by Michele Meyer
MAKING THE MOVE TO A CAREER IN PROJECT MANAGEMENT CONSULTING can be enticing. There's much to be said for a work life where you are your own boss.
But working for yourself isn't all nirvana: Earnings and work security rise and fall, health benefits can be astronomical, and you're on call 24/7. “Almost every day is a work day,” says Randall Englund, PMP, a Burlingame, California, USA-based project management consultant. “But the freedom of choice makes every day feel like a holiday. I wake up and decide, ‘Do I want to work on marketing, go to Budapest for a seminar, write for a journal in Brazil or work in the yard?’”
For many project professionals, making the jump to consulting is well worth the associated investment and added pressure.
Leaving a steady job to go out on your own is a gamble, especially when you're hoping government agencies and huge conglomerates will turn to you—instead of larger, big-name firms—for advice on how to better run organizations and raise their profit margins.
And not every project manager who makes the leap to entrepreneur reaches glorious heights. Some are never heard from again. Indeed, one-third of all U.S. startups fail within two years, and half fail within four, according to the U.S. Small Business Administration.
“All aspects of running a business fall on one person and one person alone, and that's you,” says Kris R. Nielsen, Ph.D., PMP, chairman of the Nielsen-Wurster Group Inc., with offices in Australia, North America and South America.
Make It On Your Own
For those considering entering the world of project management consulting, here are some tips to keep you on the right track:
THINK IT THROUGH. Give careful thought to making the leap to consultancy. Research on your own time, and do it without trying to lure clients while you're mid-project.
That can be grounds for a lawsuit, says Kris R. Nielsen, Ph.D., PMP, Nielsen-Wurster Group Inc. “I just fired someone who was planning to become a consultant, but was doing the research on my time,” he says.
LEARN FROM MISTAKES. Lessons learned from past failures or oversights can translate to future triumphs—as long as you own up to them and fix them at your own expense, says Scott R. Coplan, PMP, Coplan and Company. He recalls once heeding a client's request not to analyze the stakeholders’ desires at the start of an assignment—and it backfired.
“Though the project was successful, it was a painful process because some stakeholders were difficult to work with,” he says. “We missed the boat on that one, but we've since made the stakeholder analysis a key project startup point.” Several years later, his firm won a contract for a project because it was the only contender to insist on such an analysis.
SAVE UP. Without funding, not even the smartest entrepreneur can survive. Save money for lean times in a liquid account, such as a money market fund or short-term bank certificates of deposit, says Sid Weiss, a certified public accountant in Indio, California, USA. If offered a severance package, take it in a lump sum, but avoid dipping into it or your retirement account, which may penalize you for withdrawing early. “It also behooves you to speak to a financial planner—someone at your bank or your tax accountant—before taking drastic steps,” Mr. Weiss says. “They may know other options.”
That includes keeping the finances in order right from the start. When you first become a consultant, try to put away six months’ income to keep you afloat before clients hire—or pay— you. “Realize from the bank's perspective, you don't have a track record that you can walk in and get a loan,” Dr. Nielsen says.
New consultants are often caught off-guard by the billing and collection process. Early in his consulting career, Dr. Nielsen was hired for a project by Xerox Corp. “The company thought nothing of stringing along vendors, including consultants, for 90 to 120 days,” he says. Eventually, he spoke up and explained that he needed to be paid in 30 days, “so I would not have to live off of credit cards just to survive,” he says. “If you explain your situation, the majority of people will respect you.”
Dr. Nielsen also suggests taking a proactive approach by calling the client's financial department after submitting an invoice to see if there are any questions.
Those inopportune peaks and valleys in incoming revenue aren't the only risk. A bigger challenge comes when it's time to hire employees. “It's hard to find the right people and then manage them,” says Scott R. Coplan, PMP, president and founder of Coplan and Company, Seattle, Washington, USA.
When you're on your own as a consultant, you're only accountable to yourself. But when you take on employees, you also take on responsibility for their livelihoods.
Additionally, if an employee makes a mistake, the liability is ultimately yours. “The stakes are higher,” he says.
Mr. Coplan recalls an instance during a weeklong series of scripted vendor demonstrations with a client when one of his employees fell asleep. “When our client told me what happened, I immediately responded with an apology, and we did not charge for our employee's involvement in the vendor demonstrations,” he says. “I also spoke directly to our employee about the problem.”
Wearing Multiple Hats
As a consultant, project management is your primary business. That said, to successfully run your own business, you must hone a myriad of skills. “Many people don't realize consulting takes equal amounts of time in marketing and sales, business administration and, the fun part, consulting,” Dr. Nielsen says.
Project management consultants must act as “business therapists,” Mr. Englund says, adding that they must listen to the needs of clients and stakeholders, and then help them improve through understanding why and how they should do something differently.
Consultants must be change agents, as well. “Many times, clients resist advice, and sometimes you have to be persistent,” says Mr. Englund, recalling a client that threatened to pull the plug on a project—a conference that had been in the works for a year—when sales were down. Mr. Englund convinced the client to see the project through to completion by showing him the $775,000 in hotel cancellation fees that would incur, as well as the resulting negative public perception.
“As outsiders, consultants often are the bearer of bad news, saying, ‘No, you have to pay attention to these other aspects.’ That's a tough position to be in.”
But if you manage to pull it off, most clients will remember and help spread the word, says Martin Barnes, Ph.D., a former civil engineer and now independent consultant in Kirtlington, Oxfordshire, England. “Our clients do our marketing for us when they tell others, ‘Why don't you contact Martin Barnes?'” he says. “Make sure every client is pleasantly surprised at how useful what you did was. Then you'll always have as much work as you can do.”
All aspects of running a business fall on one person and one person alone, and that’s you.
—Kris R. Nielsen, Ph.D., PMP, Nielsen-Wurster Group Inc., Melbourne, Australia
To survive in today's competitive market, consultants must continually make connections. Mr. Englund suggests regularly attending both large, international conferences and local chapter meetings of associations.
“If I speak at a conference, I attend the whole thing,’' he says. “It's important to know the right people who will recommend you for your work. Even now, I wish I knew more people—and how to get mentioned in The Wall Street Journal.”
Mr. Englund also suggests publishing papers and books on project management— not only as a means to earn additional income, but also as a way to garner credibility and open doors. He has authored and coauthored four project management books, including most recently Project Sponsorship [Jossey-Bass, 2006] with PM Network columnist Alfonso Bucero, PMP. “People approach you because you're the author of a book,” Mr. Englund says. “The work and books really support each other.”
But recognize the individual personalities and cultures of those with whom you're making connections. Many executives—especially younger ones and those in large cities—turn to the web when they're choosing consultants. However, for some in smaller towns and more remote areas, print is the medium for city and regional job procurement. Local chapters of project management organizations can help guide you.
Despite the added risks, extra job functions and need to constantly network, those who do make the move to consulting usually don't regret it. “At times I wonder, ‘Why am I doing this when I could make tons of money working for others?'” Mr. Coplan says. “But once you become a consultant, you're never going back. It's too much fun.” C
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