From Solo Consultant To Building A Team (Boutique Firm)

Are you a solo entrepreneur who wishes to build your own team? Kay Formanek’s perspective on spending your time fruitfully, especially when it comes to your work, is exceptional. Kay is a global speaker on Diversity and Inclusion, visiting lecturer at leading business schools, and the Founder of Kay Diversity & Performance, a company committed to unleashing the power of Diversity Performance within pro?t and not-for-pro?t organizations around the world. In this episode, she talks about the process of leaving her previous company to start her own consulting business. She also dives into the marketing she found to be most effective in creating conversations with ideal clients, as well as the operating model she used to increase profitability and long-term success.

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I’m very excited to have Kay Formanek joining us. Kay, welcome.

It’s wonderful to be here. Thank you very much, Michael.

For those that aren’t familiar with you and your work, you are an Advisor, an Author, a Coach, and a Speaker on the transformational power of diversity to organizations and society. You’re the Founder and CEO of KAY Diversity & Performance, where you help your clients unleash more creativity, growth, and engagement. We’re going to talk about how you got to where you are and the lessons learned along the way.

I want to start off with your time at Accenture. You spent over two decades working there and I’d love to know, did you find the transition of going from working at Accenture to starting your own consulting business to be an easy one or was it challenging? Given the experience that you had working at such a large established consulting global organization, what was that transition like for you as you started your own business?

I think there were some benefits and challenges. The benefits are that you come from an organization with a formidable brand. When I was in Accenture, I think it was always Accenture and then myself in service of Accenture and organizations. You move and you start finding an organization with no name, no traction, and you think, “I don’t have this brand.”

I had spent 25 years at Accenture. I found that Accenture’s branding extended because people assume that you knew your stuff and you had a good background, but what you could then do is really create something that you wanted to do, drawing on some of the capabilities. What is very important is that with Accenture, you have large teams and you could flex the organization. As I founded Diversity & Performance, I really needed to find an operating model. I didn’t want to be big. I didn’t want to be a 600,000-person organization, but I did want to be able to flex. That was a challenge.

When you made that transition, is there anything that you took from those years at Accenture in terms of systems, processes and best practices that you found you were able to apply and see benefit rather quickly in your own consulting business?

Accenture always had the brand performance delivered. Certainly, when I was an Accenture, there was a sense of we were not strategy consulting. We don’t create written reports that are put in drawers. We really prided ourselves that we looked at the whole value chain in terms of strategy, consulting, outsourcing, etc. What you also have to do in Accenture is really make complex things simple. Those were some of the skills that I think I brought into my organization. I didn’t want to talk about the strategy of diversity alone. I wanted to create the methodology and the implementation, which was quite helpful.

Do not be a slave to the work, but choose what you’re doing. Time is the most precious thing you have, so you need to be very methodical about what you will do. Click To Tweet

In 2016 you decided to make the leap and start your own business. How long before that were you thinking about leaving Accenture and starting your own business? Was it something that was on your mind for many years? Was it an event? Take me back to that time. What was going on and how long were you considering or thinking about making that transition?

It’s a very interesting question and it’s something that I relate to other organizations. What occurs is when you leave an organization, it is usually the culmination of many moments and many reflections, and then an event. Often, organizations come to me and say, “This high-powered, very important woman leader is leaving. Convince her to stay,” I say, “Probably that’s going to be impossible because of the sense that has been built up over time.”

In my sense, I had the benefit of traveling the world and doing amazing things, but what I started finding is that what gave me the joy was focusing specifically on the domain of diversity performance equity. I wanted to do that 100% of my time. At the time, at least when I was at Accenture, it was more on the side in terms of my role versus a primary focus.

Often you’ll hear in the media or just somehow learn about somebody’s path and often focus on one event. It’s like there was downsizing. They got fired or there was an acquisition, but the actual planning process or the thought process has typically been happening for a while, even before that one event. I think that’s a great point.

When you made that decision, did you consider going in and doing more of this diversity inclusion work, maybe at another firm? Why go off and start your own thing instead of finding another consulting firm or organization that specializes or at least that maybe would create a D&I area that you could lead?

What I wanted to do when I left Accenture, I suppose, was to have the space to do what I wanted to do in a very agile way, in a very purpose-driven way. When I left Accenture, I found that I actually needed to take some space. What I ended up doing, and this was not with my planning, was a Master’s in Authentic Learning and Leadership. That was exactly the period that I needed to almost rewire myself to reflect and talk about what I wanted to do.

The other thing that is really a hint that I give many people that I coach was, as I transitioned out of Accenture, I did two things. The first thing was I worked with a design agency to develop a logo. It seems like a small thing, but in a logo are all the dreams, hopes, and meaning of what’s behind an organization. It really helps you be very concrete.

The second thing I did was design my website. At the time of designing my website, I put five things that I would be doing with diversity and performance, many things that I hadn’t done before, but it is so important to have that intent. In fact, years after the effect of establishing this organization, which now is global, I’m doing every single one of those five things. Web designers say to you, “What do you do? Be clear.” It was a very good exercise for me.

 

You made the shift and started your own business. You created the logo, the website, and then what? Did people start contacting you? Were they knocking down on your door? What was the experience like for you and how did you get your first few clients?

I made a philosophy for myself. You might laugh at the philosophy, but it’s still one that is present. I said, “I’m going to work for clients or organizations that I love on topics that I love with people that I love.” I am trying to say that in my second chapter, I wanted to have the autonomy to not be a slave to the work but, in a very clear way, choose what I was going to do. It’s very much in the sense that time is the most precious thing that you have, so you need to be very methodical about where you’re going to do that.

Having done that, quite frankly, I was just very strategic about it. Within Accenture, what I had agreed with them is that given that I was establishing a new organization in the field of diversity, which they sponsor, I could approach organizations that had been working with for 25 years at Accenture. As a result, they knew me, they knew the brand behind me and they were actually my first clients.

The other thing that I realized is you talk about the methodology. When I did diversity equity inclusion, there wasn’t a checklist. It wasn’t just general soft to stuff. I wanted to do the why, what and how and create a methodology. For that, I decided that I’d like to collaborate and collaborate with INSEAD, the business school. What was important for me was to have the robustness of research that you could talk about diversity and performance, and then thereafter, and perhaps the most important, I developed a certification for leaders worldwide, which INSEAD vetted. That gave me a highway in terms of work.

Tell me more about the certification. What does that model look like? The business model behind it, who typically pays for that? How do they go through it? Is it specifically through INSEAD or your business directly? Tell me more about what that looks like.

What I was seeing in terms of this whole domain of diversity, and if you don’t mind me making a little bit of an inflection, I think you’ll have seen all the research that even in the States, $8 billion is spent per year on diversity. When you actually look at what is happening with the investments, the research will say that maybe as much as 70% to 90% is wasted. Why is it wasted? It’s because there’s a knee-jerk reaction, “Let’s look at what others are doing. We don’t contextualize it. We don’t actually even look at it in a robust way.”

With that context in mind, I said there are leaders, chairs, board of directors, CEOs, their presidents, etc., who actually understand that they’re going to need to navigate it and lead it but who are not confident. Diversity is one of the top 10 words that make us really anxious because we don’t know what we’re doing actually with it.

What I wanted to do with the certification is actually take leaders through what I’ve written in the book in terms of, “Why are stakeholders asking for it? Why is it becoming a necessity? What do we mean, what elements need to be present for the performance and how? What capabilities have got to be there?” The certification focused on organizations, leaders, and ambassadors around diversity about these three big questions. That’s been really wonderful to do.

Diversity is one of the top 10 words that make us anxious because we don't know what we're actually doing with it. Click To Tweet

Where do people go through the certification? Is it an online certification as a part of the business school? What does that structure look like?

It used to be a given through a delivery model in Abu Dhabi, Singapore, Boston, London, etc. With COVID, we went virtual. I have to say, while there is some online learning or reflection work, what you find is that the big learning occurs from dialogue with other leaders. Something like ten certifications are given per year and our leaders from around the world from different organizations, government, commercial and not-for-profit take place. We start talking about this and having a dialogue. Indeed, what I did was to ensure that so many diversity certifications actually create unconscious bias and have issues. I made use of INSEAD to validate and support that was high quality.

It’s not like when you launched your business and you have the benefit of leveraging the relationships you had built over many years with the buyers and clients of Accenture that you were working with and serving at that time. Was it quite common for somebody to leave Accenture and go off and still tap into the past clients that they were serving as part of Accenture or was this a unique structure or situation?

I think it’s reflective and strategic. Having been a partner and being with Accenture for 25 years, I thought that there would be a problem if I went to a competitor. However, when you actually came into discussion and dialogue and started talking about what is important to each of us, we could find an overlap, which was beneficial.

When it was clear to Accenture that I didn’t want to go ahead and ahead in terms of competition, that actually I wanted to focus, and given that I confirmed with Accenture that as an EDI partner and a well-known one, this is something that they should also wish to be sponsoring, that we could find a way. I think this is not normal if you go on a confrontational side.

That was my intention. It wasn’t going to help any of us to do that. I wanted to carry on work and respect the IP, etc., of Accenture. Over the years, I have retained and changed my operating model. I have what I call the third, the third and the third. A third of my clients are commercial clients. They pay commercial prices and say the normal Accenture-type clients, the Fortune 500, and then I have actually organizations which are institutions. For example, I do work for the Ministries of Defense, Justice and Terrorism, all these government institutions from various countries. I do a third because I think they are important stakeholders.

I do a third, which is what I call goodwill. I would advise any entrepreneurs who are starting organizations to never miss that category because that category is the category where I innovate. It keeps my energy up and what is possible. It’s with organizations that are not typical and yet are pioneers and innovators. I usually do it as goodwill.

I have a question for you on the goodwill. I’d love to explore it, but before doing that, it’s interesting when you were mentioning the transition from being in Accenture to then still tapping into some of those relationships that you had while you were there and not being confrontational. In the research that we’ve done on a couple of different studies, we found that over 50% of consultants’ first client is actually a previous employer. Maintaining that relationship is so important.

 

When you did that, even though you were now running your own business, but the connections or first clients were coming through clients of Accenture that used to be your clients when you worked there, was that structured as part of an Accenture project? Was Accenture monetizing that or benefiting from that in any way, monetarily or was this completely separate?

It was completely separate. I don’t think it needed to be, but I think there will be many people who can relate to the sense, especially if you’ve been with an organization for 25 years, that you wanted a different context. I didn’t want to have one foot in and one foot out suddenly. What I wanted was to pioneer and have the space to create something new. This is why I took more distance. I leveraged the client relationships, but I was methodical and focused on creating a new space for myself.

Was there any concern at all from Accenture? Was there a conversation that, “You begin working with Client X on diversity and inclusion,” that’s going to take six figures away from their budget, and that means that we may not be able to earn that money? Essentially, they might have to reallocate some of their resources towards this other work that we’re doing as part of Accenture. Was there any concern at all about that or did that not even come up?

It didn’t come up. Accenture does hundred-million, sometimes billion-dollar, big transformation industry spins, etc. What I’m doing would probably be like drops in the ocean. It is very specialized. It’s very focused. It’s a different type. I think it’s just as impactful, but it’s a different type of transaction, a different type of scale.

I appreciate you sharing that because I’m always trying to consider what our community would want to be asking you as I’m engaging in this conversation with you. You mentioned the goodwill, and to me that that sounds like such an important focus as a way to give back, make an impact, be creative in a different way, and be innovative.

Do you think that your mindset around that is because you’re at a place career-wise or financially that allows you to have that space where you’re “giving up” a third of your time to invest into that? Would you advise somebody early on in their career to be open to doing projects that they may not be able to monetize at the full market rate or even beyond, like at a premium rate, but the benefits are so great of doing that kind of work?

This was never the reason why I got into this work, but there is this incredible synergy between these three pieces that I talk about what you’ll find, especially on the goodwill side, whether it’s an NGO, not-for-profit or a university where you’re working directly with the students. Somehow there’s been this incredible cross-pollination back into the commercial work and the institution.

In many ways, we have quite a small group of people. I’m astonished at how much of my work on the commercial side has indirectly come from the goodwill side. Once again, it wasn’t the reason I did it, but it seems to happen. The second thing is that a lot of my work, to be credible and to be repeatable, needs to be proven that you can say, “I have this methodology and it has occurred.”

When we come into a discussion or dialogue and start talking about what is important to each of us, we can find an overlap, which is beneficial. Click To Tweet

The NGO, the goodwill work, the agreement is that they are going to support me proving. I will assist them in guiding their diversity journey. We’ll have a hypothesis about the various capabilities that have to be built and we’re going to baseline and we’re going to evaluate, which allows me once again to go back. Perhaps maybe the most important is that you will know what’s important as a consultant.

To be a strategic value add consultant is that you’ve got the experience and the know-how and the stories, and you can adjudicate what will work. It gives me the bedrock of that experience that I can relate to and take into my research and my methodology. It’s a reinforcing circle and I’m very pleased about it’s worked.

I’m a very big believer in the idea of taking action or being out there. I see this in some ways as being similar to the concept of networking. Not networking where you go to an event and everyone’s just trying to pass out their business cards and sell each other, but more with the idea of you go someplace and you never know who you’re going to meet. You put yourself out there and take action.

Here, you’re doing this work. The intention is not for it to necessarily turn into a business, but it just so happens that as you’re serving, providing value, and making an impact, you’re meeting new people. Things are moving, which ends up getting you back to greater business creation and value creation. That’s fantastic.

You started off in your business by leveraging those relationships. It sounds like you didn’t have to do a lot of “marketing.” Maybe you reactivate your network. You engaged with the people that you already had relationships with. Fast forward many years later. Have you had to do any marketing, and if so, what marketing have you found to be most effective in creating conversations with ideal clients?

I do very little marketing. The marketing that I have done has not converted to relationships. I say it because when you’re talking about talent or a subject like how you navigate, what is the strategic narrative, etc., you’re not going to do that with someone you don’t know. You might do it for an organization like a big brand, but it’s now become large, my organization in terms of the organization. Certainly, you want to know their affiliates. What I have focused on is that every single project engagement program has to be fantastic because the word of mouth is the marketing.

You’ll see that I would say most of my organizations are not organizations that I’ve done work year on year as they’ve traversed into different directions, but my new clients have all come from word of mouth. If you have to talk about marketing, it wasn’t done with this express purpose, but I see the book Beyond D&I as probably marketing because people are reading it. They’re reaching out. I wrote the book because it was 35 years of experience that I wanted to capture. What I do see is that it does open doors because people are interested in having the conversation.

Are you doing anything proactive with the book in terms of marketing? Are you sending it to people with a letter or is it selling and it’s passive? How are you approaching using the book for marketing purposes?

 

I sit in the Netherlands and do some research about books. You’ll see that the big market in the United States and the second market in the UK. Through percolation, things go to other areas. For me, what was very clear is that there needed to be traction in the United States. The second thing is how to do that. I was very focused on the PR. You may know the PR agency Fortier PR. They represent some key leadership books. What I did was reach out and said, “Would you do the PR?” They have done amazing things with it, which I couldn’t have done.

I’m a mother of three children. I often say that this book feels a little bit like my fourth child. What do you do with the child? You invest in them. It’s not a flash in the pan. It’s year after year after year. We’re taking the book to the deans and program directors of all business schools that are offering Master’s and Bachelor’s courses in EDI. We’re going to all Fortune 500 organizations. You simply need a partner to do that for you.

When you mentioned the universities, it was interesting because when I was going through the book, it had a lot of data and footnotes. It reminds me of a textbook in some ways. I want to ask you, why that structure? Why did you choose to write it in that form, as opposed to some other format?

What I have missed desperately in the whole dialogue around our diversity is the concept of efficacy. Efficacy is that when you make the investment, there is an outcome. In fact, if you ask any leader, “How much do you invest in diversity and what is the return on your investment spent in diversity?” I can say less than 1% of leaders will give an answer either on the investment or the return. Yet there has been this incredible research in terms of that. Let me give you an example. Seventy-five percent of unconscious bias interventions, workshops, etc., have no impact after a week. Some even raised bias within the organization.

There is amazing research about which interventions actually work and drive behavior. I wanted to marry my practice, our 50 organizations, and even more in diversity with the efficacy, the robust academic scholar research. You’re right. This book can be a textbook and this is why we do certifications around it. The first chapter is a summary of the whole book, but for those who want to go through and use it as a handbook, you need to go through a process of certification.

You mentioned that your company is now global. You’ve done certifications globally. What does the structure of your business look like? You said that one of the reasons you want to transition from working in a very large consultancy to running your own business was to do things your own way and keep things smaller. Give us a sense of is there a team around you? I know you use this PR agency, but what does the team look like and how are you able to operate globally and provide what you’re able to provide?

When I was looking at the operating model of diversity and performance, I zeroed in on an organization that I’ve actually got a great deal of respect for. I think you’ll see some of the parallels between what I’m doing and what they’ve done. The organization was built around a person, Richard Barrett, who wrote a book called The Values-Driven Organization.

What I loved about that organization is it’s got more than 2,000 clients worldwide, but the head office, the hub of it, is very small, just eight people. They’ve got a lot of tooling, but what they do is their certified people and the certified people start executing the delivery of the methods and the process. On top of these, people who have been certified are the certifiers of the certified. That is the approach that I have.

Every single project engagement program has to be fantastic because word of mouth is the marketing. Click To Tweet

I have an organization, which is a cool organization, which has got the expertise, the technical staff, etc. I have a number of certified people worldwide who have done this work with me for a long time in different regions that can certify others. What occurs is the people who are then doing this work within the organizations are making reference to the book.

They’re making use of the tooling, for example, the capability gap analysis and the identification of the stage of diversity that you’re on. That’s how it is. I would call it an affiliate model. What I didn’t want to have was a lot of people on the payroll. I wished to have very experienced people who could make it happen in the regions.

Have you found that over the years, especially now, are you spending the majority of your time overseeing the business and thinking about strategy and not the team in the sense of people on the payroll, but all of the certifications? Are you still spending a lot of your time working with clients directly in the actual delivery itself? How are you spending your time given this operating model?

I haven’t really thought about it, but probably it’s also a third, a third, a third. My credibility is being in the trenches. My credibility is sitting down and talking with a leadership team and saying, “Where are you? What have you done? What are the problems?” Clearly, I’m at the point where you’re doing some baselining and you’re making use of the tools and everything that others can do, but what I’m very interested then is in the result. How do you close the gap? I suppose it’s a little bit like my role at Accenture. You plant it where you need to. You keep an overview and you ensure that there’s innovation.

When you think about the current model that you have, is there anything that you’re paying attention to as a way to grow it or optimize it, or look at increasing profitability? Is there anything that you learned if there’s somebody else who’s reading right now thinking themselves, “This model of certifications sounds like it could actually be a great one for me as well in my business?” Any advice that you would offer them on things to just be careful around or best practices?

During the delivery of all these certifications, what many people were saying to me and where a lot of my time was gone is to say, “This was so rich in terms of content, but I didn’t quite get this. Could you confirm this? This is where I am spending a lot of time.” This is why this book was so important. What you can do is for anyone who’s attending the certification, give a handbook and during the certification, you discuss it and everything, but it’s a point for them. The second thing that I’ve done in terms of the tooling is do a gap analysis for an organization in terms of which stage of diversity they are in, where they need to go and the state of their capabilities.

You can do this manually, or you can do it just online. All the tooling that you can give to the organization that they can update and where your time is then used to say, “This is what’s striking me and everything.” More than that, organizations want that. Maybe the last important thing is I’m a great believer in developing internal capability within an organization.

I think it is absolutely critical. I have spent a lot of time equipping an organization to be taking it forward themselves. I think that is probably a success factor of my organization because people are keeping up the network and the content, not because they can’t do it themselves, but because they want to go to the next level of performance.

 

The part of capturing feedback is an area that we’ve been very focused on in our coaching and training programs. You’ll put something out and getting the actual feedback from the clients as to what they love or what they’d like a little bit more detail on is so important as a way to provide continuous improvement. I’m glad that you mentioned that.

Before we wrap up, I have a few other quick questions for you. One is, if you look at your performance, focus, how you’re able to get a lot done, are there 1 or 2 things that you do on a daily basis that you would consider almost habits that lead to your productivity or performance or the success that you’ve been able to create over the long-term?

There’s this wonderful Dutch expression that I learned when I moved there. “Don’t postpone that which can be done today.” I am a big strategist. I love implementation. I don’t like admin. I used to postpone it or delay it, whatever. Now I just do it and I do it efficiently. That’s important because if you don’t have the basics right in your organization, if you’re not turning around proposals, if you’re not invoicing, if you’re not getting this, you are draining your organization. I try to do that highly efficiently, under 10%, and that is simply by automating and making it clear.

The second thing that is very important is whenever I see that I’m becoming a little bit dull because I’m doing too much repetition, I’m very strict with myself to change it. Work is about passion and energy and convincing the client that they’ve got the right person. You can’t afford to be idle. What I try to do is have a portfolio of work, which keeps me quite agile.

The last thing that I would say is you need good people, not specifically on your payroll. It can be the affiliate model, but you need people who speak your language. What I did is because I am an affiliate model, I work with hundreds of people who actually have their companies but work through my company, but in order to have the same language, and they all have to be certified. They’re not allowed to touch a client without having that certification which gives you confidence. Those are some things that I do.

Two other quick questions before wrapping up. What is the best book that you have read or listened to? It can be fiction or nonfiction.

I’ve got so many of these. I have to say that I’ve been reading Blue Ocean Strategy again. It’s by two professors from INSEAD. I was quite intrigued by how they extended their book into courses, into short books. I love the process of how this book grew.

Finally, Kay, I want to thank you so much for coming on here and sharing some of your story, journey and best practices with us. Where should people go to learn more about you and your work?

They can either make contact with me at [email protected] for the book or go to BeyondDiversityAndInclusion.com. They will see all the methodology and the certifications and everything.

Kay, thank you again so much.

Thank you, Michael.

 

Important Links

• KAY Diversity & Performance
• Beyond D&I
• The Values-Driven Organization
• Blue Ocean Strategy
• [email protected]
• BeyondDiversityAndInclusion.com

 

About Kay Formanek

Kay Formanek is a global speaker on Diversity and Inclusion, visiting lecturer at leading business schools and Founder of Diversity and Performance, which is committed to unleashing the power of Diversity Performance within pro?t and not-for-pro?t organizations around the world.

Within this role, Kay o?ers advisory and research services, including coaching for inclusive and strategic diversity leaders. She has also worked for leading global professional services organizations for over 20 years as Partner and Managing Director, actively supporting their D&I strategy realization.

Her proven approach to leading diversity strategically draws on extensive research and advisory work with over 50 organizations.

 

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