(Data)hugging your clients

Relationships are the currency of power in consulting.  Even in these days of professionalised procurement, who you know and how well you know them still matters; and knowing who you know and how well you know them can be a competitive advantage.

Historically, partners battled with each other to ‘own’ the most important relationships; empires were built on land-and-expand principles which would have easily recognisable to colonial settlers.  Partnership structures incentivised people to exploit their client ‘plantations’; internal collaboration was not so much non-existent as irrelevant.  But in today’s post-colonial world, relationships are much harder to control and the idea that a consulting firm’s activity for a given client organisation should be channelled through a single point of contact would be laughable if it wasn’t so counter-productive.  The first thing even the most junior consultants do now, when they meet a new client, is to send a LinkedIn invitation: it’s simpler than a business card and keeps a foot in the door for the future.

Like other organisations, consulting firms have invested in customer relationship management systems, but these are rarely able to keep up with the rapid proliferation of connections and most are designed for business-to-consumer, not business-to-business, communications.  Which is why we were interested to hear about Datahug, an Irish company whose software is already used by some of the world’s biggest financial advisory firms to manage their relationships.  The software sits on top of existing systems scanning contact information from email, calanders and other traffic in order to generate insights into connections that exists -  who knows who at a particular client and what type of activity there’s been for a given period. When somebody does a search for a company or person on the web, in LinkedIN or directly in the Datahug product they can see a the click of a button who in their company has a connection or  relationship with the entity and how strong the relationship is.  The precise information they need to effectively target the account.

The utility of this is obvious: with a few clicks of a mouse you can see not just who knows who, but how well.  But the implications are fascinating.  Does our post-colonial consulting era, in which people range freely across borders, give way to a big brother-ish approach in which firms try to retrieve the control they’ve lost?  Or do we end up at the other extreme, with relationship anarchy – benign but nowhere near as productive as it might be? Perhaps the most useful aspect of a tool such as Datahug is that it can help bridge that gap - it encourages collaboration as people can see who knows who but it respects connections by ensuring that the person who "owns" the relationship remains in the loop - providing and making the introductions.

Datahug also brings value in the long-term - driving a  switch in focus from the quantity of your relationships (the weakness of LinkedIn) to their quality.  Elsewhere, we’ve talked about the three stages of thought leadership: the first stage, in which the quantity of material matters; the second stage, where quality is most important; and the third stage, where success depends on focus (a combination of quantity and quality).  The same model may apply to relationships: at the moment we have few ways to gauge the quality of the latter, so we focus on how many people we know, not on how well we know them.