Passion, People and Principles
post # 20 — February 21, 2006 — a Managing post
What do you say to someone on your team who is not in compliance with your standards? (for example, he or she doesn’t get involved in marketing, doesn’t treat people with respect, doesn’t show up to meetings on time.) What appeals can you make to them that might tempt them into cooperating?
Here’s a list of possibilities.
- The Personal Request – Do it as a favor to me. I’ll owe you one.
- The Ego Protection Ploy – You’ll look bad in the eyes of others.
- The Team Play Appeal – It’s important to the team.
- The Fun Promise – You’ll enjoy it once you start doing it.
- The Isolation Gambit – You don’t want to be the odd person out.
- The Guilt Plea – You’re a better person than that.
- The Values Volley – It’s consistent with what you believe in.
- The Perspective Point – It will pay off for you in the long run.
- The Have Mercy Message – Other people will suffer if you don’t.
- The Contractual Comeback – You agreed to this when we discussed it.
- The Principle Principle – It’s the right thing to do.
- The Context Framer – When you do this, it has the following consequences for others.
- The Achievement Temptation – You could get good at this if you wanted to.
- The Recognition Response – People will really think highly of you if you do this.
- The Desperation Resort – Do It and We’ll Pay You (We promise.)
Anybody out there have an opinion on which of these work most often? Least often?
Which ones have I forgotten to list?
post # 19 — February 19, 2006 — a Strategy post
Jim Collins’ book Good to Great is now (deservedly) one of the all-time best-selling business books and I think it is essential reading. Collins has just published a follow-up booklet Good to Great in the Social Sector, about governments and non-profits, and reading it has forced me to reflect on the great and not-so-great professional businesses I have seen. (Charlie Ellis, the founder of Greenwich Associates, the financial sector research firm and now at Yale, is writing a book on this topic.)
There are relatively few generally-accepted, consensus nominees for truly great (not just good) professional firms. When I ask people to suggest candidates for this title (other than their own firm) I tend to receive lots of nominations for the usual cast of characters (McKinsey, Goldman Sachs, etc) but rarely detect broad agreement.
People I talk to seem to associate true distinctiveness to particular periods of different firm’s history, i.e. certain eras. There is widespread consensus that Ogilvy & Mather was great in the David Ogilvy years, as was the Leo Burnett agency when the man himself was at the helm. However, without implying any lack of respect for subsequent leaders, the consensus of outsiders doesn’t seem to be that they have been truly distinctive since.
The same might be said of McKinsey. Insiders may know differently, but the outside perspective is that true greatness coincided with the Marvin Bower years. (I’m sure the insiders find this very annoying, if they care at all what outside observers think!) Similar things are said about Goldman Sachs: the glory years, according to the outside perspective were either those when Sidney Weinberg was crafting and sustaining the culture, or when John Weinberg and John Whitehead were transforming the firm. Many observers are watching closely to see if, having gone public, Goldman can sustain the characteristics that made it so admired.
The Great Man or Woman theory of professional firm excellence (if there is any validity to it) could go as follows. True excellence only comes if you find the courage to resist temptations and stay true to your strategies, business vision and principles of operation. If one person with strong convictions can be allowed to lead, consistency in implementing the strategies, vision and principles can be achieved and the firm can become distinctive.
However, the theory might argue, as hard as this first level of individual courage is to achieve (and it is truly hard) it is a yet more monumental achievement to institutionalize a courageous culture that will adhere to strategies, vision and principles through thick and thin. Can guardianship of these things be successfully entrusted to succeeding generations if the next generation does not have a singular leader who enshrines the culture? Can it be achieved by designing processes that are self-sustaining and which correct for deviations when temptations lure individuals or the firm off the chosen path?
I must rush to observe that all this may be nonsense. After all, the focus on specific individuals as creators and sustainers of famous professional firm cultures may just be a misconception created by our desire to find heroes. Firms like McKinsey, Goldman and Ogilvy have all done very well indeed in the years since their original charismatic leaders achieved their fame or notoriety, and the outsiders’ perspective (including my own) may be biased towards wanting to find individuals to celebrate. Jim Collins’ conclusion, in the Good to Great book, is that the great firms have leaders who are ambitious for the firm but who are NOT personally ambitious or in need of the glory.
Since professional firms do not disclose the kind of information that is available on the publicly-held corporations that Jim Collins studied, it’s very hard to be scientific about all this. Even the definition of (or characteristics of) truly distinctive, great firms is hard to provide. For what it’s worth, here are some of my (far-from-final) thoughts.
First, I don’t think you can create a sustainable, ongoing great firm unless there is a broadly-held sense of stewardship, with each partner or senior officer feeling that they do not own the firm in perpetuity, but hold it in trust to be passed on in better shape to the next generation. Anything other than this culture will fail to build an institution that can live on.
Second, most of the candidates I hear about to be identified as great firms are “class acts” – they are classy people driven by principles. They are honorable, noble, idealists who you would trust with your kids or your aged grandparents. Left unobserved, they’ll do the right thing. I don’t think you can build a lasting institution with anything less.
Third, I suspect that there may be more truly great firms among the small-to-midsize firms, but we observers always get tempted to discuss the mega-firms. This may be limiting our definition of what it means to be great – does being truly distinctive mean you have to be big? There may be a lot to learn by changing the focus of our lens.
Finally, I wonder whether a firm has to be at the high-price leading edge of its profession to be deemed to be great? In its prime, and for decades, McDonalds was considered in business circles to be a great firm, but obviously was never high-cuisine or high-price. Is there an equivalent in the professions? Can’t you serve the middle market and be great? Or are we in the professions too snooty to concede this?
If you want to join in the discussion, comment here or send me an email. Points to ponder – who do you think are the truly distinctive professional firms? Who has sustained this distinctiveness through generations of leadership? If you have candidates, how did they pull off this challenging accomplishment?
post # 18 — February 16, 2006 — a Strategy post
I received the following question about the economic structuring of a professional business: ‘Although legally a corporation, our firm is run as a partnership. Each year we pay out all outr profits to the partner/owners. Should we consider retaining our earnings and using an equity plan as part of our compensation plan?’
Equity plans are not traditional among large professional firms, although there is a growing interest in them. Like the professions of accounting and law, most consultants earn their reward from the income they derive while practicing, and not from capital appreciation. In most tax jurisdictions there is little attractiveness in retaining cash inside the firm unless there is a significant, real investment purpose.
There are at least six reasonsthat I have heard for considering an equity plan:
1) The LONG-TERM-THINKING reason. If principals can share in the increasing value of the firm, they may be led into more long-term thinking, and more willing to support long-term firmwide investments. I consider this to be the most powerful reason to have an equity plan.
2) The TAX reason – create a vehicle for firm principals to convert income to capital gains. Naturally, whether this is feasible depends on the jurisdiction in which you operate.
3) The RETENTION reason – create an incentive for valuable people to remain with the firm. Equity is is an effective means of structuring a deferred compensation plan, but it is not the only means to do so.
4) The TEAMWORK reason – create institutional behavior and teamwork. If all principals have a stake in the value of the overall firm, it can be argued that collaboration is more likely. It should be noted that the teamwork effect can be obtained without using equity by structuring a compensation system based on current income (e.g. by tying rewards less to individual results and more to collective firmwide results.)
5) The MOTIVATION FOR JUNIORS reason – by allowing for ownership, ‘partnership’ can be made more attractive. (I find this reason less than compelling: the more reliance is placed upon the equity value of the firm, the harder it will be for juniors to buy in. While the other reasons for an equity plan may be convincing, this one is not.)
6) The SUCCESSION reason- equity allows the current principals to capture the institutional value they create, without “giving it away” to newly admitted owners or partners. In principle, this should encourage the current principals to be more open in admitting new principals, thus promoting the growth and dynamism of the firm.
It is most common to find the use of equity in professional businesses with extensive investments in tools, methodologies, and systems, so that the value rendered to clients is not only the skills of the specific professionals on the job, but also the accumulated wisdom, experience and knowledge of the firm as a whole. This extra value creates a ‘surplus value’ in the firm above and beyond the contributions of individuals, and it is appropriate that this value be captured (and owned) through the use of equity. Therefore, owned firms (particularly those owned in whole or in part by outsiders) tend to offer the more procedural, mature services.
In firms practicing at the creative frontier, where each job is unique, there is less value in the firm itself, and it is hard for anyone to own the firm. Thus, it is most common to find that the elite firms in each profession do not use equity as a primary reward vehicle. If it is used at all, elite firms tend to have an ‘In-and-out-at-book-value’ equity system. New principals buy their shares at book value, and sell (when they depart) also at book-value. While this allows for some capital appreciation (it captures the value of firms investments) it rarely allows for the size of capital gains obtainable in the corporate sector.
Some well-known firms do have equity plans which differ from ‘In-and-out-at-book.’ One prominent firm prices its equity by having a valuation performed by an external valuation companye every year (!) However, it should be noted that valuing a consultiung company is more art than science. External valuation firms usually rely on ‘benchmarking’ value against equivalent firms to arrive at their valuations, but this is difficult in consulting since so few firms are either publicly traded or otherwise have their financials in the public domain.
I am suspicious about those equity plans I have seen which value equity at multiples of revenue (usually close to one times revenue). These create an incentive to grow the firm almost independent of profits, and lead to a diffusion of strategic identity. Even those plans which value equity at multiples of profit (or, more commonly, the average of profits in the latest three years) can lead to more short-term thinking as pressure builds to show short-term profit gains.
I am also nervous about valuations based on discounting future cash flow. The buyer of such stock would already be paying for projected earnings, and would see a return only if profits were to exceed that projected level. Personally, I would be nervous about buying such a stock, whether as an insider or outsider. Too many ownership transitions have been made at a premium of book and have left the remaining firm burdened with excessive debt. I like to say that the existing owners can either make a lot of money (value the stock at full discounted cash-flow value) or they can leave behind a viable institution. They can rarely do both.
For these reasons, I am most comfortable with an equity system which is ‘In-and-out-at-book.’ It allows for the concept of equity, and ensures that the value of firm investments are not lost to individuals but reflected in the stock price. It also makes it easier for new principals to be admitted at a reasonable cost to them without the existing principals having to ‘give away the shop.’ Such systems, in my view, maximize the ongoing viability of the firm.
I would make one final recommendation. Since there is always the chance that the firm will be bought by an outsider, I would include ‘recapture’ provisions in the partnership agreement or terms of incorporation. If a succeeding generation of principals who bought stock at book were to subsequently sell the firm for a market premium, then the past owners should have the right (for say, 5 to 10 years) to participate in that premium.
post # 17 — February 14, 2006 — a Managing post
In case your managing partner is in need of a speech, here’s one I wrote for the leader of a large, national professional firm who asked me what he should say upon his election to the role. (I wrote it more than 10 years ago, and just found it in my files.)
TO: The Partners
FROM: The Managing Partner
SUBJECT: Our Visionary Mission, and our Missionary Vision
Our firm, like our best competitors, is aiming at familiar goals. We want to be the best, and perceived by our clients as such. We want to be innovative, and at the frontier of identifying and responding to the needs of both global and middle market clients. We want to capitalize on the latest technological developments. We want our clients to receive from us an unmatched level of client service.
In addition to all this, we want our firm to be a place that provides professional fulfillment and personal growth opportunities for each and every one of our partners, non-partners and staff. We believe that doing these things will make us one of the most profitable firms in our profession.
Little, if any of this, is new, and little, if any, is much different from our best competitors. If we are to outperform them, what we need is not a better vision, but a better approach to making it happen. We will succeed not by aiming at different targets than our best competitors, but by devising better ways to reach those same targets. We must develop and adhere strictly to sound philosophies: ways of doing business, ways of dealing with our clients, our staff and eachother.
In sum, what we must find agreement on is not our destination, but a way of conducting our affairs. We must design systems to ensure that we are living up to our principles.
In what follows, therefore, I have not attempted to picture what the firm will look like in 5 or 10 years. Rather, I have tried to convey the philosophies I hold about how we should behave as individuals and as a firm. If we follow these principles, we will achieve our goals. If we do not, then we will fail.
As I prepared these thoughts, I have tried to avoid being inspirational. These are the principles I live by, and intend to apply in executing my responsibilities. By sharing these beliefs with you, I am making you a promise that these are the principles I will operate by – and I expect you to hold me accountable for them. If I depart from these principles, let me know – in person, in a letter, or even, if necessary, in an anonymous note. But let me know!
I do not expect that all of you will necessarily agree with everything I have to say. That’s OK, and we should talk about it. But what is here is what I truly believe. You have the right to know where I am coming from, and how I am likely to react when you ask for my views on issues as they arise.
For better or for worse, then, this is what I believe.
On the Role of the Partner
Since clients hire people, not firms, our success will be built a partner at a time. That means that what really matters is not “firm strategies”, but personal career-development strategies for each partner. If, and only if, each partner is finding some way to make himself/herself more valuable on the marketplace each year, then the firm will succeed.
In turn, this means that the role of the firm is to help each individual grow as a professional. The firm exists to help the partners (and staff) succeed, not the other way round. However, it also means that the firm has the right to expect each partner to develop a personal development plan, and to hold that partner accountable for the execution of that plan.
In this profession, the need for personal development is life-long. The minute you begin to cruise, to rely on skills learned last year, that’s the moment you begin your decline. All of us, from the 30-year-old’s to the 60-year old’s must constantly be asking “What new skills can I acquire?”. And the firm has the right to ask that same question of you.
My experience has taught me that success comes not to those who swing for the fences every time at bat, but those who commit themselves to a continuous program of constant improvement, base-hit by base-hit.
There are many ways to make yourself more valuable on the market: intellectual leadership, better client counseling skills, greater ability to run large projects, and so on. But one stands above all else: specialized industry knowledge. Regardless of your discipline, and your command of it, I believe that each and every partner should have one or more industries that they know in depth, to the level that the clients perceive you as up-to-date in their industry as they are. There is no better way, in my view, for each of us to succeed than for every one of us to declare a specific industry specialization.
Partners, in my view, have five key responsibilities, and should expect to be held accountable for all of them. First, and foremost, partners must satisfy their clients, and we should be vigorous in establishing mechanisms which ensure this is happening. Second, partners running engagements are responsible for building skills in themselves and others, for adding to the human capital of the firm. We sell skill and talent, not time. We should devise tracking mechanisms to allow partners to see how well they are fulfilling this responsibility.
Third, partners have a responsibility to contribute to the economic success of the firm by running their engagements profitably, and constantly seeking out ways to improve the economics of their work. We must learn to be efficient in the use of our resources, and vigorous in tracking how well we are using them. Each partner owes us all the responsibility of managing well not only our fee levels, but the costs to the firm in delivering our services.
Fourth, all partners should participate in some way to developing our practice by attracting and winning quality new business that allows us to be in the flow of stretching, learning, growing assignments.
This does not mean just getting more business, it means getting better business, and we should establish procedures to judge not only the volume of our business, but its nature. Our goal should not be to chase any and all new business, but to get more than our fair share of the best business. Being big is not our goal, being best is. When you hear from me, expect to hear more questions about the quality and nature of what you’re doing than how much you are doing.
In the pursuit of quality new business, everyone should play a role. Some will do it directly through selling and proposal efforts, others through writing articles, others through deep involvement with existing clients and their affairs. But each one of us must play some part in the improvement of our practice through attracting interesting, challenging new work.
Last, but not least, every partner has a responsibility to contribute to the success of others. We are a partnership, and not a collection of solo operators (or independent offices) trading under the same brand name. If the firm is to achieve its goal of helping each partner succeed, then we must help eachother. Each partner should be able, each year, to point to some specific contribution to the success of others. This might be bringing in work for others to do, it might be developing methodologies or technical ideas that others can use, it might be transferring your skill to others by coaching. But one way or another, we each must do something if we are to be a firm.
The same requirement to contribute to the success of others should (and will be) applied in judging the success of practice units, offices, and disciplines. Any group that focuses only on its own results and does not help others will not be judged a success.
On Accountability
If someone has accepted a responsibility, and agreed upon a goal, then we should get out of their way and let them do it. None of us should wait to be told what to do, or how to do it. We should expect each of our partners to exercise greater judgment. That doesn’t mean abdication. It means that we should agree on clear goals, and put in place clear accountability (result) tracking systems, and give individuals the freedom and the responsibility to figure out how to get there, giving assistance only when it is asked for. We must not micromanage.
On Rewards
In judging performance, we must be thorough in conducting performance appraisals which focus on non-financial as well as financial objectives, and we must be vigorous in ensuring that each partner receives in-depth feedback, assistance and coaching on performance.
On Management
We do not have room in our firm for people in managerial positions who spend their time on administration. We need managers, but not to play cop or boss. I believe that the job of a manager or practice leader is to help other partners succeed. Management is a responsibility, not a reward. We must not glorify those who occupy “positions”, but choose the person most skilled at managerial duties, and reward them only if they are effective managers.
Managers should be deeply involved in client affairs, not necessarily by being the lead partner on their own engagements, but by spending significant time on client relations with clients of the office, by being a practical source of help on other partners’ assignments, and participating in practice development activities.
Managers should also be deeply involved with the activities of the partners in the office. They should be available to resolve issues, form teams, provide assistance and make it easier for partners to focus on their clients. Managers and other practice leaders should be hassle-absorbers, not hassle creators.
We must devise methods to ensure that our Managers operate in these ways, and truly add value. All of us must be willing to be accountable for performing our respective roles well. If client partners are to be held accountable for their performance (financial and non-financial), the same must be true of those asked to accept managerial responsibilities.
On Clients and What They Want
I believe that clients can make few distinctions on the technical capabilities of the best firms, and place great emphasis on the ability of the individual partner to enter their world, relate to them in their language, talk to them about their business. We will never succeed by being technicians alone, no matter how high our level of technical skill. Clients want us to know their business. They want us to be interested in them.
On My Style
I like to be decisive. I have learned that we can often live with a bad decision, but we are certain to be hurt by no decision. I am willing to take risks, and to encourage and reward risk-taking. Call me on that if I depart from it.
I like to ask “What new things have you tried lately?” – only by trying new things will we get better.
I like to be consultative. That doesn’t mean unanimity, or even consensus. It means soliciting views, asking a lot of questions, and then deciding. I like to hear other people’s opinions. Don’t let me behave any other way.
I don’t like to launch things that I’m not prepared to follow through on. If I’m involved on an initiative, expect me to monitor it carefully – and let me know if I don’t. I don’t make promises I can’t keep – you should fire me if I don’t live up to that promise..
I like to be straight and tell the truth, and I like to be told the truth. I want to hear the bad news, if there is any, and I want to hear it early enough for me to try to help, and do something about it. Life’s too short for politics and games playing.
I believe in extensive communications between management and partners, in both directions. This will mean meeting with clients and partners frequently. Keep me honest on this one, and let me know if what I’m doing is insufficient.
Summary
That’s not all I believe, but it’s enough for now. I hope you found these thoughts of interest, and of help. If not, well then,….yes, you’ve got it. Let me know!
So, that’s the speech I suggested he make. (Of course, he never did.) What speech components do YOU think new managing partners should include?
post # 16 — February 11, 2006 — a Careers post
I keep meeting (and getting emails from) people asking whether or not I would advise them to stay with firms that operate on principles contrary to those they believe in. I have written and spoken about this before, but I’ll elaborate here because I plan to make a full length article of this one day. As always, I eagerly solicit reactions.
Albert O. Hirschman wrote a very famous book called Exit Voice and Loyalty, (Harvard University Press, 1970) basically saying that an individual has three choices – quit, speak out, or go along.
I can’t say what’s right for everyone, because I don’t know how much people are prepared to sacrifice and how hard they are prepared to work for what they want. If I don’t think the organization I am in acts on principles I believe in, I’ll vote for exit every time, because speaking out will get you killed and loyalty to something you view with distaste is not something anyone should be prepared to do with their life.
Would I ever do it? Sure, if staying with the terrible environment will actually help me get somewhere that I can’t get to any other way, I’ll do my time. (Remember, I spent three years getting a doctorate. I know what serving an apprenticeship and a rite of passage is like!) But it better be for a finite amount of time with a clear, certain light at the end of the tunnel.
If your short term is crucial to you, you have to just suck it up and take it. You’re never going to change an individual who’s your boss, let alone a firm culture. So, if you want the rewards they offer (and they can be pretty tempting) then stop complaining about the choice you made, and live out your devil’s contract.
Or, you can say “I don’t care what it costs me in short term inconvenience, but I’m out of here. I’m fed up participating in conversations with my peers about how miserable we all are and trying to figure out much cash in the bank is enough to stop putting up with what we put up with.”
Life’s too short, and last time I checked, the common view was that we have only one life. By my arithmetic we tend to be awake for about 17 hours a day or 119 hours per week, and most professionals are working 60 hours a week, plus or minus. So, we’re spending fully one half of the one life we are likely to have at work. I can’t speak for everyone, but for me that’s a terrifying statistic if my work doesn’t have meaning and I have to spend it with unprincipled people who’ll do almost anything for money.
Am I going to spend that in an environment where I don’t respect the people I work with and for, where they treat me and others in inappropriate ways, where they are so short-term driven that they compromise every one of their own declared strategies, policies and standards whenever its convenient and expedient to do so?
Ah, but the question remains, will I live in such an environment if they paid me? What if they paid me a lot! What if they paid me an obscene amount of money? All these questions add up to is: “Do I want to join in and compromise what I believe in for the money. Am *I* as much an unprincipled person, driven by cash, as they are?
Yes you can argue that you have more excuses. If you’re young, you can say – I have a student loan; I haven’t had the chance to save anything yet. Won’t you forgive me if I buckle under and do it for the cash? Or if you’re mid-career, you can say – But I’ve got a family depending on me, kids in school and a mortgage. Won’t you forgive me if I take the expedient path?
Well, of course, you absolutely don’t need anyone’s forgiveness. The only question is: Are you prepared to forgive yourself if the bribe is big enough? Many say “YES!” and they have the right to make that choice. But they don’t have the right to complain.
Obviously, the choice that every one of us faces, young or old, is the same one the leaders of the firm face. Will you compromise your standards for money? Will you join the enemy, and become what you claim to despise?
There is a glimpse of a fourth path that Hirschman didn’t identify. I’ll call it the “Stick to Principles” alternative. What I keep trying to convey with my writings is that I am not (primarily) making moral points. I’m trying to report business lessons that end up sounding like moral points.
For example, you’ll actually get more of what you want from other people (colleagues, clients, subordinates and even superiors) if you take the time to relate to and understand them as a person, not just someone in a role.
Another example is that you actually do make more money and advance your career more quickly if you put quality before volume, and refuse to take on work that you can’t do to the highest standards.
A third example is that you will make more money if you take some time away from today’s production to ensure that you are doing the things necessary to make tomorrow better (learning, training, supervision, R&D, listening to your audience, etc.)
These are all career and business lessons, not points of principle, although I must rush to report that they get implemented more thoroughly (and hence produce results more quickly) by people who treat them as points of principle. (There’s the paradox of professionalism again.)
So, the fourth alternative is: Do what you know to be the right way to do things in your work life, and there’s an incredibly good chance that you’ll actually get more cooperation out of the world and actually produce more, even in the short run, that will keep your overlords happy.
Give your bosses what they demand, but do it your way. Because life’s too short. You only go around once. And they say being a prostitute is no fun.
post # 15 — February 8, 2006 — a Client Relations post
In the past few months, my wife Kathy and I have been through the process of trying to buy a variety of professional services. The experience has been very educational, and made me realize that we may not have been approaching it very wisely. Just as there are tips and tactics for marketing and selling professional services, there ought to be a list of tips and tactics about how to be a smart buyer. (Does anyone know of such a list?)
From bitter experience, here’s the beginning of our list:
First, don’t trust too much up front. Because I write about and consult on professional services all the time, I have been very candid with possible professional suppliers about my buying priorities, which are professionalism first, quality second, speed third, and cost last. I thought that being this candid and open would elicit professionalism in return.
We have sometimes been lucky with fabulously trustworthy (and really skilled) providers, but our approach to buying hasn’t always worked out well. In a number of cases, the vendors heard “cost last,” saw dollar bills in their eyes and immediately jacked up their proposed bid prices. Rather than helping us, as inexperienced buyers, to understand our choices, they went straight to trying to sell us the top-of-the-line model with all the bells and whistles on it. It has made us a lot more cynical, suspicious and cautious than we wanted to be.
The second thing we think we have learned from our buying experiences is that, as potential clients, we have talked too much (no surprise there for anyone who knows me!) We were so keen to make sure that our providers understood out needs, that we ended up telling them everything about what we wanted, but never really ended the conversations in any better position to gauge their abilities, intelligence, attitudes or commitment.
We didn’t want to play games by putting the potential suppliers through a phony proposal processes or conversational gimmicks, but found that just when they were trying to get us to do all the talking, we really needed them to do a lot of the talking. We realized that we needed, as buyers, to really think through the question: “What are we trying to find out about these people, and what’s the best way to find it out?”
We concluded that maybe we shouldn’t have been so giving and open about our needs, and should have tested the possible suppliers by holding back and seeing if they were smart enough to ask astute questions. It’s sad to be this Machiavellian, but it may be necessary.
We also learned that references provided by potential providers are a waste of time. Everyone’s got them, and no-one’s going to give you the name of a reference who is going to be anything but glowing about them.
Another conclusion, obvious in retrospect, is that we needed to get to a face-to-face meeting with people as quickly as possible if we were to figure out if we wanted to hire them. Everything that happened prior to that was, in essence, a waste of time.
As a possible provider myself, I don’t like participating in competitive processes, but it was clear that, as buyers, we had to talk to multiple possible providers. Even when we had found someone we thought we wanted to go with, we realized we owed it to ourselves not to commit too early, not to rush into things, and to force ourselves to comparison shop.
There’s more, but I’m keen to hear about other people’s experiences. What do you think the rules and principles of being a smart buyer of professional services are?
post # 14 — February 6, 2006 — a Client Relations post
Mike Schultz, publisher of RainToday.com , has sent me an email about his company’s new publication. For $149 you can get a downloadable version of The Business Impact of Writing a Book which surveyed 200 authors – all professional services providers – of over 590 business books. The report overview can be found here.
Some interesting results are that 84% of authors report either Very Strong or Strong improvement in their ability to differentiate their services as a result of publishing their book and 53% of authors report either Very Strong or Strong ability to charge higher fees for their services as a result of publishing their book. The report has loads of quotes from the authors interviewed (I was not one of them.)
Mike said in his email to me that – quote – I know you’re not very thrilled with the concept of book publishing these days, but it sure seems to be working out for others. Feel free to blog about it and disagree, too –end quote.
Mike was right that I don’t see another book in my future. It’s unlikely to bring cheer to the publishing profession, but I think it will be much more effective for professionals to bypass books from now on and make their thoughts and theories available purely through the internet.
In today’s world, it makes no sense to take nine months, on average, to get your material together and the same amount of time again (amazingly) to get it through the process of publication. Then begins the complicated business of marketing the book and by that time, the thoughts contained in the book are largely historic. By the time you’re in print, the odds are high that someone else has already put similar thoughts into play online.
By publishing work yourself online, through a fast and efficient website, those who want to read the work can be notified electronically of any new material and can read it at their leisure. Who needs a physical book and a bookstore when there’s an RSS feed around? If you absolutely have to mail out print copies, you can still do that, too!
Anyone who has ever written a book will tell you that you don’t make money on the book itself, unless by some (unknowable) miracle you become the flavor of the month. A book helps build your reputation, and reputation is all, but online, viral marketing is today a much more effective way for most professionals to do things. Books are so 20th century!
It’s like the music industry, where an increasing number of performers are happy to give free downloads of their music as an incentive for fans to come and see them perform live or to buy their (subsequent) albums. (Arctic Monkeys, anyone?)
Apart from all this, it has ALWAYS been my advice to new authors that the best way to build a reputation is through a regular, reliable and (most importantly) continuing sequence of individual articles, so that your audience comes to depend upon you as a reliable source of new ideas – some good, some not-so-good, but always trying to contribute.
The simple truth is that business people don’t read books. They may buy them, but they don’t read them. If you can hold people’s attention for the length of an article, that’s pretty good going. You can’t impress people much if they don’t actually read what you write, and, if they’ve heard about you at all, with a book they are probably operating on an interpretation of what someone told them they thought you meant in a book someone else told them about. (Believe me, I’ve been through this!)
And the pace is picking up. Mike Schultz himself told me that the way that people use the internet nowadays is such that shorter pieces are much more effective and that I might want to rethink my strategy of writing 3,000 word articles. (He’s probably right, too!) Others keep trying to teach me that my blogs should be shorter (Sorry, folks!)
The second reason a series of articles works better than going straight for a book is that reputations are built up over time. A book is like swinging for the fences, betting everything on one big hit. And do you know what the number of business books published in a week in the US is? Probably 50 or so. Per week! The odds against you are huge.
I can tell you from bitter experience that getting a reviewer’s attention is INCREDIBLY difficult. It’s like putting out a record: if you’re already Mariah Carey or P. Diddy or whomever, then a) your publisher will promote you b) the record stores will stock your book and c) Rolling Stone will review your new CD. If you’re not ALREADY a superstar, then, good luck, kiddo! NONE of that is going to happen.
Finally, of course, putting out the series of articles doesn’t prevent you from subsequently collecting them together and putting them between hard or soft covers and calling it a book. You even get the chance to bury the fraction of your possible chapters that, in retrospect, turned out to be rubbish.
Oh, sure there ARE virtues to books, even today. For one, speakers’ bureaus find it a lot easier to market you if you have a hot book and there is something both effective and gratifying in having a physical artifact which enshrines your (supposed) wisdom.
Still, what many of my friends either don’t know or have forgotten is that my own career and reputation (such as they are) were built on a stream of articles. It was eleven (successful and profitable) years between my first article on professional firms and the publication of my first book on the subject. You guessed it – it was, and is, a collection of my articles. Forget books — go for the online articles!
post # 13 — February 4, 2006 — a Managing, Strategy post
I may be coming late to the party and only just catching up, but it occurs to me that blogs could be (are?) an incredibly powerful internal management tool.
Here’s one way I could see it working. There is a blog to which, initially at least, only partners have access. The managing partner (firm leader / practice group leader, whatever you want) could blog regularly about what’s going on in the firm / practice, not just restricted to the formal announcement of new business wins and losses, but actually addressing issues of interest to partners, answering candidly, and allowing partners (anonymously if necessary) to pose questions to firm leadership about what is happening and why things are happening the way they are.
As firms get larger, more dispersed and more complex, the disaffection of partners (in professions and businesses of all kinds) is becoming more evident. I get calls all the time enquiring about my availability to consult on the issue of partners’ unhappiness and their feeling that they are treated like employees in an increasingly corporate culture.
Of course, this feeling exists because it is accurate – partners ARE treated like employees, and a blog would be a way to involve them, provide interactivity and participation, resulting in the feeling of ownership that all firms say they want their partners to feel.
When partners (and other people) say they want more or better internal communication in firms, it doesn’t actually mean that they want to hear more from firm leadership (although that’s how it is usually translated.) What it actually means is that people want to be listened to more – they want the chance to voice their views and to have management take them seriously. Internal blogs would allow this.
Professional firms (along with other types of corporate entities) always SAY they want to be consultative and participative, but the truth is that often managers in such firms are often terrified of participation. They would be frightened of what would be seen as open dialogue and discussion of firm management issues (horrors – open dissent!) However, there probably could be no better way to re-energize today’s bloated partnerships than using today’s technology to engage, enthuse and involve the partners.
And one day – who knows? – firms might act as if non-partners were real citizens, too.
Are any firms out there doing this already?
post # 12 — February 3, 2006 — a Client Relations post
Beverly Hedrick, Director of Business Development at the Waller law firm in Nashville, TN writes to ask:
I am wondering if the tactics listed below, and their order, which you published in 1993 in Managing the Professional Service Firm, are still correct in your view. If not, what has changed?
Proven Business Development Tactics for Professional Service Firms (In approximate descending order of effectiveness)
Proprietary Research for the client
Seminars
Articles
Speeches
Attendance at client industry meetings
Networking
Referral Sources
Community Activities
Getting Quoted
Website
Newsletters
Brochures
Cold Calls
Direct Mail
Advertising
I said in my blog philosophy that I wasn’t going to blog about old topics that I’d already written about, but in this case I’ll make an exception, Beverly, because it’s cleverly phrased by you, asking for an update.
Before I give you a direct answer, remember that my 1993 book (and the recent videos and podcasts on this site) remind you that this list of BROADCASTING tactics (generating enquiries from people you don’t know)is only done long after you do other, more effective business development: achieve such a high level of client service that you are getting your new clients by existing clients telling their friends about you, and investing nonbillable time in your key existing relationships to turn them from a series of transaction into a dependable romance.
In other words (and I’m serious) you really shouldn’t have to do too much of what’s on this list at all, because it’s low ROI compared to other ways of winning business. (Read the books, watch the videos or listen to the podcasts if that’s not yet evident to you from real life.)
However, if you do have some left over to do pure broadcasting (the items on the list) it would still be my experience that the ROI is as shown, with one obvious exception – the implications of the internet.
The top 4 items (research, seminars, articles, speeches) are all at the top because they are attempts to demonstrate not assert – put some substantive evidence out there that allows me as a client to judge whether you have fresh content or are just making claims about your expertise.
My eternal rule, Beverly, is simple. All you have to ask if you want the answer to any business development question is to ask – what would work on me? So, look at the list and consider. If you or your firm were trying to hire an accountant, a plumber, a nanny for your kids, a management consultant like me – assuming that we don’t have an existing relationship, which of these tactics would most affect YOUR buying behavior and make YOU want to follow up? A press release you read in the newspaper? Someone you met at a church social? Someone who cold-called you? You figure it out for your part of the world. But face up to the fact that clients, by and large, are influence by the same thing that influences you in your purchases of professional services.
Which leaves us just one BIG topic to address, whether or not the net has changed things. Personally I think it’s changed our ability to do the SAME list better, but still in the same order.
The most effective (for marketing purposes) websites and blogs are not those with great graphics, but those that offer fresh content, in absorbable fashion eliciting the reaction (as research, speeches, article, seminars were suppose to do in the old days) – wow, I’d never thought of it that way, I’d like to talk with that person some more. (See my article Marketing is a Conversation)
The net allows increased effectiveness in make these old-style vehicles entice people to want to contact you, but the underlying approach hasn’t changed.
Maybe, just maybe, there’s a need to emphasize number 5 on my list a bit more (attending client meetings) since if you end up (as I do) doing a high percentage of your seminars, speeches and articles on-line, (webinars, etc.) you’ll be leaving out the flesh-to-flesh, face-to-face meeting people that you did with speeches and seminars in the old days. That’s a problem that needs to be corrected, and you do that by going to client industry conferences (which was always high on the list.)
So, Beverly, I think the logic, the real world evidence and the conclusions are still the same all these years later. (Which doesn’t mean that many firms continue to rush to do activities with lower ROI than those with higher ROI). Go back to the original book for a discussion of why that – still – happens.
Any dissenting opinions out there?
post # 11 — February 2, 2006 — a Careers post
The following is an article-in-preparation that I am co-authoring with Wendy Leibowitz. Wendy is a lawyer and writer in Washington, D.C., who matches my own vast experience in procrastination. Her Web site is http://www.wendytech.com/
Unless you learn how to manage it, procrastination can spiral. The less you get done, the more you beat yourself up for being worthless and hence the less likely you are to get anything done. No wonder that a study reported in Psychology Today, found that “College students who procrastinate have higher levels of drinking, smoking, insomnia, stomach problems, colds and flu.”
Professionals are particularly prone to procrastination, in part because professional projects can be intimidating: long, complex, and stressful.
Procrastination can’t be completely abolished, but it can be kept under control by developing mind games that “short-circuit” the procrastination-inducing mental “do-loops” that plague us. Everybody needs to develop their own highly personal arsenal of tricks for living with (and suppressing) procrastination. Here are some of ours:
Preparing to work
Clients and superiors frequently do not explain precisely what they need, which makes procrastination almost inevitable, since it is difficult to begin work on something if you are confused or conflicted about what you are trying to accomplish. Make sure you know what you are trying to accomplish.
Strangely, procrastination can be caused by panic. Urgency makes us fearful and stop working. There is enough time pressure on us without artificially creating more. When accepting the assignment, acknowledge the difficulty of the task, and ask for a realistic time frame. Allow for interruptions, unexpected developments and an outside life. Most assignments in life are not a race – it’s how dependable you are, not how fast, that will make people seek you out.
If you can, have two, three or four projects and alternate till one grabs you. Robert Benchley, the 1930s American humorist said: “I can get anything done as long as it’s not what I’m supposed to be working on.” Sound familiar? It’s sometimes hard to prioritize among the projects that get thrown at you. But you can be surprisingly productive by working for a short time on each one. Imagine your projects as children, each of them clamoring for your attention. Spend time with each one.
Focusing on a Motivating Purpose
Thinking of the client you are doing the work for, and how important it will be to them can be the force that rouses you to action.
Jay Foosberg, author of “How to Get and Keep Good Clients,” recommends looking at pictures of your family to remind yourself for whom you are doing the work.
Imagine how jealous your bitterest enemies will feel when you’ve finished. (Hey, no one said to limit this list to honorable motivations.) One of the most powerful motivators for some people is to imagine the work being praised by someone they resent (“I showed him!”)
Imagine having to say: “I could have done a much better job, but he beat me to it. Grrr. I’m going to show him!” Anger, jealousy and the basest of motives can get many of us deep into the task.
Finding Ways to Start
Examine your avoidance habits: what do you do to stall? Eat? Watch TV? Surf the damn, wonderful internet? Stop doing that—just for ten minutes.
Divide everything you have to do into smaller, easy bites.
Set realistic time goals to complete your bite-size tasks, and then plan to take a break.
Promise yourself that you will only work for ten minutes.
Start in the middle: worry about openings and endings later. Usually, for almost any project, there is one aspect of the work that is most vivid, that is stimulating you to do the work, or is the most daunting to you. Start there.
Just give dictation to yourself. Pretend you’re talking to a friend or a fellow professional at a cocktail party, explaining what you are working on and how you are getting it done. Next, imagine describing what you have finished.
Sometimes actually talking to a friend can be the thing that unlocks the logjam. Why not call someone up and ask “Can I just try to explain to you what I need to do?”
Cut Yourself Some Slack!
As Julia Child used to say when she took a shortcut or dropped something in the kitchen: “You’re all alone. Who needs to know?” You’re allowed to fail a few times before you get it right.
Adopt the mental dump approach: just do something and plan to change it later. You can always revise what you’ve done. Most work needs refinement. Drafting something –anything – helps you to avoid your saying, “I didn’t do anything today.” You did, it just needs further work!
Evaluate the work, but not yourself. Don’t think: “I’m useless,” but say instead: “Yeah, that paragraph’s garbage, but I’m better than that.”
Tell yourself this is not supposed to be the best thing you’ve ever done. Tell yourself that you can write a “B” assignment. A completed assignment that is adequate is better than the best thing you’ve ever done that exists only in your head.
Arrange (in advance) with a good friend or colleague to review your first draft. That way, you know you’re only producing a first version and have permission to make mistakes. It will be less scary and you’ll get more done.
Varying the Routine
Consider working in a different setting. If your work is portable, bring some of it to a coffee shop to see how much you get done. If you are easily distracted, head to a library, close your office door, or create the equivalent of an isolation booth to see how productive you become.
If you’ve been torturing yourself by pulling all-nighters, go to bed early and see if you are more productive in the morning. Some say that for every hour earlier that you turn in, you gain two hours in alertness the next day.
Sustaining the Momentum
Make up a game with rewards. Plan to reward yourself with a discrete, non-time consuming break such as a walk around the block (or an ice-cream cone.)
If nothing comes in 15 minutes, don’t just sit there: go for a walk and come back. Taking a break from work to walk briskly for 20 minutes might kill two birds with one stone. (This is serious advice, similar to what they say about trying to fall asleep: if it ain’t happening, get up and go do something. Just lying there thinking about it will drive you crazy and won’t work.)
Advanced Techniques
Write down how you are feeling about your tasks and what upsets you about them. You might be angry that you were stuck with someone else’s work while they’re away on a vacation, or it’s just some damn boring anonymous thing that must be done. Or you don’t think you can do it. Pin the description on your desk or wall or computer screen. Then keep saying to yourself “All that’s true, but I still have to do the work!” A few (silent) curse words at this point can actually help you get it out of your system and get over it.
Some people schedule an artificial deadline before the real one. Say, make plans to go to a play or movie the evening before the project is due. That way you’ll have to finish it early, and will have time the next morning to read it over and catch the inevitable typo’s.
Make a commitment to someone whose good opinion you would like to keep (the hostage to fortune strategy). This is very effective. The person should not be a friend who will forgive you if you miss the deadline, but someone whom you’d like to impress or who will be very disappointed in you if you don’t finish. (Embarrassment can work better than guilt.)
Those are some of our mind-games. What works for you?
