How a Consultancy Can Get Crushed by the Ego of Its Owners

“Success is intoxicating, yet to sustain it requires sobriety. We can’t keep learning if we think we already know everything…we have to build an organization and a system around what we do – one that is about the work and not about us.” 

These wise words are from a book I devoured – “Ego Is The Enemy” by Ryan Holiday.

Indeed, ego is the enemy. I’ve observed it countless times in my work with consulting leaders and – I have to admit – I had experienced it personally. 

And that’s what I’d like to discuss in this article. 

There is a fine line between confidence and arrogance, between learning-driven and ego-driven decisiveness, between being a focused consulting leader and a know-it-all. 

One contributes to success in consulting. The other one slowly but surely undermines and weakens a consulting business.

The benefits and risks of ego in consulting

I’d like to clarify something off the bat. 

A healthy amount of ego is good. In fact, it is often the prerequisite to building and growing successful consultancies, especially in the hypercompetitive consulting world.

One has to go into the consulting business with a certain level of confidence – both in own abilities and in the consulting offering.

Confidence is also an important quality of a leader. When managing a team or an entire consultancy, leaders need to project a healthy amount of confidence, reliability, trustworthiness. 

It’s difficult to inspire others and help them achieve their full potential when a leader second-guesses every tiny decision.

However, confidence should never cross into the territory of arrogance. That’s a dangerous territory where a leader starts treating own assumptions as facts.

“People who base their self-worth on being right about everything prevent themselves from learning from their mistakes”. (Mark Manson in his book ‘The subtle art of not giving a f*ck’)

Recommended reading: Why Are Consultancies Appointing New Partners Without a Voice?

Making assumptions but failing to test them

I’ve witnessed this in every business and aspect of life: an unchecked ego leads to making assumptions yet failing to test them. 

It can be an inconsequential thing in everyday life – sticking to the same brand of food because “it’s the best” and refusing to try alternatives. 

In running a consulting firm, unfortunately, such refusal to test assumptions can lead to more dire consequences: a failed service launch, misallocation of resources, inefficient processes, overworked staff, unhappy clients, and, ultimately, the failure of the entire business.

“It sure sometimes feels like consulting is the industry most resistant to advice”. (Florian Heinrichs, former Accenture marketer, now consulting marketing advisor).

Of course, those with a fair amount of experience tend to base their assumptions on more than just a gut feeling. But that doesn’t negate the need to constantly challenge and test assumptions. 

Why? Because knowledge can get outdated in the blink of an eye. What prospects need, how they purchase consulting services, what they expect from their outside partners – there are a ton of variables that can change the consulting ecosystem. 

And sticking to old assumptions because they were proven right 5-10 years ago is simply short-sighted.

The downward spiral of big egos in consulting

The consulting world is rampant with big egos. I know. That used to be me. 

In my early consulting years I used to call the office with the message: you won’t believe what I just sold.

The answer of the team: “damn, did you do that again?” I was proud to sell projects we had never done before. My ego wanted to crush every new opportunity that came my way.

My ego caused me to overestimate my expertise and underestimate the impact ‘selling-without-experience’ had on the team.

Here are just a few examples of ego-driven behavior I’ve observed in consulting leaders over the years:

• Saying yes: They say yes to every prospect because they feel the need to crush every new opportunity. Their ego does not allow them to differentiate between distraction and depth/focus.
  
  
• Blaming: They blame everyone else for failure. Not enough leads generated? Marketers suck. The pipeline of projects looks weak? It’s the senior consultants’ fault. A client is unhappy? It’s the project leader who messed up. Undoubtedly, there are instances when it is, indeed, the case. However, consulting leaders with big egos tend to perceive every failure as someone’s fault instead of examining their own role in it.
  
  
• Positioning erosion: They never revise the positioning of their consultancy or put it to a test. As mentioned earlier, things change. Whether it’s the pandemic, the recession, technological advancements, or a bunch of small things – what prospects need is constantly evolving. Egotistical consulting leaders refuse to accept this change and struggle to re-assess the alignment of their business with the current needs of prospects.
  
  
• Toxicity: They create a toxic, demotivating environment internally. Big egos from consulting leaders tend to discourage opposing views and productive debate. And when employees don’t feel heard – whether we’re talking about consultants, marketing/sales/business development, or admin staff – they no longer feel invested in the success of the firm.
  
  
• Service dilution: They constantly expand the service portfolio. Instead of deepening the expertise of the consultancy, ego-driven consulting leaders feel the need to grab as many opportunities as possible by adding more and more (shiny) new services to please as many prospects as possible. This dilutes the expertise of the firm, makes its positioning on the market unclear at best, and most likely erodes the consultancy’s profitability. 

“...ego is the enemy of what you want and of what you have: Of mastering a craft. Of real creative insight. Of working well with others. Of building loyalty and support. Of longevity. Of repeating and retaining your success. It repulses advantages and opportunities. It’s a magnet for enemies and errors.” (Ryan Holiday)

Recommended reading: Why Variation in Consulting Does Not Sell

How high-performing consultancies keep their egos in check

While I’m often brought on board to help consulting firms that are struggling, I’ve also had the pleasure of working with already incredibly successful, high-performing consultancies. 

And one thing that consulting leaders share across these firms is they know how to keep their egos in check.

They are confident in their abilities yet do not pretend to have all the answers. They constantly re-examine their own assumptions and are not afraid to take a long, hard look at internal processes and own behavior. They are hungry for knowledge. They take pride in their expertise yet remain humble, share their knowledge generously, and often turn into leading voices in the market. 

They are able to find that balance between being decisive, highly competent leaders and good listeners of the voices from within and outside of their consultancy.

Here are some of the strategies that high-performing consultancies utilize to make sure their decision-making is not ego-driven:

1. They look at numbers to understand the well-being of their consulting business. More specifically, they constantly monitor profitability and margins. They understand that revenue growth alone can tell a misleading story. Their goal is to create maximum value for their clients, constantly deepen the expertise of the firm, and drive growth through efficiencies – a direct result of repetition in work (big ego’s tend to dislike repetition).
   
   
2. They talk to their target audience to make sure their knowledge of the industry and perception of their own consulting services remain relevant. The past clients of a high-performing consultancy can explain in 30 seconds what the firm can achieve and why what it does is of value. Such firms’ case studies cover both the process and highlight the measurable results achieved for clients. They constantly question and refine their positioning and make sure it’s aligned with the market needs by staying in touch with past clients, sharing educational, pain-resolution-driven, authoritative content, and measuring its results.
   
   
3. They foster a culture internally where team members are not afraid to admit to be wrong because their leaders constantly challenge their own assumptions. This facilitates healthy discussions and improves internal alignment. Marketing tends to work perfectly in sync with the consulting side. Business development is driven by the reputational footprint that the firm has established as the market leader in a narrow field.
   
   
4. They have external advisors/mentors whose advice they actually take to heart - someone who can provide a feedback loop. In some instances, it’s an informal network of advisors. In other instances, it’s hiring an outside expert to audit the business strategy and positioning of the firm. This is how I got a chance to work with numerous studious consultancies.
   
   
5. They learn how and when to admit defeat. They understand that not every initiative will succeed. They know when to pull the plug on a campaign to avoid burning more resources. They look at data and derive insights. They learn and grow as a result of these defeats, instead of letting their egos pursue pointless opportunities.

Recommended reading: (Case Study) Replicate the Secret of This Highly Profitable Consultancy

In conclusion

Ego can very easily become a liability for consulting firms. 

When gone unchecked, it creates tunnel vision and a ton of missed opportunities. And I’m not referring to the opportunities of working with more clients. It’s about missed opportunities to work with the right clients, opportunities to deepen the expertise, therefore delivering stronger value and charging higher fees. 

It’s about opportunities to create a sustainable consulting business where employees have a sense of achievement, and opportunities to build the reputation in the market as the expert.

“Why is success so ephemeral? Ego shortens it. Whether a collapse is dramatic or a slow erosion, it’s always possible and often unnecessary. We stop learning, we stop listening, and we lose our grasp on what matters. We become victims of ourselves and the competition. Sobriety, open-mindedness, organization, and purpose – these are the great stabilizers. They balance out the ego and pride that comes with achievement and recognition.” (Ryan Holiday)

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