Passion, People and Principles
In my forthcoming book (STRATEGY AND THE FAT SMOKER), I revisit the “One-firm Firms” that I first wrote about in 1985.
It’s one of the few articles I have ever written that actually names the names of specific firms. Normally, I try to avoid doing that, because I don’t want to be accused of playing favorites.
However, people might be interested in how I came up with the list of specific firms to write about.
Back then, I went to every firm I was working with and asked “Who’s number two to YOU? I know YOU’RE the best, but – apart from yourselves, who do is the best managed firm in your industry?” I wanted to see if, ego apart, there would be a consensus within each industry as to who the leading firm was.
In some (not all) industries / professions, there was indeed a consensus or close to one. The same firms kept getting named again and again. They were (back then):
McKinsey in strategy consulting
Hewitt Associates in HR consulting
Goldman Sachs in Investment Banking
Arthur Andersen (now Accenture) in accounting-based consulting services
Latham and Watkins in law.
Note that my point is NOT that these were my nominations as best firms, but that the choices of those who had to compete with them.
Some of these firms have preserved their reputations in the eyes of their rivals, some not.
My question to you-all out there. Can we try to repeat the experiment on-line? In YOUR industry, who – apart from your own firm – would you nominate as the best managed firm in your industry? Who should we be looking to for lessons in how to manage a professional business?
Most new business books are first published in hardback, and then only in paperback about six months to a year later.
What do you think the pros and cons of this choice are? Is a hardback better for image? Does it give an author two chances to promote a “new” book (like promoting the release of a movie on DVD three months after theatrical release.)
What say you all?
For me, one of the things that decided me about self-publishing was the combination of Print On Demand (POD) services and online bookstores such as 1800CEOREAD (a business bookstore that has been very supportive of my books), Amazon.com and BarnesandNoble.com.
I had known about the bookstores, of course, but POD was new to me. It’s amazing the services that such places can offer. I’m going with LightningSource.com, which was highly recommended to me.
They will not only print books in any quantity, but also offer an order fulfillment service. All I have to is send them any orders I receive, and they take of things from there. No inventory, no fuss, no muss.
They also automatically list your book with Amazon and — and this is a big plus — with Ingram, which is the overwhelmingly dominant wholesaler (book channel) to the entire (bricks and mortar) bookselling industry. They can also sell my book as an ebook.
Fees to get started (ie to register the book) are minimal, so it’s very easy to get going!
I know I’m still going to have to do a lot of marketing, but it’s exciting to see that the actual production and distribution of the book should be very simple to manage. (At least, it appears so!)
post # 415 — August 13, 2007 — a General post
In this episode, entitled Experts vs Advisors, we’re going to dig deeper into what it feels like to be the buyer of professional services. There are two ways that sellers come across in marketing their profession. They are either seen as being interested in the prospective client, their needs and the best solution for them or they are seen as interested in the transaction itself and the cash that goes with it. It’s obvious which would lend the most to creating a trusting relationship, but often convincing the buyer that the care and interest is genuine is the true test. We will look into the best ways for you to think in order to put this care and interest across to your prospective client.
Audio Timeline
00:39 — Introduction
00:45 — The seller in the eyes of the buyer: Interested in the buyer vs. interest in the cash
02:28 — Convincing the buyer that you care about them
03:39 – Conclusion
04:21 – Special announcement: Forthcoming Book and DVD offer
You can download Experts vs Advisors or sign up to receive new Maister Moments videos automatically with iTunes or other video players. (Click here for step-by-step instructions on how to subscribe.) My seminars are always available for download at no cost.
A key resource, and a great starting point for those considering self publishing is Morris Rosenthal.
He wrote the book on the subject (self published of course.)
He also has an ongoing blog, informative and entertaining, where he addresses new and up-to-date questions.
(He’s also a nice and helpful guy!)
This is one of my regular posts based on my forthcoming book STRTATEGY AND THE FAT SMOKER (available in late October or early November.)
The core argument of the book is that, in both business and personal life, we know what to do, why we should do it and how to do it, but that doesn’t mean we do what’s good for us in the long term.
The parallel between the market for business advice and the weight-loss industry fascinates me. We have in most countries a huge industry which basically doesn’t have much to say except “eat less exercize more.” Is there really any difference between Jennie Craig and Weight Watchers except the psychology of the process you voluntarily put yourself in, in order to provide structure to what you know you should be doing anyaway. Why do weight loss books sell so well? Why is everyone looking for the latest fad diet?
And..here’s the punchline.. given the lessons from the weight loss industry, what does that teach you if you’re a manager? A consultant? An employee?
A reader offers this anguished cry:
Given what is happening in my firm these days, I felt compelled to blurt out some observations and questions and see if they resonate with you, or whether your audience would care to comment.
I am part of a firm created in a merger with the assumption that the combined skills of the merged entities would lead to an integrated powerhouse. The idea was that some sort of combined/integrated methodology would emerge and we would operate as an integrated entity.
In the following few years, this is what has occurred:
There is not a single instance where the legacy firms have worked together on an integrated offering, delivered to a client. There have been a few cross-sells, but these have been matters of luck more than skill.
Each legacy firm operates as if the merger has not occurred. My group proceeds semi-autonomously, unable to see the value or need to link to the “other” side of the business. Their specialty rarely enters our discussions. And vice versa — the delivery of their work rarely leads to a discussion with the client CEO about what we can do. We’re like two separate islands.
The cultures of the merged firms could not be more different. One was loose and entrepreneurial, the other was tightly controlled and process driven. People from the latter firm seem to have taken over firm management, so we are drowning in process and layers of account management.
Everyone is unhappy. We are now on our 4 th reorganization.
David, I was wondering: How frequently do firm mergers fail? Why? If the original value proposition of a merger seems sound, then why does it still fail? If the merger is based upon integration and complementarities of offerings/skills, does it make more sense to simply ram a new integrated methodology down everyone’s throats and announce this is the way the new form works, or take an organic approach and hope that a few smart people will make it work and let momentum take over? We tried the organic approach and it has not worked.
David, I send this to you not expecting a reply, not expecting you to post this on your site, but more trying to reach put to someone I trust “virtually†(you!) to unburden myself of the pain this merger has caused me and many others. Thanks for “listening.â€
******
MY reply is this: I first wrote about mergers in my book TRUE PROFESSIONALISM.
The key points I made there were as follows:
“ ‘Alchemy’ mergers are based on the expectation of synergy – the hope that the firm will be able to create something new. However, firms will not do so merely by bringing these (different) specialists in-house (whether through merger or hiring). The key added-value (from the client’s perspective) will be the ability to design, coordinate and integrate a variety of diverse specialists. This will place significant stress on firms, as well as challenge their abilities to manage a completely different beast than the one they are used to.
“Another way to think about this is to recognize that on complex transactions, clients need a “prime contractor†who will take responsibility for the total job, including the management, coordination and integration of a variety of technical discipline specialists needed to take care of the various detailed issues (managerial, accounting, legal, financial, consulting, business strategy, and so on.) The question, then, is who credibly possesses the project management skills essential to be the prime contractor?
“Many firms have merged or acquired their way to bringing multiple specialists in-house. Few have convinced the market that they have created (and can manage) a seamless, integrated service.â€
So, for me, the answer to the core question posed by the reader is clear. Unless you have a clear formula for creating the new, truly integrated service, don’t combine the firms. It’s combined services that appeal to clients, not combined firms. And, of course, creating something truly new and valuable is incredibly hard unless it’s pursued with passion by the people inside the firm who want to be part of something different. (Which doesn’t seem to be the case here.)
It’s not about “ramming a new methodology†down everybody’s throats. That won’t create the energetic innovation that will produce what clients want. A better approach is to form a special unit that dedicates itself solely to the integrated approach (being protected from short-term economic pressures while it does so), so that they can dveloep and market test the theoretical synergy. If it survives the market test (clients actually pay for it and like it) then you can roll it out.
But, as always, that takes patience. And one thing recently merged firms rarely have is patience. (The Fat Smoker Principle Strikes again: we don’t want to incur short term discomfort to get where we want to be tomorrow.)
As I have previously reported on this blog, I am going to be self-publishing my new book STRATEGY AND THE FAT SMOKER, an integrated collection of the articles I have written over the past two years or so.
The decision to self-publish always raises questions among friends, and they often ask why I have decided to go this route. They worry — on my behalf — that people might get the wrong idea that regular book publishers no longer want to publish my books. I have no idea if the risk of that is real, but it’s a risk I’m prepared to take.
Ask any business author who has published a book what the experience was like: for the vast majority, the horror stories are endless.
Basically, publishers don’t actually add any value. Yes, they can edit a manuscript and get a book typeset, but both of those things are freely available as stand-alone services to anyone.
Publishers, like record companies, would be incredibly valuable if they marketed your book for you — most authors can use all the marketing help they can get. But just like the record business, the truth is that publishers don’t do any marketing for you unless you’re already a star. Since so few books succeed, it’s not worth them spending anything on an individual book: they put a portfolio of product out there and wait to see what succeeds.
So, as every author knows, you have to do our own marketing: hire your own PR at your own expense, etc.
In the old days, the publishers (again, like the record companies) could get away with this because they controlled access to distribution — your book would not be stocked in the big chainstores unless it was published by a “name†house.
That may still be true, but today you can get your book easily listed on Amazon, Barnes &Noble.com and 1800CEOREAD, and reach a high percentage of business book buyers. I don’t know the percentages, but apart from airports, I don’t know many business-book buyers who cruise bookstores. And — here’s my point — my publisher never got my books into airports anyway.
(BTW, I’m not saying they were worse than anyone else — I’m saying they were no better.)
So, the adventure begins. I’ve been learning a lot about self-publishing, and in future blogposts I’ll tell you about some of the things I’ve learned (and who I’ve learned it from.)
Have any of you been down this self-publishing path?
My forthcoming book, STRATEGY AND THE FAT SMOKER, is an exploration of things we all claim to know, but few of us actually do. For example, many firms claim that what distinguishes their organization is that their people are client centric and act like trusted advisors. However, few of these organizations, when they hire, have programs to select for people who have basic friendship attitudes and skills and few have systematic programs to help their people develop them.
As others have observed (for example, Pfeffer and Sutton in their book HARD FACTS, DANGEROUS HALF-TRUTHS & TOTAL NONSENSE) we should draw upon what we already know from relationships in our personal lives when it comes to understanding business relationships. People and firms often don’t do this. It sometimes seems as if, when they come to work, people leave behind everything they have learned about interacting effectively with others.
If you have an active social circle and people like being with you, the odds are that you will have a significant advantage in learning the skills and habits of business development. If, on the other hand, you’re a social recluse, you will find it more difficult to convince clients to see you as a trusted advisor they wish to work with.
The way most clients choose professionals is essentially identical to the way people choose their friends. They look for professionals who can (a) put them at ease, (b) make them feel comfortable sharing their fears and concerns, (c) inspire trust in their ability to oversee both the client and his transaction, and (d) prove their dependability.
Creating these feelings in others begins with having the correct attitude — a sincere interest in others. However, the outward signs of this genuine caring are often conversational and interpersonal skills.
If you want to win a client’s business, it’s necessary to give the client the chance to talk to you, person to person, about their needs, wishes, and wants. The key is to make it easy and comfortable for the client to share his or her feelings and secrets. In short, if you really want to win a client’s business, you must know how to have a conversation.
Imagine a dinner party conversation. What makes a good conversationalist in such a setting? He or she:
- Has a fresh point of view, but does not try to thrust it upon everyone else
- Speaks politely and respectfully
- Tells good stories to illustrate key points
- Is good at drawing other people’s views out and drawing them into the conversation
- Speaks intelligently on a variety of subjects, but is not afraid to admit areas of ignorance
- Avoids trotting out well-worn arguments or clichés.
- Listens with genuine interest
- Is light-hearted in style, but always respectful of others’ views
All of these conversational skills also apply to effective marketing and selling. You may remember to behave this way at a dinner party, but do your client meetings really meet these criteria? What about your seminars, speeches, articles, blogs, and websites?
Is the tone of your client interactions friendly, inviting the client to chat, to think about ideas and to encourage both sides to get to know each other as people?
Suppose you want to be good at building romance: getting another person to work with you to build a mutually beneficial, mutually supportive relationship. What characteristics would make you good at this? Most of us have discovered that whether it is love, friendship, or work, people respond best when they believe that you are (among other things) considerate, supportive, understanding, and thoughtful.
It’s worth pausing and asking yourself right now: do people think I am considerate, supportive, understanding and thoughtful? Do my friends and acquaintances? Do those I work with? Do those I manage? Do those I serve? If the answer to any of these questions is “no,†then it’s worth asking yourself, “Why not? What’s the problem?â€
The answer is likely to be some variant of the fat smoker syndrome. You know what’s good for you, but it takes attention to a lot of detail today to get the reputation that’s going to benefit you in the future.
A reputation for being supportive, for instance, must be earned through social habits. And to be seen as considerate, you have to be able to remember information that people share about their lives, proving that you listened and paid attention. It also helps to follow up with skillfully phrased questions about what you were told last time you met. The idea is demonstrate concern, not intrusiveness, with a question like, “How did it work out with that guy you met?â€
To be viewed by other people as supportive also takes thought and careful attention to language. It is important to remember that friends don’t judge each other. They don’t evaluate. They don’t point out each other’s weaknesses. Suppose that your friend has a child who is badly behaved. You don’t say, “Your kid is a little horror!†or “You’re raising that kid incorrectly,†even though both statements may be true. Instead, a friend could say something like, “Have you ever thought about doing or saying such and such to little Ashley?â€
Having the ability to respond with the right phrase in real time takes practice, as do all social skills.
As individuals, or as organizations, it is possible to set out to develop friendship skills. However, like all aspects of the fat smoker syndrome, it requires a concerted effort to invest today in building skills (and relationships) that will pay off tomorrow. Unless they are already naturals, relatively few individuals – and even fewer organizations – have the self-discipline to stick with the program. That’s why it’s a successful strategy for those who do.
Do you know of firms that make a competitive advantage out of all this by selecting for and training these attitudes and skills? Can it be done?
post # 410 — July 31, 2007 — a General post
In Marketing to Existing Clients, the 19th episode in my live video and podcast series, we’re going to look at four types of marketing and relative R.O.I. probabilities for each. We will also examine why most professional firms choose the least probable investment for their non-billable time.
Audio Timeline
00:40 — Introduction
01:27 — Investing in existing relationships vs. new sales generation
02:40 — Four places in marketing for non-billable time
03:54 — An R.O.I. comparison of non-billable hours
10:07 — A real world example of the merits of relationship building as non-billable time
14:23 — Why we choose the lowest probability marketing actions
17:19 – Conclusion
You can download Marketing To Existing Clients or sign up to receive new Maister Moments videos automatically with iTunes or other video players. (Click here for step-by-step instructions on how to subscribe.) My seminars are always available for download at no cost.
