IS YOUR BUSINESS GROWTH ORGANIZATION BROKEN?

It’s not always about redesigning the growth organization; it might be time to refresh the business growth process

As many professional services firms are struggling to reach their growth goals, they are questioning the effectiveness of their sales organizations. Business growth organizations are well-designed and likely to succeed as long as they have all the necessary elements aligned with the growth strategy of the firm: support tools, systems and skills, as illustrated in this simple grid.

Before undertaking the complex and time consuming process of re-designing the sales organization, I’d first look at updating the sales process, sales tools and the roles of the various business-growth-related parties, such as marketers, business developers, billable professionals and sales leaders. These upgrades are driven mainly by smarter and better informed buyers who are squeezed by constant cost cutting demands.

Much has been written and said about the evolution of the business growth / sales process over the past few years, especially for professional services firms. You’ve most likely run into a number of proprietary ones with fancy acronyms. They still follow the very traditional process of “awareness – education – sale – loyalty”, albeit the various stages being called something else or further segmented into smaller ones. One thing that’s become clear and I’ve been advocating is the shift from pre-packaged solution-based approach to “insight selling”, as coined by Brent Adamson, Matthew Dixon, and Nicholas Toman at CEB. I have been referring to it as a consultative or problem solving selling technique. Its differentiation and strength is multifold:

(i) Cultivating prospects who are most likely off the radar of competitors (because the identification criteria are different from the traditional ones of industry, size, etc.);

(ii) Gathering intelligence and developing business understanding that goes beyond the orthodox one of budgets, purchase decision maker, etc.;

(iii) Sparking dialogues that don’t steer towards uncovering already recognized needs and solutions, but leading to unrecognized problems and drafting solutions jointly; and

(iv) Building client value and long-term relationships, which facilitate future, post-engagement conversations and additional opportunities to work together.

It’s an approach that calls for upfront investment in terms of updating the roles and skills of the business growth parties, as well as the sales tools, and in return positions the organization on a different level from competitors to avoid price bidding and dictate deeper terms of engagement.

Based on extensive research, Adamson, Dixon, and Toman recently released another article on “insight selling,” titled “Dismantling the Sales Machine” (for HBR, November 2013). As always, I appreciate their professional research, which further supports the consultative approach I’ve been advocating. In this paper, the authors refer to “insights selling” as a process where “sellers challenge customers with disruptive insights into their business and offer unexpected solutions.” It no longer encourages certain “check-the-box” compliance sales process and activities, but rather emphasizes the importance of identifying the right prospects, giving professionals the freedom to make judgment calls, and expanding the use of innovation and creativity to design solutions. I wholeheartedly agree with this approach and couldn’t have defined it better myself, with one exception. Unlike Adamson, Dixon, and Toman, I am a supporter of “compliance” of the sales process and believe its value should not be understated. A couple of the statements in the article make it sound as if the authors believe that results justify sales actions, regardless the associated cost. When it comes to compliance I am not referring to supporting the use of certain sales activities, but the process, which is critical in measuring efforts and effectiveness and efficiencies of these activities. What I support is that when it comes to sales activities, a/k/a business growth tactics, one size fits none. Successful sales tactics vary from one professional to another. Compliance should ensure that there is a process in place that guides the sales professionals and ensures that activities that work for professionals are taking place.

As I’ve mentioned in the past and as spelled out by Adamson, Dixon, and Toman’s research, this new sales approach calls for updating the various business growth roles, changing team formations, skills and tools. Sales professionals (a/k/a business developers, billable professionals, etc.) should work on developing their advisory skills and use both emotional intelligence and IQ. Sales leaders (a/k/a CSO, CMO, Managing Partners, etc.) should become coaches, facilitators of information and encourage idea generation and collaboration. They should emphasize the power of individual networks and a long term view to prospects. The latter dictates a fundamental shift away from the traditional transaction oriented approach towards the one of creating value for clients and developing true relationships. In order for that to succeed, sales leaders must look for quality of their business growth pipeline opposed to velocity as key performing indicators (KPI’s) and most likely re-write the existing compensation model. Sales leaders and organizations should equip sales professionals not only with new skills, but also with tools that help identify prospects and prioritize actions, create demand and spark solution innovation, and lastly, provide decision making guidelines for making confident judgment calls.

Is it time for you to refresh your sales process, cease the bidding war with your competitors and improve your business growth results?

By Mira Ilieva-Leonard

© 2010-2013 Copyright Mira Ilieva-Leonard / iStile All rights reserved

WHAT HAVE WE LEARNED FROM THE COLLAPSE OF DEWEY & LABOEUF

An organization development case study for professional services firms

A year and a half ago I posted my piece “For the greater good or eat what you kill”, which used the much talked about collapse of Dewey & LaBoeuf to explore hypothesis behind the destruction of intelligent professional services firms, and make recommendations to avoid such a fate. It is that same unfortunate story of Dewey & LaBoeuf, told by James B. Stewart for the October 14th 2013 edition of The New Yorker that inspires me now again to share my thoughts and re-emphasize on the key organizational development factors for professional services firms.

It is a story worthy of an Oscar® nominated movie script. There are mafia connections, luxury lifestyle, disturbing emails, and backstabbing, peppered with greed and egoism. I am not talking about Tom Cruise’s movie “The Firm”. I am referring to Stewart’s recent article for The New Yorker titled “The Collapse” . For juicy details I urge you to look up the article; for the purpose of this blog I’ll focus on the key takeaways.

After a careful study of the characters, the various circumstances and the storyline of the events, leading to the bankruptcy of Dewey & LaBoeuf, James B. Stewart concludes that “cooperation and mutual respect” is at the heart of successful professional services firms. I wholeheartedly agree with the author as I mentioned in my original piece.

Building up to that conclusion and referring to industry benchmarks, Stewart talks about a number of factors that influenced, or one might say accelerated, the faith of Dewey & LaBoeuf: size & structure, compensation model, and culture. While industry and economic trends might have guided many firms like Dewey & LaBoeuf to look for alternative growth models and structures, the “vereins” have yet to be proved successful, at least in the legal industry. Vereins, defined by Stewart is “a constellation of separate legal entities doing business under a single brand.” I see how the author reaches that conclusion however, I am not fully convinced. Looking across industries to the advisory world of the BIG 4, their model, in terms of size and structure, doesn’t seem much different than the one pursued by Dewey & LaBoeuf. They, however, have seem to have managed to make it, although they have suffered a decrease in their numbers today. Therefore, while size and structure matter, I’d advocate that the compensation model and culture are the heavily weighted levers that make the ultimate difference, and the ones that lead to demise in Dewey & LaBoeuf’s case.

As seen in Stewart’s article, a compensation model, mainly incentivizing rainmaking can encourage wrong behaviors and be counterproductive. Similarly, a culture allowing for a digression from the clearly defined traditional firms’ values of “loyalty and collegiality,” often has a hefty price. Interestingly, this is where Stewart’s statements support my hypothesis of the grave and destructive effect for firms, using compensation models feeding the “eat what you kill” mentality and encouraging narcissistic behavior, as outlined in “For the greater good or eat what you kill”. This piece and blog is not about being right, but about identifying problems and applying lessons learned to solve them. And so, if compensation models that heavily weight rainmaking and narcissistic firm cultures are directly correlated to the failure of Dewey & LaBoeuf, and potentially other professional services, then what’s the solution?!

It all comes down to “cooperation and mutual respect”. That’s the culture that successful firms foster and Dewey & LaBoeuf blatantly ignored, according to Stewart. In my past articles I refer to that as collaboration and encourage organizations to reward it, because it provides for learning, best practice sharing, better solutions design and a team client approach…for the greater good. Taking a prescriptive approach to collaboration, similarly to the one in my “One for all: all for one” article, here are a few tangible points to consider when looking to inspire collaboration:

• Explore a firm development strategy with collaboration as a core attribute, or even as a sustainable competitive advantage. Take an all-encompassing approach: from recruiting and retaining talent, to growing the firm and boasting team performance.

• Define an organizational structure that fosters sharing and cooperation, spread throughout the firm: from basic operations to compensation models, as well as support and client facing practitioners.

• Employ tools and systems that encourage communication, knowledge sharing and transparency, which are some of the key components of collaboration.

• Establish functions and recruit / develop professionals who not only understand the value of collaboration, but have the necessary skills to build and cultivate collaborative culture.

© 2010-2013 Copyright Mira Ilieva-Leonard / iStile All rights reserved