Passion, People and Principles
At a conference of leading management consulting firms last week, I led a discussion about the barriers to developing strong, deep relationships with clients — a “fat smoker†strategy in the sense that we all know we should be good at it, but few of us are.
As we explored the topic, I took a poll on how many people thought relationship skills were “born†and how many thought they could be “made†(i.e. developed.)
(Only) two-thirds of the audience thought they could be developed. However, very few firms said they had formal programs to help their people develop the interpersonal, social, political and emotional skills necessary to be good at relationships. As a rule, they depended either upon people developing these skills for themselves, or (if you were lucky) learning on the job by observing those ahead of you who were good at it.
The challenge was made even more difficult when it was pointed out that — ultimately — relationship skills are about values and attitudes, not personality characteristics and skills. If the discussion is about values, then it really is challenging to address the key questions:
- Are these born or can firms develop them in their people?
- If they can be developed by the organization, how?
- How did you learn to develop your relationship skills?
- Were you ever given any formal training that helped?
- What would you advise others that wanted to work at developing these skills?
post # 460 — October 30, 2007 — a Client Relations post
Hi David,
I had a question I wondered whether you or your blog readers had any opinions on.
Many companies have unprofitable customers. This situation may arise for many reaons including:
* Poor pricing controls – offering large and multiple discounts
* Historic overservicing and undercharging long-term customers
* Lack of understanding of the true cost to serve
Nonetheless, whatever the reason, when companies do find unprofitable customers they need to manage them. They can be made profitable or they can be “fired”.
Do you have any ideas or strategies for actually firing customers? Does anyone have any examples of how their companies (or others) have done this and what the results were?
Regards. Daryn, Sydney, Australia
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Well, gang, what say thee?
There’s a great blog called SLOW LEADERSHIP which picked up on the dilemmas I pose in Strategy and the Fat Smoker.
Here’s what it had to say:
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Somehow the consumer society manages to combine a puritanical obsession with working with a totally hedonistic devotion to getting whatever you want in as short a time as possible.
Yet capitalism itself is all about putting off gratification for the sake of greater long-term profit through investment. Instead of taking all their cash and having a truly memorable blow-out in some exotic location, entrepreneurs and capitalists are expected to invest their money and wait for bigger rewards some time in the future. Instant gratification is also the antithesis of America’s favorite attitude to life: the Puritan Work Ethic.
If you truly accepted having it all and having it now as your goal, you would never go to work. Somehow the consumer society manages to combine a puritanical obsession with working with a totally hedonistic devotion to getting whatever you want in as short a time as possible.
***
A great analysis. Is there a way out of this culture?
post # 459 — October 28, 2007 — a General post
Bob Sutton was awarded the Quill award for “best business book of the year ” for “The No-Asshole Rule.”
Way to go, Bob! As I said on his blog, we all look forward to the movie of the book!
post # 457 — October 26, 2007 — a Client Relations post
A consultant sent me this emaial, soliciting advice:
Last week I spent a couple of days with group within my client’s organization. The group was all male with one female. I was appalled by the pre-pubescent behavior of the males towards the female. I’m a former Marine, played football in college, I’m not unfamiliar with male environments. Their behavior towards their own female staff made me uncomfortable. My test is that I don’t want to put our employees in an environment in whichI would be uncomfortable putting my wife or daughter.
But, it’s a really big client. And, my desire to back away from this client is being challenged by others.
Our first, agreed-upon principle is that our employees come first. Great employees, who are truly experts in their area, are harder to come by I think than clients. This is an interesting test of our application of our principles.
Any suggestions about how best to handle this would be appreciated.
post # 458 — October 25, 2007 — a General post
Here’s a great piece by Jonathan Copulsky, (a consultant at Deloitte in Chicago) published in the October 22, 2007 issue of Brandweek.
Smells Like The Publishing Spirit
While any self-respecting management consultant strives to achieve stellar results for his clients, there’s one desire that often seems to permeate both body and soul more than any other: He dreams of being the author of a bestselling book.
Don’t believe me? Browse the business section (or even, at times, the center-aisle tables) of the nearest mega bookstore, and count the number of books with the grinning guy in a suit on the dust jacket.
Naturally, he wants to demonstrate his in-depth knowledge and experience, share his insights, purvey his skills—and earn your respect. Perhaps I should say “we,” however, because the siren song of publishing oft tempts me—a veteran marketing and sales consultant—too. Only the fear of being unable to make my book truly stand out from the stack has kept me from succumbing to the temptation.
Until now, perhaps. Last week, you see, I finally found my inspiration—the talisman sure to set my book apart from the rest. A newspaper story informed me that, when it comes to business books, animals are “in.” The article cited Spencer Johnson’s mice tale, Who Moved My Cheese? which has topped bestseller lists for almost a decade. More recently, John Kotter recast his 1996 organizational change bestseller as a fable about a penguin who mobilizes his colony against the threat of its melting iceberg. Our Iceberg is Melting sold more than a quarter of a million copies.
With these zoological precedents in mind, I have decided the world is now ready for Who’s Buying Our Guano?
A book about guano can’t miss. A prime ingredient for both fertilizer and gunpowder, guano is rich in history, nitrates and adorable animals. Produced by birds, bats and even baby seals, it can be found throughout the world, from tropical islands to dank caverns. Guano’s geopolitical influence also has been profound.
Peru, Bolivia and Chile waged war over guano 150 years ago. Perhaps it fueled their cannons, as well as their feud. Long before the world worried about weapons of mass destruction, Congress authorized the takeover of islands rich in guano deposits and even empowered the president to use the armed forces to protect our newfound national guano interests. Bats, seals, birds, war and American imperialism; that, friends, is an unbeatable combination.
Who’s Buying Our Guano? will be set in an impoverished but guano-rich bat colony. Mobilized by one of its wiser and more experienced members, Sollie (short for Solomon), the colony wakes up to the commercial value of its deposits. Sollie convinces his fellow bats that they need a robust marketing and sales strategy, as well as a premium product, to achieve results in the lucrative but highly competitive global guano market.
Under Sollie’s leadership, the colony quickly creates a multitiered distribution structure that includes exclusive agreements with the top-tier organic retail gardening chains. The bats’ brand of guano immediately achieves market acceptance and generates an impressive rate of return. Less than 12 months after the bats launch their branded line, however, they come under fire from the seals. Although the seals’ brand of guano is lower in quality in terms of its fertilizing value, they promote it heavily with coupons and bulk-purchase discounts.
Our bat-marketer is, of course, baffled and disheartened. Despite their clearly superior product, the bats are losing market share. The ensuing crisis of confidence prompts Sollie to proffer his resignation. Fortunately, the CEO and the board rally behind him. Re-invigorated by this show of support, Sollie leads the attack on the guano sector by identifying value-added guano services, launching a boutique series of guano varietals and creating a series of beautiful complementary products for the home, including an ergonomic guano spreader available in six colors.
All of these innovations put the bats back on top of the guano pile. Determined to stay there this time, Sollie launches an in-depth study of the bats’ target demographic. Following a thorough analysis, Sollie is shocked to discover that the bats’ guano brand is failing to make a profit on nearly 15% of its customers. He concludes that the colony is literally giving away services, ranging from expedited shipping to custom packaging. Sollie convinces the board to introduce a menu-based pricing scheme. The result? Profitability increases by more than 500 basis points.
As just these little teasers prove, Who’s Buying Our Guano? has all the ingredients of a blockbuster. Although bats may strike some as icky, just think of cute bats, like Jannell Cannon’s Stellaluna or Fu-Fu from the PBS cartoon Sagwa.
Trust me, after my title hits the shelves, the business publishing sector will never be the same. As Sollie and his talented marketers teach us, when it comes to marketing and sales books, there’s always more guano to buy.
***
Thanks, Jonathan, for permission to reproduce this.
post # 455 — October 24, 2007 — a Managing post
I was giving a presentation to a group of young people (mid to late 20s) newly promoted to their first supervisory position.
As always, I was making what I thought were obvious points – that the best means to get productivity and quality from those you manage is to help them find the meaning, the purpose, the excitement in what they have to do.
The reactions were amazingly cynical. “Have you ever worked in a professional service firm?” asked one young man.
A young woman asked, “But how do you motivate people to do the unexciting tasks that have to get done?” (I told her that she was unlikely to get much commitment, productivity and quality by dlegating with an air of “We all know this is boring, but someone’s got to do it, so I chose you!”)
Obviously, these young people had not (yet) been managed in a style that elicited their enthusiasms. Even though their firm (like all others) had grand statements about its commitment to developing its people, they had already learned (or so they thought) that the world did not really work that way.
I said that I hoped they would not just pass on to the next generation the poor way they had been managed, but I didn’t leave the room with much hope.
Sad, sad, sad.
post # 452 — October 23, 2007 — a General post
In the 25th and final episode of this series, we will close with a proverb that I use to conclude many of my seminars. It illustrates that what most businesses need is not clarification on what the right thing to do is, but the courage to not give in to short term gratification.
Audio Timeline
00:39 — Introduction
01:00 — Summary Proverb
01:21 — Conclusion
You can download Summary Proverb 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.
post # 454 — October 22, 2007 — a General post
It is a great honor and privilege to be invited back to host the Blawg Review again. I did so previously for the Blawg Review #76.
The Blawg Review is designed to be a collection of posts on blogs relating to the law. In making my selection, I have focused on issues relating to the business of law, rather than legal matters (which I am not qualified to judge.)
Let’s begin with some MARKETING blogs.
Charon QC …the blawg has an absolutely amazing post about marketing at the UK firm of Eversheds, which talks about the need for “Innovateers, Knowlivators, Logithiser, Performibutors, Proactilopers, Professionaries, Prioricators and Winnowmats.”
Intrigued? Go check it out – it’s worth it.
Dan Hull, at What About Clients? has a good post summarizing the key elements in winning high-end clients.
Michelle Golden, president of Golden Marketing is also an active member of the VeraSage Institute, which is committed to abolishing the billable hour. She reports on the advice given by another consultant on how to implement a value-pricing approach.
Susan Cartier Liebel at Build A Solo Practice, LLC offers tips on how to build a practice. I was surprised, to put it mildly, that she was passing on “classic” sales advice with questions like: “Is the prospect pre-qualifed? What is their motivation to buy your product? Always conclude with a call to action.”
I had hoped we had moved on beyond such traditional sales advice in our understanding of how professionals get hired. See, for example, (my co-author) Charlie Green’s blog for an ongoing discussion of an alternative approach — trust-based selling.
To be fair, there’s a lot of otherwise good stuff on Susan’s site. See, for example, this post:
Lori Herz, on her blog Write for Clients talks about Customer Experience Management (CEM). Evolving in tandem with the new experience economy, the CEM model considers a customer’s relationship with a service or product from the vantage point of user experience. As she notes, people tend to translate their consumer (or, I’d note, professional service) experiences into stories that they quickly share with others.
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Now, let’s turn to the topic of LEADERSHIP.
The ever-stimulating and readable Bruce MacEwen asks whether “transformative change” is on your agenda. As he notes, it’s probably in your future, though, regardless whether it’s made it onto your agenda. Relying heavily on McKinsey research MacEwen offers relevant advice on how one can successfully drive radical change within an organization. He takes us through the steps of aspiration, leadership and engine (or ideas) and process.
Tom Collins, at More Partner Income, reacts to Bruce MacEwen’s post with some thoughts of his own on “The Right Way to Manage Change in the Law Firm.”
As I also try to stress in my new book, Strategy and the Fat Smoker, Tom points out that the benefits of change are not immediate and do not follow a smooth linear line of improvement. He tells us that the magic ingredient is “KASH”. KASH stands for new Knowledge which, when combined with the right Attitude, results in new Skills, which, through use, become Habit.
Another of my favorite legal bloggers, Arnie Herz at Legal Sanity, quotes an executive coach in posing an interesting and, perhaps, daunting question for law firm leaders: If you lost your title, position and power tomorrow, would others still support you and want to work with you?
Actually, that’s not a bad question for any trusted advisor who provides client counseling advice to ask himself or herself!
Another former co-author of mine, Patrick McKenna, has a checklist of questions to self-assess your leadership, including: alignment; engagement, retention, innovation, collaboration, talent, productivity, agility, responsiveness.
Katheryn Hayes Tucker, asks whether the General Counsel job could be a route to a CEO position. She cites Delta Air Lines’ new CEO, Richard H. Anderson, the former Texas prosecutor who started in the airline business as an in-house lawyer with Continental Airlines and then became general counsel at Northwest Airlines Inc. before moving up the ranks to CEO there. She also mentions Home Depot’s CEO Frank Blake, a former GC at General Electric and Former Coca-Cola Co. GC Deval Patrick, who is now a chief executive of a different kind: governor of Massachusetts!
Brian Sommer is a former Accenture partner whose blog, while it does not explicitly address law firms, is essential reading for those tracking the latest thinking in managing professional businesses. In one of his latest blogposts, he interviews Beth Carvin, CEO and President of Nobscot Corporation. Her firm has software that allows workers to request and find potential mentors and mentees within their own firm.
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Some ECONOMICS issues are touched on by these posts:
Peter Lattman at The Wall Street Journal Law Blog provides a link-heavy blog covering a lot of stimulating territory, including whether deal-making attorneys earn enough money, and the ongoing debate about whether (for example) Goldman Sachs should be allowed to buy Simpson Thatcher. If you want to track the latest chat about money-making in the law, this is a good place to start.
A recent ruling blogged by Joseph Palazzolo on the Legal Times blog hits contingency fee-based firms where they’ll feel it. From the case: “A client may discharge his attorney, with or without cause, and such a discharge will not constitute a breach of any agreement between them,” Judge Janice Rogers Brown wrote. “This rule is admittedly harsh to attorneys, especially to those who provide services under contingent-fee agreements, for they bear a substantial risk.”
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A couple of BLOGS ABOUT BLOGGING are worth noting.
When it comes to corporate blogging strategy, some corporations, even cutting-edge ones, are more conservative in their approach. Kevin O’Keefe focuses on Google and describes how its blogging strategy may be a good model for such conservative firms, allowing them to participate in the blogosphere without getting in over their heads. Every product team at Google has a blog but their focus is strictly PR, not to give rise to a conversation on the blogs, none of which allow comments. Law firms may also want to follow Google’s lead on the use of blogs in place of press releases.
Daniel A. Schwartz at the Connecticut Employment Law Blog discusses his decision not to publish a blogpost rather than risk disrupting his firm’s relationships with a client. That leads to a discussion of proposed blogging principles in a law firm.
A warm blogosphere (blawgosphere?) welcome to the renowned Ellen P. Goodman, making her first ever blogpost at Balkinization.
She shares a few thoughts about the need to radically reform our system of public service media for the digital age. She explores the question of what media regulation might mean in a networked environment, and concludes that traditional broadcast regulation, which assumes content scarcity and captive audiences, is of limited use today in achieving the kinds of democratic values that were advanced 40 years ago in Jerome Barron’s important article Access to the Press: A New First Amendment Right.
Professor Daniel Solove at Concurring Opinions has a really interesting discussion of “Who, Exactly, Is a Journalist?” The story is about Howard Bashman, who calls himself a “member of the news media,†yet who also happens to be a Pennsylvania attorney who also operates a blog. Does readership define a journalist? Does receiving money for writing make one a journalist, as Bashman does?
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On the HUMAN INTEREST topic, Rhonda Muir at Law People reports on a story in Inside Counsel. She quotes John P. Donahue, Senior Vice President, General Counsel and Secretary of Rhodia Inc., as saying “We evaluate ‘courage’ as a behavioral characteristic of our lawyers, and we link this evaluation to compensation. Rhodia has “embraced professional objectivity of its in-house lawyers as a core value” and Donahue wants to make sure that “our lawyers can deliver bad news to clients,” with whom they are often closely aligned.
Rhonda notes that Hospital administrators contend that a ratio of 1 conflict avoider in 4 employees results in a “dangerous workplace” — think: “I don’t want to get so-and-so in trouble over reusing needles” or “Maybe she’ll start writing down dosages after she gets used to our procedures”. Left to their own proclivities, lawyers’ much higher rate of avoidance than hospital workers risks being just as dangerous.
Then there’s the story about 18-year-old Kathleen Holtz, who, if she passes the California bar, will be the youngest lawyer in the Golden State, and quite possibly the nation. L.A.’s TroyGould has hired her as an associate, and she’s reportedly doing great.
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And that’s it for this week!
Blawg Review has information about next week’s host, and instructions how to get your blawg posts reviewed in upcoming issues. Also they are hosting the Carnival of the Capitalists this week, so don’t forget to go check it out.
The online reviews of my new book have begun. The pride of place for being first goes to Ron Baker, the founder of the VeraSage Institute which is dedicated (among other things) to abolishing the use of billable hour pricing in professional services.
Ron also has a new book on the way: Mind Over Matter: Why Intellectual Capital is the Chief Source of Wealth.
If you don’t know Ron’s earlier works, you should. As I have said before on this blog, I think he is always essential reading.
Anyway, it’s nice to know the feeling is at least partially mutual. This is what he had to say about my new book on his blog:
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In the Introduction to David Maister’s latest book (available for pre-order now), The Fat Smoker Syndrome: Keys to Success for Professionals and Professional Firms, he writes: “Much of business, I believe, is about things that are obvious, but not easy.”
This reminded me of a line from Ronald Reagan’s speech from 1964, “A Time for Choosing,” which launched him on the national political scene. Incidentally, I know it is one of Ed Kless’ favorite quotes:
They say the world has become too complex for simple answers. They are wrong. There are no easy answers, but there are simple answers. We must have the courage to do what we know is morally right…You and I have a rendezvous with destiny.
Maister’s latest book is full of common sense and simple answers, along with much insight based on his vast experience working with Professional Knowledge Firms:
We know what to do, we know why we should do it and we know how to do it. Yet we don’t change, most of us, as individuals or as businesses.
[Y]ou can’t achieve a competitive differentiation through things you do “reasonably well, most of the time.”
The necessary outcome of strategic planning is not analytical insight but resolve.
I have been told more times than I care to remember that the reaction to one of my presentations has been “This all makes terrific sense, but there’s no way we’ll ever do these things around here.”
[On turning away business rather than accepting any customer simply because they have a checkbook and breathe], Maister says: “Not only should you do that, but the only way you can achieve any strategic distinction is to do that. Strategy is deciding whose business you are going to turn away.” [As my colleague Tim Williams likes to say, "A firm is defined by the customers it doesn't have"].
The book also slaughters some sacred cows, my favorite being the scheduled performance appraisal process, which Maister says “are doomed to failure.” Amen. For more on this, see the fantastic book, Abolishing Performance Appraisals: Why They Backfire and What to do Instead, by Tom Coens and Mary Jenkins.
Of course, I have my disagreements with Maister (such as his contention that law firms are different, which defies the laws of economics, in my humble opinion). That said, I always learn from him. You will too.
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Thanks, Ron!
