avatarAldric Chen

Summary

A 1-Man business consultant outlines three critical business lessons derived from real-world experience that are not typically taught in business schools: regularly assessing one's value to the organization, understanding the Profit & Loss statement, and being ready to pivot strategically.

Abstract

The author, a business school graduate and seasoned consultant, emphasizes the importance of self-evaluation in terms of unique contributions to a company, especially during economic downturns. He underscores the necessity of understanding basic financial statements, particularly the Profit & Loss statement, to align oneself with the company's revenue generation or cost management. Additionally, he advises on the importance of adaptability and the development of T-shaped skills to navigate through a company's strategic shifts, ensuring survival and growth during challenging economic periods.

Opinions

  • The author believes that the knowledge gained from formal business education is limited and that practical experience offers invaluable insights.
  • He suggests that preparedness during economically challenging times can be a decisive factor in job security.
  • The author asserts that every employee should be able to articulate their unique value proposition within the company, especially when facing potential downsizing.
  • Financial literacy, particularly understanding the Profit & Loss statement, is seen as crucial for positioning oneself effectively within a company.
  • The article conveys that during times of corporate contraction, individuals should focus on securing revenue or demonstrating productivity and execution skills to maintain their relevance.
  • The author emphasizes the importance of being adaptable and versatile, with a broad skill set (T-shaped abilities), to thrive during a company's strategic pivots.
  • He implies that those who are unwilling or unable to adapt to changing business environments are more likely to be let go.

3 Important Business Lessons I Learned as a 1-Man Consultant No Business Schools Will Teach

I am a business school graduate by the way

Photo by Austin Distel on Unsplash

Yes, I (really) mean it.

There is a limit to business knowledge disseminated from prestigious B-Schools. The school of hard knocks, however, has much to offer.

I happen to be a graduate of both schools. It took me 4 years to finish Business School, and I spent the subsequent 12 years cracking the DNA of the global business environment.

There is no linear progression in business life.

And so, I would like to share 3 major business lessons I learned as a 1-Man consultant you can use to side-step professional-level crises coming in your direction.

Lesson 1: Periodically Evaluate the Value You Bring to the Organization

You must.

Because your contributions will be scrutinized intensively during bust years.

Let us face it. Companies scale and contract. You don’t want to be squeezed out when corporate contraction happens.

The keyman in my consulting engagement is worried about retrenchment. This consulting client operates a software business, and revenue growth has tapered considerably.

Rumors about rightsizing have been rife. It does not help that all Big Techs are aggressively trimming their headcount.

I asked him the following questions when we went out for a cup of black.

  • What are you working on that only you can handle and no one else can?
  • What are your cumulative contributions to the company?
  • How does your work help the company do better?

He has no answer. I am not surprised.

Many people don’t think about such things.

But I told him to go back and think about it. He did.

When he was invited to the “Dreaded big room” and got questioned on his work deliverables and performance, he was ready. He escaped unscathed.

His colleagues aren’t that lucky. 2 of them couldn’t articulate what they do and justify their work contributions to the company. They were asked to leave.

You see, being prepared does not hurt. In bust years, preparation can save your ass.

Lesson 2: Understand the Profit & Loss Statement & Where You Belong

I will get to the rationale later.

Firstly, financial statements are the report card of a business. Finance and accounting are the de facto languages of a business. You cannot avoid them.

I repeat. You cannot.

This is not to push you to become a 1-Man consultant in finance. It is to get you to understand the business environment you are in.

And no, you need not invest time and big money in an accounting major or to become a Doctor in Quantitative Finance. Simple, basic, structural understanding does wonders.

For instance, the Profit & Loss (P&L) statement can be deconstructed into 3 main sections.

  • Revenue
  • Costs
  • Profits (Derived from Revenue minus Costs)

You might find it uncomfortable to use such jargon at the start. That is fine. I can rephrase the questions for you.

  • Are you generating income for the company?
  • Are you part of the company’s operating costs?

Once you have a clear answer to the above questions, you know how to spiral ahead during boom years and protect yourself during bad times. It can be straightforward.

I want to elaborate further on what you can do during bad times.

If you sit at the revenue-generating side of the P&L, show what you have done and can do. The following pointers are simple examples.

  • Aggressively securing contract renewals before the upcoming recession hits
  • Hitting the roads to promote the company’s products and services
  • Lowering the barriers of entry for prospects to come on board

You get to show the future you have built for the company. Your results are closely aligned with your business case. Yes, many companies trip over themselves to keep high revenue generators.

If you sit on the costs side of the P&L, focus on the following.

  • Your ability to increase the productivity of your department
  • Your ability to manage many teams
  • Your ability to execute projects

Your senior leadership will understand that you can be relied on. Why so? Because people with execution discipline are hard to find. Trust me on this point.

Lesson 3: Be Ready to Pivot

Always keep this in mind.

Survival of the company is always in the mind of the senior leadership. They are paid to steer the company forward through growth.

Lean management comes into play when times are bad. The senior leaders will gather to discuss how they are progressing with less funding, fewer people, and lower costs.

I have sat in many meetings like this as a 1-Man consultant. It happens all the time.

And so, you want to be ready to adapt when the moment of strategic pivot arrives. Those who have demonstrated T-Shaped abilities will thrive. Quiet Quitters will be asked to leave.

I have seen this over and over. So, I say the following.

Be flexible.

And be willing and able to do more during economic contraction. These are the personas that senior leaders will never release.

Parting Keynotes

I learned a lot about business during my 4-year study at B-School.

The thing is… business is a sport that evolves with time. And it involves social dynamics. Our ability to see the big picture cannot be taught in an academic environment where the linear narrative is prized.

The school of hard knocks taught me the reality of the business world.

And, of course, I had the great fortune to witness corporate events unfolding before my eyes as a 1-Man consultant.

Thus, I say this.

Strive to be self-aware.

Always take stock of your contributions to your company, where you sit in the P&L, and be able (& willing) to pivot and do more.

You will survive this foreseeable economic headwind.

And thrive.

About the Author:

As a content contributor, I write my observations from daily life and my business exposure. Because our life experience is the bedrock of our unique perspectives.

Get full access to Medium using this link and read gazillion exciting articles.

Economics
Investing
Finance
Business
Entrepreneurship
Recommended from ReadMedium