Impact Pricing Podcast

Ep147: Talent Acquisition: How to Successfully Hire a Consultants to Fuel Business Growth with Wendy Johnson

 

Wendy Johnson started out as an M&A consultant at Accenture, and she got to IBM ten years ago. Now, she is the Vice President at PagerDuty.

In this episode, Wendy talks about the reasons you work with a consultant and not just with someone internally. She emphasize the idea of looking at pricing not as a project but as a process that needs tweaking as you go along and not overhauling.

 

 

Why you have to check out today’s podcast:

  • Discover the reasons how companies benefit from hiring external consultants
  • Find out the advantages and disadvantages of hiring external vs. internal consultants.
  • Find out how to hire and work with an excellent consultant to avoid wasting money, time, and effort.

              

Structure your data and your dashboards in a way to inform all your decisions and such that all of the decisions you make in pricing could be data-driven. 

Wendy Johnson

           

Topics Covered:

01:39 – Why is it relevant to talk now about a topic on consultants

02:15 – Getting consultants versus hiring them

04:52 – Making the most of a consultant’s engagement with the company

06:04 – Engaging consultants and the value they contribute to the company

07:25 – Driving force behind onboarding a consultant

08:11 – Observation on how consultants work

09:03 – Consultants hiring their own excellent talents

11:00 – Why hire a pricing leader in your company before hiring a consultant

12:34 – What you can do to get other executives involved in getting a consultant

13:12 – One good thing to think about getting data analysts to get involved with consultants

13:58 – Way of knowing for a successful engagement

15:32 – Disagreeable actions consultants do and how to avoid them

17:18 – Thoughts on hiring second consultants and pricing

19:21 – Her pricing advice that could greatly impact one’s business

20:28 – Important KPIs she looks at in her dashboard

         

Key Takeaways: 

“I found that the best way to use consultants and the best way to enter into those relationships is to have a structured engagement with a very finite piece of work or finite task. I think a lot of times the project is too broad. And you end up when that engagement ends, not being left with enough to actually use the work they’ve done.” – Wendy Johnson

“I think we have to be thoughtful when we engage the consultant not only thinking about the piece of work that they want us to deliver but including what it’s going to look like after they leave, like what tools are they leaving for us to use, to reassess.” – Wendy Johnson

“There’s been a scenario where we knew we just did not have enough feet on the ground doing a huge transformation. You don’t necessarily want to hire a lot of talent, because that capacity need is temporary. So, then you figure out how to fill that temporarily, with consultants, or there’s a specific skill set that you know and that’s temporary as well.” – Wendy Johnson

“I think if we have an answer to our question at the end of the engagement, and then if we have a way to continue doing that work, we’re not stuck with that, that’s success.” – Wendy Johnson

“Pricing shouldn’t always be project work. You should build a framework, and there should be some consistent cadence and how you measure performance and you should be tweaking more than overhauling.” – Wendy Johnson

             

Connect with Wendy Johnson:

                    

Connect with Mark Stiving:   

                          

Full Interview Transcript

(Note: This transcript was created with an AI transcription service. Please forgive any transcription or grammatical errors. We probably sounded better in real life.)

Wendy Johnson  

Just structure your data, in a way. Structure your data and your dashboards in a way to inform all your decisions and such that all of the decisions you make in pricing could be data-driven.

[Intro]

Mark Stiving 

Welcome to Impact Pricing, the podcast where we discuss pricing, value, and the helpful relationship between them. I’m Mark Stiving; today our guest, returning guest is Wendy Johnson. Here are three things you want to know about Wendy before we start. She started out as an M&A consultant at Accenture, which is kind of interesting, given what we’re going to talk about today. She was our guest on Episode 84, where we discussed what it was like to be a pricing executive. I highly recommend you go back and listen to that one. And she moved into pricing at IBM about 10 years ago and hasn’t looked back. She’s currently VP of pricing at pager duty. Welcome, Wendy.

Wendy Johnson 

Thank you, Mark. I’m excited to be back.

Mark Stiving 

All right, well, so, I normally start out with how did you get into pricing, but everybody can hear that in episode 84, if they want to go back and listen. So, let’s today talk about consultants. That’s what we said we were going to talk about. And at one point in time you were a consultant. So this is kind of interesting, for a big company. First of all, tell me why this is top of mind for you right now. And then we’ll try to put that in perspective.

Wendy Johnson 

This is actually top of mind because I’ve been having conversations related to my new role at PagerDuty, about where to use, how to use our talent, or how to structure our talent and the topic of consultants has come up, as it always does. You know, where is it appropriate to use that type of talent and those type of resources versus hiring and onboarding?

Mark Stiving 

Well, I love the fact that you framed that answer as the question to the next question. Where do you choose, or what have you learned, right? Where does it make sense to use consultants as opposed to hiring people?

Wendy Johnson 

Well, you know what, given my experience using consultants in the past, and we’ve had some, I’ve had some hits and some misses, I found that the best way to use consultants and the best way to enter into those relationships is to have a structured engagement with a very finite piece of work or finite task. I think a lot of times the project is too broad. And you end up when that engagement ends, not being left with enough to actually use the work they’ve done. Like for example, hiring a consultant to do packaging and pricing. Like you think you have a packaging or pricing challenge in the market, you need to make some adjustments. Consultants come in, and they do that analysis for you. And, you know, good or bad piece of work, make some recommendations on your pricing. When the engagement ends, what happens the next quarter? Right? And your book, you touch on this and when price climate… Win Keep Grow, right?

Mark Stiving 

Yeah.

Wendy Johnson  

You touched on… At the beginning, you need to tweak a lot, right? It’s not a… you know, static. Pricing isn’t a static activity, right?

Mark Stiving 

It is never static. That’s the thing. And so we’re constantly adjusting, you know, just like you, I’ve had experiences with consultants. I’ve never been one. But I really, you know, I see pros and cons with consultants all the time. And one of the biggest cons I see is the implementation piece. So, at the end of whatever the engagement is, they give you a gorgeous report. It’s got phenomenal analytics and results and recommendations. And now it’s up to you, you got to go figure out, are you going to implement this? How do you implement this? It’s really hard.

Wendy Johnson 

It is really hard, especially if the people in the organization change after they leave. That’s happened before. You know, do the implementation. Everybody signs up and people change, right?

Mark Stiving 

Yeah. And so let’s talk about… By the way, I don’t know the answers to these questions, but we’re just going to have a conversation. How do we engage a consultant to get us really good ideas and then how do we get that into implementation? How do we make it so that it’s valuable to our company?

Wendy Johnson 

I think we have to be careful or thoughtful when we engage the consultant not only thinking about the piece of work that they want us to deliver but including in the engagement, what its going to look like after they leave, like what tools are they leaving for us to use, to reassess, right? And what are their recommendations on their cadence? Or maybe we make a… we have a relationship where they come back, you know, I just think everybody needs to be thoughtful about what that end looks like.

Mark Stiving 

Yeah, I think it’s easy to…, forget the consultant for just a second, I think it’s really easy for us as a company, or even an executive to say, here’s a brilliant idea, let’s go do that. And we forget that we’re touching 10 different departments, 30 different people, we’re trying to get people to change the way they behave every day. This is it’s tough to do this job.

Wendy Johnson 

It is tough. It is tough.

Mark Stiving 

Have you engaged consultants to help you do the training, to help you convince all the other departments around that we have to go change what we do?

Wendy Johnson 

Actually, yes. And I think consultants are very valuable in that particular area that change management, because they’re seen as objective. Right. And I think the conversations are healthier when the recipients, it’s not all internal, right? And there’s some objective feedback entering into those conversations.

Mark Stiving 

Yeah, it’s interesting, I never do consulting, I’ve never been a consultant. That I still don’t do, consult, what I call consulting. I do a lot of advising of companies and coaching of individuals. And one of my clients right now said that he wanted me to do the training. And the reason was, because he thought that people would listen to me more than they would listen to him. And I just found that really interesting, probably truthful, but really interesting.

Wendy Johnson 

I think it is true than just hearing another voice. It’s helpful to versus the one you’re hearing in your meetings every week. I think that helps. That’s helpful, especially if it’s a sizable transformation.

Mark Stiving 

So, let’s start at the beginning. How do you hire a consultant? Why do you hire a consultant? In your experience have you seen… what was the impetus that says we got to go hire a new consultant?

Wendy Johnson 

There’s been a scenario where we knew we just did not have enough feet on the ground doing a huge transformation. You don’t necessarily want to hire a lot of talent, because you know that that capacity need is temporary. Right? So then you figure out how to fill that temporarily, with consultants, or there’s a specific skill set that you know and that’s temporary as well. You know, you’re not going to need that ongoing. So I think those are good scenarios. I also think, organizations, specifically for pricing, who are just entering their pricing journey, it’s probably healthy to hire a consultant, get feedback on what they should be doing before they invest a lot in the wrong place.

Mark Stiving 

Yeah, I’ve certainly seen consultants do audits that I thought were very valuable. Because it helps a company understand here’s some places you could go, here’s where the low hanging fruit is. Let’s go get that first. So, I think that’s hugely powerful. And then I also am always amazed at the times that I’ve had consultants working with me is usually there’s one or two super smart, super experienced people involved in the engagement. And then they throw 10 or 20 people straight out of college that are crunching numbers that are doing all the work. And you’re like, whoa, we need people to do the work. This is pretty awesome.

Wendy Johnson 

That was me. That was me at the beginning of my career.

Mark Stiving 

Nice. Well, that was, I mean, these… they work — these guys hard. Yes. So it may be expensive, but boy, you get something out of it.

Wendy Johnson 

They certainly do. And I, you know, I would say especially the larger, like the big, is it still big five, I forget what number there are now, those big five, they hire excellent talent at that level, they can attract really good talent, and they just hire very well at that level.

Mark Stiving 

Well, they pay extremely well. They do a fantastic job at recruiting. And by the way, I think it’s a really fun job in the sense that you’re only on a specific engagement for three to six months and then you get to go do something else. And so you’re exposed to so many different opportunities and so many different learning lessons. So, I mean, I think it’s a wonderful job if you’re willing to work hard straight out of school. I’ve never been willing to work hard so that’s okay.

Wendy Johnson 

Stop it.

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Mark Stiving 

Okay, so let’s talk about who inside a company should be engaged with the consultant in the world of pricing. Right, who inside our company should we get involved with the consultants?

Wendy Johnson  

I definitely think the pricing leader and going back to what I said about, you know, companies early on in their pricing journey, I do think it’s good to hire consultants, like you said, to do an audit or just give advice on what the next steps should be maybe somewhat what an organization for that company could look like, or some options. But I wouldn’t do too much more with the consultant until you hire a pricing leader. Because it’s, and this has come from my experience, a lot of times, it’s difficult for that leader to enter that organization, and try to pick up work that a consultant has left behind and maybe have a different perspective on what should have been done. So it might end up not being the best value if you’re redoing or throwing stuff away.

Mark Stiving 

Yeah, so what I just heard you say is hire your pricing leader before you hire your consultants. And that makes sense in that, look, the consultants are going to leave someday, right? You need someone there that understands, that takes responsibility or ownership of this project, and they can see it through and help the company through. So I think that that makes a ton of sense.

Wendy Johnson 

Right. Right. For that continuity. Right?

Mark Stiving 

Yeah, absolutely. So, we get the pricing leader involved. How often are other executives involved?

Wendy Johnson 

I think it’s good to establish milestones so that you’re getting buy-in along the way, depending on what those are, depending, of course, on what that project is. But yes, it’s definitely, you definitely need to establish those milestones. So, you’re getting that buy-in along the way, and you don’t have to extend the engagement further making it more expensive.

Mark Stiving 

Yeah, and it probably has a lot to do with how big the project is.

Wendy Johnson 

Right?

Mark Stiving 

If we’re transforming the company, the CEO probably needs to be involved. And if we’re trying to change a price or find a price point on a product, probably not.

Wendy Johnson 

Right, right. If you have internal data analysts, I like to have them engaged a lot, all out so they can pick up they can reuse whatever those tools are, right, in that analysis and redo it again, quarterly or annually.

Mark Stiving 

Yeah, so although we get our own data analysts to help with the consultant, right, because they need to be able to find the right data and understand the right data. Our data analysts are also learning from the consultants. What’s going on? How are you doing your analytics? The consultants will ask questions that we didn’t know the answers to. And now we get to go figure it out. And so we learned a ton as we did that. I think that’s awesome. So, how do we know if a consultant succeeded? How do we know if this was a successful engagement or not?

Wendy Johnson 

I think if we have an answer to our question at the end of the engagement, and then if we have a way to continue doing that work, we’re not stuck with that. Because we know that an answer is not necessarily the right way. It might be right at that time but the market changes, everything changes, and we need to be able to change but we need a plan for when they leave. If we have a plan for when they leave, then I think we’re good.

Mark Stiving 

So I think that’s a reasonable answer. I would love to know, did we actually implement it? Did we do something?

Wendy Johnson 

That’s a good point. Did we do something? What was the impact? What was the ROI on this whole effort and can we measure it?

Mark Stiving 

Yeah. So now I love consultants. I have lots of friends who are consultants, actually love them to death. I think they’re awesome, smart, great people. But I have a complaint or two about consultants. So, let me toss one out. And I want to hear what you do, if you’ve experienced it, what you do to not experience it? But what I’ve seen happen is consultants come in. And I think they make really good short-term recommendations that hurt the company in the long-term. And that’s because they get graded on the short-term response to the results, and they never get blamed for the long-term results. So do you see that and how do you try to prevent that?

Wendy Johnson 

You know, I see that especially with price actions, do we want to raise or lower prices? And that always falls in the bucket. Yes, of what you describe, very easy to get great short-term results. But the long-term, especially if later down the line, we’re dealing with migration, or complexity that we’ve built into our system because of a new model or manual work that we’re looking at ahead on the consultants they usually not around. Yes, at that time for that renewal cycle, right? Yeah, for that base.

Mark Stiving 

And so have you seen a way to combat that to just say, look, I don’t believe you as a consultant. I don’t want to do that. I mean, what do we have to do to make sure we’re not hurting our long-term business?

Wendy Johnson 

I think and that’s why it’s so important to have a pricing leader or somebody who really understands pricing. They know the modeling work that needs to be done to make those long-term estimates, right? So, although we might not have the capacity to do the work, ourselves, we do have somebody who can guide that work and ask the right questions, and you’re not leaning entirely on your consultants for that guidance, right?

Mark Stiving 

Yeah. Have you ever seen- I’ve never seen those but I love the idea. Have you ever seen somebody hiring a second consultant to implement what the first consultant recommended?

Wendy Johnson 

I haven’t seen that. I have not. I have seen organizations who get stuck in a cycle of consultants, like, it’s really a matter of not fixing the real problem. You know, it’s, I need consultants for this project. And then there’s a next following. And there’s always a project because the core work has not been done, you know.

Mark Stiving 

There’s something fundamental that we didn’t get to. And so it feels like it’s always broken.

Wendy Johnson 

Yes, it’s always broken. There’s always a fire drill, there’s always a, like, pricing shouldn’t always be project work. Right? You should build a framework, and there should be some consistent cadence and how you measure performance and you should be tweaking more than overhauling.

Mark Stiving 

Yeah. And so what I find interesting, when you say the word, it shouldn’t be a project work. At first, I wanted to disagree with you. In fact, I still might a little, but I absolutely agree pricing is a process, right? So we put processes in place that we can just turn the crank and we do this over and over again. And we set prices and we monitor and we change prices and we monitor and so we have this process in place. And then when it’s time to go tweak something, yeah, let’s create a project, right? Let’s go do some firm to figure out how we’re going to get better at what we do, how we’re going to tweak our process, and we might implement a project to go tweak our process. But I agree completely pricing has to become a process for us if we’re going to do right.

Wendy Johnson 

Right. I completely agree. I completely agree.

Mark Stiving 

Nice, nice. Wendy, this has been fascinating and fun. As always, I love talking to you. But let’s ask the final question here. What’s the one piece of pricing advice you’re going to give our listeners that you think would have a big impact on their business?

Wendy Johnson 

Oh, wow, you got me, Mark.

Mark Stiving 

Right.

Wendy Johnson 

You know, and this, a noise, probably a lot of the people I work with, and I’m so focused on data, and just structure your data, in a way structure your data and your dashboards in a way to inform all your decisions and such that all of the decisions you make in pricing could be data-driven. It helps with engaging with all your stakeholders, including consultants. There’s just a lot less churn in terms of disagreements, and a lot of back and forth, when all of your decisions are data-driven because even if you don’t agree with the final decision, it’s so much easier to tweak if you have a good base of data.

Mark Stiving 

Yeah, I agree 100% that we need good data, we should be using good data. So I’ll ask a follow on question. What do you think are a few of the really interesting KPIs you’re watching on your dashboard?

Wendy Johnson 

The ones I, and this is very basic that I like to watch is just unit prices, you know, the average, of course, and what that range is, how, why is that range, do we have any control over? What our unit price and of course, segmentation, segmentation like this, figure out what the segmentation is that’s driving customer behavior because that unit price can be right on point for one segment and way off for another segment and understanding the segments for your business that there’s so much opportunity in understanding the value that your product or service is for various segments of your business, so much opportunity there.

Mark Stiving 

So, it’s so funny, maybe I’m too much of a geek. But as you’re describing that, I’m picturing my dashboard that I’m about to go build out just because I want what you just said. And so my dashboard has a box plot of ASPs. And I can choose the timeframe that I want to see for the ASP box plot. And then I can have a drop-down for my market segment, which market segment I’m looking at, and I can see how the box plots. Oh my god, this is awesome. I want this.

Wendy Johnson 

I love that. I love it.

Mark Stiving 

Thanks. Wendy, thank you so much for your time today. If anybody wants to contact you, how can they do that?

Wendy Johnson 

LinkedIn is always the best way. Wendy Johnson on LinkedIn.

Mark Stiving 

Okay, we’ll have your LinkedIn in the show notes because I’m pretty sure there’s more than one Wendy Johnson.

Wendy Johnson 

Probably.

Mark Stiving 

Probably. Episode 147 is all done. Thank you very much for listening. If you enjoyed this, would you please leave us a rating and a review? These are extremely valuable to us. And if you have any questions or comments about this podcast or pricing in general, feel free to email me at mark@impactpricing.com. Now, go make an impact!

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