination ( Purple of Cadbury or red and white of Colgate )

The Downward Spiral of Measuring People's Performance

Does measuring people's performance actually improve the performance of the organisation as a whole?

Performance measuring / management includes

1. Giving them bonuses, promotions or other rewards for good performance
2. Denying them those things as punishment for poor performance
3. Sacking them or firing them
4. Putting in place identtification of training needs and mentoring and coaching.   

But, does the act of measuring performance worsen it? .

Is there a chance of a vicious cycle

1. Managers want people to perform better so they monitor people to assess their performance
2. When they are monitored, the people feel judged and most take it personally and feel threatened
3. When feeling threatened, they get defensive and, to protect ourselves, they try to 
• Hide performance problems 
• Manipulate measures
• Set achievable targets
4. These acts worsen the performance and leads to more monitoring and the
5. performance goes down further.

ANSWER : 

Let people collaboratively measure process performance and not people performance..

CASE STUDY

1. Priority identified as the “Accuracy of the billing process” because the customer survey showed that they did not pay the bills which were inaccurate or had confusing rates.
2. It was decided that the operational challenge is to improve three specific performance outcomes (1)     timely payment of invoices (2)  revenue collected for all consignments handled (3)  ease of understanding of invoices, statements and adjustment notes
3. A small team worked together to define the billing process and its purpose, analyse their billing process to identify where the causes of problems were and develop performance measures to monitor the improvement of the billing process.
4. They created 5  “Process Result Measures” (1) Value of Overdue Accounts  (2) Age of  Overdue Accounts (3)  Customer Satisfaction rating on Invoice Accuracy (4)  Bad Debts as a % of Revenue (5) Total cost of Billing and follow up function % Billing
5. The flowcharted the process and  systematically walked through it to identify the problems that currently prevented good performance in the areas of  (1)   Freight consignment notes are not always supplied when they should be, and freight is shipped without them (2) Freight consignment notes go missing when they are paper-based. (3) The wrong charges can be applied when the data about exactly what freight and what amount of freight is not accurately provided by the customer (4) Accounts should never get to this stage, but there is a considerable number that are in dispute over what has been invoiced and the charges applied .
6. Before they decided how to fix these billing process problems, the team designed a few measures to track these problems in-process so they could tell whether or not their fixes were working. They called these measures ‘In-Process Measures’ (A)  % Freight Consignment Notes Not Supplied  (B) % Freight Consignment Notes Electronic (C)  Accuracy of Freight Data = Number of errors found in quantity or type of freight that would affect how the freight was charged, divided by the number of freight consignments (D) Value of Accounts in Dispute = The total amount of revenue associated with accounts that are currently being disputed by customers.
7. Thus, the team could focus very directly on fixing the problems that mattered most, and making sure that their efforts were improving the in-process measures, and in turn improving the process result measures.

Building A Healthy Company

10 of the largest 15 bankruptcies in history have occurred since 2001.

Is it so difficult to strike a balance between the short and long term?

This is an edit of an article published in McKinsey Quarterly of August 2005

Authors : Richard Dobbs, Keith Leslie, and Lenny T. Mendonca

"Performance and health" is derived from a simple comparison with the human body. Some people may seem performing well for today but they may not be in a position to keep on performing well over time and may not enjoy long and active life. Companies too must make plans and allocate resources to both the tasks : performing well for today and lasting to perform well year after year. Managing a company across time frames is a challenge; are the boards and senior managers up to it? Are they focusing on quarterly results and give little attention and money to actions that create longer-term value - particularly if they depress today's profits?

This is not due to lack of tools. The problem is that these tools are either being applied too mechanically or ignored due to intense focus on survival and by (perceived) pressure from investors. Of course we understand that short-term is important because only by delivering it will the management build confidence in its ability to realize longer-term strategies. But companies must also act today to ensure that they can convert their growth prospects, capabilities, relationships, and assets into future cash flows. A survey had revealed that more than 80 percent of the executives would cut expenditures on R&D and marketing to ensure that they met their quarterly earnings targets—even if they believed that the cuts were destroying long-term value.

A major European financial-services company achieved an impressive turnaround from 2001-2004 but found to its dismay that side effects have been falling customer service levels, a huge increase in staff turnover, and a fall in its share price. Management complained that the financial markets didn't understand what the company had achieved. But in reality they understood, all too well, that its short-term success had been purchased at the expense of its underlying health.

Many companies talk of “health” but only superficially.  The "scorecards" that are supposed to balance short and long term often consist of disconnected metrics that confuse the organization and lack any real impact. A company came up with 96 key performance indicators – which was bound to be dead on arrival!

What Seems To Go Wrong?

What breaks down long-term initiatives is the tendency of managers to defend the performance of their own silos instead of debating and helping to shape action across the whole organization. In silo-structured companies, managers typically argue about the virtues of one metric as opposed to another (especially if transfer prices are involved), deflect debate to other parts of the organization, and set up barriers to change. This kind of behavior isn't deliberately malevolent; it is driven by deeply held beliefs about a manager's roles and boundaries and reinforced by the idea that the body corporate is the sum of many discrete units, each with independent characteristics, that should be monitored with a battery of metrics.

Emerging Awareness Of Health

In a McKinsey survey IN 2005 of 1,000 board directors, most made it clear that they want to

·         Devote less time to discussing the latest financial results and much more to setting strategy, assessing risks, developing new leaders

·          Markets, customers, competitors and suppliers.

·         Organizational issues such as skills and capabilities

·         Relations with outside stakeholders : regulators, media, wider community.

Above all, they wanted their companies to seize prospects for long-term growth and avoid exposure to risks from organizational blind spots or from any unwillingness to acknowledge external change.

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Here is a list of 5 important things that make companies healthy

1.      Strategy

2.      Metrics

3.      Communication

4.      Leadership

5.      Governance

Strategy

First, a company's strategy should be reflected in a portfolio of initiatives that consciously embraces different time horizons. A typical large company does, of course, include business units with distinct strategies, but few of them could really help it adapt to events or capitalize on new products / services / markets / processes / value chains.  Such a portfolio of strategic initiatives should not fall prey to the issues associated with strategy

·         Resources and capabilities are needed not only for planning and communication but also for execution.

·         Not only to (reactively) plan for the future but instead (proactively) plan the future. By developing and managing a portfolio of initiatives—rather than a single approach to strategy—companies can lower the risk that unpredictable events will place them on the wrong foot.

Metrics

A vast assortment of metrics is self-defeating and the company must choose is a manageable number of metrics that strike a balance among different areas of the business and are linked directly to what creates value for all major stakeholders.

·         Financial metrics ( most already have them)

·         Operations (quality and consistency of key value-creating processes)

·         Organizational issues (the company's depth of talent and ability to motivate and retain employees)

·         State of the company's product markets and its position within them (including the quality of customer relationships)

·         Nature of relationships with external parties, such as suppliers, regulators, and nongovernmental organizations (NGOs).

Systematically identifying and tracking health metrics that reflect the strategy of a business—and the forces driving its value—is difficult. A useful framework is to think of value creation in the short, medium, and long term.

·         SHORT TERM (KEY : MOMENTUM OF EXISTING ACTIONS) : Looking at trends, benchmarks and cause-effect relationships to see if there is adequate momentum in existing initiatives to enable us to deliver what we want over the next 1-2 years. Examine issues like whether  profits increased due to raising prices, new campaigns, new markets, new products. Whether profit were achieved by encouraging dealers to increase their inventories. If revenue growth per store and revenue per square foot is better than its competitors.

·         MID TERM (KEY : CHANGES IN THE PIPELINE) : The key questions here is whether there is enough innovation and experimentation and initiatives in pipeline to deliver results over theThe time frame ought to be longer for industries, such as pharmaceuticals, that have long product cycles and must obviously focus on the number of profitable new products in the pipeline. Metrics that compare a company's product launches with those of competitors (perhaps the amount of time needed to reach peak sales). For an online retailer, customer satisfaction and brand strength might be the most important drivers of medium-term health.

·         LONG TERM (KEY : ARE WE READING THE ENVIRONMENT RIGHT AND IF OUR PRIORITIZATION IS CORRECT) Opportunities and threats : new technologies, new customer preferences, new ways of serving for current businesses. And to ensure enough growth opportunities to create value when those businesses inevitably mature, they must monitor the number of new initiatives under way (as well as estimate the size of the relevant product markets) and develop metrics that track the initiatives' progress.

In addition the senior managers should also address (A) Retention of  key employees (B) True depth of management talent (C) if right skill sets are being delivered : business overseas will need people who can work in new countries and negotiate with governments.

For a business unit, top management and the board should monitor no more than three to five metrics, representing different areas of the business for each time frame. To make sure that the metrics are appropriate, the finance department or the performance-management group should regularly reexamine the way the company creates value.

Companies must avoid the erroneous thinking that too often juxtaposes "hard" metrics for performance with "soft" ones for health. They can and should attach hard numbers to health metrics, such as the motivation and capabilities of their employees. Similarly, they can and should track their current performance with softer metrics, such as the quality of their latest earnings or of their relationships with opinion formers.

Communication

It is important to change the nature of their dialogue with key stakeholders : capital markets and employees. It is important to identify investors who will support a given strategy and then attract them. Management teams should also spend serious time with analysts who follow their companies, in order to explain their views on the industry and to show how strategies will create sustainable advantages.

Reaching out to employees is just as important. The complaint that "we don't know what's going on" often indicates that a company's leaders are communicating results rather than long-term intentions.

Leadership’s Role In Providing Direction

Board members and C Suite customers must involve budding leaders in dialogues of the company’s development which also enables their own development. The senior leaders also must be aware that what they say (and do not say) in such meetings will get “enormously amplified” and casual or random remarks and themes at such meetings will run the risk of making the organization schizophrenic. The senior leaders must not create an overload of initiatives. They must produce a simple and coherent agenda.

Focusing the leadership on personal behavior is also crucial to maintaining a company's health. Companies can likewise encourage a wider perspective on the business, and stronger linkages across boundaries, by giving senior managers a portfolio of roles. Alternatively, some companies have successfully developed peer groups of business unit leaders who share a collective responsibility for their businesses. Other companies are strengthening their core functions and reversing the trend toward corporate atomization into a number of semiautonomous business units.

Companies must take a longer-term view of the way they manage talent and career tracks and of the incentives created by money, recognition, and promotion. One company's approach is to implement a long-term incentive plan for top management—a plan that has weakened the direct link between remuneration and short-term earnings. By contrast, the current trend of making people change roles every two or three years isn't necessarily good for long-term corporate health.

Governance

The growing demand for corporate probity and better governance has reinforced the CEO's pivotal leadership role. Board meetings therefore represent a useful opportunity—and discipline—for testing the organization's resilience to pressure and change over time. The need for resilience is greatest when investments take a long time to pay off, as they generally do for natural-resource and pharmaceutical companies and public-sector bodies. CEOs and boards lack rapid performance feedback in such cases and thus need to keep a close eye on a range of considerations: regulatory influence, marketing and supplier partnerships, and organizational skills.

Strategic Insight in Three Circles: 4 Steps

Sometimes simple tools are elegant and powerful and this is one such tool. Critical strategic insights can be gained from populating a template involving just three circles. 

How to build a distinct competitive advantage in order to grow and be profitable over the long term? Just draw  three circles. Those circles, placed in the proper relationship to one another, provide a good visual representation of what strategy—both internal and external—means. You will absorb strategy concepts by using this simple tool and take it back to your  organization where it can become a part of the decision-making process.

Here’s how it works.

1. Draw a circle and fill it with the things that customers value and why—that is, Customers’ Needs. Depending on the complexity and breadth of your offering, you may need to focus on a specific customer segment. Note that this exercise, when done in a group, may reveal brand new or emerging opportunities for value creation. The first circle thus represents the consensus view of everything the most important customers or customer segments want or need.

2. Now draw a second circle. You’ll fill this one with how customers perceive Company Offerings. This one could be especially tricky in a group exercise, because (short of good, hard analysis), there may be plenty of opinions about how customers perceive your product and brand.

3. Now “slide” the two circles together so that your specific set of offerings overlap with customers' needs. Let’s hope that the overlap “feels” good and solid, so that there’s a high comfort level that you are providing some significant benefit or set of benefits that the customer requires. “Even in very mature industries customers don’t articulate all their wants or problems in conversations with companies. ..Customers’ unexpressed problems can often become a source of relationship building and growth opportunity.”

At this point, working on your own, you can probably see a number of areas where further investigation may be required—even though you think about this stuff everyday. And, working as a group, it may be time for a lunch break, as (at least the first time through) there is bound to be a fair amount of debate around both circles, and their overlap.

4. Now it’s time for the last circle, which represents how customers perceive the offerings of your competitors. In a group setting, this may be the circle where there is the least amount of agreement. (Which is why you’re trying this exercise in your office with the door closed, first. Forewarned is forearmed.) This third circle slides up to overlap the first two in a variety of interesting ways, as follows:

Each area within the circles is strategically important, but A, B, and C are critical to building competitive advantage. You should ask questions about each.






 
For A: How big and sustainable are our advantages? Are they basd on distinctive capabilities? (Sometimes the biggest surprise is often that area A, envisioned as huge by the company, turns out to be minuscule in the eyes of the customer.”)

For B: Are we delivering effectively in the area of parity?

For C: How can we counter our competitors’ advantages?

You first, and later the team, should form hypotheses about the company’s competitive advantages and test them by asking customers. The process can yield surprising insights, such as how much opportunity for growth exists in the white space (E).

Another insight might be what value the company or its competitors create that customers don’t need (D, F, or G). This plays, by the way, to Christensen’s Innovator’s Dilemma: Where have you pushed the technology or offering so far that folks stopped seeing value in it?

Perhaps the greatest insight will be how much opinion and conjecture there are behind your "analysis," instead of data-based knowledge. That alone—knowing what you don’t know—may be one of the most useful outcomes of the exercise.

9 mistakes to avoid if you are successful in the market

Success affects everyone differently. And not necessarily in a good way. Because what it took you to become successful will not allow you to stay their for long - unless you learn to avoid these 9 common mistakes successful people commit : 

1. Become a defender after being a challenger : successful start-ups often enter by disrupting the status quo but when they succeed they themselves become the  status quo and yet they don't realize it. Why did Apple and Google had to challenge and disrupt the BlackBerry with their new platforms : iPhone and Android platform? Because RIM itself was a disrupter but they forgot it when they began succeeding.
2. Sticking to knitting when the rest of the world changes around you. When success makes the businesses rigid - and when the markets evolve rapidly around them - they often go back to "doing their  basics" - what made them successful earlier - with renewed vigour.  Sony CEO Howard Stringer's strategy was built around the concept of product synergy- in fact there was none. 
3. Losing the fear of failure. As Andy Grove of Intel said; "only the paranoids survive". Fear is a key emotion that warns you when to be alert and when you need to act. When you start to think that success is inevitable and believe you can't fail, you become reckless and take risks you shouldn't. This is the reason why mega-mergers and leveraged buy-outs failed.
4. Paralyzed by the fear of losing it all . The opposite of the above is to become totally risk averse because you're afraid of losing what you've won. Nothing risked, nothing gained.  
5. Not listening to those who matter  : When you stop asking questions and don't listen pro-actively and deeply to your key stakeholders -- customers, executives, directors, investors -- you miss critical "early warning" signs. If you do not experience minor aches and pains when they are minor, you will not need to be on a hospital bed for weeks for a major operation.
6. Becoming isolated from reality : you cut yourself off from the reality through the  layers of bureaucracy and hierarchy. That includes executive, suites, buildings,  assistants, meetings, dinners, conferences and other filters to keep the external world out. This is the reason the rulers in the olden days used to go out among the masses incognito in the night to see what they talk and think.
7. Surrounding yourself with people like you :  There are always those around you to tell you what you want to hear and sugarcoat negative news for you. Keeping only the people you like creates a bias which can be fatal.
8. Forgetting the "magic of the moment" factor . Do not attribute your success only to the products, materials, features. There was a "magic of the moment" too - pricing, timing, partners, even luck. The same old formula will not work because the magic of the moment will not come every time. You must actively change yourself. 
9. Being a one time wonder :  There are many who get it right and get the funding and the stars shine bright and become "one hit wonders" . But to develop a second and a third successful product requires a willingness to embrace marketing, sales, operations, customer service and other business functions.

Why Consulting Is A Job Everyone Needs To Experience

 You should see yourself as a consultant. Here’s why you need to experience consulting

Reason #1: Problem solving

No matter what field you are consulting in, your job is to identify problems, and fix them.
If you are lucky, you’ll have free rein to do whatever you want, but the chances are you’ll have to solve the problem within specific guidelines. This means you’ll have to be creative and start to think outside of the box. This is important for you to learn because it will not only teach you how to solve problems, but it will also teach you how to do this across any industry. This means you can work in any field in the future because you can adapt to any environment. And if you decide to stay with the 9 to 5 route you will be more valuable to your employer as they will be able to throw you at any problem.

Reason #2: You’ll learn to speak your mind

A consultant isn’t an employee. Sure you maybe working for a consulting firm, or your own firm, but when you go to different businesses to help them out, you’re considered a consultant… not an employee. As a consultant, you won’t be shy to speak your mind and tell companies what they are doing wrong. Why? Because you are getting paid to do that!
Speaking your mind is a really important trait… these days there are one too many people who are afraid to do this in the corporate world. By speaking your mind, you are helping your co-workers or the company who hired you. So always say what you are thinking, especially if it benefits the company.

Reason #3: You’ll learn how to keep a job

If you’ve ever worked at a large corporation, you know that there are plenty of people who just twiddle their thumbs every day. And to make matters worse, they keep getting paid without doing much work and no one ever dares to fire them. As a consultant you won’t have that luxury. Businesses have much more strict rules when it comes to laying off an employee versus firing a consultant. Typically they can fire a consultant without requiring any approval from their superior. This means that you have to continually earn spot as a consultant. You will have to keep on working hard and continually provide exceptional results. You’ll learn how to fight to stay alive and never give up.

Reason #4: Communication

The best thing I learned as a consultant is how to communicate effectively. You won’t be working in an office every day and you know your gig isn’t steady. You’ll have to keep providing results, as I mentioned in reason number 3 above. But providing results isn’t enough, you need to show them. You do this through reports, emails, phone calls, meetings and any other form of communication you can think of. By communicating on a regular basis people will know that you are working away and producing results. The moment you stop communicating is the day they’ll think you are goofing off, which will lead to you being fired.
You can’t take communication for granted and it is important no matter what you do in life.

Reason #5: Deadlines

Don’t you hate it when people miss deadlines? I’m so used it these days that I expect certain people within my organization to be delayed and I even account for it on my end. Well, you won’t have the luxury of missing them as a consultant. You either hit the deadlines, or else you’ll face consequences. I still remember each of the deadlines I missed because it usually lead to me getting fired or I wasn’t paid for the work that I put in. It taught me that you need to hit deadlines and how important it is to be timely. And what you’ll really learn is that a lot of people within a company can affect your deadline. Sometimes it isn’t you who is causing the delay, so you’ll have to learn how to manage people and timelines.

Reason #6: C-level experience

No, you’re not going to be the CEO as a consultant. But you do get to interact with the CEO or other high-leveled executives. They are the ones who approved hiring you and they write your check. You’ll have to learn how to sell yourself and your solutions. This is very valuable experience because in the corporate world, you can’t just do anything you want, you typically have to get buy in from other people. And if things don’t go your way and you get shot down a few times, don’t worry about it. Pick yourself back up and keep pushing forward. Eventually you’ll learn how to convince executives to do what you think is best for them. It took me a few years to get there, but now, I am great at selling to C-level executives.

Reason #7: Money management

It doesn’t matter if you are consulting for a big corporation with billions of dollars in the bank, or a small startup. Everyone has budget constraints. You’ll have to learn how to play within the constraints to get the job done. You’ll get first hand experience when it comes to trimming the fat, figuring out ways to be more efficient, and stretching the dollar as far as it can possibly go. Best of all, you’ll learn how to keep track of expenses, which is something that everyone can use. You can’t run a company without being conscious about how much you’re spending on a weekly if not daily basis.