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

ON THE TACTICAL SIDE OF BUSINESS GROWTH I: Growing the firm and the role of the marketing team

Here’s a short series focused on business growth implementation, a collection of my thoughts, popular opinions and current trends...

The importance of lead generation and what it means for marketers

New clients are necessary not only for the overall development and growth of a firm, but for its survival. Clients come and go. In a competitive world, driven by tight economics and intelligent buyers, clients’ attention is constantly distracted by multiple, smart service providers who test loyalty and threaten client relationships. Firms discounting the value of constant development of new clients are laggards or soon to be such. On the other hand, firms understanding its importance know that a strong marketing team is instrumental for the business development process and fully utilize and enable those resources.

The definition of the marketing function and its deployment depends on firms – their size, strategy, and outlook. For some firms, marketers should be focused on brand management and internal and external communications only – i.e., they facilitate branding activities, develop and distribute newsletters, maintain communication materials (websites, brochures, etc.), create client and firm events, etc. For others, marketers are a key part of the executive team in charge of leading and developing the firm, and are involved in the entire sales cycle. In this latter scenario, in addition to managing branding and communications, marketers are engaged with strategy and service development with the BD and sales teams as well as client retention, and all of the support tasks that accompany this strategic function: from gathering market intelligence, supervising the CRM systems, developing proposals, and creating loyalty programs, among others. These two examples demonstrate polar opposite views of the role of marketing in professional services firms. As long as firms realize the need for constant client acquisition they should define the marketing role to ensure it includes direct connection to growth, especially if that’s not already the case. Marketers should also realize that they have an opportunity to have a bigger impact on the overall development of the firm and provide a greater value by tying their activities to revenue generation.

In other words, marketers should consider that part of their responsibilities includes engaging, inspiring and supporting both the firm and professionals to grow the firm. So, what might that mean and look like for marketers? Managing the lead generation process...
I’d recommend that marketers start by having a clear understanding of the strategic direction of the firm as a whole, and its constituent practice groups and/or individuals to ensure proper prospect targeting. They must know what “a good lead” looks like so that they can better find them and communicate with them. Marketers must work with the rest of the parties involved in business growth (partners, business developers, etc.) to define growth objectives in terms of revenue numbers, and translate them into leads to incite actionable plans.

Measuring processes, tracking systems and reporting tools are critical for lead generation. Here marketers must look to the IT and financial teams for cross functional support. When elaborate CRM and budget tracking tools are already in place then marketers must recognize their full potential, adopt them and demonstrate their key benefits to the rest of the stakeholders. If no such systems or processes are in place, then marketers should develop and use simple practices and tools such as excel sheets. Remember: one can’t manage what one can’t measure!

A big part of managing the lead generation process is the tangible execution. Marketers must set up and run lead generation campaigns: often a combination of thought leadership platforms, social media tactics and direct outreach (see “lead generation tools” below). The objective this time is to go above and beyond the traditional awareness building campaigns. It is to identify and engage prospects into a two-way communication, which will eventually facilitate connection and develop a relationship. This is often a long and multi-step, multi-dimensional task that calls for patience and discipline.

The proper implementation of lead identification, touch and follow up with the right content and the appropriate frequency are just as important as equipping the firm and its professionals adequately in order to convert leads into an actual prospects and revenue. Marketers should communicate the value and plans of the various lead generation campaigns to the key stakeholders. They should create tools, cheat sheets, articulating value propositions and key talking points, and “how to” guides for specific thought leadership platforms. Business growth is a team discipline. Everyone in the firm has a role to play. The more prepared and the better equipped players are the higher the chances of success.

Professional services marketers today have a wide range of lead generation tools at their disposal. Industry best practice ranks thought leadership as the number one method for effective lead generation. Marketing professional services is “selling the invisible” as Harry Beckwith calls it. It is about demonstrating knowledge and differentiation, and for that knowledge-based materials are best. White papers, articles, newsletters, case studies, books and e-books, presentations – in-person and webinars, and surveys are just a few of the popular tactics employed by marketers. Properly structured and executed they can be very effective.

Growing professional services is also about building deep relationships and trust. In managing the lead generation process, it is marketers’ responsibility to tee up relationship building opportunities and put professionals in positions to demonstrate their know-how, start new conversations and earn trust. Continual education platforms such as seminars, on-line technical courses, conferences, issue-based events, community initiatives are examples of live and on-line forums, facilitating relationship building and lead nurturing. Again, it is imperative that marketers realize that the full value of these events spreads beyond building awareness and amplifying the brand to facilitating relationship creation and demonstrating subject matter expertise.

While some conventional lead generation tools such as direct outreach with call to action, telemarketing, list purchasing, contests and free trials are losing their attractiveness, social media is gaining popularity and increasingly becoming the default channel to fueling the lead pipeline. The novelty of LinkedIn, Twitter, blogs and microblogs, Slideshare, videocasts and podcasts, and infographics might evoke resistance in some firms. It is marketers’ duty to articulate their value, make the cost/benefit case to the firm stakeholders and to utilize them in a way correlated to revenue generation.

So, what’s next? Introducing and implementing new processes and tools is challenging and requires executive buy-in and support. Start small. Run experiments and learn what works and how. Build upon that to increase the number of followers. Share wins. Be patient and determined. Ultimately everybody will win – the firm and the marketers.

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

ON THE TACTICAL SIDE OF BUSINESS GROWTH II: Challenges facing marketers, Important data analytics for CMO'S, Relationship building insights

Here’s a short series focused on business growth implementation, a collection of my thoughts, popular opinions and current trends...

*********************************************************************************************************************************************************** "What Are The Biggest Challenges Facing Marketers According To New IBM Study?"

According to a hot-off-the-presses study conducted globally by IBM (500 marketing managers) across 15 different industries, creating growth (through the acquisition of new customers) and sustaining growth (through superior loyalty) is at the very top. 42% of respondents suggested that acquiring new customers and 36% suggested driving loyalty and satisfaction were the biggest challenges facing their organizations.

While these results aren’t earth-shattering as it is likely that a survey a decade ago would have yielded a similar pattern, what is surprising is the items at the bottom. Only 21% of the respondents suggested that measuring ROI was the most challenging problem they faced, behind branding, leveraging data, understanding and effectively using social channels, and creating positive experiences for consumers. A few years ago, measuring ROI was at the top of everybody’s list. This perhaps suggests a sign of the times – a tough marketplace, increased competition, a more global marketplace, and more savvy consumers have made growth especially challenging.

Other key findings from the survey suggest that the marketers who are driving better firm results are doing something different than their less successful counterparts. They tend to be significantly more adept at tracking, technology, and analytics and use these tools to develop more sophisticated and adaptable solutions. They are more engaged in all customer service interactions and tend to personalize marketing offers. In short, stronger firm-wide leaders are more engaged in all customer interaction, and seem to have greater competency in what is necessary to be successful today. See a summary table that compares the top performing marketer performance with the balance of marketers (from IBM 2013) below.


For details, read on here: http://www.forbes.com/sites/kimberlywhitler/2013/05/21/what-are-the-biggest-challenges-facing-marketers-according-to-new-ibm-study/

*********************************************************************************************************************************************************** "The 80/20 Rule of Analytics every CMO should know"

With all the talk about Big Data and Predictive Analytics – both of which involve complex, advanced skills and tools, driving millions of dollars in marketing – it is hard to believe in the power of simple analytics.

The truth, however, is that only 20-30% of the decisions really need the use of advanced techniques like predictive analytics. Seventy to eighty percent of marketing decisions can be judiciously addressed with simple analytics techniques, which can be learned by any marketer and executed on an Excel spreadsheet.
For the benefits of data analytics simplicity, read on here: http://www.forbes.com/sites/piyankajain/2013/05/26/the-8020-rule-of-analytics-every-cmo-should-know/

*********************************************************************************************************************************************************** "Here's How To Build A Win-Win Networking Relationship"

Here is a business-building rule of thumb: Don’t waste your time networking if you are not prepared to develop win-win relationships. Trust me when I say, I know what I’m talking about.

I am the organizer of a local business organization with a membership of over 400 self-employed women. I was shocked when I learned that most of the members attended only one or two meetings and then did not return. When I sent out a survey asking why they stopped, the majority replied that it was because they had not gotten any business.

Hadn’t gotten any business! Were they kidding me? They expected people to buy what they are offering after only a couple of visits? Hadn’t they heard that potential clients/customers need time to get to know, like and trust you? What happened to building win-win relationships?

Here’s my advice: If you aren’t networking for the long haul then don’t bother networking at all. Frankly, you are wasting your energy if you expect instant gratification. Here are five key networking tips that I share with my organization of women entrepreneurs:

1. Understand your target market.
2. Know exactly what you bring to the networking table.
3. What is your networking goal?
4. Networking rule of thumb: Give value to receive value.
5. Follow up promptly to develop and maintain win-win relationships.

For the full article, read on here: http://www.forbes.com/sites/womensmedia/2013/05/21/heres-how-to-build-a-win-win-networking-relationship/

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

LEADERSHIP LESSONS FROM MARGARET THATCHER

Margaret Thatcher, one of the greatest leaders of the 20th century, passed away this week. While a lot has been said and written about her policy, style and personality, not much has been highlighted as lessons to be learned by today’s leadership.

A few years back, after seeing “The Iron Lady”, a semi-biographical film, I was taken by the leadership evolution of the main character. So much so that shortly afterwards I did a good bit of research and discovered that true to the film, Margaret Thatcher had indeed dedicated time to develop her Executive Presence to become the strong leader the public came to know. Ever since, I’ve used her as a prime example of a leader exuding Personal Gravitas, when discussing its importance and development with the next generation of leaders of professional services firms (see also "Where In The World Is The Next Generation Of PSF Partners?" )

I encourage you to take a look at this 2-part interview with Sir Bernard Ingham, Margaret Thatcher's chief press secretary, and note the difference between charisma and gravitas, and the four key characteristics of personal gravitas. Which quality(ies) will you and your leadership team work on developing?





© 2010-2016 Copyright Mira Ilieva-Leonard / iStile All rights reserved

MAKING PROFESSIONAL NETWORKS WORK

Increasing the chances of success of alliance relationships

Over the past several decades, globalization and regulation have forced the creation and development of a multitude of global professional networks a/k/a alliances or associations. Their purpose is to provide a structured framework for independent local firms in different jurisdictions to come together and cost-effectively provide services to clients across borders. While the majority of these networks are found in law and accounting, they also cover industries like tax, insurance, real estate, architecture, etc. Recent research shows that these networks employ more than a million professionals and staff, and have cumulative annual revenues in excess of $200 billion. Throughout the last few years, I’ve personally worked with about a dozen networks across various industries, witnessing both best and worst practices, hence this article.

Whether it’s an extremely well structured network (like the Big 4), or one more loosely organized, for the network to function, its member firms must have shared strategic objectives that lead to strategic value creation, contributing to a feasible venture that can withstand competitive pressure and environmental change. That’s mainly manifested by the members’ ability to receive referrals from other members, the quality and reliability of firms to which they can refer, the potential to attract and of course, retain clients by being able to provide services in other states or countries, as well as the members’ capacity to exchange knowledge that can reduce risks in their own firm's operations, and access to other resources. Clients are in the heart of the member firms. The network’s purpose is to provide a platform to facilitate meeting members’ objectives by offering support like branding, market positioning, technical knowledge, etc.

As with all organizations, their success depends on shared objectives, long-term commitment and collaboration. Professional networks have to work very hard to become and remain successful. According to industry data and my professional experience, the most common challenges for networks are unbalanced relative contribution, differing short term vs. long term priorities, culture clashes, and incompatible styles and objectives of members. And what is the solution?! A reconciliation of at least two sets of the following: business systems, people, cultures and structures, plus added sensitivity to the cultural and environmental specificity of each member.

It makes sense, right? If you think of the leading, well-structured networks, they all share a common brand, business systems and perhaps people and organizational culture (although the latter might not always be the case). So why won’t more organizations adopt this model? Firms often perceive that these networks will impair their strong local brands, threaten the independence of their operations, and require unacceptable levels of data and relationship sharing. In sum, these concerns indicate a lack of trust and an unwillingness to incur additional cost.

Firms will get as much out of their network relationships as they are ready to contribute. Before joining (and during membership tenure), firms must make the cost/benefit analysis, assessing the true cost of the membership, beyond the annual dues, inclusive of the time and resources necessary to assign to the relationship. Firms must keep in mind that network memberships offer them a global development strategy at a fraction of the cost and time necessary to create such a strategy from scratch. They must clearly articulate their strategic objectives and ensure they are in line with the ones of the rest of the members. They must recognize that a network membership is a partnership and for it to work they have to get to know, like and trust their partners, at least the ones who share their strategic growth direction. They must be willing to commit and at the same time work to earn the respect of their partners. They must be prepared to compromise and be patient – networks are long-term commitments.

On the other hand, networks must demonstrate the value of its membership, and work to build and develop a collaborative environment. Many of the collaborative principles outlined in my article “ONE FOR ALL: ALL FOR ONE” are applicable here. Networks must enable relationship building and knowledge sharing. Joint training and development of professionals’ technical and advisory skills are essential. While networks must set clear expectations and contributions, they must recognize and allow for flexibility. Markets and conditions change and so will members’ circumstances. Networks must offer and maintain shared backbone business systems, and request member adoption or compatibility. This is a much less burdensome process today because so many firms are technologically savvy and more willing and able to integrate new systems. Last but not least, networks must take a segmented approach to serving its members. They must assess their capabilities, gauge their involvement interest, and engage them accordingly.

Making professional networks work is a complex process with a multi-party commitment. It can certainly be a worthwhile venture for both the network and its members as long as there are shared objectives, long-term commitment, and collaboration.

© 2010-2013 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

EDELMAN TRUST BAROMETER: WHERE IS THE TRUST

How to go about building and sustaining it?

For over a decade Edelman, one of the largest and independent public relations firms, has been researching and publishing an annual study of the state of global consumer trust. The results have customarily been revealed during an event, called “Edelman’s Trust Breakfast.” Four years ago, while witnessing one of the most disastrous global financial crises, I had the opportunity to attend the event and hear the discoveries of the study first hand. Now, at the dawn of a very public act of distrust - the confession of one of the most celebrated athletes of our time, Lance Armstrong - I am glad to review the recently published study, titled “Crisis of Leadership,” compare it to the study from four years back, and report a few positive trends.

GENERAL FINDINGS
2009: US consumers have generally lost trust in the business sector and especially when it comes to certain industries like banking and automotive. Biotech and technology are the least affected areas due to the idea of innovation and hope that consumers attribute to both of these fields. What that meant to professional services firms (“PSFs”): biotech and technology will most probably experience the highest growth in the upcoming years and we should position our practices / industry groups for that.

2013: Trust free-fall has finally come to a halt; more than that, it is stabilizing and even improving for some countries (Germany, France, UK, France, etc.) While trust is on a rise for institutions – after dips in 2009 and 2012 – the gap in trust between businesses and governments is still significant, with NGO’s and businesses leading the way. Technology remains the most trusted industry sector. While the Automotive industry has been able to regain consumers’ trust since 2009, understandably the Banking and Finance sectors are yet again at the low end of consumer trust barometer. What that means to PSFs: True to my 2009 forecast, organizations should continue to invest in their Technology-focused strategies. Even with the low trust ratings, firms with strong Banking and Finance capabilities should stay close to their Finance clients, many of whom will need help rebuilding their images.

SIZE & LOCATION MATTER
2009: While consumers have lost trust in corporate America, they will be most willing to trust small size and entrepreneurial organizations, because they can get to know the leaders, especially those who are hands-on with the organizations and have direct control over them, and they are overall more transparent. What that meant to PSFs: look for opportunities with emerging small and entrepreneurial organizations.

2013: Small businesses are still trusted more in the West while the big businesses have the upper hand in the emerging markets. Businesses headquartered in the Southern European States and the BRICS are lagging in acquiring consumer trust in comparison to the ones based out the developed countries such as Germany, Sweden, Switzerland, UK, US, and others. What that means to PSFs: Consider how this affects your and clients global development strategy and make the necessary adjustments. Continue to look for opportunities with small and mid-cap clients in the developed economies and align yourself with the leading brands in the emerging ones. Keep in mind that the geographic location where you and your clients conduct business has become even more important.

WHAT INFORMATION SOURCES WOULD CONSUMERS TRUST?
2009: Surprisingly, internet-based information doesn’t appear to be considered as a reliable source as one might believe, even with the younger generation. Market analysts and business articles seem to be some of the most credible sources, though friends and employees follow very closely. What that meant to PSFs: Company websites providing their own information and statements are no longer enough. Include client testimonials and quotes from current and alumni employees in your materials. Give your advocates venues like websites, public events and annual reports to underwrite you.

2013: Trust in media has gone up since 2009, “as a result of diversification of options and strong coverage of scandals.” The older generation (aka decision makers) prefers traditional media in the developed markets; in the emerging ones, trust is evenly spread out across the communication spectrum – from traditional to social media. While trust in CEO’s has increased, consumers continue to consider academics, technical experts and people like themselves as the most credible sources. What that means to PSFs: These are important findings for marketing and communication experts. They should keep them in mind when selecting media delivery channels and spokespeople.

HOW LONG DOES IT TAKE TO MAKE A MESSAGE VISIBLE AND BELIEVABLE?
2009: The marketing communication norm that it takes 3x to communicate a message for it to register is no longer valid. Given the current consumer cynicism it appears it takes closer to 5x for a message to make an impact and to become believable. What that meant to PSFs: increase the frequency and consistency of your messaging. Keep in mind your statements will be questioned, so be clear, precise and consistent.

2013: Consumer skepticism carries on; majority of consumers still need to hear a message between 3-5 times to find it believable. What that means to PSFs: My 2009 prescription is still valid. Pump up the volume. Keep your messaging simple, short and to the point, articulating the value to your clients opposed to solely boasting accomplishments.

HOW DO WE BUILD AND SUSTAIN TRUST AND RELATIONSHIPS?
2009: Trust is fragile and hard to come by today. Reframe your thinking and hone in on the following trust building elements:

Diplomacy - demonstrate your corporate responsibility; take a stand on global issues like regulatory ones; get your leaders out in the community and make sure they are actively involved and offering solutions.

Social responsibility - clients and their customers will be looking for what your organization stands for and how you go about demonstrating that. If being “green” is important to your organization make sure your clients know about it, not only by telling them but also by showing them.

Shared sacrifices – “walk the talk;” communicate to your clients and prospects what your organization is doing to share their burden (i.e. instead of spending on a large client Holiday party make a donation on their behalf, etc.)

Continuous conversation – open two way communication lines with your clients via blogs, intranets, client interviews, etc. More than ever clients would like to share with you their experience, both good and bad, and in order to keep their trust you should be willing to listen and take notes.

The bottom line: service and leadership as well as authenticity and transparency will matter the most in sustaining and building relationships.

2013: The need for organizations to go above and beyond operations to build trust is clear. While this year Edelman has expanded and segmented the trust building attributes into five main components: engagement, integrity, product & services, purpose and operations, my 2009 recommendations listed above remain important and valid. Engage your clients and employees and increase the two way communication. Be transparent and take responsibility for actions. Consistently deliver quality services and exceed clients’ expectations. Shift behavior from “license to operate to license to lead” and embrace a model of inclusive management.

For copies of Edelman’s Trust reports, visit the following website:
http://www.edelman.com/trust-downloads/global-results-2/
http://www.edelman.com/trust/2009/

Portions adapted from the Series "Oldies but Goodies": The Lost Trust (first version published Wednesday March 4, 2009 by Mira Ilieva Leonard, Partner, Creative Growth Group)

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

ONE FOR ALL: ALL FOR ONE

Collaboration: a key ingredient for successful development of professional services organizations?

Earlier in the year, after writing an article about narcissistic behavior in professional services firms (PSF’s), “For the Greater Good or Eat What You Kill”, I promised a piece on the importance of collaboration and the impact it has on the overall development of PSF’s. The subject has been on my mind ever since. Recently though, I experienced a few events which have reinforced my strong belief in the idea. One of them is a meeting with the managing partner of a mid-sized PSF who, much to my pleasant surprise, not only understood the value of collaboration, but was also able to demonstrate the direct and impressive business progress as a result of it. You see, most of the PSF’s I’ve worked with employ the “eat what you kill” mentality. If you’ve read my previous pieces you’d know I believe this mentality has mostly counterproductive effects on the development of PSF’s. My conversation with that managing partner was one of the most positive experiences I’ve had in a while. I can’t help but ask myself what’s different about that firm, its culture and its leadership team that allows them to embrace collaboration and sets them apart from the rest and, in my opinion, makes them “progressive.” That, however, is a different question I’ll leave for another time and perhaps an interview with that managing partner.

Before I move on to the other event that pushed me to write this piece, let me take time to articulate the importance of building a collaborative environment in PSF’s. It encourages learning and development, critical for knowledge-based organizations such as PSF’s, turns knowledge into action, which closes “knowing-doing” gaps, and increases the chances to grow business and succeed in the market place. To elaborate on the latter, PSF’s collaboration provides confidence to existing clients that the firm will provide the necessary resources to support them along with richer ideas and solutions; for new clients, collaboration means a stronger and deeper team and higher chances for both the client and the advisor to identify someone to connect with and build trust, and this builds stronger, better relationships between clients and advisors…after all, people like to work with people who they like and trust. When it comes to client development, collaboration helps alleviate the burdensome stigma of sales. Working as a part of a team makes that experience less onerous, and promotes best practice sharing, while keeping everyone accountable. Those are all significant factors for successful and sustainable business growth.

The merits of collaboration within PSF’s are countless. The real question is how to build and nurture such collaborative spirit. I discovered an answer that supports my hypothesis in the most unusual place. I recently stumbled upon an article in the Scientific American, from July 2012, titled “Why we help,” and this article provided the final push I needed to write this piece. The author, Martin Nowak, a professor of biology and mathematics at Harvard University, argues that contrary to what the majority of us might think of evolution and the “dog-eat-dog” concept of survival as its underpinning, cooperation is the driving force for evolution. Using the game theory paradox called the “Prisoner’s Dilemma,” the scientist runs a number of simulations to identify five mechanisms for the evolution of cooperators: direct reciprocity (the “tit for tat” concept), special selection (neighbors or friends in social network tend to help each other and develop a snowball effect), kin selection (think “The Godfather”), indirect reciprocity (based on reputation and “pay it forward” principle) and lastly, group selection (for the greater good). Nowak draws on a number of examples from the animal kingdom and makes a surprising conclusion that humankind is the most cooperative species, mainly driven by the principle of indirect reciprocity, or reputation and the ability to tout achievements. So, would that mean a bit of narcissistic thinking, boasting and peer pressure is not only healthy, but necessary for evolution and collaboration? Yes and no. The professor employs game theory again, this time a series of games called “Public Goods Games” designed for multiple players, to demonstrate that when in a group environment, even when starting with good intentions, collaboration often fails. Individuals will often act in a manner where self-benefit, rather than group benefit, becomes the individual’s preferred option, ultimately resulting in a loss for everyone. With further experiments, and to save my faith in the goodness of humanity, the author offers a solution to fostering collaboration: people need to be convinced that there’s a real problem threatening them in order to adopt “for the greater good” behavior and also be publicly praised and pressured in line with the reputation principle. One could see this sort of framework helping in many different kinds of situations – from officials trying to solve the European debt crisis or U.S. fiscal cliff negotiations, to any kind of business organization including PSF’s.

In my previous writing I suggested making the system / organization the star to build and foster collaborative environments instead of promoting and rewarding individual performance. Applying the principles articulated in Nowak’s work, I can now expand and prescribe that PSF’s constantly must demonstrate and communicate the importance of growing the organization and the danger of not doing so to the business; become vocal in celebrating client development accomplishments and equally so to learn from failures; and nurture an environment where experimenting with innovative ideas is welcomed.

© 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

Systematic approach to business growth

Is there a quick way to sustainable business growth and organizational development for professional services firms?

I like to challenge my own thinking and so, after writing my last articles, “Creating a Culture of Business Growth” and “For the Greater Good Or Eat What You Kill?” I questioned whether it is necessary to address the full business growth system – strategy, support tools, and skills - in order to make sustainable business growth progress. After all, many firms claim to be successful by focusing on only a select few of those business growth related segments. Or, are they? And how have they defined “success” and more importantly, how will they define it going forward?

The ultimate question comes down to the aspirations of firms and their stakeholders. Are you looking to build organizations for the long run? Or, do you only seek short term success with a measurable self-centered economic benefit? If the latter represents shareholders’ objectives, then the non-systematic, “band-aid” approach - as I call it - might be considered success. However, if the professional services firm leaders are focusing on long term gains, then I am afraid the long and systematic approach to building or enhancing business growth platform is the way to go.

A selective segment approach to business growth might have worked in the past for some firms due to extraordinary external market conditions. Those, blended with the young and entrepreneurial spirit of newly formed organizations often lead to quick success, but is ultimately unsustainable I am afraid. That opportunistic viewpoint takes a linear approach without seeing the full picture, and focuses on a sliver of information and limited events. This approach tends to address symptoms instead of curing problems, identifying trends, and thinking long term. It employs reactive tactics and doesn’t provide fundamental and sustainable systems support to track and measure performance and return on business growth investments. There is no investment in developing skills and sufficient support tools to allow the executioners to utilize the tools that fit them most (“one size fits none” when it comes to business growth tactics) and ultimately, to execute on strategy.

If that’s how you are running your organization, and you consider the last paragraph to be the “right approach” and you do not have strategic long term aspirations then stop reading here. This will be the top of the bell shaped curve for you. Don’t waste your time learning how to develop a systems-based approach to help you build sustainable business growth platform and move your organization up the S - curve.

When I went back to research, looking to rebuff my own systems theory and to find a quick and easy way to help professional services organizations increase the velocity of their business development, one of the sources I reviewed was an old favorite business read: The Fifth Discipline: The Art And Practice Of The Learning Organization. Reading it was yet again an eye opening experience. Instead of rejecting my theory, the book helped me reaffirm that a systematic way of approaching sustainable business growth is necessary. It provided me with answers of why some of the short term linear approach business development projects work briefly, but not in the long term. More than that, the book gave me possible answers for some of the narcissistic behavior I observed in “For the Greater Good or Eat What You Kill?”, which I determined limits change in professional services firms, and I have been so desperately looking to decipher. Most importantly, the book illustrated that a comprehensive approach to business growth spreads beyond the segments allocated to Marketing, Business Development and Sales. To make a significant and sustainable business growth impact, leaders should employ multidisciplinary approach.

In his book, the accomplished Peter M. Senge, draws on extensive management research and experience to argue that the traditional management approach is not optimal and in order for organizations to survive, continuously adapt, innovate products and services, and overall develop, they should strive to become learning organizations. According to the author, the process of building and running learning organizations rests upon five pillars: systems thinking (the cornerstone), personal mastery, mental models, shared vision, and team learning. And while the majority of examples he uses do not come from professional services firms, I am convinced that applying some or all of the principles from the learning organization model will help firms manage many the challenges they face, and especially the ones related to business growing.

“Systems thinking is both more challenging and more promising than our normal ways of dealing with problems,” says Senge. I agree. It is about seeing the whole, interrelationships and processes. It helps executives absorb increased amount of information, manage complexity and accelerate change. In business growth terms, it clarifies why when marketing is creating powerful lead generation campaigns, there will be limited if any business growth results if the professionals (or the sales force) are not equipped with the necessary advisory skills, sufficient tools and the system to turn those leads into actual business; why when the professionals bring in new clients, these clients will consider such work commodity and as soon as another service provider comes along with a better value offer they’ll be ready to jump ship, if the organization is not ready to commit the resources to support the new clients beyond technical solutions to build strong relationships and loyalty.

Here is another example of the importance of systems thinking which will resonate with most leaders of professional services organizations. If a firm doesn’t pursue business growth and provide opportunities for growth for its junior professionals (directors, associates, etc.), after a period of time it faces high chances of losing its talent, which it has invested in developing over the years. The question often asked is: do we invest in attracting, developing and retaining new talent (HR), or do we invest in building a solid business growth engine (Marketing / BD) to provide for business continuity. I’d argue that the real questions here are how to balance those two processes, and what are the forces that increase or decrease their progression.

To adopt a systems thinking method, the author recommends that executives start to approach problems by identifying the source of the issues: what’s the core, not the symptom; the forces that support accelerating or decline growth processes, and the sources that would bring stability and resistance, as well as identifying organizational behavior patterns limiting growth, shifting the burden of blame, and others. I would recommend that firm leaders do the same to build and manage sustainable business development platform.

Mind that, as the name of this principle implies, this is not a one-time event. A comprehensive and systematic approach to organizational development and business growth today must be constantly monitored and calibrated, as a slight adjustment of one segment might skew another. To use an already mentioned example, a series of successful marketing campaigns might generate extraordinary amount of sales leads, which the organization, this time manages to convert in new projects, albeit scarce capacity of execution resources. If the capacity issue is not addressed, in the long run professionals will resist further marketing initiatives of fear of overload. I’ve witnessed a multitude of such vicious circles and how liner approach might bring a short term relief, but not long term solutions. As you see, employing such systems thinking is critical for firms.

The rest of the disciplines of learning organizations outlined in the book are easily discarded by most firms because they are considered soft, hard to measure, and often threaten the established order. Each of them however offers important supplement to the systems thinking principal and are critical for building strong organizations. Before dismissing them, I'd encourage professional services leaders to consider application to their firms, especially the ones of mental models, which among other things, explains why change management exercises and introduction to new business growth systems and programs might fall short of success, and the team learning one, which casts light on what's behind the “narcissistic behavior” of professional services organizations, ultimately limiting their growth. Contact me for a full copy of this article, articulating the value of all the principals of learning organizations and their function in professional services environment.

Pressured by economic forces and the evolving model of the professional services industry, firms’ leadership should consider innovative management frameworks. A systematic way of approaching professional services organizations is necessary for their survival, it is critical for their business growth, and inevitable as we live in environment moving towards systematic interconnected sharing culture - open source, social networks, etc. To develop a long term sustainable business growth platforms, firms should learn to utilize such comprehensive approach. They should avoid the temptation to employ quick, short term solutions, addressing individual segments (strategy – systems – skills) of the business growth platform and think how specific changes will impact the entire platform and organization.

Special thanks to the author of “The Fifth Discipline: The Art And Practice Of The Learning Organization” for his extensive research, insight and clearly articulated management frameworks. I would encourage the leaders of professional service firms to pick up a copy of the book and think about applying the principles of the learning organization, beyond the points outlined above.

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

Enhancing Business Growth Planning For Superior Results

Learn from past growth strategies and close knowing-doing gaps to achieve your business goals

As a new year approaches, most organizations prepare to set their goals for 2013 and draft Marketing and Business Development plans to reflect their renewed aspirations. Progressive organizations ensure that part of that process involves performance evaluation of past plans and close appraisal of what has worked, what hasn’t, and most importantly, why or why not. Let’s focus on the latter as in my experience it is the most constructive part of this practice. To make intelligent and educated decisions about future growth strategies, one must first evaluate the success or failure of past ones by questioning the entire strategy development and delivery chain – from the viability of the adopted strategy, to the selected support tactics and their implementation. Judging end results only is short-sighted, unproductive and insufficient. “It didn’t work - let’s discard it and move on”: it is certainly the easiest and fastest approach to strategy review, and no blame is attached. While there is something to be said about this quick, back of the envelope exercise, I would encourage professionals to dedicate time to go through a thorough cost-benefit analysis, employing objective and tangible metrics.

In doing so, and prior to drafting a sound future business growth plan, there are a number of key questions one must answer. I’d recommend starting with the strategy itself. Was the growth strategy feasible? Had the organization dedicated the necessary resources and time to properly execute it? Had the organization allowed enough flexibility in the strategy for it to absorb sudden and unavoidable internal and external changes? A critical strategy development criterion is that a strategy is viable and consistent with the internal characteristics of the organization (structure, systems, people and culture), as well as supported by the necessary financial and human resources. These questions here are critical regardless of the outcome of the strategy as their answers provide learning points and a platform to develop not only enhanced future growth strategy, but also other key segments of the organization.

Once the strategy is evaluated, consider whether the firm’s tactics had supported the strategy. Had the organization utilized the proper mix and balance of tactics such as general awareness building (branding, PR), engagement (social media), thought leadership (articles, surveys), and targeted relationship building? What is the ROI on the various initiatives and at what level should the organization continue to invest in them, if at all? The second question begs another more fundamental question: does the organization have the proper measuring mechanisms in place to help executives evaluate the effectiveness of the business growth strategy? Have you ever heard the popular saying “You Can't Manage What You Don't Measure”? It is very true and important in determining the efficiency of the business growth platforms employed. The “new normal,” dictated by economic uncertainty and tighter financial margins, no longer allows professional services executives to make decisions on soft and anecdotal data. Today, if an organization is not equipped with systems to track and measure performance tied to certain financial commitments, the leadership team will struggle to justify business growth spending and obtain budget approvals.

Last but not least, consider what percentage of the past business growth plans had been put in action. The chances are there is a substantial gap between the plan and practice. The “80 / 20 rule” rears its ugly head: unfortunately, most firms see 80 percent planning and 20 percent doing. Because this is where “the rubber hits the road” I would encourage professional services organizations and their executives to ponder the reasons for such discrepancy and look for ways to bridge or decrease the plan–do gap. One of the most frequently encountered reasons for such disconnect in the professional services market is the mismatch between the organizational / professionals’ strengths and weaknesses with the selected strategy delivery tactics. This is something easily amendable but often underestimated. Organizations and professionals have different inclinations and strengths when it comes to business growth; firms must foster and leverage those with well aligned tactics instead of introducing uncomfortable ones, leading to resistance and avoidance of plan implementation.

Other reasons attributable to the lack of action and the development of “the knowing – doing gap” deal with timing (talk happens immediately and actions, leading to results, much later), organizational culture (unconditional acceptance of implicit and inherited mental models), management practices and compensation models. The latter two, especially when expressed by fear inducing management and internal competition policies, are often mistaken for motivation and drivers of action. Organizational development research shows the contrary. Organizations which build and nurture a collaborative environment (not internal competitive one) manage to turn knowledge into action, share best practices and drive growth at a sustainable and fast pace. So, when examining what’s inhibiting implementation of past business growth plans and overall, the organization, reflect on the factors outlined above and most importantly, take immediate actions to close the know-do gaps.

To ensure that a comprehensive overview of past business growth strategies is complete and productive I would recommend that executives identify and address at least 3 points for improvement, perhaps one of each of the stages outlined: strategy, tactics and delivery. Once equipped with the knowledge obtained from the review process the team can then develop a new, and improved, strategic business growth plan. Good luck!

© 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

GAMIFICATION FOR PROFESSIONAL SERVICES FIRMS

What Professional Services Firms can learn from the on-line gaming industry when it comes to retaining and growing client relationships

It may appear that the on-line gaming and professional services industries do not have much, if anything, in common. However, when it comes to attracting and retaining clients, professional services firms can apply the main principles behind the concept of “gamification” (“applying gaming principles to non-game applications and processes, in order to encourage people to adopt them, or to influence how they are used” according to Wikipedia). In fact, such a strategy might be just what that industry needs today to build and preserve client relationships and alleviate pressures related to cost, quality and overall management.

Let me outline some of the gamification principles, and my recommended applications to professional services firms, as discussed during a recent event held by the American Chamber of Commerce in Luxembourg titled: “Game on! Business Growth Lessons from the Gaming Revolution.”

Competence This principle helps define the ultimate objective then breaks it down into long-term and short-term goals and actionable tasks (or “levels,” in gaming language). Projects serviced by professional services firms are very often complex and require long sales cycles. Professional service firms might consider breaking the big monster of a project into smaller, less cost-prohibitive, less risky and easily digestible phases. This will help avoid getting stuck in the complex services buying decision making process, chasing multiple decision makers and sourcing from various budgets to launch the project. Once in progress, this approach will also help with the project management of the assignment.

Engagement Gamers see this principle in action by the constant and helpful communication with game providers…“helpful” being the operative word here. How are you, professional service providers, engaging your prospects and clients? How is the content you share with them of value to them (not you)? Does it educate them and help them remove frustration? Professional services firms are becoming content producing machines. In fact, I frequently ask my clients (law, accounting, advisory firms, etc.) whether they consider themselves in the information dissemination business. What business are you in? If the thought leadership materials you share with your prospects and clients don’t provide insights and answer “so what,” then you are, and you are at risk of losing their interest.

Flow This principle is closely connected to the “engagement” one and in gaming terms “being in the flow” means moving onwards in the game. Gaming companies facilitate this process by educating gamers on how to overcome challenges by providing tips and encouraging them to move on to the next level. Professional service providers often struggle to recognize when there is a gap between clients’ expectations and their processes and deliverables. One way to avoid falling in that trap is to apply “in the flow” gaming principles. Firms can do so by educating clients of their client “on-boarding” and project management processes, setting the right expectations and constantly communicating project progress. The latter is so simple and important and yet is so frequently underestimated and rarely performed. Professional service providers should also constantly consider how to innovate services and re-engineer their service delivery methodology to keep their clients “in the flow” and set themselves apart from the competition.

Autonomy As it implies, in the gaming world the principle of autonomy is the process of empowering gamers to select the pre-defined by the game paths to follow. I have often said “one size fits none” when it comes to professional services firms, their professionals, and their clients. Professional service firms should embrace this principle of guided experience and when possible, give clients options by providing several alternatives that would solve the clients’ problems, the benefits and consequences of each, and let them decide which one to take. The client’s involvement in the decision making process increases the client’s sense of ownership, and the likelihood of long term success of the project. After all, people feel much more strongly about the choices they make opposed to the ones made by others on their behalf.

Relatedness This principle of communities of like-minded individuals going through a shared experience is very powerful and explicit in the gaming industry. Players team up usually in a virtual world online, to achieve shared objectives and create opportunities for mutual benefit. These ideas are increasingly receiving attention across other industries. Professional services firms have began to apply this principle by creating alumni groups, specialty subjects internal forums, etc. I would recommend that they take this concept to the next level and provide platforms for their clients to connect and learn from each other, and even act as mentors in some cases. Firms will be surprised of the amount of knowledge and the goodwill they will build and receive from their clients.

Feedback Within the games, players typically strive for awards and achievements, while the game makers repeatedly ask for customer feedback through reviews. Each side is getting feedback as to how they are playing the game (or the quality of the game being provided). This is the feedback principle. And, it provides motivation and builds loyalty. Professional services firms have a long way to go to catch up with the gaming and consumer product industries when it comes to implementing and utilizing feedback mechanisms. Most firms are not comfortable to even distribute basic client satisfaction surveys because of their fear of negative feedback. This is no longer acceptable, especially given the current ominous economic environment. The American Bar Association Journal recently shared a survey outlining the top four reasons clients have left law firms over the last year: cost, lack of expertise, poor service and departure of key professionals. Professional services firms are missing huge opportunities to retain clients and build stronger relationships. They should get in-front of their clients before it is too late, listen and take actions to remedy negative points.

Many professional service firms are becoming dinosaurs because they are not adapting to a more competitive environment by implementing basic customer satisfaction and client retention principles. It is interesting to see how the progressive firms are re-engineering their business models to move onwards, and equally disturbing to watch other firms continue to ignore reality and fall even further behind. I hope my thoughts will provide more than just wishful thinking, but also strike a chord and encourage action. Which one of the above principles will you adopt today?

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

Where In The World Is The Next Generation Of PSF Partners?

Now that I've committed to make time for thought leadership, I am launching a special series: "Oldies but Goodies". It brings back some of my favorite pieces I've written throughout the years that are still relevant today. Enjoy!

March 2010 USA

You know how there are some people that you just can’t help but notice when they walk in a room? They tend to carry a certain air of gravitas, walk taller, speak louder (not shouting) with confidence and command immediate respect – present themselves as a proper executive. Where are these people now? I see fewer and fewer of them in the professional circles these days and most tend to be of what I’d call “old school”. Is the notion of “executive presence” extinct? And if that’s the case, what will the next generation of leadership look like?

Executive presence has always been an unwritten requirement for advancement in a professional services firm. But, now it may be unwritten, unspoken and unnoticed altogether. Living in a quick service society, especially in the US, the younger professionals we work with today appear to approach their professional life and how they present themselves in an extremely casual way. It starts with the way they dress, their preferred methods of communication and language, and most importantly, their pride-in-presentation and confidence (or the lack of both). Is this a function of the Millennium, Gen X, Y, Z (can’t keep track of them anymore) overall breeding or something else? Does this mean that the next wave of Managing Directors will text message their teams and clients instead of writing letters or meeting in-person, change the dress code to “no jacket required” at all times, and…?

Call me old fashioned, but I believe we should bring “executive presence”- and the professionalism it implies - back. We need to groom the next generation of leadership so that they are not only a generation of competent technicians but also advisors that capture their clients’ and colleagues’ confidence. I am glad to report that I am not the only one who has noticed this disturbing trend. Managing Partners and Directors are increasingly bringing the matter up during our conversations on how to elevate their professional force and make them better advisors, client cultivators and leaders. And, it all starts with executive presence. So, what do we do about it? In my experience it takes work on both sides of the equation – current and future leadership – to make a real impact. Here’s what I’ve seen work and might stimulate thinking:

Confidence comes with knowing what one stands for and having the internal strength (ego) to defend that position. Managing partners need to encourage their fresh workforce to start identifying specializations and define their professional claim to fame early in their careers. Professionals who know what they are or aspire to be “famous for” tend to carry themselves with a higher degree of confidence. Up and coming partners need to find the balance between improving their technical skills while serving senior partners and navigating internal politics. A lot of this has to do with the ability to establish and maintain peer-to-peer rapport – both with clients and colleagues – and to assert ones’ point of view with conviction yet patience and poise. Be mindful of each interaction and prepare ahead of time. I often hear from our younger clients that they tend to step back and let the senior professionals run meetings. While that’s most natural because the senior professionals most likely have the experience and perhaps the client relationship, I always encourage them to step up. It starts with a brief conversation with the rest of the colleagues ahead of time defining each one’s role during the meeting. Senior partners need to allow the junior partners equal “airtime”, encourage them to participate if not lead the meeting, become mentors and think of how this sharing of airtime supports the succession of the firm’s leadership and sustenance of its value.

Professional service providers are hired by clients for their advisory and leadership skills. Clients look for outside help, a comprehensive view of the situation and direction on how to go about solving a problem, hence leadership influence. And, in order to get a full view of the situation, professionals ought to understand it first and even before that earn the trust of their colleagues and clients so as to gain a better understanding. The latter takes time and patience which is not something junior professionals have in abundance. Yet, there are ways to get there – put oneself in place of the person across the table from you, listen actively and genuinely, demonstrate emotional intelligence. Remember the person I mentioned earlier in this article? The one that everyone notices when he or she walks in the room? That person can be either a completely arrogant jerk or someone that everyone’s attracted to because of the friendly and reasonable nature of his or her personality. Be the latter one! Radiate positive charisma and you’ll be able to lead both colleagues and clients.

So far, I’ve spoken only of what takes place between the ears of young professionals. How a professional’s thinking manifests in verbal and physical presence is equally important. I was recently in Europe for client visits and was reminded of all the small, external items that add up to make an impact. Most of the professionals I met had excellent command of their tone and language (mind you, they spoke at least three languages each), were always dressed a level up (even in casual situations) and seemed genuinely interested in conversations (made eye contact and smiled). It certainly made me feel I was working with an extremely high caliber of professionals – I am sure their colleagues and clients feel the same way as well. So, dear junior professionals, pay close attention to how you dress and carry yourself. If you’d like to move up to the next level in your career, distance yourself from the current casual fad. Communicate in a crisp and concise manner – sometimes, even, face to face rather than by Twitter - dress up (even on casual Friday’s) and build up the internal confidence to embrace stillness and eye contact.

Is there something to this or do we need not worry about executive presence? Is the power of a quick serve cultural trend too strong to overcome? Even if that’s the case, perhaps that allows you more opportunity - dear future leadership – to dramatically stand above your casual crowd of competitors – with a level of professionalism in thought, words and appearance that allows you to claim impact and influence.

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

For the greater good or eat what you kill?

My reflection on what's influencing human behavior in professional services firms...

I love professional services organizations. I’ve dedicated my professional career to working IN or ON professional services organizations. They employ highly educated and accomplished professionals: some of the brightest people I’ve ever encountered, whom I look up to and learn from… that’s the reason I am fascinated by them.

The recent collapse of Dewey & LeBoeuf brought up a question I’ve been struggling throughout the years: why is it that smart organizations fail or can’t seem to advance beyond a certain point or at a faster pace?

Timing is an interesting thing. I was rereading some of Malcolm Gladwell’s articles for the New Yorker magazine, when I ran into the “Talent Myth,” which contains his observations on talent and organizations. I need to open a bracket here and thank Gladwell for his brilliant research and writing. I can only aspire one day to be half as articulate and elegant in presenting my thoughts as he is. In his piece, Gladwell talks about “narcissistic organization” and among many other sources draws upon an essay, written by Robert Hogan, Robert Raskin, and Dan Fazzini called "The Dark Side of Charisma.” Both the essay and Gladwell’s article talk about three types of managers, whom on the surface seem like the perfect leaders but when studied closer represent real danger to organizations. The authors refer to them as the “High Likability Floater”, the “Homme de Ressentiment” and the “Narcissist.” The latter one grabbed my attention. The authors define narcissists as ones who “resist accepting suggestions, thinking it will make them appear weak, and they don't believe that others have anything useful to tell them.” “Narcissists are biased to take more credit for success than is legitimate and are biased to avoid acknowledging responsibility for their failures and shortcomings for the same reasons that they claim more success than is their due." If organizations and management profiling is of interest, I’d highly recommend that you look up the sources of my inspiration and read more.

Is this narcissistic behavior self-confidence gone bad? After all, confidence is expected from professional service provides, who are hired for their breath and depth of expertise and experience and a level of certitude to comfort clients is natural. I am afraid it’s much more, as narcissistic managers are not only limiting themselves and ignoring new ideas and better ways of doing business, but also fuel negative performance across the firm, especially with the impressionable next generation of leaders and encourages more of the same…a vicious circle. In business development terms, as that's my domain, narcissist managers are the ones who go to market alone, have it all figured out, don’t need the firm’s support with content or connections, and would never admit that a failure might be due to some of their actions. Sound familiar?

Is this my answer? Would such narcissistic behavior be so powerful to lead professional services organizations to ignore toxic conduct and spiral downwards? In the past, I’ve always argued that the compensation model of professional services organizations was feeding the constant pull towards “eat what you kill” mentality instead of fostering a spirit of “for the greater good” – this is what often holds back firms. It now appears that might not be the only reason. The narcissist factor, let’s call it that, would also explain why the business growth skills programs so many professional services firms run have limited and short spanned success. If my answer to why intelligent organizations such as professional services firms fail or get stuck is a combination of the typical compensation model and narcissistic behavior, then what’s the solution?

In full disclosure, I am an admirer of Adam Smith and believe that society and organizations should encourage and compensate those who are willing to take on higher risks, work harder and come up with and implement extraordinary ideas. At the same time, I recognize that when encouraged, or rather when unharnessed by a positive common goal, such actions can lead to destruction. This in essence is the fundamental issue at hand here. Professional services organizations are complex networks of brilliant people, many of whom display narcissistic behavior which is often magnified by the firm’s compensation models. When these organizations are disconnected due to the lack of common strategic goals and systems, they crumble.

When talking about growing professional services firms I emphasize the importance of strategy, systems and skills. It now appears those are vital beyond business growth – their alignment is not only necessary for the development of organizations, but for the organizations’ survival. Firms who strive to endure and moreover, move forward at a significant velocity, should focus on the system not the individual superstar performance. One size fits none. Goals and systems are diverse and vary from one professional services organization to another. However, in the long term, none of this will work if the organization is not working towards a firm-based, common goal which benefits the firm as a whole rather than the individual performer. And, this culture must originate with the leadership team. When it comes to business growth, organizations should encourage and reward collaborative approach, which provides for learning, best practice sharing, better solutions design and a team client approach…for the greater good.

I will elaborate on the merits of collaborative business growth approach in my next post…”one for all - all for one.”

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