The Other Side of Value Creation
This time, I’ve got something a bit different for you.
In consulting, we often talk about value creation from the client’s perspective—solving their challenges, delivering impactful solutions, and driving their success. But there’s another side to the equation that’s equally important, especially if you want to thrive in consulting long-term: how consultants generate value for their employers.
This article dives into that lesser-discussed topic: understanding your value to your consulting firm. We’re talking about the business side of consulting—the mechanics that keep the consulting engine running. And no, this isn't your typical Consulting Tip. We’re taking a step back to explore the bigger picture of the consulting business model.
The Other Side of Value Creation – Why It Matters
To succeed in consulting, it’s not enough to be good at your job. You also need to understand how your work contributes to your employer’s bottom line. This isn’t about being manipulative or overly business-minded—it’s about understanding the basic principles of how consulting firms operate and grow.
When you understand how you create value for your employer, you can:
✅ Negotiate promotions and pay raises by demonstrating your impact.
✅ Position yourself for leadership roles by contributing beyond billable hours.
✅ Make informed career choices, whether you’re aiming for partner track or exploring other opportunities.
How Consultants Create Value for Their Employers
Unlike value creation for clients, which revolves around solving problems and delivering solutions, value creation for consulting firms is about sustaining and growing the business.
Here’s how it breaks down:
1. Billable Hours and Utilization 💰
This is the most obvious form of value creation: getting paid for your time. As a consultant, your billable hours directly generate revenue for your firm. This is why utilization (the percentage of time spent on billable work) is often a key performance metric.
Junior consultants are typically valued for being cost-effective while delivering high-quality work, allowing firms to maintain healthy profit margins. More experienced consultants are expected to deliver higher value, justify premium rates, and take on leadership roles, including mentoring juniors and managing client relationships.
2. Client Satisfaction and Retention 😃
Happy clients mean repeat business. The more satisfied clients are, the more likely they are to engage the firm again and refer others. As a consultant, your role in delivering high-quality work, maintaining clear communication, and building trust is crucial in fostering long-term client relationships.
It’s not just about delivering the project but also about creating a positive client experience that builds loyalty. This is especially important for more experienced consultants who are expected to nurture and grow client accounts. Even after the project, it is good to keep in touch, share industry insights, and suggest future improvements.
3. Business Development and Sales 🤝
Business development isn’t just about closing deals. It’s about recognizing opportunities, expanding existing accounts, and building relationships that lead to new engagements.
While junior consultants aren’t typically involved in direct sales, they can contribute by delivering outstanding work that leads to referrals and support direct sales by preparing various materials. Experienced consultants, on the other hand, are often expected to leverage their networks and industry expertise to identify and secure new business opportunities.
4. Brand and Thought Leadership 🌟
Consultants create value by enhancing the firm’s brand. This includes, for example, speaking at events, writing articles, and publishing thought leadership content that positions the firm as an industry leader.
Regardless of experience level, representing your firm positively in public and professional networks builds credibility and trust, attracting new clients and top talent.
5. Recruitment and Talent Acquisition 🎯
Consulting firms are only as good as their people. Attracting and retaining the right talent is crucial for long-term success.
Everyone, from junior to senior consultants, can contribute to recruitment by promoting the firm positively. For example, anyone can refer friends and former colleagues who would be a good fit for the company. Taking this a step further, consultants can take part in university cooperation and talk to students about their career experience. More experienced consultants often play a direct role by participating in interviews, leveraging their network for referrals, and onboarding new hires.
6. Internal Growth and Capability Building 🌱
Building internal capabilities is key to maintaining a competitive edge. This can involve developing frameworks, methodologies, and tools that improve efficiency and effectiveness, and marketing materials to boost sales. This also includes training and mentoring junior employees to ensure they’re ready for client projects.
While junior consultants contribute by learning quickly and sharing insights, senior consultants lead by example, driving internal initiatives that enhance productivity and client delivery.
7. Leadership and Strategic Direction 📊
Leadership is more than just managing a team—it’s about setting the strategic direction and ensuring alignment with the firm’s goals.
Senior consultants can play a crucial role in shaping the firm’s strategy, leading projects and business units, and ensuring alignment with long-term business objectives. Even without an official management position, they can lead by example and guide junior team members through their actions and decisions. Meanwhile, junior consultants can demonstrate leadership by proactively solving problems, taking ownership of their work, and showing initiative.
Leadership is about influence, not just authority—and it can be demonstrated at every level.
Junior vs. Senior Perspective – Key Differences
The way you create value evolves as you grow in your career:
Junior Consultants contribute through high utilization, effective delivery, and supporting the team. They help maintain profitability by delivering quality work at a cost-effective rate.
Experienced Consultants are expected to lead teams, manage client relationships, contribute to sales and business development, and take on thought leadership roles. They influence strategic decisions and drive the firm’s growth.
Understanding these differences helps you navigate your career more effectively. It also emphasizes the importance of having the right balance within the company—a concept known as the consulting pyramid. In a well-structured firm, there’s a mix of junior and senior consultants to optimize cost-efficiency and value creation.
An Upcoming Topic: Value Creation for Clients
This was the “easy” part—understanding value creation for your employer. But consulting isn’t just about keeping the firm profitable; it’s about delivering exceptional value to your clients. In an upcoming post, we’ll explore how to maximize value creation for clients, from problem-solving to strategic advising.
Stay tuned!
👉 What are your thoughts on value creation for employers? How have you seen this play out in your own career? I’d love to hear your perspective—reply to this email or share your thoughts in the comments!
Best regards,
Eetu Niemi
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