Should I Specialize or Generalize?

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    One of the age-old debates for a consultant is whether to specialize in certain industries or areas of study, or to be a generalist across many industries and/or technologies.  In this week’s podcast, we will discuss the advantages and disadvantages of each approach and discuss the balance between them.

    1. What are the areas of specialty that a consultant can focus on?Consulting Specialist
      1. A consultant can focus on a specific industry.  For instance, you can focus on the retail or insurance or finance industries.
      2. Even those are fairly broad considerations so you might even focus on a sub-industry within an industry.  Within the insurance industry, you could focus specifically on healthcare insurance.
      3. Or if you’re a healthcare consultant, you might focus on implementation of electronic medical records systems.  A consultant may help healthcare organizations in specific areas like improving operational efficiencies.
      4. Alternatively, you can be an industry generalist and focus on some knowledge area such as marketing, finance or information technology.  For instance, if your specialty area is as a strategy consultant, you may work in healthcare, retail, finance, all over the board as far as industries, but you help all of those industries improve their strategic planning processes.
      5. Even those areas can be broken down into separate specialties.  Let’s say you’re an IT consultant.  You might focus specifically on internet security.  That can be applied to any number of industries.
      6. A retail company with a website and a finance company with a website will both have similar needs when it comes to internet security.
      7. If you’re a marketing consultant, you may focus on national marketing campaigns.  That can be applied to a number of different industries.
    2. What are the benefits of specializing?
      1. The primary advantage is the depth of knowledge you have in that area.  When a retail company looks for a strategy consultant, they want to know they’re hiring someone who has depth of knowledge in strategy within their industry.
      2. If the same retail company is looking to develop a website, they want a consultant that knows how to do web development and they often prefer that they’ve done it in a retail environment.
      3. The more specific your past experience matches to what they want is usually better.  For instance, if a company like Home Depot is looking for a strategy consultant, they may look for someone who specializes in strategy consulting with a strong retail background.
      4. So a firm that has a strong specialization in strategy consulting but their experience is across a broad swath of industries sends them a proposal. That firm’s competitor has a deep experience working with retail companies, but they’re all over the board in strategy, marketing, IT and finance consulting.
      5. Home Depot has to decide which specialization is more important to them.  Is their greater need retail experience or do they want someone who just knows strategy?
      6. Ideally, they would get a firm that specializes in both the retail industry and strategy.  And there are firms out there that have that focus.  But it’s often hard to find exactly what you need on all levels.
      7. What they’re looking for though is a depth of knowledge.  They want a consultant or a consulting team that has extensive experience in developing or redefining strategy for a large company.  They also want a consultant that had extensive experience with retail companies.
      8. I’ve had clients tell me “I’m looking for someone who has done it before and can do it again.”  If Home Depot finds a consulting firm that has successfully done the strategy type of work they’re looking for for a company like Wal-Mart, they know they’ve got someone that’s deep in experience for both strategy and within their own industry.
    3. Why would a consultant want to be a generalist?Generalist Consultant
      1.  Well we talked about the advantage of having depth of knowledge with specialization.  Being a generalist is about having a breadth of knowledge.
      2. You do hear of consultants who are generalists who just offer business advice.  It’s more common for a firm to generalize in many industries and many knowledge areas.  Then they have lots of individual consultants that specialize in one of them.
      3. What we generally see with individual consultants, whether they’re independents or part of a firm, is that they specialize in an industry and generalize in the type of advice or work that they do such as IT or strategy.
      4. Or it can be the other way around, where they specialize in IT or strategy consulting and then generalize across a broad swath of industries.
      5. Whether you studied marketing in college or not, we’re all marketers.  We have to market ourselves either to find a job, or to sell projects as consultants.
      6. Generalizing is about positioning yourself to as broad of a market as possible.  Take a consultant that has ten or fifteen years of consulting experience.  He or she may have specialized in strategy consulting.  And let’s say most of that was in the insurance industry.
      7. If that consultant is trying to sell a project to another insurance company, they’re probably going to focus on that experience as a specialty.
      8. If the same consultant is trying to sell a project in retail, their focus will be on their broad industry knowledge.  That can be an advantage too.  They can point out how the knowledge is transferable from one industry to another.
      9. And they can sell it on the basis that they bring a different perspective to the table.  They can sell to the client how their breadth of knowledge in other industries would be beneficial to them.
      10. So it’s really about how a consultant positions himself or herself for either the job market or the consulting market. You can make either your depth of knowledge and advantage or your breadth of knowledge an advantage.
      11. And as I said, you usually see a combination of specialization in something with a generalization in some other aspect.
    4. What would you recommend to a young consultant starting out and debating whether to be a specialist or generalist?
      1. I would recommend what most people do and that’s a hybrid approach.  Specialize in either an industry or a knowledge base and then generalize in the other aspect.
      2. If you specialize in IT, don’t limit it to an industry like retail.
      3. One thing to keep in mind if you work with a firm is that you don’t have a lot of choice. It’s the luck of the draw for what you end up getting assigned to.
      4. My undergrad major was in computer science.  So I’ve always been an IT consultant.  But I worked in many different industries including manufacturing, distribution, retail and insurance.
      5. So I considered myself an IT specialist and an industry generalist.
      6. I’ve been assigned to projects in all kinds of industries, but looking back, a majority of it has been in health care related industry work. I wouldn’t say I’ve necessarily specialized in it.  I’ve just done a lot of work in it.
      7. In the process, I got a business degree to be able to relate the business language to IT, but I still am in IT consulting.
      8. I know some consultants who specialize in IT like me and have only worked in healthcare consulting.  They’re specialized in both industry and knowledge area.  But I don’t think consultants necessarily set out to do that.  They got assigned to a healthcare consulting project and then another.
      9. Before they knew it, that’s all they had done.  I’m sure they could have requested a different industry if they wanted, but it would have to be a conscious effort on their part and their firm would have to comply.
      10. There are other ways to steer your career.  You can leave that firm if they don’t give you any other options to focus your career.
      11. You have to decide whether it’s a limiting factor or not.  Right now, IT consulting and healthcare consulting are in huge demand.  And I – along with many others – think that that trend will continue for a long time to come.
      12. The combination of aging baby boomers along with the Affordable Care Act here in the United States; and the volume of healthcare organizations that need to significantly upgrade their technology systems have combined for an almost perfect storm of need for healthcare consulting.
      13. But in ten years after things die down from the affordable care act and millions of IT consultants jump on the healthcare consulting bandwagon, who knows?  Maybe there will be a glut of healthcare consultants on the market and their stock will go way down.
      14. Today’s shortage can become tomorrow’s surplus.  I remember ten years ago, they were saying that there would be a huge demand for teachers.  A lot of people went to college to become teachers here in the US.
      15. Then, the housing market went to hell in 2007 and 2008.  Property taxes are what generally support school districts.  Suddenly, schools are cutting back, increasing classroom sizes and not hiring many new teachers.
      16. So just because people see a trend around the corner – and ironically, it’s usually consultants that identify these trends, a consultant needs to think about the long term viability of those trends.
      17. Just one more point about that.  If you become a great consultant and create great demand for your knowledge and skill, you can become glut-proof.
      18. If you specialize in healthcare consulting and down the road it becomes a very competitive market, it doesn’t mean you need to get out.  It just means you need to be competitive.
      19. Greater supply doesn’t mean there will be less demand.  It just means you’re competing with a lot more people.  If you happen to be among the best out there, you should still be able to find consulting work.
    5. Any final thoughts on specialization or generalization in consulting?
      1. I just want to stress the need for balance.  If you specialize too narrowly, you run the risk of targeting too narrow of a market.
      2. If someone wants that specific set of skills you specialize in, you can demand bigger money, but the chances of it being a large market are significantly low.
      3. Conversely, if you generalize too much, you may not be able to define enough of a niche.  You become the Jack of all trades but the master of none.
      4. You end up targeting too broad of a market and no one sees you as a fit for any specific work.
      5. I mentioned that there’s a level of chance involved based on what projects a firm assigns you to.  If they assign you to one industry over and over, that by default becomes your specialty.
      6. But if you have a certain interest in some specialty, you can request specific training, or train on your own dime to start developing that.  You’ll increase your chances of getting assigned to a project in that specialty.
      7. You can also try to focus on employment at a firm that specializes in the area you’re interested in.
      8. But I think the key is once you decide on a specialty, make sure you’re deep in that specialty and build general capabilities around that.

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