CCS: A Growth Framework For Boutique Consulting Firms

For centuries, physicists and mathematicians have been looking for theories that put together different rules and laws of complex systems. The challenge is to capture the most critical elements of a system, including their interconnectedness and dynamics, in a simple and elegant way.

While it's clear I don't stand a chance close to Einstein, Newton, or Gauss, I also decided to take on a similar challenge. After working closely with dozens of boutique consulting firms, you start to see patterns and understand what the path to success looks like.

It takes extraordinary work to reduce complexity into a simple map. But this is an excellent tool for those who want to grow their consulting practice and don't know where to start. Here's how this post is divided:

CCS Framework: An Overview

The CCS framework is a methodology you can use to identify what's holding back growth, and how to invest your time and resources to unlock it.

Any type of system, be it your health, a manufacturing line, or a business, can be analyzed and improved by understanding what their key components are, and how they work and communicate with each other.

The challenges and constraints tend to be fairly similar when we look at a specific system. For 99% of the people, the right combination of diet, sleep, and exercise will get them in better shape. The same can be done for boutique consulting firms.

There is no growth without demand. So when we put it at the center of our analysis and take a high-view of how consulting firm works, we find these modules:

• (C) Creating demand: This is how you drive awareness, generate interest in your offerings, and get people to believe you could improve or transform their business.
• (C) Capturing demand: This is how you qualify prospects, address concerns, and win new businesses, transforming interest into revenue.
• (S) Serving and satisfying demand: This is how you successfully deliver projects and engagements, and generate more demand in the process.

Your challenge is to design each one of these modules in a way that you can perform them profitably and consistently. If you do so, growth will follow.

If you spend more to acquire and serve clients than what you charge them, you are not doing it profitably. If every time you're busy serving clients you see no influx of new demand coming in, you lack consistency. The CCS modules must be continuously functioning, with each one feeding the next in the process.

We look at how to identify and fix issues at the end of this article. But first, it's important to bring clarity to what each of those modules includes.

Each of modules is composed of other components, which can also be broken down into sub-components. Since the CCS framework is a great tool to understand the big picture - before diving into strategic and tactical work - the following is a simple and short description of them.

Creating Demand

Driving interest for your consulting services is not only necessary to grow, but for your business to survive. Clients will only choose to work with you if they want to. There might be existing demand for what you do in the market, or you may need to create it among your target audience.

Whichever is the case, to build and maintain a healthy pipeline you need a clear plan of action coupled with a flawless execution of that plan. That's why we can divide demand generation into two components:

• Marketing Strategy: It's the plan of action that includes an analysis of your circumstances and the recommended initiatives to earn attention and trust from your target market.
• Marketing Implementation: It's the process of putting the recommended initiatives from your plan into action. The execution of that plan.

This distinction will be useful for us to identify leverage points in your business. Some consultants invest a lot of time marketing themselves without a clear plan of action. Others have a reasonable idea of what needs to be done, but can't commit to consistently execute their plan.

When lack of demand is the problem, we need to dive deeper into the many sub-components that form the marketing strategy or engine. I use different methodologies to look at each of them, which I'm currently documenting and will make available here for access.

Capturing Demand

Once you started conversations with your target audience, you need a plan and system to predictably convert them into real clients and revenue. This is B2B sales, and to do it right you need not only effective processes but decent sales skills.

We can divide demand capture into two components:

• Sales Operations: The systems, processes, and tools. It includes your CRM and analytics tools, your pricing structure, an efficient proposal development process, among others.
• Personal Development: Selling is all about engaging with people. So here we include sales training and coaching for you or any other consulting partners, and your personal operation skills that come to play.

As a solo consultant or partner leading a boutique consulting firm, chances are you are not that interested in developing your sales skills. Your passion is solving problems and engaging with clients. You do sales by necessity, not by choice.

Bringing in a salesperson to remove yourself from the process, however, will almost always hurt your business. Your clients hire you, not only your offerings. And selling high-ticket consulting services requires deep expertise.

Of course, you don't always need to get personally involved. Productized services and info-products can play an important role in your offering mix, and in this case you can adopt a self-serving model. But even in this case, your sales operations will play an important role to transform initial interest into revenue.

Serving And Satisfying Demand

The last demand gear will determine whether your consulting business will have a chance to thrive, or if you will hit a ceiling in terms of revenue, brand, and reputation.

Successfully overdelivering on your marketing promises is the key for you to retain and upsell your existing clients, as well as drive referrals from them. This is how you build a solid and respected consulting practice.

Doing it is simple, but not easy. Pragmatically speaking, you only need two things: Knowing how to solve the problems you were hired to solve, and actually solving them.

That is why I typically divide this module into two:

• Methodology: Know-how and expertise built during previous engagements that allow you to solve your client's problems in a repeatable and reliable way.
• Business Operations: How you are doing the work. It includes all of your business capabilities, as well as the firm's internal culture and values.

Your methodology is what allows you to successfully solve your client's problems (almost) every time. Think of it as a checklist - airplane pilots have one, and so do surgeons. Every new engagement is an opportunity to improve your methodology, and developing one will improve the overall quality of your delivery.

Your capabilities are the collection of people, processes, and technology that you need to be able to do to successfully deliver your engagements. They might consist of internal staff or contractors, exclusive technology or a hired tech stack. It's what you need to get the work done.

Your values also come into play here, since they reflect how you and your team act when you need to make tough choices and decisions. It guides your client relationships, your internal team dynamics, your choice of projects, and virtually every other aspect of your consulting business.

Putting It Into Practice

This framework can be a great way to visualize what the leverage points of your business are. But you might be asking:

• How do I identify which module (and component) I need to focus on now?
• Is there a recommended order for me to go through? Where should I start?
• What's the best way to systematically improve those modules in my consulting firm? How can I make long-lasting changes, and coordinate the different activities in the process?

Answering those questions is a big part of my advisory work. While I'm currently translating all of the lessons into written and video content, I hope this section can be a starting point for you to unlock the growth of your consulting practice.

Your Business, Your Goals

First, we need to quickly highlight the uniqueness of strategy and business success.

What I'll be sharing with you here can be seen as a framework for you to build your own growth strategy. It's not a recipe or a manual of instructions. That's easy to understand when you look at what strategy really means.

A strategy is nothing more than a plan of action to achieve a set of goals. If you change your goals, your plan of action needs to change as well. Having worked with a lot of independent consultants, I met people with many different individual needs and aspirations - and, by consequence, different business goals as well.

Your business goals will mostly reflect how you look at work, and what your personal objectives are. A founder who sees his work as a vehicle to create a positive impact in society might act very differently from one that looks at his business as a means to support his preferred lifestyle.

Needless to say, there's no right or wrong:

• If you want to generate short-term revenue, then your goal should be to maximize how much demand you capture (C). Captured demand is revenue.
• If you want to generate long-term growth and positive value for clients and society, your goal should be to maximize how much demand you serve and satisfy (S). This leads to higher mindshare, organic growth, and a strong brand and reputation.

99% of the partners I know would agree with the following affirmation: You have a successful consulting firm when it is financially profitable and creates positive value for your clients and stakeholders, both in the short and long term.

The following sections were all framed with that universal goal in mind. If that's not your case, feel free to contact me to explore other growth approaches that fit you better.

The Theory Of Constraints

As already mentioned, any type of system can be analyzed and improved by understanding what their key components are, and how they work and communicate with each other.

The growth of a consulting business is a direct reflection of three main modules (CCS), and each one of those includes multiple parts and sub-components. I'm sure that if you look closely, however, you will find things that need to be fixed in every one of them in your consulting firm. The problem is you can't do it all.

Your time, money, and energy are limited. So the best way to unlock growth is to ensure that the activity you are focusing on is the one that makes the highest possible impact on the overall system. The leverage point.

This is where the Theory of Constraints (TOC), created by Eli Goldratt, comes to mind. It is one of the best methodologies to think about complex systems such as a consulting business.

TOC states that any system with a goal has one limit and worrying about anything other than that limit is a waste of resources. It sounds complicated, but we can illustrate the idea with a simple example.

A factory has an assembly line with three sections, with each section feeding the next. Two of those can produce 100 units per hour, while the third can only produce 50 units per hour. How many units does the line produce per hour?

If you said 50, you're right. As you might have heard before, “a chain is only as strong as its weakest link.” The third section is the limit (or bottleneck) of the system.

While this might sound obvious, the consequences are often overlooked. Any investment outside of improving the third section won’t improve the outcome. Tripling the first two sections to produce 300 units per hour will not lead to any growth in the production of the system as a whole, and should be avoided.

See any resemblance to your consulting practice? If you don't have enough people interested in your offerings, documenting your sales process or training your team to deliver a new service will not lead to more business. You're ignoring the limit.

Finding The Bottleneck

Now that you understand what TOC is about, let's examine the different parts of our system. With a defined goal, only one of our CCS modules should be the focus of your growth efforts at a time:

• (C) Creating Demand: Your marketing strategy or implementation.
• (C) Capturing Demand: Your sales operations or personal development.
• (S) Serving/Satisfying Demand: Your methodology or business operations.

How do you find the current limit? Once again, it's helpful to look at each of these modules as factory machines.

Demand gets processed by each of these machines and passed to the next one. Sometimes, a machine gets idle since it does not receive any demand to work with. Or maybe demand is piling up on the assembly line, since one machine produces much more than what the next one can process.

Looking at this perspective makes bottlenecks easier to spot. The three biggest signs include:

1. Backlogged demand. There's too much demand piled up at one part of the cycle, and not enough at the other end.
2. Long wait times. There's enough demand in the cycle, but it needs to wait in the assembly line since a machine is not working fast enough.
3. High stress levels. Feeling frustrated or anxious about any of the machines is a sign you are not confident they can work as they should, or you don't fully understand how to operate them.

Backlogged demand is the easiest sign you can spot. Here are some examples:

• If you are not generating enough qualified opportunities, the bottleneck is demand creation. There's no demand for you to capture through sales.
• If you have a healthy and respectful pipeline but see a poor win rate, capturing demand is your bottleneck. You need to transform that demand into revenue.
• If your revenue is growing but you're struggling to deliver on your marketing promises, your bottleneck is operations. Failing to serve and satisfy your clients is damaging to your brand and reputation, and will cap your long-term growth.

Long wait times can also help you find your bottleneck, but it's trickier to use. The problem is that our three machines consist of different activities, so they will require a different time cycle:

• The journey between prospects noticing you and believing your offering could improve or transform their business takes time. People will move at their own pace and take as long as they need to go through it. Someone may buy low-ticket items such as a book or online course fairly quickly. But consultants offering high-ticket engagements need time to earn trust and mindshare. Good marketing takes time, with the first results taking at least 4-6 months to show up - but if you sustain your initiatives and don't see any win, this is a red flag.
• Your sales cycle should always be considerably shorter than the marketing one, but it will also vary based on the price and complexity of your offering. Smaller deals can take 2-3 months to close, while large and transformational solutions can take up to 6 months. Selling to large companies often means you need to not only bring different people to the table but also reach a consensus that works for everyone. Do you see deals that are stalled for more than 6 months in your pipeline? If yes, that's a red flag.
• The time you need to deliver your services will depend on what you're selling. The red flag here is seeing recurring delays caused by you or your team. If asking for postponed deadlines has become a habit, this is a problem you need to prioritize.

Finally, stress or anxiety can also be a useful clue to identify your bottleneck. This is because most of these feelings are a sign you either don't know what you should be doing, or you can't manage to do it and deliver on your commitments:

• Creating demand is a bottleneck when you don't have a clear plan of action to promote your consulting business, or when you don't implement the plan you have.
• Capturing demand is a bottleneck when you don't know which kind of conversations you need to have with prospects, or don't know how to take control and lead those conversations.
• Serving and satisfying demand is a bottleneck when you don't know how to solve the problems you were hired to solve, or don't have the capabilities to do the necessary work.

Since most consulting businesses are highly dependent on founders or partners, this process gets much easier once you bring someone with an external perspective. If that's something you might want to explore, feel free to reach out. I'm not always a good fit, but when that's the case I'll gladly put you in touch with other qualified professionals.

You can't prescribe before you diagnose. Finding the bottleneck is really about identifying where most of your effort and resources should go to. And it's how you accelerate and build the foundation of sustainable growth.

Fixing The Bottleneck

When consulting firms struggle or don’t grow as quickly as founders or partners expect, the cause is not the number of hours being invested in the business. Usually what I see is the opposite - consultants burnout trying to get through using brute force and getting nowhere.

Growth problems are not due to a lack of effort, but one of these two things:

1. Resources are directed at the wrong limit. “What got you here, won’t get you there.” When one bottleneck is removed, investing more time, energy, and money on it is ineffective. The things you needed to focus on when you started your consulting practice are not the ones that will allow it to thrive.
2. A lack of systems to process demand. What also happens is that, as you shift resources to solve a bottleneck, the previous bottleneck you've fixed collapses. If you imagine the three machines in our system (CCS), that would be unplugging the energy cable from one to source the other. You, the owner, end up running from one part to the other trying to balance both.

Let's quickly explore both of them.

Directing resources to the wrong limit is the result of not identifying the bottleneck in the first place. And performing a recurring review of how each of your CCS components is working is the only way to avoid it.

As mentioned before, if you never performed such a high-level review before I highly recommend bringing external help. Once you have more clarity and transparency of what you should look for, you adopt key performance indicators for each one of those components.

Keeping track of KPIs will help you identify when a bottleneck is solved, and where the next source of problems will likely be. Sounds like an easy and simple activity to perform, but very few consulting firms actually do it regularly.

The second big cause of growth problems is a lack of systems. This is an extremely important topic, which might receive a separate article in the future.

The three different modules of our CCS framework are interconnected in several ways. And this is where our biggest challenge relies on: one thing affects the other.

Let's say you've been receiving more and more client complaints on recent projects, and decide to focus your efforts on the "S" module. The logic is simple: with a better delivery client satisfaction goes up, leading to more referrals and repeated work. Win-win, right?

Not necessarily. As you and your partners shift more time and resources to serve existing clients, you dedicate less to promote your consulting services to new clients. With less new demand coming in, it's not at all clear if this is actually positive for the business' growth.

The solution to avoid overwhelm and build a robust CCS system is adopting a systematic approach to solving limits:

1. Formulating hypotheses and putting them to test.
2. Reviewing results, and repeating experiments if necessary.
3. Documenting the solution, and creating processes to support it.

Solving a bottleneck might require some experimentation. After working with many specialized consulting firms and partners, I do know how similar companies have solved similar problems. This is precisely the value of hiring someone with deep expertise in a vertical or industry - you accelerate your learnings.

But you also have (or at least should have) a unique positioning. Unique offerings. A unique personality, values, and business culture. So while it's likely that the solution to your limit is less complex than you imagine, it will need to be tested and adapted to fit your business.

These experiments will produce results, which you will then review. Here we use numbers (instead of intuition) to check how the system reacted, and if the bottleneck has been solved. If that's not the case, we use the data to create a new hypothesis and design new experiments to be put on test.

When you do find the solution, it's time to document and systemize it. The goal is for you to never need to invest your time to solve the issue again. It's only when that happens that you can truly direct your focus to the new limit of your business.

To create business systems, you first need to document the specific activities that your solution consists of. Your system is nothing more than a collection of tools, practices, and procedures that will make sure all these activities get done right.

It might involve automating recurring tasks. Creating SOPs (standard operating procedures) and guidelines for you or your employees to follow. Or simply hiring an external consultant or agency to execute the activities your business needs, but you can't provide.

No matter how you choose to do it, solving the limit will inevitably unlock growth. And building the systems and capabilities in your business to do so is what allows you to move forward - without falling back to the ground whenever the next “marketing trend” or growth hack comes along.

Conclusion

This framework is not perfect by any means. Whole books have been written about TOC and each of the CCS modules, and there are entire fields of study about each of the sub-components.

Still, it’s proven helpful for me as a starting point for identifying growth issues in many consulting businesses. As the saying goes, "All models are wrong, but some are useful." I’ve found this to be a great tool to understand the big picture before diving into strategic and tactical work with clients.

Now ask yourself those three questions:

• Do you struggle to articulate your growth goals or prioritize the most important initiatives that need to get done?
• Do you wrestle with trying to figure out which “best practices” apply to you and your consulting business?
• Do you feel like your firm would benefit from bringing a specialist to transform your marketing and growth ideas into practice, and create more structure and consistency to your initiatives?

Maybe you have some challenge or opportunity in your business that you know you need to solve or seize. Yet, somehow, it keeps getting pushed to next week, next month, or next year.

If that's the case, don't hesitate to reach out.