Even the best leaders need guidance in times of crisis or if they want to prevent one whenever the stakes are high. They need someone who is brutally honest whenever they’re about to do something stupid and lead them to make better, level-headed decisions. For a lot of leaders, that accountability partner is Constance Dierickx, the President of CD Consulting Group. Starting out in corporate America as a college dropout stockbroker, Constance observed firsthand how people would make irrational decisions when it comes to their money. Fascinated by the link between human emotion and decision-making, she went back to school to study psychology. Years later, she started her own successful consulting firm and is known in consulting circles as the Decision Doctor.
Listen to the podcast here:
Crisis Leadership: How To Make Better Decisions During Tough Times With Constance Dierickx: Podcast #165
I’m here with Constance Dierickx.
Thank you. It’s a pleasure to join you.
You’ve advised over 500 executives on six continents in 28 industries. Your clients include well-known organizations like AT&T, IBM, Olive Garden, and many more. You’re also an author, speaker, and a frequent contributor to publications that we’ve probably all heard Harvard Business Review, Forbes, and others. You’ve accomplished a lot. I’m excited to dive into how you got to where you are and extract some of those lessons, best practices, and insights for everyone reading. Let’s start off earlier in your lifetime, which is your education. You have both a Master’s and a PhD in Psychology. Tell us a little bit about how that has if at all, helped you to become a successful consultant.
It’s been enormously influential. Part of the reason is that I finished my education when I was officially a grownup. I was a college dropout. I got married and I had children. Later, I was working as a stockbroker. It may surprise your readers to realize that you can be a stockbroker without a bachelor’s degree, but I did it. Maybe they might not allow that anymore. While I was a broker, I kept observing the irrational ways in which people made decisions about their money because that’s what I was talking to them about was their money. I realized all the influences on them that affected their decisions and sometimes in ways that were far away from their self-interest. Less do think that it’s only clients who have this problem.
I noticed that my colleagues weren’t a lot better than clients. I started studying and reading on my own decision science. I would go and run into the psychology department, read books on cognition and perception, and how emotion affects decisions. I was running back and forth. I was like, “Why doesn’t somebody put these together? This is ridiculous.” At the time I didn’t know about a marvelous researcher named Daniel Kahneman who won a Nobel Prize in Economics and who is a psychologist. I decided to go back to school and figure out how I can help people make better decisions that would lead to more success and more happiness. I had to choose at that point. I chose psychology because I felt like it encompassed more than if I went through a business. I got a PhD in Clinical Psychology. I clocked about 4,000 clinical hours. I graduated and became a consultant. I haven’t seen a therapy patient in many years.
I want to explore that with you, but before we do, why did you drop out of college?
I wanted to get married and have babies. I was young.
Going back to university, were you older than a lot of other students?
I was and that terrified me.
What was that like? For some people, that would be enough to prevent them from going back, feeling like an outsider, or maybe you don’t fit in, or something wrong with you. What was going through your mind and how did you get yourself to go?
You make a great point and I’m glad you did because many people let something like their age stop them. I was in my early 30s when I did that. What enabled me to do it were two things. One was my husband encouraged me to go and do what I wanted to do. He’s my second husband. We’d been married for a few years. I used to come home at night and be upset. I talk about how I hated my job as a stockbroker. He said, “What do you want to do?” I told him and he said, “You should do it.” I had support, which is important. I felt like I was on a mission. My mission was I got to help people stop making stupid decisions because I saw even smart people and some people with a lot of money and professional success.
I felt driven by a purpose. Here’s the cool thing, I discovered that there are many universities all around Canada and the US where the average age of the student body is not 20, 21. The average age of students where I went, the University of North Carolina in Asheville, was 28. I was this much older. I don’t think anybody noticed. I think I cared a lot more than they did. The night I graduated with my bachelor’s degree, there was a woman in my class who graduated with a degree in Psychology. She was 63 years old and I was like, “Everybody’s thrilled for her.” That’s a good example of how perception affects decisions and that perception can be wildly misguided, but people need support. If anybody in your life wants to go back to school, my advice is to support them and encourage them to do it.
It’s true. I wrote in my book, The Elite Consulting Mind, that it’s like, “The grass is always greener.” People will say to themselves, “I’m too young to do this. I’m too old to do this. I live in a small town, so I don’t have access to these things. I live in a big city and it’s too competitive.” Our minds are always trying to play tricks on us and get us to create reasons or excuses for why we shouldn’t do something. Constance, you were thinking here you’re a little bit older. You found a place where you weren’t that much older, but it sounds like maybe there was still some resistance inside of you, even though you had a husband that was supportive.
Have you learned may be from that time or even through your studies around psychology, when you encounter a situation that is challenging where maybe your mind is telling you, “Don’t go forward with this. Don’t make a fool of yourself?” All these different negatives could happen. Your mind is playing these games on you. What do you do? What have you found that is helpful for you to maybe acknowledge that, but still take action and move forward?
I want to back up though and say it’s not our minds playing tricks on it. It’s our minds trying to rationalize our emotions. Emotions are often ambiguous and unformed, especially around things like what we’re talking about. The way we try to make sense of our experience, which is often felt in our body or our guts, people will say, “My guts are turning.” The mind rationalizes and says, “You’re feeling this way because you haven’t done this before. You’re too young. You’re too old. You’re too tall. You’re too short. You’re too thin. You’re too fat.” I was called too blonde at one point. I’m of descent where people are fair-haired, blue-eyed, and have light skin. What am I going to do about that?
What I learned was that oftentimes the rumination was a lot worse than the action. I’ve also learned as I’ve gotten older that failure is not fatal. What if I went up on a stage and did something ridiculous? Nobody’s armed. We hope nobody’s harmed in the audience. I’ve also studied courage and I’ve learned that we don’t go from being scared to being wildly courageous like this, but you take these steps. If you mine your experience for success and you say, “I walked into Merrill Lynch without an undergraduate degree and got hired as a broker, passed the series seven, and all these tests.” Let yourself recognize that you did that. You start to build up. It’s almost like building muscle. You lift weights, but you don’t get a big bicep the next day. I’ve learned that courage can be learned and strengthened.Oftentimes, rumination is a lot worse than action. Click To Tweet
Often, people are focused on the future without taking a moment to acknowledge what they’ve already achieved. You’re looking into the unknown. You might feel some hesitation, but if you look at what you’ve already conquered in your life and what you’ve overcome, that’s a sign that you’ve done it. You can do it again. Were there many women stockbrokers when you were a stockbroker? How did you get involved in that?
I like to look at organizations through a strategic financial lens. I’m not an accountant, so I don’t dig into numbers deeply, but I like to understand where a company is investing their money and how well it’s doing and how the decisions are made. At the time I was selling computers, microcomputers were fairly new things and IBM entered the market and destroyed the retail microcomputer business. I was selling more and earning less. I remember I went to the library to study careers like, “What job can I get without a degree where I can make enough money to support myself and my daughters?” I was single at the time. I found out that stockbrokers in the US on average made $90,000 a year and that sounded good.
I knew that I didn’t speak the lingo. I made a list of all the brokerage firms in my area. I ranked them by where I would ideally want to work, and Merrill Lynch was at the top. I went and I got hired by Merrill Lynch. I started out by approaching the ones down here in my list and failing miserably. None of them hired me. Not only that one guy said to me, “Not only will I not hire you, neither will anyone else.” That ticked me off. I left his office.
When you say that ticked you off, did that encourage you to take more action and prove him wrong or it did?
It ticked me off mister, I wish I could remember his name because I’d say it right here. I launched myself out of his office. I threw the door open, I walked two blocks up the street to the Merrill Lynch office. I walked in. I knew one person there and I asked to see him, and he said, “What are you doing here?” I said, “Your competition is trying to hire me. I thought we should talk.” That is brassy. I figured what have I got to lose? I’ve already been turned down by the people I don’t admire and don’t want to work with. I got interviewed and they asked me where I went to school and I said, “UNC, Asheville,” which was true. They didn’t ask me if I graduated. They never asked for a transcript. They assumed I had a college education. One of the things that taught me is that language skills are critical. If you have a good vocabulary and facility with language, it can take you far. I don’t mean lie or fake things but having the ability to focus on developing your language skills and then execute on that is hopeful. Luckily, I had some good experiences in that regard. All you English majors out there, you have not wasted your time.
Looking back, if someone said, “That makes sense. I’d like to improve my language skills,” what’s one piece of advice that you would offer that you think might be easy or at least they could take action on and see a result rather quickly?
Fiction or nonfiction?
Read anything. Read everything. When you come to a word you don’t know, look it up and then go online. We have an advantage. You can go online and hear the word pronounced. One of the things that trip people up is when they try to use big multisyllabic words, but they mispronounce them or they use it in a way that’s not exactly right, which makes them look worse. Common ordinary language is fine but have mastery over and then be on a mission to build your vocabulary consistently. I look up words probably more days than not. I’m looking up a word or a concept.
Let’s shift to your consulting business. You left the stockbroker world right then and went into studying psychology. You got your PhD or Master’s in that area. You logged a whole bunch of clinical hours in psychology. You started your consulting firms, CD Consulting Group, which stands for your name. That’s an important point and it goes to show that you don’t have to have the world’s most brilliant new innovative name to be successful.
You’re right about that. When you’re a solo entrepreneur, people know you by your name, your face, and what you produce. I got good advice about that from my mentor, Alan Weiss. He said, “Don’t spend your energy on that on a logo, go get clients.” When I got out of grad school, I went to work for a firm. I was with a consulting firm for twelve years and I was a partner. I knew that I would leave when I felt like I wasn’t learning anything. I reached a point where I rightly or wrongly. I’m not criticizing them. I didn’t feel like I was learning. I left. That’s been many years.
Tell us a little more about that when you started CD Consulting Group around 2010. What sparked that decision? Why did you decide to go out and start your own consulting firm?
One of the things that consulting firms do that I think is a big mistake is they focus on methodology. They have all these phrases they use that I think are irrelevant and get in the way of delivering value. We’re going to do a pitch. We’re going to this meeting. We’ve got our deck. We stand up and we say, “We’ve been a business for 87,000 years.” No one cares. I see consultants focusing on telling clients how they do things and all the features. I have never done that since I met Alan Weiss because his whole focus is on delivering value. I felt like the firm I was with was a good firm but was traditional. It was too wedded to their own history, which was long, and their own methodology. I wanted to be free to sit with a CEO or a senior executive, listen to them, come to some agreement about what needed to be done, to move them further, faster, and then do that. Even if it meant I had to create a way to do it, I was going to do it. I’ve invented bespoke methodologies, but they’re not weighty. They’re always simple.
Once you made that decision to go out on your own, what was the first thing that you did to get your own client and to build your business?
I told everybody what I was doing.
Who specifically? Was it family or friends?Failure is not fatal. Click To Tweet
How did you do it? Did you call them? Did you email them? Did you send them letters in the mail? What did you let them know?
I used to email a lot and I call people. Luck played a role in most parts of my life that have gone well. The lucky thing was that after I left the firm, a former client of the firms who we hadn’t worked within several years, which meant I was not violating. My noncompete called me up and I thought this woman didn’t even like me. I hadn’t talked to her and after several years, she said, “I need your help.” I ended up doing a ton of business with her company on and off for several million dollars’ worth of consulting.
Why did she call you?
She remembered me being good and facile in situations where it was high stakes. She used the phrase high stakes, which I stole and said, “I’m going to say that about myself now.” I asked her, “Why me?” She said, “You’re quick, smart, and direct. You will tell a CEO if you think that he or she is misguided, but you’ll do it in a way that you’re not insulting them. They understand and they trust that you are trying to help them achieve their objectives, not yours.” It’s lovely. The spigot got turned on and I ended up being successful like my first three years which were good. It allowed me to stop being terrified.
Was most of your business with that one client for a long period of time?
You had that one client, but it came about through something more than lucky. You did a great job and they remember that.
Good work helps.
How do you get the next few clients? What actions do you take and where did that come from?
I did a little bit of contract work for my former employer that helped financially but didn’t help with my business growth over the long haul because that extended my noncompete, but it let me be less terrified. I started to grow my business when I got braver about telling people what I did. When people meet you in a given circumstance that defines your brand for them. They’re like, “You’re an executive coach.” It made me want to stab them with a pen or something, but I’m like, “I do.” I started looking for opportunities in normal conversations with people to drop in some of my experiences like an M&A for example. I started doing things like having a lot of lunches and coffees with people.
This is important, lunches, coffees, dinners, or whatever glass of wine is fine. If you’re not looking for the buyer and you’re not looking for a need that you can help with, or that you could refer them to someone which you’ll get credit for that, not money but credit. I got good at listening. For example, if I went to lunch with someone and they said, “Our company needs you. Our CEO needs your help.” Make them a buyer. A buyer in my language is someone who has the responsibility for achieving a result and has the authority to hire me without getting permission from anyone and who can sign the check and pay me in advance.
Let’s say you’re in that situation like you’re having a coffee or lunch with someone. They say, “Based on what you shared, I could see how our CEO could benefit from your help.” They’re not the buyer. What do you then do? What have you found works best to get in front of the buyer?
I ask to be introduced.
What if they say, “No, the RCO likes me to vet through things and get some information. Can you send me some more information first?”
No.Money is never the reason people say no. Money is more of a priority. Click To Tweet
I can have the conversation about their objectives, the person who owns responsibility for achieving the objective. I wouldn’t be blunt. I would say, “It’s not fair to you to expect you to do my marketing for me. We could talk for hours, but inevitably in my experience, you Mr. Big, will have questions that only I can answer. Why don’t we figure out what’s the best way to get me in front of him and perhaps you and I should talk with him together, but sometimes what Mr. Big needs or wants is a little bit of privacy. If I get a meeting with him, I will come back to you, and we’ll have a discussion about the themes of that discussion.” How’s that?
That works well.
I don’t let people give me the run-around because they’re not the buyer. They’re reluctant to introduce me. When I was a baby consultant, a mistake I made was not recognizing that that person didn’t have the stature inside the company to make the introduction. They were too embarrassed to say that, or they didn’t know it. They would obfuscate and it’s like, “We need to talk some more, I need to gather the information, and then I’ll take it.” I’m like, “No.” Has it worked for you?
I was hoping that you would say what you said because this is a challenge that many people come up against. It’s the idea of focusing on specialization and getting clear on where you can truly add value. A lot of people say, “I help all kinds of businesses.” They have no idea where to target their energy and their focus because they’re worried about losing opportunities. If you cut things, everyone is equal and the same thing with the situation that we role played lightly together where a lot of people would be in that situation and go, “I should still have that conversation because I don’t want to miss this opportunity.” They end up wasting a lot of time, unfortunately, talking to a non-buyer. What you shared is valuable. I appreciate you working through that role-play with me. A lot of people will get some climax.
Part of the reason is, I said this to a client not too long ago. She’s a smart, talented executive. She’s got a big job and big title, but it’s less than what she could be doing. I said to her, “You are playing not to lose. You are not playing to win.” She goes like, “You’re right.” The point isn’t for me to be right. The point is for her to be brave enough to go after what she can do. What she can do is more than what she’s doing. She’s getting micromanaged at her level, which is ridiculous.
Even when you might fear that you’re going to put them off or that you’re going to say something that goes against the grain or what they believe in. In your experience, how critical is that to your success of being direct?
It’s important to my success. However, I will say that it’s foolish to be direct and affirmative if you don’t have enough information. What I see people do that’s a mistake is they talk to somebody in an organization and they go roar. The person takes that as the truth. The truth is more of an amalgamation of information. Once I feel I have enough information that my point of view is valid, then I become brave. I’ll say something to a client, sometimes I say, “Ignore me at your peril.” I only say that to clients where we know each other well, and we have a good relationship because they know I don’t talk like that all the time. It’s my way of going, “Warning Will Robinson, you’re about to make a mistake.” Sometimes they make the decision anyway that I’ve advised them not to make. When it goes wrong, I never say, “I told you.” They usually remember.
As a solo independent consultant, what’s your mindset around growth? You only have many hours in a day, there’s a capacity level that once you reach, you can’t go beyond. What have you found has been beneficial or helpful for you in being able to achieve your growth goals and continue to build a business, even though it’s you?
First of all, I don’t charge for my time. I never have. I don’t work that way. I had a client in the past that we knew each other well. He said, “You’ve got to figure out how long this is going to take.” I’m like, “No, I’m not.” He goes, “Somewhere in your formula, that has to be time.” I’m like, “There isn’t,” and he finally relented. I based my fees on the value that my client is going to derive. My fee is as a percentage of that, that represents as best my client and I can figure together my contribution to their success. In M&A for example, I have 4% of the price that some companies are paying for some other company or a quarter of a percent.
I don’t necessarily do the detailed math on it, but once your buyer articulates with your good guiding, supportive questioning, what it would mean to them to achieve their objectives financially, and also personally, what’s the order of the intangibles? Once they articulate that, and you give that back to them with how you’re going to help and what it’s worth, your fee should be a non-issue. If your fee is an issue, something that happened before then is wrong. Money is never the reason people say no. That’s what they tell you. Money is more of a priority. Organizations have money. People say, “I consult to not-for-profits that’s why I don’t have a good business.” That’s horse pucky.
When we talk about value pricing and ROI in terms of fees, when do you personally say to yourself, “This is going to be a $100 million deal, or I’m going to help you to create $10 million in value, so yes I could look at 20% of that, or a 3 or 4 times return on investment for the client?” At what point do you look at the fee and go, “I can’t because I’m going to be spending some time with them. I’m going to help them to achieve $10 million in growth over the next months.” Even ten times return on investment, that’s $1 million. At what level do you go, “I shouldn’t charge like that much.” How do you think about that in terms of making sure that you still receive equitable, fair, and great compensation while at the same time not casting a large number that might be beyond where you should have? What’s your thought process around that?
There’s such a thing as a ridiculous indefensible fee. I don’t know how to explain how I do that, but I do exactly what you’re saying. Oftentimes what happens, especially talking about M&A, is that I start doing work that’s described, this is the work. Nine or ten months later, we see something else and then there’s something. It might add up to $500,000, $600,000, or $700,000, but it isn’t necessarily agreed to all at once upfront. As you go through a deal, you learn more, and you make adjustments. I’ve learned that what I thought I should be doing at one point in time can change. Those conversations with your client are priceless because it shows them that your interest is their interest. You’re not jumping on some bandwagon.
There’s more that we could be going into here. What I want to do is make sure that people can learn more about you and your works. Where is the best place for them to go and to learn more about you?
My website, which is my name Constance and that sounds simple enough, except for my last name. It’s Belgian. It has an X at the end of it.
I want to thank you again for coming on here, spending some time, and sharing a little bit of your backstory, how you got to where you are, and how you’ve achieved success.
Thank you. It’s been fun. You asked good questions and I appreciate that. They’re not the usual.
We try our best.
Thanks so much.
About Constance Dierickx
I advise boards and senior executives when the stakes are high and in crisis. Expert in mergers and acquisitions, my clients include small private companies and global public corporations. I contribute to Harvard Business Review and Forbes and am the author of HIgh-Stakes Leadership: Leading through crisis with courage, judgment, and fortitude, and co-author of The Merger Mindset: How to get it right in the high-stakes world of mergers, acquisitions, and divestitures.
My M&A clients succeed 400% more often than the average. In CEO succession, my clients retain over 95% of the internal executive talent who were contenders for the top job, but not selected.
Due to the sensitive nature of my work, many clients cannot be named but these are among those I am able to name: AAA, AT&T, Belk, Boys and Girls Clubs of America, Chubb, Cox Enterprises, DIRECTV, IBM, Johnson Controls, Joy Global, NextGear Capital, Olive Garden, Schnabel Engineering, Tennessee Valley Authority, Westinghouse.