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Edelman has done it again...

The 2016 report is chalk full of valuable insights, as always, especially when it comes to selecting the most trusted spokesmen and communication channels to deliver key messages, and earn the trust of clients, shareholders and employees.

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POSITION YOUR CLIENTS CENTER STAGE FOR A WINNING GROWTH STRATEGY

"What business are you really in?"

Tis the season when marketers and firm leaders dive deep into excel and power point exercises, as they conduct year-end performance reviews and look ahead towards 2015 planning. I wonder how many will stop for a moment and ask: “what business are we really in?” and take a different approach to short and long term strategy development.

Nearly 55 years ago, Theodore Levitt, a professor at Harvard Business School, articulated the importance of businesses focusing on clients’ needs in an article titled “Marketing Myopia,” which is a Harvard Business Review (HBR) favorite. He posed the question “what business are we really in” and provided a number of case studies, illustrating the peril facing organizations, which have ignored that question. I was recently reminded of this timeless concept not only by re-reading the re-published article, but also because I am beginning to see it more often in professional services firms in the form of marketing officers and firm leadership working together for the benefit of the client. It’s about time, one might say.

Thanks to this “clients first” concept, professional services marketing functions are enjoying a renaissance period. Professional services firms are recognizing the importance of “client centric approach” to their businesses, and thus their business growth strategies, and with that they are changing their historical definitions of marketing to encompass a more strategic and intelligent function. On their end, marketers are doing their part in raising their profiles by utilizing client data and analytics to drive growth and demonstrate their value in terms of dollars and cents. It’s a push - pull process that is leading the way and changing internal growth organizations. This trend is highlighted by the increasing tenure of CMO’s, according to leading executive search firms.

“An industry begins with the customer and his / her needs, not with a patent, a raw material, or a selling skill,” writes Levitt in the aforementioned article. Let that be a reminder that now that the marketing and strategy functions are finally working alongside, it is important to stay focused on what brought them together: the client. While it’s easy to get distracted by budgets, operations and tactics of delivering strategy and business growth plans, put your clients’ agenda first this year.

Consider changing your annual strategic planning process. Facilitate a session to answer the question “what business are we really in,” as well as how have your clients and their needs changed, and whether your business is still in line with them. Put aside the internal political minutiae. Shift your focus from developing new services or re-packaging existing ones to your clients. Expand the scope of the process to include a wider input pool: internal professionals across functions and external industry leaders, and most importantly, your clients. Think innovation, not preservation. Be prepared to reallocate resources in your budgets. And last but not least, make it a dynamic strategic planning / review process that takes place throughout the year.

If all else fails, at least go back through your client satisfaction surveys / interviews and outline just one additional initiative that you are going to undertake in 2015, which will focus on your clients’ needs. It might just help you outpace your competition and re-define your market.

By Mira Ilieva-Leonard Mira.ilieva-leonard@istile.com

© 2010-2014 Copyright Mira Ilieva Leonard / iStile All rights reserved

Clients changing the business of law

How are firms dealing with it and what it all means in practice?

I was recently invited to moderate a panel of law firm CFO’s for the Southeastern Chapter of the Legal Marketing Association, titled “The Evolution of Law Firm Finance and Its Impact on Business Development.” The panel considered the following circumstances and how they have impacted the business of law. As a result of the recent recession law firms are undergoing overwhelming change. Many of them are retooling their financial strategies by adopting alternative pricing methods, shifting operational financing, improving vendor management, and most importantly, how they go about attracting, serving, and retaining top clients. In other words, firms are modifying their way of doing business to better align with the demands of corporate America. So what does that mean for the industry in practice?

Below please find some of the key takeaways from the conversation along with my personal observations. A side note: in my experience this trend is not limited to law firms and is evident across the professional services industries. Many of the points brought up during the conversation are applicable to professionals offering consulting, accounting, and other business services.

The fact that clients today are expecting the same high quality services for lower cost worries some professionals, but hasn’t persuaded them to change their pricing model. Some cling to the notion that this is only a fad and “the good old days” of buyers’ flexible budgets will return. If neither are willing to change their thinking, both groups will soon become industry laggards.

This shift from a revenue- to a cost- based law firm business, where “profit” is the name of the game is clear. It presents many opportunities for firms ready to improve performance and leverage efficiency. However, the transition is not easy, which makes the hesitation of the above-mentioned laggards understandable. It necessitates a “one size fits none” mentality, where firms must take a segmented positioning attitude for various practices and partners, and learn both the consultative and commodity approaches of selling legal services. It requires applying new staffing and project management models, such as “the pyramid” staffing model for consulting and other deep expertise services, and / or “the diamond” model for highly leveraged, packaged services. It also calls for new skill sets: project management, financial understanding, change management, collaborative skills; and new tools: financial dashboards, collaborative index, etc.

Marketers and Billable Professionals: CFOs are your new best friends. In order to succeed in this environment, marketers and billable professionals will need to understand the business of the firm and the various individual practices. In addition to joining forces on addressing RFP’s, they will need to work with CFO’s to package services: define how to sell and deliver them in order to keep healthy profit margins, and create business models to stay competitive and win business. They will need to communicate often to identify where the systems and processes can be improved to serve clients better. They will need to track Marketing/BD spending and measure ROI, to better evaluate business growth initiatives and create more accurate budgets. Ultimately, they need to align their agendas to champion change to create and employ the supporting systems, skills and processes.

The CFO’s sitting next to me for this session might be some of the most progressive ones I’ve encountered. I was delighted to hear them speak about changing behavior, collaboration, and building a different type of organizational culture. They understood what it would take to make the transition: to meet their clients’ expectations and remain relevant.

The bottom line: change is upon us and instead of wasting time and energy fighting it, embrace it. Accept that with the new business model new compensation structures are afoot and necessary to change behavior and overall firm culture. Adopt new KPI’s (key performing indicators) such as team profitability, cross selling, and collaboration. Understand that "not all clients are created equal;” approach them and structure delivery accordingly.

It is indeed a transformative period for the legal and other business services industries. Progressive firms that will act upon this shift quickly, and put the wheels of change in motion, will stand out. Will you join them? At iStile, we work with firms to help them take advantage of such opportunities by structuring and implementing the necessary systems and equipping the management team and professionals with the necessary skills.

By Mira Ilieva-Leonard Mira.ilieva-leonard@istile.com

© 2010-2014 Copyright Mira Ilieva Leonard / iStile All rights reserved

GROWING PAINS: HOW TO IDENTIFY AND ELIMINATE THEM

Focus business growth resources and attention where it counts

I often ask leaders of professional services firms “What is holding back their business growth?” Rarely do I get a clear answer. Why is it that most professional services firms do not have a grasp of their business growth process? How can they know how to solve their business growth issues, and where to focus resources and attention, if they don’t recognize the problems at hand? I often hear the excuses like “it’s the economy”, “the competitors,” and “it’s the people” but, I rarely ever hear plainly articulated points such us: “it’s converting leads into proposals,” “it is the win/loss rate”. In my experience, a leader can troubleshoot those growth pains and address them properly only when he or she has a full picture of the business growth pipeline and can clearly identify bottlenecks. Here are a few questions to help you, leaders of professional services firms, identify where you might have business growth leakage. Start by examining your business growth pipeline. Where’s the bottleneck? Lead generation, conversion, client retention rate, etc…

How are you loading your pipeline? Are you measuring the quality and quantity of your leads? If you are not, consider launching a process to help you do so. Knowing the sources of business so that you best spend your limited money and time is significant to the business growth process. Calculating ROI on marketing and BD spent is a sound, but unfortunately uncommon practice.

How often are you connecting with leads to build awareness and how? Traditional marketing dictates that in order for a message to come across it needs to reach its audience three times (3x). This conventional wisdom is challenged, as recently demonstrated by the Edelman’s Trust Study (see "Edelman Trust Barometer: Where is the Trust?”) and today, it takes a minimum of 5x for a message to resonate. It’s double the work for marketing and communication specialists. The good news is that social media is providing a cost efficient way to communicate and engage with audiences. The bad news is that social media has also created a massive clutter of data and communication apathy. Staying consistent, on point, focused on quality content and respectful is the key to cut through the information mess and connect with your audiences in a meaningful way.

What is your conversion rate? How many of your leads become actual prospects? If the number is too low, consider changing and/or increasing the marketing and BD tactics (thought leadership initiatives at this level work best for professional service firms) to better and more frequently position you in front of prospects, allowing you to demonstrate your technical capabilities, engage in dialogue and identify opportunities. What’s the velocity of your pipeline? Do you have a massive number of proposals that are not moving forward? Why are they not moving forward? Have you rushed into a proposal without fully understanding the situation: the need, the stakeholders, and the purchasing decision making process? If so, work on your advisory and problem solving skills to learn to better scope the problem, and in the process to better help the prospect and move to the next stage of the business growth process.

What is your proposal win/loss rate? What can you do to improve it? If your rate is low, question the reasons: is it pricing or is it the solution? If the latter, take a look at the pipeline velocity questions above and work on improving the problem solving skills (are we solving the right problem?) and solutions offerings (do we have the proper solution?). Professional services firms often bypass an important stage in the business growth process: education, and jump immediately from awareness to sale - this is frequently seen when a firm participates in an RFP or beauty contest. It is likely your pipeline is filled with these opportunities and therefore, whether you know it or not, you are competing mainly on pricing. This is a good place to stop and re-examine your current (and aspirational) position in the market: are you a low cost provider, or a high-end, value-adding adviser? You cannot be both successfully. There are only a select few organizations that can afford to be both and flourish in the long term. If you choose to be a low cost provider, RFP’s are a viable channel to fill your pipeline. In this case, if the win/loss rate is low then I would suggest you revisit your pricing strategies, analyze your efficiencies, and examine how your relationships are managed. You see, even with RFP’s where pricing is usually the lead selection criterion, relationships do matter. Thus, the education stage can mean relationship development.

What is the retention rate of clients? How many of your clients’ needs are you satisfying? How many of your clients are willing to try other of your service offerings and are recommending you to peers? Businesses exist because of a need or love for their services, products, etc. If you can master to win on both counts, you’ve reached the holy grail of business. Thus far, professional service providers have relied on the need of their services and have completely ignored the second, building loyalty. To sustain, if not even grow business, that approach is no longer an option. A couple of months ago I referred to the latest Financial Times survey on Efficient Client Adviser relationships and the importance of the clients’ recommendations it highlights: commercial awareness, added value services, contribution of management and people support. All of these call attention to building trust and loyalty between clients and their professional service providers. If you are having troubles expanding your client relationships or your client retention rate is deteriorating, take a closer look at those points, and better yet, talk to your clients.

Now that you have a few key questions to help you identify the bottlenecks in your business growth process, I urge you to assess your business growth tactics. Hopefully (and most importantly), your firm has a system in place to address the answers to those questions. Look for more on that and how to best leverage your assets in the next segment of this blog.

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

Got Growth: how to position your organization for strategic growth and business model renewal?

A PaperJam Business Club Workshop | January 15th, 2013 | Luxembourg

Per request, please find the framework of the workshop presentation.

Got Growth: How to position your organization for Strategic Growth and Business Model Renewal? from Mira Ilieva Leonard

Like most organizations today, you are probably experiencing increased pressure from your clients, demanding high service at lower prices. That, coupled with the global downfall and near future economic uncertainty, incrementally impacts your organization’s profit margins. In addition to these factors, requiring immediate attention, your organization also faces a more fundamental problem: the need for radical business model renewal driven by the changing regulatory environment and the diminishing value of the “Lux Factor”.

So, how do you go about turning these challenges into opportunities? Join the session and learn how to focus and become strategic and efficient in growing your organization’s business, re-energize and enhance your executive team, and prepare to transform your business into less dependent on the “Lux factor”.

During this workshop you and your fellow peer executives will receive a process for developing and executing your growth strategy, frameworks to find and seize growth opportunities for new markets, prospects and business models, an overview of the necessary internal organization and capabilities to support your growth strategy, a checklist for evaluating your organization’s existing growth strategy and related capabilities and a ”no frills attached” ½ day follow-up growth readiness assessment.

For additional details and to join me and my colleague +Marc Sniukas (Doujak Corporate Development), visit: PaperJam Business Club

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

To BD or Not To BD?

I recently launched a special series: "Oldies but Goodies" to bring back some of my favorite pieces I've written throughout the years that are still relevant today. Enjoy!

May 2010 USA

To BD or Not to BD = to focus on business development or not? That’s not even a question worth debating when it comes to leading progressive professional services firms (PSF), if you ask me. But let me spell it out: to survive and grow, business development, on a firm, practice and professional level, is not even a choice – it’s a necessity. Instead of my pun on Hamlet’s famous quote, I’d argue the real question at hand is how to go about doing it. After experiencing the recent business slow down, PSF’s seem to agree and are increasingly encouraging business development actions. And, because the question “how to BD” offers many answers, one of the fastest and quick-fix solutions contemplated by firms is hiring BD professionals. That certainly is a solution, however it might not be the most appropriate one depending on the situation at hand. So, for the purposes of this article let’s think of “To BD or Not To BD” as the PSF dilemma of whether to hire in-house BD professionals or find alternative growth solutions. Let the battle of our inner Hamlets commence.

In my experience working with PSF’s of different shapes, sizes and cultures, I’ve had the opportunity to see when bringing in BD professionals is successful and when it fails. And so, before sharing my thoughts and weighing the pro’s and con’s of hiring BD professionals, please consider the following questions… Does the culture of the firm allow for BD professionals? How would your current and prospective clients feel if they were approached by BD professionals representing the firm? Would the technical professionals accept and leverage the skills and actions of that professional or carry on doing things they've always done, which might not necessarily be the most efficient or effective, or worse yet, sit back and relax because the burden no longer lies with them? These are all significant questions, not necessarily pertaining to the growth of the PSF, but to the organizational cultural domain that is just as significant to the firm’s survival. Reflect on these and other similar culture and client related issues before moving forward, I beg thee.

Now, when the firm culture is built to accept and utilize client development professionals, bringing them on board, with the proper expectations, can be a powerful growth solution. One of my business partners likes to say that ”client development is both an individual and a team discipline” and I agree. BD professionals can “hunt” and at the same time offer leverage to the technical professional service providers (i.e. lawyers, accountants, consultants, etc.) by supporting their individual client development actions. Prospect and referral identification and research, as well as relationship building, at both strategic and tactical levels, customarily require unknown or untapped skills for many technical professionals. The right BD executive will act as a mentor and strive to enhance the talents of the technical professionals, amplifying the impact of their collaborative client development efforts. On a micro level, they will also support the proposal process: from scoping to presenting along with the technical professionals, and working along the marketing team on the presentations, in between. Because when it comes to PSF’s, the professionals are the embodiment of the firms’ brands, the proper BD executives will have the executive presence and gravitas to do just that. And so, on a macro level they will also represent the firm in the community, help build and enhance the brand and goodwill and most importantly develop strategic to growth relationships.

I don’t know about you, but I almost convinced myself that hiring BD professionals (the right ones) is the way to go…well, “almost” and the “right” being the operative words here. Before jumping ahead, a few additional to the culture concerns to keep in mind…The economic downfall has purged many PSF’s of excess and unaccounted for spending, making them more efficient and effective. Why should business development and marketing be treated any other way? So, before casting a vote on BD professionals, ask yourself whether the firm is fully utilizing the resources at hand as well as providing the necessary support systems, tools and skills. Audit the firms’ business development organization to identify any opportunities for enhancement or repurpose. The chances are if you look for improvement and leverage you will find it. When you can say - with a certainty - that all of the PSF’s internal client development resources have been tapped in and exhausted, only then would I recommend considering additional growth alternatives such as hiring BD professionals. Even then, keep in mind that ultimately buyers of PSF services buy the people who will do the actual work. In other words, having BD professionals on staff shouldn’t release the technical experts from their own BD responsibilities, nor the firm from its responsibilities to provide them with the proper support tools, systems and skills programs. However, that often is the case, and it brings a whole new set of growth challenges.

To BD or not to BD – that is the question: whether to grow the PSF with the help of BD professionals on staff. That’s your prerogative, dear reader – I only hope my comments encouraged you to consider the full complexity of the situation; one, which might call for support from experts on creating superior, lasting, predictable client development results for professional service firms.

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

Effective Client-Adviser Relationships, an FT Survey Findings 2012

Finally the notion of client-adviser relationships and its importance for the professional services industry is gaining international press. For the second consecutive year, the Financial Times (“FT”) has performed a survey sampling executive-level clients and professional service providers including law, accounting, and consulting firms. Because of my hands-on organizational development experience with services firms and overall close observation of the industry, the results do not come as a surprise to me. In fact, they support my personal remarks and recommendations. Here are the four key points spelled out by FT in its 2012 report and my thoughts.

Contribution of management

FT: The impression of whether a firm is well managed is important to clients. Sharpening internal attitudes towards clients and developing C-suite level relationships through regular dialogue are key priorities for management.

Mira Ilieva Leonard (“MIL”): When your house is not in order even your friends stay away. The same applies for professional service firms and their clients. Clients recognize when firms are experiencing turbulent internal dynamics and will stay away in anticipation of the negative effects on the management of their projects. While having the shareholders involved in the firm on a daily basis provides many challenges such as reaching consensus, etc., professional service providers should learn to overcome them and manage their firms as true corporations. In addition to building their brands, firms should focus on defining their key expertise, growing client adviser relationships at executive level and developing a consistent and collaborative client-centric culture.

Knowledge and commercial awareness

FT: Advisers need to really get under the skin of their clients’ business. Clients want advisers to provide a more commercially-savvy view of future risks and external benchmarks.

MIL: Clients are no longer expecting only a technical conversation. They want to know that their advisers understand all aspects of their business and industry, and the challenges and opportunities presented. They anticipate that their advisers can share benchmarking data and industry best practices. Professional services firms should invest in expanding their client intelligence capabilities and knowledge. Firms should equip their professionals with the skills, tools and systems to build this into a continuous process.

Added-value services

FT: Account planning and client feedback are the added-value extras that clients find most beneficial. Clients actively encourage firms to invest further in these areas.

MIL: As I mentioned in my previous post, “What can Professional Services Firms learn from the on-line gaming industry when it comes to retaining and growing client relationships?”, professional services firms need to recognize and embrace the value of feedback mechanisms and insightful thought leadership materials. FT’s reaches the same conclusion supported by data from the clients themselves. Firms must work to overcome their fear of negative feedback and get in-front of clients. Developing insightful thought leadership materials takes time and the right resources, yet again this is what clients demand now.

Supporting people

FT: Although advisers are appraised on their client service and commerciality, fewer are given adequate training and support to deliver on these competencies. Further investment in project management tools and protocols is welcomed by advisers to help deliver more profitable client service.

MIL: Some progressive professional services firms are recognizing the skills gaps and are making efforts to fill them by bringing specialists either on board or as of counsel. Others are building advisory curriculums with emphasis equal to their in-house technical training programs. These are a select few. Most firms are still undervaluing the importance of such skills and tools and are taking a haphazard approach to the issue. They are the ones that are going to find themselves in trouble in the long run.

The FT report is a must read for Managing Partners of professional services firms. Please contact me if you think your firm would benefit from implementing some of these concepts into its business strategy and culture.

Download the full FT report here.

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

"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.

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