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Growing Talent Development Firms: The State of Outsourcing

Monday, July 2, 2018
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Given that none of us would be in business without our customers, it seems prudent to spend some time exploring how to gain and retain them in long-term partnerships that are mutually beneficial. This blog is the first of four that will address the topic of working with your clients. This first one focuses on the state of outsourcing talent development solutions as a business model for your clientele. How do you not only get in front of potential clients, but also ensure they know how you can best serve them? The next blog will explore just who are your customers, and the third and fourth installments will focus on how to best establish and keep a strong relationship with your clients.

Outsourcing is big business, and this is true for talent development (TD) as well. Recent estimates (Training magazine, November/December 2017) suggest that $7.5 billion of corporate TD budgets is spent on outside products and services. This is roughly 8 percent of the total training expenditures of $93.6 billion. Although the TD supplier market is extremely fragmented, these figures seem to indicate there is a lot to spread around. How, then, can you be sure you get your fair share of the supplier spending pie?

First, be sure what part of the pie you actually want, and bid for that slice. It doesn’t make sense to vie for client-desired capabilities you neither have, nor perform well. Second is to be sure you are really competitive in the space in which you have chosen to be. Is your capability in facilitation, design, development, consulting, project management, or several of these? Are you a content or a technology provider? Perhaps this latter distinction is most important, since you don’t want to be potentially embarrassed by your performance in an area that doesn’t suit your deep expertise and experience. Many content providers without a technological solution will present themselves as the total package and worry about resourcing the tech later with a partner or two. The problem is they won’t be sure how to create the proper solution for the client without significant technology delivery experience and expertise. Similarly, a technological solution provider may not be able to provide the content the client wants without borrowing it from elsewhere.

This journey is easier if you already have worked with the prospect; they will know your work and how you relate to them personally and their organization overall. This doesn’t mean you don’t have to put your best foot forward, and you may also find you have to re-educate a client who thinks of you one way given their past experience, and doesn’t know you have other capabilities. For example, you may have facilitated a senior-level program for them and received rave reviews, but you may have done this just to help them out and don’t really want to continue in this role. Now they keep calling you to do more and more senior team facilitation—which, while you are very competent at conducting it, is not a service on which you are interested in building your business model. Can you say no the next time you’re asked? Until you do, you risk being pigeonholed into an area not conducive to growing your business. What your client hasn’t learned is you have excellent program design and development capabilities they could tap for a totally different type of need. In this case, it would be wise to sit down with the client to advise them about both your expertise and what you want to do for them going forward.

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For a brand-new client, the education process is equally critical, if not more so. In this case, you must make it very clear what your offer is and how you can enable their business through your programs and services. Of course, without any prior experience with you, they have only a couple sources of information from which to draw. They can review your sales and marketing materials and even meet with you and other representatives from your organization, but they also may want to check your references. For this reason, it is even more important that your current and past clients truly understand what your capabilities are and what you want to carve out for the growth of your business.

There are basically two types of relationships you can establish with clients, one much more desirable than the other. You can create a series of transactions wherein the client purchases your materials or services, pays you for them, and both of you move on; or, the more desirable partnering relationship in which your client seeks your counsel to address their talent development challenges. In this case, you may actually not be a selected program or service supplier, but rather more of a trusted advisor who can assist the client navigate the often-overcrowded supplier landscape. You must be careful, though, about putting yourself into this role, as it ultimately may present a conflict of interest: It will be difficult to both advise the client and also recommend yourself and your own business as possible solutions to their challenges. There is an obvious give-and-take position you must maintain in situations like these; but once again, you could inadvertently get yourself boxed in as their go-to advisor, not the ultimate supplier.

How can you be sure your clients fully understand your capabilities? What guidelines have you established to stay true to your current and future business growth interests? What have you done to move your client relationships from transactional to partnering interactions? Join us for part two in this blog series to learn more.

For more insight, check out The Complete Guide to Building and Growing a Talent Development Firm.

About the Author

Cohen is founder and principal of the Strategic Leadership Collaborative, a private consulting practice focused on business strategy and development. A 40+ year veteran of the talent development industry, largely on the supplier side, he has demonstrated a proven track record for building equity by growing top and bottom-line performance for eight different consulting enterprises in the education and training industry he has either founded and/or led. He has been called on to consult with numerous firms needing strategic planning guidance, business coaching, and board advisory services.

His latest book is The Complete Guide to Building and Growing a Talent Development Firm.

He can be reached at: 952-942-7291 or steve@strategicleadershipcollaborative.com or at his website: www.strategicleadershipcollaborative.com.

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