More Comments on STRATEGY AND THE FAT SMOKER
post # 471 — November 30, 2007 — a Strategy and the Fat Smoker post
Three more reviews of my new book this time from bloggers who focus on (respectively) the accounting, legal and marketing communications agency worlds.
First, Dennis Howlett compares some of the points I make in the book to his own experience. He writes:
â€œWhen I was in practice I made a conscious decision that I would never compete on price and that I would never take on work I didnâ€™t believe we could execute against. That takes courage – something David notes is rare and therefore a source of competitive advantage. Youâ€™ve also go to have unshakable belief in your business model. Thatâ€™s not the same as a rigid belief. It is one of the reasons I believe in value pricing. People will pay a premium (relative to the general perception of market value) if they know what you stand for and if you can clearly demonstrate differentiated knowledge and ability. The same is true for existing clients.
â€œThat meant at times, Iâ€™d enlist the services of firms that were better qualified than ours to handle specific problems. It wasnâ€™t that I didnâ€™t want to do the work. I knew the client would be better served elsewhere. In the long run, it meant the client was better served overall.
â€œThese are principles I follow to this day. Last week for instance, I mentioned to a colleague that I will not work with certain companies because I donâ€™t share their values. Weâ€™re incompatible from the get go and any relationship is bound to be problematic for both parties. In some cases that has meant turning away otherwise very good business. Thatâ€™s always a tough call but in life Iâ€™ve found material reward is but a fraction of the total reward for undertaking an assignment.
â€œDavid makes the point and heâ€™s right – following certain principles involves an emotional investment in the things that matter to you. With that comes pain and pleasure. Fortunately, the upside far outweighs the inevitable lows.â€
Julie Fleming-Brown, in Life At The Bar, picks up on another point in the book that discusses viewing firm personnel in the relationship or transactional mode.
â€œAre you saying,â€ they (senior people) ask me, â€œthat I need to show an interest in my subordinates as people and care about their career ambitions?â€
â€œOnly if you want them to respond to you,â€ I reply. â€œIf your subordinates feel that you are prepared to work at a relationship with them, ensuring that both sides benefit, then they will give you more of what you want. Thatâ€™s human nature, not a political or religious point.
â€œBut if they think that you, their superior, are just trying to get out of the deal more of what you want from them? Harder work, more billable hours, whatever? Then they will respond in kind. They will view you as you are viewing them: useful only to the extent that they can get out of it when they want in the short run.
â€œThere will be no long-term loyalty and no commitment to the larger interests of the firm, because you have set the pattern that this is truly a temporary transaction, not a relationship. If you treat people as THEM, as objects, or as â€˜other,â€™ they in turn will treat you instrumentally.â€
Julieâ€™s comments were these:
â€œAnd that, my friends, is the crux of the associate retention problem in big firms. Maister nailed it, in my opinion. Associates view partnership as a distant, likely unattainable goal, perhaps even a goal they donâ€™t want to attain. Firms offer money as the short-term benefit, â€œgreedy associatesâ€ are born, and associates become eager to move on to the high bidder, to the firm where they can get the most short-term benefit, figuring that at some point theyâ€™ll end up in a firm where they can and will make partner â€” but thatâ€™s down the road after theyâ€™ve switched firms a few times. (Of course, thereâ€™s nothing that will motivate a lawyer toward money like facing $100K or more in law school debt, but thatâ€™s another thread.) According to a NALP study cited in â€œLaw-Firm Life Doesnâ€™t Suit Some Associatesâ€ (which I discussed here a couple of days ago), 60-62% of entry-level associates have left their firms by the end of the fourth years.
â€œWhat can law firms do to encourage good associates to stay? Create a sense of mutual loyalty. Pay attention to associatesâ€™ professional development, career satisfaction, and concern for the person. Make sure associates know that theyâ€™re not fungible, that theyâ€™re part of a team, that they contribute to something important. Help them recognize meaning in their work â€” and Iâ€™m not talking the do-gooder kind necessarily (though that often keeps lawyers working in public interest despite low pay, lack of resources, etc.), but the kind that comes from practicing an area of law that fits, taking on advancing responsibilities, receiving appropriate guidance that promotes professional growth. Say â€œthank you.â€
Finally, Rich, at CopywriteInk says, “Maister expertly paints an accurate, if not frightening, picture of business as usual today.”
â€œIt is not uncommon for me to be told even by the most senor people that their firmâ€™s impressive financial results have been accomplished by a management team which has consistently created an environment of fear and insecurity,â€ writes Maister. â€œThe simplest explanation for the prevalence of this â€˜abusive behaviorâ€™ is the simple fact that, in the right situation, it works!â€
Rich goes on to say:
“However, he distinguishes that such short-term work-under-fire tactics are exactly that â€” tactics that will eventually lose their effectiveness and eventually elicit resentment. In contrast, proactive, passionate, and positive management teams energize and excite people about what they do, which in turn becomes tangible in the way the workforce interacts with clients. Long term, applied wisdom will lead to better financial results.
“Heâ€™s right. As Iâ€™ve often advised agency owners, especially those who have an account executive background, negative reinforcement can teach mice to press a bar for cheese, but it never did anything for creativity. And even with mice, too much negative reinforcement will eventually immobilize them.
“My net assessment of Strategy And The Fat Smoker is that it provides some much needed advice for the increasingly fast-paced world of random transactions, especially those that occur online. Business, especially communication, is poised for a shift toward relationships that mean something, whether that means people to people or product to consumer.”
Mike Wallace said:
This term value pricing as mentioned to me is an overused term where firms use this is a strategy but only end up charging higher fees and the value part of it is a perception rather than being acheived.
What do others think?
posted on December 3, 2007