What are clients actually paying for?

The case for Principal-led delivery

Professional-services proposals usually describe work as inputs — a project team, a few workstreams, a set number of weeks, a list of deliverables. Then those inputs get turned into fees.

That makes sense from the provider’s side. From the client’s, it’s an odd way to think about the problem. Business owners do not want 80 consulting days. A chief executive does not want three workstreams. An investor does not want a presentation. They want their business to be in a better position at the end of the engagement than it was at the beginning.

While the traditional consulting model tends to monetise capacity, clients are usually trying to buy progress.

Sometimes progress requires a large team, but more often than not it just requires an experienced person who can understand the issue quickly, distinguish cause from symptom and help management make a better decision.

Think of a founder whose business has reached €40 million of revenue and stopped growing. The problem might be sales, pricing, management capability, incentives, channel strategy or some combination of the five. A team can study each in considerable depth, but a commercial operator can pick up that the so-called sales problem is really an organisational one within the first few conversations. The economic value of experience isn’t just that it produces better answers, but that it can save time. People who have encountered these patterns before know where to look first and which questions are likely to reveal the real issue. The opportunity cost of avoiding a strategic mistake far outweighs the professional fee.

Closing the accountability gap

One of the peculiar conventions of advisory work is the clean distinction often drawn between deciding what should happen and making it happen. A consulting team develops the recommendation; management then assumes responsibility for implementation.

There are good reasons for that separation in some circumstances, but it can also create an accountability gap. If the strategy fails, was the recommendation wrong or was the implementation poor? If performance does not improve, was the diagnosis incomplete or did the organisation resist change?

Senior operators tend to approach such questions differently because their careers have not allowed for that distinction. A chief operating officer cannot merely recommend a new process. A sales leader cannot simply devise a commercial strategy. Executives are judged by what happens afterwards.

Bringing that operating mentality into advisory work changes the relationship. The adviser becomes less of an external commentator and more of a participant in the outcome.

This is one of the ideas behind Principal-led delivery. The client gains direct access to the person whose experience is relevant to the problem, and that person stays sufficiently close to the work to influence what actually happens. Additional capability can then be added where it is useful rather than because an organisational pyramid needs to be staffed.

A model organised around Principals can be more agnostic about where the answer comes from. Traditional firms understandably draw first on their own resources. A Principal can begin with a different question: what combination of people and capabilities will produce the best outcome for this client?

For one assignment, that may be a single senior practitioner working directly with the owner. Another may require expertise in finance, commercial strategy and operations. A third may need specialist analytical support for a few weeks and an experienced executive embedded for several months. Increasingly, AI can take on part of the research and analytical burden as well.

The architecture follows the problem rather than the other way around.

Building enterprise value

For owner-led businesses, the distinction becomes particularly visible when the objective is to increase enterprise value. Owners often treat growth, cost improvement, management development and exit preparation as separate initiatives, commissioned from different providers at different moments. Yet from the perspective of a future buyer or investor they are all parts of the same story.

A company with attractive revenue growth but poor quality of earnings will be penalised. So will a profitable company that depends too heavily on its founder. A credible international expansion strategy may improve the valuation story, but only if the organisation has the management capability to execute it. Preparing a business for sale therefore begins long before an adviser starts assembling the transaction documents.

Our own Principal Method was designed around that logic. It begins by establishing where value sits and what is constraining it, then moves through strengthening the business, accelerating the factors that drive growth and, ultimately, helping the owner realise the value that has been created. The sequence—Assess, Build, Grow and Realise—is less important than the underlying principle: start with the outcome and work backwards.

Pricing for outcomes, not time

Time will remain an appropriate basis for charging for some work, but it need not be the default for all of it. Fixed fees can work well where a diagnostic is clearly defined. Milestones can create discipline in longer engagements. Success fees can make sense where an objective can be measured with sufficient clarity. In selected circumstances, participation in the value created may be the strongest alignment of all.

The point is not that every adviser should take risks on every mandate but that incentives matter. A model in which the provider benefits from a larger team and a longer engagement should at least be examined critically when the client benefits from the opposite.

Questions worth asking an adviser

Clients considering an advisory firm might therefore ask a different set of questions from the usual ones:

• Who is the person whose judgement we are actually buying?
• How much of that person’s time will we receive once the engagement begins?
• Have they dealt with this type of problem from an operating position rather than merely advised on it?
• Who will take responsibility for moving from recommendation to execution?
• Does the commercial model reward the provider for the same result that matters to us?

The answers will often reveal more than the logo on the proposal or the number of pages in it.

The future of professional services is unlikely to be defined by a single model. There will be room for global firms, specialist boutiques, independents and new forms that sit somewhere between them. But one change seems increasingly difficult to reverse: clients now have more ways of accessing expertise than they once did, and more technology with which to support it.

That should allow them to buy less organisational machinery and more of the thing they wanted in the first place: experienced judgement applied to a consequential problem.