"Creating a culture of business growth" for PSMG

After taking unnecessary time off from writing about my experience and expertise in growing professing services firms, here is a preview of my upcoming piece for the publication of the Professional Service Marketing Group (PSMG).

May/June 2012 PSMG 33

In times of tight budgets, scarce human resources and market uncertainty one might argue that it is difficult to talk about building a culture of growth. Many professional services firms claim that it is time to think of survival; growth will follow as soon as clients regain their market stability and begin to grow. I would argue the opposite. It is time now, more than ever,to think about building or re-building the firm culture of growth to ensure progression and successful positioning in the professional services market landscape in the future.

A growth strategy which is dependent on the firm’s clients’ growth will result in no growth at all when clients aren’t growing themselves. Thus, the firm risks being left behind by its competitors. Most clients are currently not growing or growing at a very slow rate. That, coupled with the abnormal client churn rate – clients are struggling to a point they are willing to forgo advisory services for low cost, commodity solutions – leads to a net negative client growth rate.

“Old school” marketing is no longer enough. Clients expect more – it is no longer sufficient that the firm tells them how great it is, what services it provides and how well it goes about doing that. That’s a given. Clients expect that the firm and its practitioners understand the relevant-to them business and functional issues, as well as industry and market trends. This calls for a high level of intelligence and constant education – technical and advisory.

Professional services firms are getting smarter and more aggressive. They are looking for better ways to engage with prospects and are willing to reduce their overall economic benefit just to launch an engagement. Beware of the threats and opportunities that come with such behavior. Loyalty is constantly tested. Client relationships are always up for grabs.

A new generation of professionals and clients expect to engage with progressive organizations. Such firms are defined as transparent, and are engaged in multiple ways of communication with clients and employees, welcoming constant feedback. The new generation of professionals expects to live the brand, meaning that they demand social corporate responsibility, active community involvement and leading edge social media engagement.

The current state of the market offers a multitude of opportunities. The cost cutting trends are opening white spaces in terms of service quality, new service offerings, and improved ways to deliver existing services. That, along with the greater availability of billable professionals to employ new projects,further supports that indeed now is a good time to dedicate to building a culture of growth.

In my professional experience, in order to successfully build a culture of growth one must ensure that the business growth strategy, systems, support tools and skills are aligned and closely connected. Addressing one without the others is as if you are to place a band-aid on a knee cut, without caring for a broken leg or a serious heart problem.

STRATEGY
Start with the business strategy of the firm. Work with the executive team to define clear short and long term strategies, taking into consideration clients needs, market forces and current and future service offerings. Have a clear understanding of what clients and markets are most important for the firm (near and long term), and then define how,when and at what cost will the firm work to attract and retain them. Marketing and business development leaders often struggle at this level due to the gap between them and the executive teams. In mature professional services markets (like the US) that gap is closing as firm management increasingly understands the value of those functions being aligned with them and is open to include them in strategic development discussions. In other markets,such as mainland Europe, where the business growth functions are still narrowly defined as general branding, communication and internal marketing, the disconnect between the business strategy of the firm and the marketing and business development tactics is often clearly evident. Bigger yet is the gap in particular markets, where up to recently marketing and business development functions were ‘nice to have’ but not ‘a must have’.

SYSTEMS / SUPPORT TOOLS
Once a clear business growth strategy is outlined,one must ensure that the support systems, processes, and tools are in place and running smoothly. If not, a fundamental exercise of design or re-design and implementation of such processes is necessary. Systems like Enterprise Resource Planning (ERP), which connect across functions – marketing, accounting, and IT– guarantee that the business growth tactics support the business growth strategy. Such systems also track and measure business growth performance, allowing for timely tactical adjustments, when needed. Additional processes that should also be considered are those that connect and run through the entire client engagement process: from the identification of a prospect through the education, sale, and client retention. Mature professional services markets widely utilize Customer Relationship Management (CRM) to support their strategic development. Newly exposed to marketing of professionals services markets and professional services firms alike are still early adopters of such tools and are often building them in-house. A secondary benefit to such systems is that they often help break organizational silos and increase communication flow within practice areas and departments. Building and living a culture of growth is a firmwide exercise. It includes back and front office functions.

SKILLS
Even if all of the above are in line, if professionals are not aware of the support available to them and equipped for business growth, the project of building a culture of growth will have limited buy in and success. I recommend that firms provide professionals and their support staff with the proper skills by investing in training programs and dedicated in-house professionals. Again, having observed mature professional service markets, I notice that most firms there have already invested in professional staff, expected solely to guide, monitor and act as coaches to professionals. Other markets and firms are still experimenting with the idea by bringing in third party providers. In most cases, that’s executed in an inconsistent manner leading to limited success.

Building a sustainable culture of growth is a necessity for any progressive professional services firm and can be accomplished by following a practical formula: Business Growth = [(Strategy + Systems + Skills) Resources] over Time. To ensure success, I would add focus, patience and firmwide understanding of the importance of the project for the overall health and longevity of the firm.

At the time of the writing of this article, Mira Ilieva-Leonard lead Marketing and Business Development at ATOZ Luxembourg, a high-end tax advisory services firm. Prior to joining ATOZ, Mira was a Partner with a US based consultancy working exclusively with professional services firms to help them grow in a sustainable and predictable way.

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