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Every consultancy starts the same way. A founder with sharp instincts, deep relationships, and a willingness to do whatever it takes to reach success.

That combination is powerful, can build a strong 7 figure firm, and then somewhere on the climb towards 8 figures, it quietly stops working. The pipeline gets harder to protect, forecasts get looser, cracks begin to show in pricing and client servicing and in the numbers. That plateau has a name, the 8 figure wall. And today, we're gonna talk about why the strengths that build a firm become the very things that can stall it and what it takes to break through without losing the expertise that made you worth hiring in the first place.

So I'm pleased to introduce our program leaders today. Kyle Hepenstall is the founder and managing director of CompassX. His boutique started in 2009 and scaled into the Inc. Five thousand twice and passed the 8 figure mark.

That makes him a rare person on a panel like this who actually has climbed the wall that we are describing.

Christopher Mello is managing principal and founder of Mello Consulting Group and a former big four management consulting partner, bringing more than twenty years of finance and business transformation work to the question of what has to change under the hood.

Ben Edwards leads consulting, go to market for C MAP, and has worked at hundreds of boutique worked with hundreds of boutique and midsized firms just this year across management, data, tech, and AI niches.

That gives him a pattern level view of what is stalling and scaling, and what it actually looks like across this market. Gentlemen, welcome. Thank you so very much for joining us today.

Thank you. Michael.

Thank you.

Alright.

Let's let's start by naming this. For founders, listening who suspect they are approaching the wall, can't quite see it yet, what does hitting it actually feel like from the inside? And, you know, I'm gonna kick this off with, Kyle. You scaled Compass X past that 8 figure threshold. Was there a single moment when you realized the instincts that built the firm had become something that could very well be slowing it down, or was it a slow creep that you only saw in hindsight?

Michael, that's a it's a great question. And for me, it was definitely in the latter category, and that to me, that was a series of smaller walls along the way.

I think we were just chatting before this call.

For some people on this call, it might it might be a million dollars, right, who they're still in the solo practitioner, or maybe they have one employee or two employees. And then you subsequently, you break through that level, and then there's another hurdle. Maybe it's three to five, and then you break through that, and then it's six to six to eight, and then you break through that. So for me, it was a smaller increments, and, I I actually don't spend a lot of time thinking about those increments personally. I'd like to hear what Chris thinks about that, but I don't spend a lot of time. I'm I'm pretty focused on just doing what I think is the next best thing for the firm and for its for its growth and for my employees also.

And we'll circle back to some of those details, but, you you, you asked Chris. So, Chris, when you look under the hood of a firm that's stalling, where where do the numbers betray that problem? Where do you first see see that those hints?

Yeah. So, I mean, to answer Kyle's question, I don't focus on it either, Kyle, to be honest. It's it's I think for me, it's, it's just continuing to to listen to, you know, our existing clients, listen to the marketplace, you know, understand where they're allowing us to go, where they want us to go, and then trying to match them up with, you know, with talent that can go there for them. It's not necessarily just about hitting, you know, hitting that next milestone, hitting that next metric, hitting that next number. But, Michael, to the to the original question, it it becomes, I I think it's a it's a, you know, a thousand cuts, the, the death by a thousand cuts to to quote our friend. I don't know where that comes from. Maybe Taylor Swift has a song.

I think it's it's you know, you start getting in these conversations that you didn't have to have, you know, at a million dollars and five FTEs.

You know, the conversations at 30 FTEs that are, hey. You know, who's going to this project and and why? You know, with strong leadership teams who want great resources, the conversations become different for sure, as you're scaling.

Yeah. So so, Ben, from from your perspective working with, you know, firms just in the last year, what are the symptoms you see early on? Ones that show up before the the revenue actually starts to starts to flatten out. What do you see?

Yeah. I think you're right. Chris and Carl's call out that the symbolism of eight figures might not necessarily resonate with you as the founder, but in the data, we find that that's, like, a relatively critical juncture because you certain have a a number of employees. Your breadth and stretch over the business becomes a little bit more tried and a little bit more tested.

But, yeah, absolutely, when I speak to the founders, it's not like they ever really have a a single set goal. In fact, particularly in the consulting market, the ambition levels are always to to keep moving as best you can. The earliest symptoms that I think you could point to where they might be death by a thousand cuts, it might be microbrewalls, however you wanna describe it, but you automatically would default to pipeline and client concentration and a percentage of new business versus recurring. There's maybe three data points that you would want to look at to give you a leading indicator as to whether revenue or growth might stall out.

Personally, the thing that I found when talking to leads and fans of boutiques is there's another significant tell. And I think that is your spending is you if you were billing that out to a client would actually make a material difference. So the amount of founders who I speak to who are still heavily involved in, let's say, 80% of invoices or 50% of pricing conversations internally or running every sort of, like, project portfolio review.

The relative value of that versus passing that down the chain to the leadership team or democratizing data so people can make their own decisions, I would think that's quite a significant tell before you hit a juncture to know whether things might stall out, I e, you've hit or found a bottleneck or you've actually got something that you can scale and and grow beyond.

Okay.

You mentioned bottleneck, and I think that's probably where where we wanna head right now to see where where those bottlenecks are, you know, whether it's it's pitching, pricing, client management, or finance.

So if you had to point to an underestimated bottleneck, where would that be? Where where the founders least expect it? Where where is that gonna be?

And that's back to you, Ben, because you see it so much.

Yeah. Sure. So a real client example here, and I have some recency bias because somebody said it to me the other day, but I thought it was a brilliant quote. And they said ownership doesn't live in an org chart.

And I think really what that means is you can look at revenue and pipeline and client concentration. All of these other things that on a metrics level give you an idea whether you were hitting a wall or not.

And you can have a leadership team in place who, on the org chart, are the ones responsible for all of those things, Michael, that you said. So who is in charge of who's in charge of pricing, somebody who's in charge of finance.

But unless you've actually given them the tools, and that can be or it could be support, it could be KPIs, it could be direction as a sort of founder visionary leader, then they literally do just sit on the org chart. So I think that is probably the most under recognized founder bottleneck because it's not really something that comes out in the numbers or the metrics. It's sort of a hidden thing that is all about human empowerment. And it's not to stretch it too far, but in this we had a little bet beforehand how long it would take before somebody mentioned AI, and I'm gonna spoil that because we're twelve minutes in.

But in this world where AI is everywhere, particularly in professional services, I hear all the time about how it's the human component that's gonna make the biggest difference in the boutique space. And I guess that's often talked about in terms of client delivery. I actually I think from a bottleneck perspective, the way to solve that is about that human component inside of your business.

Well, I'm gonna I'm gonna turn that to, to Chris for a second. So, you know, a found lead leading a firm, as a founder, you know, you work a lot on you know, you you price based on your gut, and your relationship with those clients. What specifically breaks about that approach once you hit scale? And and and how do you replace it? And and I know we'll go to AI here again. Sure. Wanna throw that to you, Chris.

No. Yeah. I mean, let me I'll I'll get to pricing. I I do wanna say this.

I think I think this will resonate with a lot of founders out there if they're listening. I mean, I I find that my role in the firm and this is hard. This is hard. My role in the firm as the founder has changed every year of operation, which is which is kind of interesting now.

I mean, we're six years in. You know, we've doubled every year in each of those six years. So my contribution to the business went from being the primary delivery person, you know, interacting with the clients in year one to slowly adding people slowly adding experienced leadership people who are dealing with the clients. And now in year six, you know, I'm continuing to try to mostly take myself out of client work.

So that's been a, you know, a big shift. And the reason behind that is because my role in the firm has to shift. Right? I I do need and, Michael, to get to your pricing point, like, there are things that you as a founder have to decide what you're great at, where you can get people that can surround yourself with things that you're not so great at. They do better and let them go.

And then and then hold on to those things that you are great at and and really kind of run the firm on those. And I think that's where, like, every journey is probably a little bit different. So for me to get to the pricing point, because there's a broader point that I'm going down this path, but to get to the pricing point, I've held on to a lot of the pricing review. My leadership team who's winning work, and out there in the market does understand that, you know, here's our target rate per rate that we're trying to get per resource. How much do you think you're going to it's going to on the cost side, they come to me with the cost.

Michael and Ben, we've done panels, we've done webinars before. I'm a very big believer in not pricing to your cost to deliver, but pricing into the value you're delivering to the client, right? The marketplace value of your solution.

And to me, part of the things that something I do is constantly listen to my buyers, my CFOs, my VPs of finance, understand what my competitors are offering them for solutions and cost for those solutions, and then making sure that I'm valuing what I can deliver the same or higher quality, you know, not based on my costs, but based on what I think the market expects that solution, you know, that outlay for that solution to be.

Hopefully, that some sense, Michael, to you.

No. No. No. It does. And and, Kyle, let's let's let's turn that, lens on you.

Where where do you where do you see that breaking down, and how how how does that approach work for you? How do you make that approach work?

Yeah. I'd probably go back a little bit because Chris said a lot of salient points that resonated same same as same as my experiences. I think, Chris, I'm I'm I try to get myself on delivery roles now because I've been out of delivery probably longer than I have been in it. And so I kinda crave that client interaction, that that frontline get back in the trenches. And and I love when I'm I love when I'm written into some styles, and we we try to do that as often as possible. But, that was probably the first thing talk about bottleneck. Like, I think that's how we started this conversation around pricing.

Bottleneck to me is that that's that's the first bottleneck. You. You and your ability to deliver fifty hours a week of work. Right?

I think that the bottlenecks evolve. And and like Chris said, your role has to evolve, and you have to constantly as let's let's call it the visionary and and certainly one of the visionaries in a company if if you're the founder, you constantly have to spend time stepping back, getting yourself up to that 30,000 foot view and and looking wide. I think that's one of the most important things that you have to carve time out for each week, if if if you're in that position today.

Just looking looking out, looking wide, and deciding where you're gonna go and, like, you have to make that bet ultimately. You have to bet on yourself. You have to bet on your your lieutenants. And, I think those bottlenecks could be at any given point in time 10 items. And so then you have to use your consulting skills and decide what two are you gonna work on because we know working on 10 is not the answer. Anyone anyone who's ever held an operational job, it just doesn't you don't get there quick enough. And especially being a boutique consulting firm, you have to use speed is our biggest advantage, I think.

Speed in the ability to deliver at speed and everything from contracting at speed. Chris and I come from big firms. And Chris, how long does it take to create a get a SAL through your firmer former firm's contracting and legal department. Right? Months, maybe.

A value a value proposition. Right? Being easier to work with. That's part of, like yeah. I totally understand that resonates.

Yeah.

And and it may not it's, selling the invisible. It may not it may not sound great to a client when you first meet them, but over time, like, they they know they know what that is, feels like to work with you repeatedly versus an alternative. When it comes to pricing, to me, pricing is is a I'm gonna talk to it on the on the in the context of a bottleneck. Pricing to me, is is like anything else.

It's a task that you have to, as I say said earlier, stand by back. Think about, do you need to be or do you want to be involved in this process? If the answer is no, you know, need to be I I ask myself need to be a lot. Do I need to be?

Then I think about how I'm going to delegate that. For example, I would like I will do a final review on something like pricing or invoicing, but we now have systems and processes in place where, you know, my time has been reduced to less than an hour or or a half hour or, you know, some amount of time that is a lot less than I used to spend when I used to have to carve four hours out or something of my day to review something. So I I think that's a particular just example of a bottleneck, and and there's gonna be many of those. And you just have to, decide as the founder, is this something that you like to do, you're good at, you want to do, and, can it be delegated?

So so, Ben, let let's reach back to you really, really quick here in terms of what firms what you see firms actually have the data to to to figure out where those bottlenecks are, you know, that that aren't running on instinct anymore. Do do do they have the data, or are they using the data to to to find these bottlenecks?

Yeah. Between Kyle and Chris, as you'd expect, given their experience and running the firm, they've hit on the two primary ones that the data tells does across sort of 700 firms that were jump in the ability for the firm, for the business to gain efficiencies by removing the classic sort of founder bottleneck. One is around pricing. And although Chris still holds that, I know from other webinars, he's got a fairly well defined services offering fairly well defined sort of, like, commercial component.

All of his clients aren't treated like snowflakes. You know? They go in. They move at speed.

They have their value prop. There's a value component. So there's a speed element to it, lots of our other clients who have gone beyond the eight figure wall have unlocked large parts of that as well. It no longer just lives in the founder's head.

It has been documented. If they went away for two weeks, somebody hypothetically could pick that up. And it's not just the SOW, the SAL that goes out. It's the what happens with the change order, what's the margin that we want to achieve, who typically gets resource to it, how do we make those decisions.

All of that feeds into that. So that's item number one.

The second area where we see a demo to jump in sort of freeing the founder bottleneck and be able to scale further is the service delivery component. So it's the actual work that gets done with the client. What's the value that gets recognized by the client, which then feeds into some of the value based pricing conversations. We see that firms are increasingly talking about outcomes based or fixed bid based because the pressure on t and m type work is difficult to correlate, but I can definitely see a trend where moving towards those sort of, like, commercial outcomes is very much contingent on the services that you can deliver.

And and therefore, we see a high propensity of consultancies moving in that direction, and they're freeing up the founder to spend more time on the things that they're expert in. So whether that's Carl going back into delivery, you know, or it'd be Chris working on proposals and pricing. Everybody's got their strengths, but it's by the sounds of it, both these guys here and the other people who work with, they freed themselves up from the tens of other things that could be occupying their headspace to then focus on the things that they are best at and add most value to the business.

So some some strategy, in in analyzing that data to to, to streamline, which brings us to, how how we would deal with silos. And I know that may sound kind of counterintuitive. We usually think of silos as, big company diseases, but the the program flags, even small teams. So how does a firm of 15 or 20 people end up with silos, And and what do they look like before anyone would call them a silo? How do they do that? It stay with you, Ben.

Some stuff are intrinsically not a bad thing.

I think right now in this, again, world of AI, one of the threats to a boutique and any consulting firm is not having the data in the first place. So when we see businesses who do have the data, but it operates in silos, at least that you're further ahead than not having it all. But how how do you get to that point? Well, lots of consultancies now are no longer in physical office spaces altogether.

We've got disparate teams who work in different zones, still lots of travel. So there's information flying from different places. Everyone's got their favorite tools. And, again, with AI, you can sign up to these things with a credit card, and all of a sudden, your ops person is 5 coded something, and your delivery person is using this expense product.

I just think it's a natural thing in businesses that are extremely fast paced. And as the founder, you can't wrap your arms around even fifteen, twenty people anymore. So you've got to figure out very quickly where those silos are and then try and bring that data together as quickly as possible. The sooner you do that, that we definitely have seen this.

But the sooner you start sort of centralizing your data, there's almost a compounding effect where you get a benefit from the fact that you've now got some historicals, which you can reference against, and that could be for price incisions. It could be resource incisions. It could be an invoice that's going out. You've got historicals to reference against.

So I know we're talking about silos and how to identify them. I just wanted to throw in sort of like, we're at a great moment in time now with technology, with AI that we could start breaking down some of those those walls a lot faster and quicker than maybe we were previously ever able to do.

But let's let's dive into what those might look like. Kyle, when did you did when did you notice, any first silos at Compass X, And and what what what happened to to cause you to identify it and name it?

It's actually a great question because I'm astonished many weeks that a company 40 to 50 employees large like ours has silos. Like, I'm it astonishes me, but it it's definitely there. It's definitely there, Michael. The first part of my answer is gonna, replicate what Ben said.

We are a hybrid, organization. Our frontline consultants are often some in some form of travel to the clients. We do business. We have clients nationally.

We're located in Southern California, but we have clients nationally.

And so, that is is the easy answer. Even our operational team that, you know, is is colocated, often during the week, even with that, you know, about seven to 10 people in in size, we do have silos. And I would say the next biggest reason for those silos is, I gave it in my one of my earlier answers is speed. I'm I'm a big proponent of speed, making decisions quickly and moving moving quickly with minimal intelligence, because I'd rather move and make a mistake and and then iterate. That's that's my personal philosophy and style. And then I think because you drive forward fast, you're you tend to have, you tend to create some some of those silos when when, you're moving that quickly.

So that that would be my answer of, just kind of identifying that they're there. Right? Everything from, you know, your talent team not exactly understanding the requisition of of the consultant that they're trying to go out and locate, just because there hasn't been a good handoff in exchange in from the client services manager. That would be my example of something that might happen this week. Okay.

Well, let's go to Chris.

Mike, I was was gonna say, Mike, can I jump in on that one?

Because I I I think silos have been an interesting, challenge to help us really hit the mark of this of this webinar on the on the eight figure wall. I I think they've really enabled breaking some of these down has really been the catalyst to getting through that wall. What I'll say is this, you know, my firm does a lot of so I'll give you my profile, you know, 30 FTEs across 12 or 13 states, and we're all virtual, right? So it's a completely virtual environment.

So it's how do you keep everyone informed on what the firm is doing when you're all kind of in your own home office most of the time. We travel to clients if needed, but very virtual delivery. And we do a lot of project work, right? Finance transformation work, trying to really move the needle for the office of the CFO.

What I realized quickly, I think, was our best client it's, you know, everyone knows this. It's really hard to get a new logo. Our best client should be our existing clients, right? They should be our existing clients. The problem with project based work is once you do one project, you can lose that existing client if there's not the second project due for them.

So what I've really tried to do is make sure that first client experience, that first project is key, but then make sure my team is trained to notify or to understand and be aware of, Hey, we also do these 5x other things. And if we see warning signs of those at the client, we need to make sure we're introducing those other services, those other offerings, those other people to that client, you know, to break through that. And then what we've done is connect the incentive scheme. So we've actually connected the incentive scheme to the cross sell where, you know, if we're doing, you know, Oracle Enterprise Performance Management work and we see an enterprise resource planning opportunity, an ERP opportunity, you know, we better be getting that EPM principle better be getting that ERP principle in front of the client, right, sooner than later.

And I think that understanding what each other does well, understanding, you know, kind of how we go to market and the services we offer and then introducing those services, I think has really been a key to us breaking through, you know, that 8 figure wall.

Thanks.

Yeah, does. It does. So, before we move on to the next question, I kind of want to throw this out there for our audience. For a founder who's still small enough whose firm's still small enough they aren't siloing to this degree yet. What's what's something a logical thing they can do to keep it now, to keep it from forming?

That's a toss-up for whoever wants it.

One thing we started doing I mean, you know, silly things like having a firm wide group chat where every time we sign a new, you know, statement of work, I firm the firm loves to be in the loop. Right? Everyone loves to feel like they're part of the culture. Right? So from my group chat where everything every time we do anything big, you know, we're sending live photos, Michael, from the Consulting Magazine event on Thursday, you know, like keeping everyone feeling like they're part of the journey even if they're not physically present.

Every other Friday another little thing I use a little things, but, you know, real life things. Every other Friday, we found that lunch and learns didn't work with client schedules, but we do a breakfast and learn on every other Friday morning where we try to get the whole team together and just do an hour on, you know, something interesting we're working on, you know, in that client situation. One one team member comes in, gives an hour overview of what they're doing. And, you know, it it's amazing how that can trigger thoughts from other team members to say, hey. Maybe I should be talking to, you know, my client about this. So just trying to bring people together in an otherwise, you know, virtual siloed world. Right?

Yeah. Yeah. Absolutely.

Should I give an example of this? The the complete opposite of the Chris's nice human ones. There's something that's, like, really born in the data and in the weeds.

Yes. Because there's the thing that sort of we see is if you're at the smaller point in your journey and what can you do to anticipate getting beyond that, I think you can easily over fixate on a large number of really important metrics, you know, sometimes fifteen, twenty, 30 different metrics you might obsess over. And without knowing it, that is what probably is causing that leader founder bottleneck because, therefore, if that metric is important to you, everybody's questions roll uphill to you, maybe maybe one thing to do is really simplify down to five or six key things that you absolutely obsess over on a daily, weekly, monthly basis. And everything else you then your team till you get to the point that you then can be completely helicopter view, visionary strategist. You've got the leadership team running the business, and then you can obsess over way more KPIs. So completely different take to Chris, but hopefully useful.

Yeah. Well, so firms are are are growing. Some are scaling. Some are you know, have hit a plateau. But in your experience, Ben, what are you what are you seeing that actually separates a firm that's genuinely built to scale from one that has just simply gotten bigger?

Well, the the best cohort analysis that we can do here is looking at second time founders versus, you know, people that have built the business from the ground up in the first instance.

And the percentage of second time founders who put operations and essentially the running of the firm rather than the running of themselves or the running of individual teams or colleagues at the heart of their decision making is is unbelievable. And often the second time around founder is doing it with a certain purpose in mind, It could be that they've identified a a niche. They wanna exploit that opportunity while the market exists to scale and grow and then maybe get some form of exit.

Or they want a brand because they've done something in their first firm and they've moved on. I think, obviously, with that ambition and that drive, and then they've obviously reflected back on some of the things that went well and didn't go well, we just see almost every second time founder that I speak to puts operations at the core.

Even when even objectively speaking, I'll say, that's early. They might be two to five people doing less than 1,000,000 in revenue, but they're obsessing over their sales. They're obsessing over their resourcing. They're obsessing over their invoicing.

But most people would probably be looking at, like, go to market or, how to build a a presence. You know, the the the cooler, sexier stuff that consultants get to do to grow the business. Second time founders are, like, in there, you know, in in getting involved in the upside. So that's probably what we've we've seen.

So what should firms, what should be scaling, what should they standardize first? You you got a firm. You're you're you're growing from a practical standpoint. What should it what should it standardize, and what should it leave deliberately in the hands of its best people? Chris, Kyle, what would you what would you say?

I I think I like I I mean, I don't know. This is I'm just reflecting on the question a little bit. I I think I I think I like that my people know their path. I think we've done a very good job kinda standardizing the performance management processes, you know, kinda how they'll move through the firm, what it takes to get to the next level, how they'll become for me, and and you've heard me talk about this on prior webinars, how they're compensated is a big part of my value proposition for the employee.

Every everyone kind of knows, how much they'll make based on how much they deliver in in the model. So it's it's a very, commission based, outcome based compensation process as well. And some of the leadership team is all tied to that EBITDA metric. Ben, to your point on the metrics you're trying to drive, like obsess over the revenue per the EBITDA metric, pick your obsess over the cross sell, you know, and tie your compensation to it.

I think people like it makes people feel like they have a lot of control over their outcomes. So I think making I don't know. To me to me, getting that mechanized was an important part of being able to, a, retain existing talent and and, b, kinda attract new talent, at least at least in in the case of Melo.

Kyle, what did what did that, evolution process look like? What did that model look like on a day to day basis for you?

For me, the answer is easy. It was talent talent, and I see some questions kinda coming in, that may maybe maybe this might answer some of the some of those questions. Understanding how we are going to replicate the top top initial founders and and the my lieutenants in terms of the people who are doing execution delivery work, how do you replicate those people? And for for the first three to five years, I obsessed over standardizing and developing how we are going to do that from a talent intake screening, hiring, double checking references, and ultimately having someone that not only can deliver.

Right? I think delivery is sometimes the easiest thing to screen for. Some of these and again, I just referenced some of the questions, I think. It was a question from Karen.

The bedside manner of a consultant in terms of are they going to own that relationship as well as you would?

And, I'm you know, Chris does it with compensation, it sounds like, or certainly a a a piece of cons compensation we do also. But that's we call it sometimes solution owner, but that solution owner who is going to own the overall delivery to the client is, is important. So replicating that talent process and and being able to break that down into chunks so that we can compete with the larger firms who frankly have a lot more numbers than we do.

Interesting that you you let's just share with our audience because they can't see it. You were we'll go ahead and talk to the question that came in.

Karen has a a client services firm with revenues around 7,000,000, a leadership team that not only managing but doing direct client work. The problem is despite the documentation, process development, roles, responsibilities, performance management, technology, still have a problem with, things getting screwed up with the clients. Revenue churn, happens as a result. So what are the three things you've done, to program out the stupid in operations so your firm can continue to deliver your brand promise. I like that, to to program out the stupid.

Guys, Chris, you wanna you wanna address that? And then back to you, Kyle.

Oh, yeah. That's a that's a tough that's a tough question. It's a good question. It's a tough question. You know, I think we've done a lot of the things Karen's talking about, you know, making sure we've got, you know, deliverable templates, making sure, you know, those deliverable templates and and the art our historical artifacts are embedded in those things.

I I do think for us keeping we we still and it it's become less about me, which is key, but we still keep a strong one of my strong lieutenants embedded on every project. I do think it's a little bit before we all jump out, it's like a little bit of our secret sauce, right? I want our clients to feel like they have direct access to Mello leadership.

That's that's part of the value proposition. You know, I always I think I've said this on prior webinars, luck talking to K, P, M, or G or P, W, or C, right? You can come talk to Mello. You know exactly who I am.

You know where to find me. I don't have to be involved in the delivery. Actually, this you know, my lieutenant's better at this than I am. They're there to QA and make sure your, you know, your engagements, you know, going as as you want it to go, and and we're delivering the output we need.

But, you know, I'm I'm also here as a sounding board, and and that's kind of how that's really to to to this point, that's how we manage QA, I would say.

Kyle?

Yeah.

Mike, I I would, my advice to Karen would be don't confuse delivery with the bedside manner of a a consultant or That's a great point.

Someone that you're going to embed in the client. So we have a specific persona that we've you know, model of a persona that we've developed over the years of someone that fits that role because it's not always your best delivery person.

And so, that that would be my single point of advice to her. But but Chris is also right. It's not easy.

No. No.

I'll tell you.

It's a great it's a great it's a great point, and I probably over over over, you know, kind of glazed over that.

I think matching your your client's work style and personality and, you know, especially if it's a if it's a highly engaged service, like, with your delivery teams is is very that, you know, and kinda helping that bedside manner facilitating that bedside manner. I find myself matchmaking a lot. You know, this person is gonna play well with this person. Thinking about that, not just thinking about the deliverable they're going to put on the table, but the experience they're going to have getting to that deliverable. That's super key.

Interesting. Interesting. Yeah.

I think, you know, what's important to understand is you don't have to be involved in delivery, but remaining accessible is part of that client relationship even in terms of matchmaking, as you said, to make sure you people with the right bedside manner with the right client.

That makes a a great deal of sense.

Kyle, was there ever a decision you had to force yourself to to stop making even though you're still the best person in the building to make it? Were were there processes you had extricate yourself from to to improve the overall process?

Yeah. I mean, we touched on this one a little bit. I'll give it's not the most critical business decision, but it is critical because it brings revenue into your bank account. Right?

Like invoice review. Let's just take that. Right? So at one point in in the stage of the company, I had to touch I in my mind, I had to touch every single invoice, right, and look at that and generate it.

And is this correct? And part of it was we needed, you know, cash in the bank, but there was also, I don't wanna make a mistake. And and I wanna make sure that the client's being treated fairly. And they're you know, they they can be pretty complex, some of these projects, in terms of how you bill and and price your services.

So that would be an example of, like, I can remember specifically telling someone that I can't I I have to do this. And then, you know, gradually, you challenge yourself and you you build you build yourself out of the role. And, now it's down to the point where it's max an hour a month when when it comes to my particular invoicing. But that that was a that's a small example, but it's a very relevant example probably to everyone on this call.

Chris, do you have do you have an example?

No. That's a great Kyle, it's real. It's a real thing. It's very hard to let that go and and, you know, making sure client accounts are on track, you know, that that comes with that. For me, you know, it's it's been letting go of scoping and contracting. The early days, I was, you know, having every scoping conversation with the client. I was physically sitting there typing contracts, you know, building off of prior contracts, but I'm like, you know, creating these contracts.

And that that had to go. It just it's such a time sink, and it takes so much time where now, you know, whoever is my point on that on that, you know, on that contract, on that engagement, they're creating their own contract. Right? I I if they've got questions, I wanna look at it. And if they change from our standard terms and conditions, of course, I still wanna see it. But mechanizing that process has been a huge time release for me, for sure.

So letting go of some of those possessive or even OCD behaviors that made you a founder to begin with. Right?

Ben, Yeah. So for for those people who don't get past this wall, how often is that blocker, the business model, versus the founder's own willingness to to let go? I mean, you know, are they hurting themselves in some some cases?

Right. I mean, you just heard you've heard it from the two guys there, like unbelievably good examples because you could host this webinar with other industry experts and thought leaders, and they would say, oh, founder sales. You gotta remove yourselves out of PD or to call delivery.

It's this. It's the, like, the the the stuff in the detail that takes your time that actually you're probably not the best person in the business to do anyway. It's why you employ other people, and it's that stuff that you wanna remove. So, yeah, it's it's absolutely that that we see is the make or break for being able to scale or not.

You know, found a sweat, found a skill, gets you to a point in time, but the business is no longer just you. And therefore, I think it was Carl who said earlier, you know, how can you scale yourself beyond fifty hours? That's the critical bit. It's when you move beyond being the person to it being the firm and the business takes precedent.

You know, that's as much about mentality as it is operations. You know, there's plenty again, no recency bias, but I was speaking to a New York based founder a few weeks ago who runs a consultancy for the media and advertising space, and he just reached breaking point. So he you know, the bottlenecks had become all too consuming. And, but there was a moment of clarity, a moment of realization that he could no longer do three or four hours worth of delivery, then do some lead gen in the afternoon, work with his leadership team, then in the evening between bedtime with his kids and dinner with his wife, look for all of the invoicing.

And but you get that in this industry. This is consulting. It's, you know, it's an industry that's been born on people doing red eye flights, doing silly hours in client conference rooms until x time in the morning. So I get why that sort of, like, grit, that time is almost ingrained in people, and they it's a difficult thing to shake sometimes.

I would be interested in in understanding how a firm would know really the difference between is it a is it a temporary slowdown, or is it a genuine structural wall? How how are you gonna define those? How do you look at your operations and go, this is this is just a slowdown versus I've got bigger problems? Ben?

Structurally, there's three key components in the business. There are three levers that you can pull that enable you to grow or scale outside of yourself. One of which is that sale, that initial pricing piece, then it's the resourcing, and then it's the finance component. Like, if you can start pulling any of those levers to your advantage beyond it just being yourself and actually there's things embedded in the firm that enable others to take some of that off your plate, or you can use technology and AI to automate large components of that, then you are freeing up hours in a week, days in a month, weeks in a year.

So those would be the three key pillars that we just see so much time being lost, for want of a better phrase, where, you know, ideally, you would create some sort of processes or systems around those three components to to free yourself if you want. Now if you still want to be able to go in, or if it's still the area that you add the highest value in your business, then absolutely. But, you know, at least explore those options would be my sort of, like, recommendation.

Okay.

And and the reason can I just do quick quick quickly then? The the quickly, the reason why is there's one metric. There's a golden metric that sort of, like, identifies your your likelihood to be able to break past significant six seven figures through to eight figures or not, and that is truly understanding your project margin. It sounds really simple, but the correlation between those firms who absolutely have mastered their understanding of project margin and then growth and scale is, like, unprecedented.

It's the one thing out of hundreds of things that you could measure that is the the sort of, like, most demonstrable piece. Because I think it there's so much in there that underpins it. It's how you price your work, how you resource your work, have you understood your ICP, you understand the value of what you're delivering, and it all comes together into this one little metric that not many people really obsess over. So that would be the one sort of, like, thing that I would point to.

Like, if you obsess over that, at least in our data, it shows you've got a much higher likelihood of being able to break past this point.

Okay. Well, and and it and it had to to come back full circle again. So how does AI change this equation?

I mean, for firms trying to scale delivery without adding account.

And well, I mean, Kyle, how how do you utilize it, and and what has been its effect?

I'm gonna just tagline the the deli I'm gonna separate first and tagline the delivery to your client every every way you can possibly imagine is is is the answer to that one. From an operational perspective, I can tell you there are so many opportunities It'll make your head spin. We had, three interns this year, over over the summer. Not super technical degree major degree interns, great schools.

So just great individuals. And in eight weeks, the amount of automation that they were able to build for us, was quite incredible.

And we we set them on certain tasks like in invoice reconciliation was that was that's that that happens to be a big one today, but just reconciling invoices, automatically, systematically for us.

Right? So the the AI component from the delivery perspective, and and Chris, I think, has something to say about that is just prolific, especially probably in in the work Chris does. And operationally, I just think you can't not but pick up, you know, one of the major platforms and just start thinking about Chris mentioned contracting. We're using a ton of anthropic right now for our contracting. We do have a in house attorney, and and she happens to be my wife. She she is she is able just to to quadruple herself in terms of what she's able to do in contract review and contract editing. So there's many, many opportunities for, enabling AI, and everyone should be doing it.

Yeah. Chris, how how are how are you applying that?

I mean, listen. I saw I my team my my team pulled me here. I'm I'm gonna be honest with you. You know, I'm hiring, you know, a lot of big four skill sets, big four senior consultants, managers who are, like, you know, kind of ex starting to dabble in this, but the big four really does start to limit, how free they are to dabble.

You know? And they they come here, all of a sudden, like, you know, the guardrails are off in a in a in a good way. In in a I say guardrails are off in a good way, right? In a in a way that they can explore a little more.

And they came to me a couple years ago, and and I'm like, how are you how is your output on this this content? You know, I grew up through the ranks.

My whole shtick was I've got twenty five years in in consulting. I've done a deck on that. I've always done a deck on that. You know, you want you want me want a PowerPoint output?

I've got it. I've already got it built. Just tell me what it is, and I'll you know, I can kinda change it to the situation and make it make it fit, but I've got a starting point. Now what we've done really is taken those starting points, embed them into agents that understand our templates, our style, our, you know, our you know, how how we like to document, And we've put that twenty five years in the hands of every one of our junior consultants.

Right? So now their their output low it's it's it's crazy what I've seen. I mean, I can't believe what they're doing. But they were all subscribing to the enterprise or to the, you know, $100 a month cloud subscription, Kyle, that you were just mentioning.

And I didn't even know it. I was even paying for it. They were like, this just makes us way more productive. We can and I'm like, wait.

Wait. Wait. Wait. Wait. What? What are you all doing? And, you know, obviously, now the firm has stepped in and kinda, you know, better done some education, done some, you know, kinda commandeering of of what was going on there.

But, it it is wild what's changed in the ability for a consultant who produces PowerPoint a lot as output, how efficient they've gotten for sure.

Wow. Yeah. Dan, what are you what are you seeing AI changing that equation?

Well, it's absolutely individual productivity, specifically in boutique consulting, is off chart compared to other professional services niches and also compared to other industries.

Makes a ton of sense when you think about, like, the mentality of people in that space and also the drivers from the client side to work at speed, get more delivered. But AI hasn't been as leveraged much in and on the business. So when we compare individual productivity, which is going like that compared to average firm growth, is still fairly flat, you can tell there's like a a difference there. I think what will happen, both people have talked about the use of LLMs.

I'm sure everybody in this call is from using ChatGPT, Cloud Anthropic, Microsoft Copilot, etcetera, extensively. When you start plugging in something called an MCP across all of your different tooling, all of a sudden, you as leaders and founders can use those same LLM tools to ask questions of it that aren't just gonna be based on content they scraped from the web and Reddit as the context for actually your firm's data. All of a sudden in real time, you are starting to interrogate your own business based on your own context and use AI in the business to get a handle on, hey. What was that which of the sales prospects is actually most likely to move forward based on some call recording data plus pipeline data, and which is the highest margin based on your operational data, for instance.

Your finance team will hopefully have to spend a lot less time at the end of month producing these reports. Your board packs don't have to be viewed on a quarterly basis. You can get the nuggets of insight you want. Everything is speeding up.

AI has accelerated that, and I think the next frontier for boutique consulting is taking that same process they've done for productivity gains and applying it in the business.

Interesting. Interesting. Well, we're we're we're we're running out of time here. I'm gonna give a lightning last word, to each of you, because I know there's founders on this call thinking here listening to this one, that's me.

Get it. So for those founders who are listening and possibly facing this wall right now, what's one move you would tell them to make first?

And you got thirty seconds each. We'll start with you. Chris?

I think for me, it's for for me, my secret sauce is listen listening to my people in terms of what, you know, where we need to go, what they're hearing, and where they want to go, where their clients wanna go, and and then listening to the clients. And and I try I genuinely try to take as many conversations as I possibly can to learn about, you know, Ben, I think you do a good job of this too. Like, learn about what's happening in the market, learn about where people wanna go, and then evolve, you know, evolve myself and evolve the firm to kind of cert to serve that market.

And I I think, Michael, that's our that's a lot of our sauce, honestly.

Yeah. Kyle.

It's key.

That's a great answer, Chris. I think that, everyone's every firm is different. Chris already said that. I agree with that. And everyone's at a different spot. And so my advice I gave earlier is spend time every week stepping back and looking higher, wider, further out, and then you're gonna have to bet on the one or two things that you need to knock down to accomplish this year. So, that's that's my quick answer.

It's not a it's not a cookie cutter answer because I think everyone's in a different Yeah.

Ben, close this out.

I'm so glad you go to those two, the hard questions first. It always gives me a little more time to think, so I appreciate that. I would say just maybe be harsh on yourself in terms of evaluating where you're spending time that you really don't need to and then figuring out have you got people in the business who can take that and run it themselves because they're better, quicker, faster.

You know, that is what will help you. It doesn't have to be an eight figure wall. Both within five minutes of the start of the session said, you know, it was micro increments. Whatever the the next stages you're trying to get to, it will all involve disseminating and democratizing what's in your head out to the rest of the business.

Well, unfortunately for having us. Really appreciate it. Yes.

Unfortunately, we are at the end of our time. We've gone just a little bit over. There's some questions that came in last minute.

I will distribute those to our panel, and we'll make sure we get some responses directly to you. Thank you, Kyle, Chris, and Ben for sharing your perspective and insight. Thanks also to CMAT for sponsoring our discussion today, and thanks everyone who joined us. We really appreciate your time, and we hope this conversation gave you some useful ideas to take back to your firm and your clients if you missed any part of this presentation.

It will be available on demand at consultingmag.com, so you can view it again or for a colleague.

And while you're there, we encourage you to explore other upcoming and on demand programs. Again, Kyle, Chris, Ben, thank you.

That ends our program today. Thank you all again, and have a great afternoon.

Thanks, Paul.

Thanks, Mike. Thanks, everyone.

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