Before my consulting career began I ran a manufacturing company that employed 2,000+ people.
During that time, there was a Japanese word that I was completely obsessed with. This one:
Muda.
It’s a word that loosely translates to waste (as in, waste of resources) and is used a lot by lean manufacturing practitioners.
In a factory, it’s not very hard to spot muda, i.e. things like excess inventory, overproduction, rework, etc. That’s because you’re dealing with tangible things: raw material, finished goods, work in progress, etc. You can *see* muda all over.
In manufacturing, muda costs money. Reducing muda means increased output, revenue and profit.
You see waste, you deal with it and do everything you can to reduce it.
But in consulting, which is a SERVICE business, it’s a whole different story.
A consulting business may waste resources for years and simply never realize it because you simply can’t see muda “lying around”.
Having run a consulting business for many years, here are my observations about the two most dangerous types of muda for a small consulting business.
👉 1. Too many services/chasing too many customers
In manufacturing, adding a new product line often means a significant capital investment. You don’t make that investment unless you’re sure you have customers for the new line. Which means you have a purchase order or at best a letter of intent (LOI) from a customer. Adding a new product line or expanding to a new market takes considerable thought, research and planning.
But in services, there’s no monetary investment involved. You come up with any number of services and go to market targeting 5 different customer segments. It’s too easy and tempting not to. But in the process, you lose focus and an extraordinary amount of time. Imagine what you could do with all of that lost time.
👉 2. Creating before selling
In manufacturing, you make before you sell. You make products, sell them and get paid. As the industrial economy made way for the knowledge economy, the “make before you sell” mentality never went away. In the consulting world, firms spend weeks or even months conceptualizing and creating intellectual property and marketing collateral for new services before they even talk to a potential customer. They even partner with other firms to come up with new service ideas. When they go to market, most of those ideas don’t fly.
Truth is, in consulting, you take a concept or an idea to market. If a potential customer bites, you then create the intellectual property as you go. Even better if the customer pays you first to create it.
Creating elaborate services before selling them is a huge waste of time and energy.
The bottom line…
Muda is everywhere in consulting businesses even though you can’t see it.
The key question is: what is muda costing your consulting business?
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