Avoiding Vortex's - Unprofitable Work

In every business there is a balance between the need to keep cashflow rolling and really difficult and unprofitable work.

In professional services Firm's such risks are higher given the high human capital cost with limited ability to leverage man hours.

At LCC we have a strict approach of looking at potential engagements and attempting to avoid what I have labelled 'vortex's'. These are situations that might have cashflow attached but are very difficult pieces of work to complete.

They occur in every industry. Whilst it is always a balancing act, I recommend that you critically review larger opportunities that are presented where the profit is marginal. If such an opportunity / contract proved to be heavily unprofitable the associated 'stress' that it can place on the corporate system can be incredibly negative.

In my experience it is far better to avoid these situations and pursue other, more profitable, work.

Keeping a Clear Head

On the weekend I took to the water sailboarding for the first time in years.

Not only was it enjoyable it was a really useful experience from a professional perspective. Plonking along on a sailboard in a stiff breeze the only thing I could concentrate on was the waves, wind and my balance. An hour on the board focussing on these things delivered a refreshed mental feeling, being able (or forced in my instance on the water) to switch off mentally completely from business issues.

I thoroughly advise that you figure out that special sport or past time that allows you to immerse yourself in the 'present' and switch off from day to day issues. I only wish I had revisited this sport a few years ago.

Be Careful Using Consultants

There is always an issue for a young company as to whether they should hire or use collaborative initiatives / consultants. This can be a difficult issue to handle.

My own experience is that non payroll based employees rarely prove to be as effective as one imagines. The energy and dedication of consultant can wane if there are not quick wins, or alternatively the risks in work that the consultant wants to pursue can be outside of the box of what the Firm actually wants to pursue.

At LCC we have attempted collaborative engagements from time to time, but despite best efforts, dedication of resources and much time / money invested the recoupment from such initiatives is marginal at best.

In many ways this is similar to a 'channel' initiative. Not all channels work. With consulting services the risk are understandably higher given the intangible nature of services delivered. As such I would recommend that you wait until you can hire full timers - and approach any collaborative effort with caution.