Dear Friends & Colleagues:

Just in time for the holidays, the audiobook is now available for my new book, How To Win Client Business. If you have a niece, nephew, son, daughter or friend who has entered the professional services, this would make a great gift (ok, I may be biased).

Also, this week I’m giving away signed copies of the hard back version of  How To Win Client Business to the first 10 people who sign up for my blog. This won’t cost you anything and I promise not to fill your inbox with a tsunami of content. Typically once every week or two. At best. For those interested, you can sign up here.

Fine print: Please know that this information will not be used for any marketing purposes. Hard to believe, but there is no subversive or ulterior motives. Just a free book and a free subscription to my blog.

To celebrate the launch of How To Win Client Business, I’m sharing an excerpt from the book each week. This week’s peek is from Chapter 8: You Can’t Sell Beyond Your Credibility Zone. In this chapter I share the lessons I learned early in my career from the incredibly expensive mistakes made by EDS (Electronic Data Systems). This story illustrates how people – even highly paid and well educated executives – have very little understanding of how clients buy.

Without further delay, here’s this week’s excerpt. I hope you enjoy it!

Doug

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Chapter 8: You Can’t Sell Beyond Your Credibility Zone

The Cautionary Tale of EDS

 

The Story’s Beginning

 

EDS was a household name in the mid-’90s. It was the brainchild of the wacky

billionaire presidential candidate Ross Perot, famous for his charts and graphs on

the national debt. Perot didn’t win the 1992 presidential election, but his company

continued to thrive in an era of expanding corporate and government IT investment.

 

By the mid-’90s, EDS was a $10B company with over 50,000 employees

worldwide. In 1994 they signed a deal worth $3.2 billion with Xerox, which at the

time was the largest information technology contract ever. As often happens to

companies, EDS’s grand success led it astray: the firm began to believe that it could

do anything. If it could sell billion-dollar IT contracts, how hard could it be to sell

million-dollar projects in management consulting?

 

The logic of EDS’s attraction to management consulting was easy to follow.

While the profit margins on IT services might be, say, 10%, the margins on consulting

services were often double or triple that. EDS wanted a piece of the action.

 

At the time, I didn’t know much about management consulting; I had spent a

total of three months in the profession. I was, however, mesmerized by EDS’s glamourous

glass and steel headquarters built 20 miles north of Dallas. And I bought

into the belief that EDS Management Consulting would quickly become a competitive

threat to the other top consulting firms.

 

As it turned out, millions of dollars of investment in new employees, office

buildings, and advertising could not buy EDS the respect of Fortune 500 CEOs.

It soon discovered that transferring its great reputation in IT services to the field

of management consulting was a bridge too far in the minds of corporate executives.

EDS Management Consulting was burning through countless millions and

the top brass were losing patience. They were in search of a new strategy for their

struggling management consulting division.

 

In 1995, EDS changed course. If it couldn’t work its way into the front door

of corporate America, it would try a new angle – maybe the side door was open.

EDS acquired the reputable Chicago-based consultancy A.T. Kearney, then the

fourth-largest independent management consulting firm in the world whose top

clients included GM and Coca-Cola. According to an article in the New York Times,

the acquisition was for $600 million. A.T. Kearney’s 118 partners were instant

millionaires.

 

I can still remember the day EDS made the acquisition announcement. My

teammates and I were very excited – and also curious what this meant for us. Would

A.T. Kearney accept us into the fold? How would the cultures of EDS and A.T.

Kearney fit together? What would clients think of this newly formed company?

The people at each company were very different. EDS was a techy, Men’s

Wearhouse crowd – a holdover from Ross’s days at IBM. A.T. Kearney was more

Brooks Brothers – not unlike what you might expect to find on a leafy Ivy League

campus. Both were accustomed to being the smartest in the room.

 

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Click here to order your copy of my new book, How To Win Client Business, today!