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PREFACE THE WORLD'S FOREMOST CONSULTANT AND HIS IMPACT ON THIS BOOK IT HAS BEEN ONLY LAST YEAR that my book A Class with Drucker: The Lost Lessons of the World's Greatest Management Teacher (AMACOM, 2008) was published. I had the very great honor of being Peter Drucker's first executive PhD student and of maintaining a relationship with him over a 30-year period. This is significant because Peter Drucker was not only the greatest management teacher, but was also known as The Father of Modern Management. Moreover, he was also the most celebrated management consultant worldwide. Drucker Societies have sprung up all over the world to continue his ideas and his legacy. And no wonder: His ideas were not just fluff. Consider just one of his clients and one engagement. DRUCKER'S CONSULTING Jack Welch, the legendary former General Electric CEO, sat down with management consultant Drucker shortly after 01-HMBC-FM-2 3/4/09 2:32 PM Page xiii becoming CEO of GE. Drucker posed only two questions, but they changed the course of GE's future.Those two questions were worth billions of dollars over the course of Welch's tenure as CEO. The first question was, "If GE weren't already in a business, would you enter it today?" Then he followed up with, "If the answer is no, what are you going to do about it?"Welch decided that if GE could not be number one or number two in a market, the business would have to be fixed, sold, or closed. According to Welch, that strategy, which was based on his consultation with Drucker and the questions Drucker asked, was at the core of GE's success.1 Yet Drucker did not consult for just large corporations. He consulted for small businesses, nonprofits, governments all over the world, the military, and churches.Yet he had no giant consulting firm to back him up. He was a sole practitioner who even answered his own phone. He did not even have a secretary. Many of the techniques and concepts in this book originated with Peter Drucker. I just did not realize their origins until I sat down with my notes from my time as his student and reflected on what he taught. So I am doubly enthusiastic about updating this book. Its errors, if any, are mine. But the debt I owe Peter--and that's what he asked all of his students to call him--for pushing me in the right direction and showering me with his wisdom, ideas, and friendship is significant.The incubation of many of the concepts and techniques contained in this book are surely his, and I am happy not only to acknowledge this, but to dedicate this edition, the fourth since 1985, to him. HOW CONSULTANTS GET STARTED Before we get into the nitty-gritty of consulting, you need to understand one thing. Like many others, I did not start out in life with a burning desire to become a consultant. I know that I am not alone in this regard, for I have talked to hundreds of other consultants, both full and part time, and very few started out with that intention. Most of them must have had an early experience like mine. Because my entrance into the consulting field was unplanned, the first time I performed consulting services I had no one to ask for advice. This is true even of Peter Drucker. Drucker did not plan on becoming a consultant. I know this because Peter said that his first experience in consulting started not long after arriving in this country. Previously, he had been a newspaper correspondent and journalist as well as an economic analyst for a bank and an insurance company. However, because he had a doctorate (in international law, not in management), Peter's services were mobilized for World War II. Peter was told that he was to serve as a management consultant. Drucker said that he had no idea what a management consultant was. He checked a dictionary but could not find the term. He said he went to the library and the bookstore. "Today," he told us, "you will find shelves of titles. In those days, there was almost nothing."The few books on management did not include the term, much less explain it. He asked several colleagues and had no better luck.They did not know either. On the appointed time and date, Drucker proceeded to the colonel's office, wondering all the way exactly what he was getting into. A receptionist asked him to wait, and an unsmiling sergeant came to escort him to the colonel.This must have been a little intimidating for a young immigrant who not too many years earlier had fled from the military dictatorship of Nazi Germany, most of whose party members wore one sort of uniform or another. Peter was led into the office by yet another stern-faced assistant. The colonel glanced at Peter's orders and invited him to be seated. He asked Peter to tell him about himself. He questioned Drucker at some length about his background and education. But though they seemed to talk on and on, Drucker did not learn what the colonel's office was responsible for, nor was he given any understanding of what he would be doing for the colonel as a management consultant. It seemed as if they were talking round and round to no purpose. Drucker was more than a little uncomfortable in dealing with the colonel. He hoped that the officer would soon get to the point and tell him exactly what kind of work he would be doing. He was growing increasingly frustrated. Finally, Drucker could take it no longer."Please sir, can you tell me what a management consultant does?" he asked respectfully. The colonel glared at him for what seemed like a long time and then responded: "Young man, don't be impertinent." "By which," Drucker told us,"I knew that he didn't know what a management consultant did either." Drucker knew that someone who did know what was expected of a management consultant had made this assignment. Having lived in England and having read Arthur Conan Doyle's Sherlock Holmes, Drucker knew what a consulting detective did.With that knowledge and the insight that the colonel did not know anything about management consulting, Drucker asked direct questions about the colonel's responsibilities and problems. Peter then laid out some options about what should be done and the work that he, Drucker, should do. The colonel was interested and clearly relieved. He accepted Peter's proposals in their entirety.This proved to be Drucker's first successful consulting engagement. So Peter Drucker was not only the father of modern management; he may have been the father of modern management consulting as well. MY INITIAL IGNORANCE ABOUT CONSULTING Experience in other fields had taught me that whenever I lacked knowledge about something,my first step should be to find a book on the subject. Like Peter, I did just that. I visited several bookstores, and I checked with the libraries. But I found no books with the information I needed in 1973 when I became a consultant for the first time.The few books on consulting were all about consulting by the large consulting firms.They contained none of the specifics on what to do. It was only slightly better than when Drucker became a consultant.At least I knew what a consultant did. But there was much I did not know. How much should I charge? Was a contract absolutely necessary? Did I need a business license or some other kind of license? What could I do as a part-time consultant without running into a conflict of interest with my full-time employer? How much could I make if I decided to devote myself full time to consulting? Also, if I consulted full time, how much time would I need to spend marketing my services versus actually consulting, and how should I go about marketing my services anyway? These and numerous other questions plagued me, but I had no single volume to turn to for answers. Eventually I learned, but mainly it was the hard way: through experience. I made numerous mistakes, which in some cases cost me a lot of money and in all cases wasted time and brought frustration. However, I did finally learn what to do and how to do it, and I began to make money. I consulted for Fortune 500 companies, for small businesses, for start-up companies, and for the government. Then in 1979, I received my doctorate and became a full-time university professor. (By the way, becoming a successful business consultant in most specialties does not require a PhD, an MBA, or in fact any business degree at all. More about that later.) In any case, becoming a business professor did not curtail my consulting activities. If anything, it intensified them. AN ACADEMIC COURSE IN CONSULTING At my university, I noticed that many students had a tremendous interest in business consulting--and not just business students. I was persuaded to develop an interdisciplinary course at California State University at Los Angeles on the subject of consulting for business. As the course developed, we did not stop at theory; every quarter I invited practicing consultants from many fields to share their experiences. The speakers ranged from those in small, one-person operations to staff consultants employed by multimillion-dollar corporations. My speakers included full- and part-time consultants, and both men and women. So popular did this course become that it attracted not only business students from all disciplines but also psychologists, chemists, anthropologists, attorneys, and English majors. Many of those who took the course were older students from outside the university, including engineers, pilots, and many company executives and professionals who wanted to leave their corporate jobs or to consult part time.We even attracted a number of professors, who sat in on these lectures at various times to pick up what they could and some students from the prestigious graduate schools in the Los Angeles area. Partially due to the success of the business consulting course, anoth- er program for which I had responsibility also prospered.This was the Small Business Institute at the university, for which I became the director. The Small Business Institute program, conducted at universities around the country under the sponsorship of the U.S. Small Business Administration, furnished consulting services to small businesses. Business students, supervised by professors, did the consulting. Over a period of years, we developed one of the largest Small Business Institutes in the country and several times won district, regional, and national awards for the top performance among all participating universities. The Small Business Institute program allowed students in the consulting course to do hands-on projects as a part of their education. Unfortunately, this fine program fell victim to budget cuts in the federal government in 1994. However, many universities continue it, asking small business clients to pay for the consulting work accomplished. I have to say, even when small businesses must pay, the program is still a bargain for the businesses that choose to participate. Meanwhile, the success of our program led to many requests for help from outside the university. To make this program mobile, we developed a consulting seminar that I gave several times a year. These seminars were attended not only by neophyte and would-be consultants but also by many consultants with considerable experience in their professions. They generously shared their experiences and knowledge with other seminar students and with me. Eventually I taught the consulting course at other well-known universities, including the University of California, Los Angeles, and Drucker's School, Claremont Graduate University. Sometimes I taught the course as part of an MBA program and at other times in seminar form for the general public. I left my first university to become president of a small graduate school, and eventually I decided to go full time to devote myself to the Institute of Leader Arts (www.stuffofheroes.com), into which my original consulting practice has evolved. THE INFORMATION IN THIS BOOK As a result, this book is based not only on my own experience but also on that of many others, including numerous guest lecturers, professors, and students who have accomplished more than 500 different consulting engagements for many different small businesses. It is also based on the face-to-face interchange of ideas from consultants in many different fields and geographic locations, and many consulting clients all over the world, some of whom are in the government or military. Had I had this book in my hands when I first started out, I would have saved myself thousands of wasted hours and much frustration. I would have avoided countless blunders, including journeys down blind alleys, while I struggled to learn how to promote my practice, develop long-term client relationships, and, in one case, get paid for services already performed. This book contains the collective experiences of hundreds who have endeavored to earn their livelihood through the practice, either full or part time, of business consulting as well as ideas that I developed based on Drucker's concepts. Its aim is to help you to build a successful and rewarding business consultancy. But the book is practical, not theoretical. If I have done it right, you should have all the tools necessary and know how to apply them to start and build a successful management consulting practice. I don't know whether you will make it big. As Peter said,"Without action, nothing gets done," and the action part is up to you. But in the almost 30 years since the first edition has appeared, literally thousands have used it to help build a successful practice--and you can, too. So let's get started! NOTE 1. John A. Byrne,"The Man Who Invented Management," BusinessWeek (November 28, 2005), accessed at http://www.businessweek.com /magazine/content/05_48/b3961001.htm on November 19, 2007. Excerpted from HOW TO MAKE IT BIG AS A CONSULTANT, FOURTH EDITION by William A. Cohen . Copyright (c)  2009 William A. Cohen . Published by AMACOM Books, a division of American Management Association, New York, NY. Used with permission. All rights reserved. http://www.amacombooks.org. Excerpted from How to Make It Big as a Consultant by William A. Cohen All rights reserved by the original copyright owners. Excerpts are provided for display purposes only and may not be reproduced, reprinted or distributed without the written permission of the publisher.