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culture, executive leadership team, growth, key account management, professional service firms, Training, Workshop facilitation

20 workshop facilitation tips and secrets

In Articles on 24 July 2014 at 8:48 am

I have been facilitating planning workshops, firm retreats and focus groups for over 25 years. I love it! It’s a real buzz to nail a complex issue and create a safe and productive space for everyone to do their best thinking and speaking.

A friend recently asked me to write down some of my workshop facilitation tips and secrets. Listed below are some of the key points that I included in my reply. No rocket science here but hopefully some practical ideas for you to use and adapt…

1. Understand your role. It’s important that you are clear on your role in the workshop viz-a-viz the the person that usually leads the meetings of this group (Board Chair, CEO, MP, Team Leader, CRP). Ideally they should be treated as an equal participant in the workshop with you as the independent chair/facilitator of the discussion. They might open and close the session, but this is your show.

2. Get the venue and set-up right. The monkey enclosure at the Melbourne Zoo was a recent workshop venue highlight. My general preferences: offsite is better than onsite; natural light is key; ceilings not too high or too low (converted barns or halls are hopeless); beware basements of expensive hotels; no noise or distractions from other rooms; screens/boards (if used) visible to all; AV, pens and other equipment ready, tested and working; U-shape set-up for smaller groups, round tables for larger groups; breakout rooms nearby are nice but not essential.

3. Be shockingly clear on the workshop objectives and outcomes. Design the process/agenda to achieve those outcomes; leave the rest out. Calibrate outcomes to the time available or vice-versa – don’t kid yourself that you’ll get full agreement on a 5-year strategy in a one hour discussion.

4. Visualise the process or “screenplay” of every session. As a facilitator you need to imagine the flow of the discussion, how long each deliberation will take and where it may go. If you can’t really do this perhaps more work needs to go into describing the specific discussion topic i.e. it may be framed too generally or narrowly.

5. Anticipate the most contentious issues. Good preparation should reveal the likely potholes, road humps, obstacles and diversions. Give more time to these in the agenda; gather more data beforehand to inform this discussion; pre-identify options/likely solutions; get to these issues quickly by getting everyone to sign-off on the less contentious stuff.

6. Understand who’s who in the room. Do your homework on the participants; know their hot buttons, preferences and needs; identify likely supporters, vocal disruptors, passive aggressors and abstainers. If appropriate, make contact with key opinion shapers before the workshop to see where they’re at and get their advice on how to run the meeting. Getting their fingerprints on the agenda can also be very useful at times.

7. Get engagement before the workshop. Ideally ask participants to do some work beforehand and apply their minds to the issues at hand. This may be pre-reading, completion of a survey, gathering data from other staff or clients or just to jot down their questions or concerns next to each agenda item.

8. Mix it up. In designing the agenda try vary the process and keep it fresh. Don’t have four or five breakout sessions in a row with the same groups. Consider a variety of buzz groups (two or three people sitting next to each other), syndicate work, debates, videos, post-it note brainstorms, guest speakers, competitions, presentations, etc.. David Gray’s book is an excellent resource on different types of activities you can use.

9. Look to parallel process. Assume you have five major issues to deal with in the workshop. One option is to deal with each sequentially by the whole group. My preference, not always though, is to parallel process and get five smaller groups working on each issue at the same time. One should try avoid boring plenary report-backs from each group. There are a variety of ways to get the outcomes from small group work fed back efficiently and effectively.

10. Be independent. As a facilitator it’s important to be content neutral by not taking sides or advocating a strong view during the meeting. If you want to state your view or advice, pre-qualify your comments. If it’s a really contentious issue, people need to trust the process and trust that you will not bias the outcome.

11. Plan your note taking. If you’re going to use the whiteboard or butchers paper to note comments during discussion think beforehand about how that might be presented. Where are you going to start, continue and end; where you will go if more space is needed; what layout will you use. I use mind maps a lot but sometime just a bullet point list is fine. I ran a workshop recently where I wrote up the key points on the glass encasing the room. It was better than butchers paper and blue tac.

12. Get early involvement. If time allows, start by asking people their expectations for the meeting and any concerns. Get everyone to say something as early on as possible. Directing questions at specific participants keeps people on their toes.

13. Let the bees fly. Quite often one or two participants will have a bee in their bonnet – a strong opinion about the issues to be discussed. In my view the worst thing you can do is bottle them up. Let people get things off their chest early on in the process and try get all the key problems on the table. If there are no more bees and elephants left in the room (this is mixed metaphor mayhem (with alliteration)) you can start to work on options and solutions.

14. Limit the loudmouths. In most workshops there are participants who love the sound of their own voice, interrupt others and make it easy for the abstainers. I try limit their impact on the discussion via buzz groups, polling, ’round the rooms’ and/or directly enquiring from those less vocal. Another tactic I use is to frequently mention their name and their key points: “As Alex pointed out, cross-practice collaboration is a major problem in the firm…”. They then feel heard and their ego stroked – two major causes of loudmouthedness.

15. Draw in experts. Where and when its possible get the experts or most well-informed person on a particular issue to be involved. So, for example, if it’s an IT issue get your CIO to introduce the topic, help with Q&A and contribute to the debate. This approach avoids the blind leading the blind and accelerates collective understanding.

16. Frame the problem. One of the most critical skills of a facilitator is the ability to fathom all the discussion and synthesise and frame it it in a way that allows for clearer decision-making. Without this intervention the workshop runs a huge risk of becoming a talk fest and the issues left unresolved. It’s actually a worse outcome than not having the workshop at all. My approach is as follows: I wait till the law of diminishing returns kicks in – the moment when people start repeating themselves and no major new insights/contributions are made. I then try to play back everything I’ve heard by clearly defining and restating the problem in as simple words as I can, and clearly mapping out all the alternative solutions/options. I then ask the group if to give some feedback on my problem statement and options. After some discussion, if appropriate, I ask for a vote around these options. If one option is clearly preferred, or not preferred, it helps narrow the choices and you’re one step closer to resolution.

17. Help the strugglers. If someone is struggling to make their point, [i] restate your understanding of their issue in your own words, or [ii] ask them to give an example or re-explain. Chances are most others in the room will be confused too.

18. Hand back the agenda. If it appears that a particular issue is going to take up much more time than scheduled, put it back to the group on how the agenda should be rejigged, i.e. what agenda items should be kept, what should be deferred or dropped. This empowers the group and protects your credibility as a facilitator.

19. Use the clock as your friend. “We only have 20 minutes left and we have to get a resolution on this”. Use the pressure of the clock and people’s desire not to waste time to break a deadlock. If resolution is not reached, then at least agree the process to be followed to reach it some time in the future.

20. Finish on a high. A great way to end is to revisit the objectives/expectations and recap the key outcomes and next steps. Even if things were not completely resolved, it’s important that people feel that the issues have been advanced and there are clear steps to get resolution in the near future.

I’d love to hear some of your top facilitation tips and secrets.

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account planning, business development, client loyalty, client relationships, innovation, key account management, professional service firms, strategy management

Your loyalty levers: head, heart and ego

In Articles, Commentary on 22 May 2014 at 9:05 am

Sticky profitable clients are nice. Most professional service firms just love them. I’m sure you do too.

But what keeps these clients loyal to your firm and willing to come back for more?

Research evidence suggests that client satisfaction is an important driver of client loyalty, but as the chart shows it’s not the full story. There are many instances that for a given level of client satisfaction, clients of one firm are significantly more loyal than another. It would appear that there are other hooks, zippers or levers that facilitate client loyalty. These levers generally work both as a positive motivation to stay, but also as a disincentive to switch.

In my view, there are three primary loyalty levers and they relate to your client’s…

Head – the perceived financial benefits gained/foregone as well as the anticipated time, costs, hassle and risks of switching.

Heart – the emotional and social benefits gained/foregone.

Ego – the impact of staying/switching on client’s personal status, reputation and position of influence.

There has been extensive commentary on client loyalty strategies particularly around developing closer personal relationships. Rather than repeat all of this, I thought I’d share a few head, heart and ego ideas that have received less air time.

#1 Multiple services

Beaton Research and Consulting data shows that client loyalty increases as the number of services bought by the client grows. Their data shows client loyalty goes up by 10.4% when moving from 1 to 4 service lines in legal services, 12.3% in accounting and 6.6% in consulting engineering. While cross-selling is good for the revenue line, it’s also really good for the client loyalty line. Intuitively this makes sense. The more services you provide, the more you know and understand about the client’s business, the more personal connections there are and the higher the perceived switching costs.

#2 Loss of future financial benefit

Colin Jasper and I argued in an earlier post that there is much merit in exploring relationship pricing arrangements that provide incentives for both parties to commit to working together for the long-term. Client loyalty is incentivised by having a retainer arrangement in which the client foregoes significant future financial and strategic benefit if they end the relationship. Discounted hourly rates that are easily matched by competitors do not qualify as a loyalty incentive.

#3 Cultural alignment

One of my clients has scored major brownie points with his clients by actively supporting their causes and CSR projects. Every effort is made to attend client-sponsored charity events, make donations and provide people and resources for joint community development projects. Underpinning this activity is the message is that we’re like you; our values and your values are similar; culturally we’re aligned. He says this approach not only fosters client loyalty but it widens clients’ ‘zone of tolerance’ on pricing and occasional service stuff-ups.

#4 Buying in self-image

While clients will seldom reveal this decision criterion in surveys or interviews, their actual behaviour betrays them. There are numerous instances of clients staying loyal to prestigious firms not because of superior service or advice, but just because they’re prestigious. Simply put, they like sunning themselves in the firm’s after-glow. Their status is reinforced by the company they keep. Going ‘downmarket’ is a major threat to their ego. Many clients don’t like to admit it, but they often buy in their own self-image.

Related to this point is the ‘making them look good’ phenomenon. Some firms are experts at making their clients look like superstars. Switching to an alternative provider may reveal a hidden capability flaw or risk being seen to perform at a lower level.

#5 Co-creation

Clients are less likely to walk away from anything that they’ve invested a lot in. Getting clients to co-create new products, processes, projects or programs helps encourage this investment. To illustrate, one mid-tier law firm in Australia recently initiated a project to redesign the workflow process with a major insurance client. The intent was to reduce handovers, minimise errors, take out resources, speed up time and reduce cost. The end result: the client got a lower unit fee and the firm enjoyed a greater share of wallet and a commitment from the client to ‘co-act’ (their words) together into the foreseeable future.

Your call to action

Focusing on improving client satisfaction is a good thing, but if you really want to create sticky profitable clients its time to think more creatively in playing to your client’s head, heart and ego. What’s more, if you’re seeking to win a new client that appears to be wedded to a competing firm, having a deeper understanding of their relationship can help craft a winning strategy.

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account planning, business development, innovation, internal collaboration, key account management, planning, professional service firms, Sales management, strategy management

What’s wrong with the sales pipeline?

In Articles, Commentary on 24 April 2014 at 12:19 pm

Panic sets in when the phones stop ringing!

In the frantic rush to drive revenue growth, sales pipelines have become the favoured business development tool of many professional service firms. Before your firm follows a similar path, I think there are five important limitations to note particularly when it comes to selling to existing clients. To address these problems, I’ve developed a complementary/alternative approach based on the McKinsey Three Horizon Growth Model.

Five key limitations

1. Revenue not value-focused

I recently reviewed the sales pipelines of a major professional service firm and over 85% of the opportunities listed amongst existing clients were focused purely on revenue generation. The language of “sales” orientates one thinking around revenue and, in my view, creates a blindspot around other opportunities to enhance perceived value, reduce cost and improve the overall profitability of the account.

2. Reactive not proactive

Sales pipelines can encourage lazy reactive thinking that relies mainly on the client to feed the top of the funnel. At worst, firms just sit around and wait for the next RFP to be issued. Effective strategic account management demands proactive discussions with clients, challenging their thinking, suggesting things not on their radar and, if appropriate, offering unsolicited proposals.

3. Internally not externally-focused

In an interview with a senior BD manager from a large global engineering firm he lamented the fact that pipeline meetings were very internally-focused. “90% of the discussion is about us. It’s about our specific project proposals and who we can influence to get our proposals accepted. This is okay to a point, but we spend very little time talking about the bigger-picture of where the client is at and their broader strategic needs.”

4. Sales ends at a sale

The concept of the sales pipeline was first developed for B2B product organisations with dedicated salespeople. In this context, once the sale is made the sale process ‘ends’ and accountability is then shifted to production or delivery teams. In many professional services, sales does not end at a sale. Delivery is critical for repeat purchase, on-selling and referral. Pipelines focused on new opportunities sometimes deflect attention from expanding the scope of current projects.

5. Awkward language

Many law, accounting and consulting professionals find the language used to define the key pipeline stages awkward and ambiguous. One law firm client recently relayed a story of protracted internal discussion around the definition of “Initial Contact”, and significant resistance to the term “Closing” as it implied some type of manipulation and counter to trust-based selling. While this is not a flaw in the pipeline concept per se, it is a common barrier to effective implementation.

A complementary/alternative approach

One approach I’ve successfully experimented with, is adapting the McKinsey Three Horizons Growth Model (see graphic below) and applying it to a firm’s strategic accounts. There are few points to note about this adapted model:

The axes are Time and Value created in the relationship i.e. not just revenue or profit generated by the firm
Strategic account managers need to focus on the three horizons simultaneously, not sequentially
Each strategic account plan should reflect a good balance of H1, H2 and H3 actions and opportunities
The traditional sales pipeline is not ignored but absorbed into the three horizons
Sales pipeline meetings become “Three Horizon Meetings” with a broader agenda
There is potentially much benefit is working with your client in creating and updating the key points under each horizon.

Your thoughts

I’d welcome your thoughts and experiences in using the sales pipeline. Does it work well? What are some of the limitations you’ve noted? Do you think the Three Horizon Model is a useful addition to your toolkit?

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business development, client relationships, innovation, key account management, planning, pricing, professional service firms, strategy management

What’s your sneaker strategy?

In Articles, Commentary on 31 March 2014 at 11:05 am

At a strategic planning workshop last week I retold the old sneaker joke…

When two hikers on a Southern African safari are suddenly confronted by a lion, one of them drops to his knees and starts to put on his sneakers. His friend says, “why you’re doing that – you can’t outrun a lion.” To which he replies, “I don’t need to outrun the lion, I just need to outrun you!”

This joke led to a fantastic discussion on the firm’s competition and their “sneaker strategy“, that is, how it intended to outrun its rivals.

For this firm, a leading communications consultancy, we identified five major competitor sets:

Boutiques and one-man-bands
Direct, comparable competitors with a similar service/staff profile and geographic footprint
Indirect competitors from adjacent sectors including the Big 4, engineering firms and change management consultants
Clients in-sourcing, DIY and captive suppliers (clients doing without or taking on more risk was also in this category)
Web-based products and providers, mostly off-shore, providing lower-priced solutions for process and commodity work.

For each competitor set we then went through an exercise trying to identify how the firm could beat the competition. In some cases, my client’s competitive strategy was confident and compelling, but in others it felt more like a wish and a prayer. The discussion was instructive in that it clearly identified that their current client relationships were the bedrock of much of their competitive strategy. It also revealed major knowledge gaps, especially how little they knew about Competitor Set 5.

Framing the discussion around, “how are you going to run faster than the other guys?” or “what do your sneakers look and feel like?” was particularly instructive in opening minds and challenging assumptions. It was much better than getting people to talk about positional advantages and distinctive capabilities. This textbook approach is okay but it often yields textbook answers.

When someone said, “they’re starting 20 meters back but running 20 km/h faster than us”, the discussion went on to how the firm could [i] slow their progress, or [ii] join their team, or [iii] shift the finishing line, or [iv] start a different race? It was clear that the level of the discussion was at least two or three notches above anything we had attempted before.

If your firm wants to win the race, or at least get a medal, I’d highly recommend this simple but effective planning tool. Feel free to change the joke to suit your context – a grizzly for North America, a tiger for India, an angry red roo for Australia or a Man United supporter for England.

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business development, client loyalty, client relationships, key account management, marketing, Measurement, professional service firms

The two sides of the client loyalty coin

In Articles, Commentary on 29 November 2013 at 12:32 pm

CASE ONE: I continue to book and fly with Qantas but I would not recommend them to others. My desire to accumulate frequent flyer points is stronger than my need for a more customer-focused airline.

CASE TWO: One of my clients has lots of raving fans but is struggling financially. He gets great feedback, but for various reasons his customers are not spending more with him.

These two case studies support Don Peppers’ argument that there’s an important distinction to be made between attitudinal loyalty and behavioural loyalty. Client recommendation or advocacy, as measured by the Net Promoter Score (NPS) is really just an ‘attitude’, it is not really an indicator as to whether the client will give you more of their business. My loyalty to Qantas is behavioural but it’s not backed up by a positive attitude towards them. Put simply, there are two sides to the client loyalty coin. The goal in your firm is to have clients that give you BOTH a good rap and a good Dollar.

The New Client Loyalty Matrix

Plotting attitudinal loyalty and behavioural loyalty yields a New Client Loyalty Matrix:

So what are the strategic implications of this new Matrix? Here’s my initial list, but I’d welcome your thoughts and comments.

At at minimum you should measure both dimensions of loyalty for all key clients. I think most firms will have reasonably good data on attitudinal loyalty, but many will just use historical financial performance at the indicator of behavioural loyalty. I’d argue that getting deeper insights into future behaviour and the true nature, degree and predictors of client commitment is a frontier few have forged.

Just measuring and focusing on NPS drives clients towards Quadrant VII. The goal should be to get your key clients towards Quadrant IX.

Most new clients start out in and around Quadrant V. It would be an interesting piece of analysis to track the progression of all new clients with say the first 18 months of being with the firm and see where they land up, AND WHY?

Most of your best referrers would be in Quadrant VII. It’s worth having another look at these and other fans with closed wallets and seeing whether there’s something the firm can offer them that would be of value. In other words, move them right on the Matrix. To illustrate this, one mid-tier accounting firm found that its traditional referrers were a happy hunting ground for the firm’s personal wealth management and SMSF services.

Your most vulnerable clients are those in Quadrants III and VI. They may be giving you most of their business at the moment but their heart’s not quite in it. Their spend with you might be as a result of a long-term contract or a company-wide directive such as global panel alignment. Relying on these type of arrangements for your client’s loyalty might have short-term benefits, but in my experience, it usually ends badly.

One needs to understand the specific drivers to get a client that’s in Quadrant V or VII and shift them over time to Quadrant IX. Providing great service, good value and being nice guys might get to Quadrant VIII but more structural or deeper strategic interventions would get you to IX. For example, negotiating some type of an incentivised retainer arrangement could get you there.

The best opportunities for growth will most likely will come from your competitors’ clients that are in Quadrants III and VI. Their behavioural loyalty to your competitor might be more to do with perceived switching costs than any other factor. If your offer includes paying for these switching costs then suddenly you’re in the game. As an example of this, one law firm got a prospect to switch by offering discounted “getting to know you rates” for the first three months of a relationship as recognition of these switching costs and to symbolise their willingness to invest in the relationship.

True commitment

In some industries it is almost impossible to create truly committed clients. For example, servicing public sector organisation that are bound by strict probity requirements might make “Consider” the highest level of behavioural loyalty. I think the implications from the Matrix still hold up, you just need to adjust the scale to what’s possible.

Your call to action

Your immediate call to action is to take a fresh look at the questionnaires and discussion guides you are using to solicit feedback from you clients. Are they asking the right questions to adequately measure both attitudinal and behavioural loyalty? Are they providing insight into the things your firm needs to do to, the actions to be taken to get the client in or around Quadrant IX?

My other challenge to you is to plot all your firm’s top clients on the Matrix and stress test your whole client portfolio. Is is sustainable? Where are the points of vulnerability? What broader capabilities do you need to develop to get better at driving both types of client loyalty? What does your overall relationship capital base look like and what could you do to make it more valuable?

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business development, client relationships, key account management, pricing, professional service firms, Sales management

Smarter Relationship Pricing

In Articles, Commentary on 14 November 2013 at 2:01 pm

Written by Joel Barolsky and Colin Jasper*

Most pricing literature focuses on how to price a product or a discrete service. Far less has been written or researched on relationship pricing. This creates a significant challenge for those involved in pricing professional services as many arrangements between buyers and sellers are relational rather than purely transactional.

By relationship pricing we mean a pricing arrangement that covers multiple transactions over a period of time and where there’s some commitment from the client and from the firm to do business together.

The most dominant form of relationship pricing is discounted hourly rates. Many firms offer their priority clients discounted rates as both a symbol and a reward for a more valuable relationship. Similarly, many clients seek to lock-in discounted hourly rates for a period of time by setting up preferred provider panels via tender.

There are a number of problems with this approach. Firstly, there are few incentives for the firm to invest in a new service delivery model or in technology that could significantly reduce cost. Typically within the discounted hourly rate model, major cost reductions over time result in reduced firm revenue without improved profitability. While in the short-term this appears to benefit the client, in the long-term it significantly slows the pace of service innovation and the potential for step-change efficiency improvements.

Secondly, there are few incentives for the firm to provide breakthrough ideas and service that delivers a quantum improvement in the client’s business. With a discounted rate model, the only reward for truly outstanding results maybe the chance of a greater share of wallet or just a good vibe.

And lastly, the total system costs are often significant, especially in “second bite” panels where clients ask panel firms to re-compete for discrete projects. In these instances, the client has to go through a process of briefing firms, addressing issues, receiving proposals, assessing proposals and informing all parties of the outcome. Each of the panel firms has to invest significant time and effort in preparing and presenting their proposals. If one properly accounted for all this non-value adding activity by each participant for every transaction, it’s painfully clear that over time the whole arrangement is lose-lose.

Incentivised retainers

One form of relationship pricing that is worth exploring in more detail is what we call incentivised retainers. It doesn’t suit all circumstances or relationships but has a number of elements that set the scene for better outcomes for both the firm and the client.

At its most basic level an incentivised retainer has these characteristics:

An underlying intent to achieve the strategic objectives of both parties
A joint focus on ensuring quality outcomes
Agreed incentives for the firm to improve their performance on things that matter to the client (eg. end-customer satisfaction, speed, consistency, reduced rework, reliability, managed risk)
Agreed incentives for the client to help the firm reduce their costs
An efficient and effective process to deal with matters outside of the agreed scope
On-going processes to ensure a positive and constructive relationship.

Some interesting examples of these retainers or variations of this theme include:

A client whose primary focus was not to exceed their annual budget entered into a retainer arrangement with a single firm at 95% of the budget. To encourage the firm to find cost savings, the contract was offered to be renewed at 95% of the previous year’s budget. While both firms have the option of exiting the relationship at the end of each year, the arrangement has now been running successfully for several years.
A client gave one firm all the work of a particular type on a medium-term transparent retainer arrangement. This arrangement encouraged the firm to invest in new processes and technology that radically improved cost-to-serve. Having greater cash flow certainty allowed the firm to make these investments and to date it has yielded significant benefits to both parties.
A client wanted to encourage genuine competition for a long-standing incumbent firm. They had established a panel, however this had minimal impact in changing the buying behaviour of a broad range of instructors who had deep relationships with the primary provider. An innovative competitor entered into a retainer arrangement based on agreed resources in order to provide the client with a credible high quality, cost effective alternative to an embedded incumbent provider. Individual instructors could continue to use – and pay for – their preferred firm. Alternatively they could access the innovative competitor at no charge, as the retainer was paid centrally.
A client sought greater price consistency from one project to the next. An incumbent firm with significant historical data was able to analyse past projects, classify them into three categories, and provide a staged fee structure for each category. They then converted their pricing from hourly rates to task-based billing – at a price-point that was neutral to both parties – in order to meet the client’s primary objective.
Firms who put a proportion of their remuneration at risk, at the sole discretion of clients, based on their overall satisfaction across a range of projects over a set time period.
A client who wanted the flexibility to utilise a range of firms at different price points offered annual retainers to multiple firms. Selected firms were encouraged to work together on a range of projects to maximise the value to the client. Retainers were reviewed each year based on the client’s perception of the contribution made by each firm during the prior year.

Limited only by imagination

The opportunity to establish incentivised, relationship-based retainer arrangements is limited only by the imagination of the participants. While many firms offer creative arrangements, not all meet the specific needs of the clients. In our experience, the best arrangements have been created by firms and clients working together to find mutually beneficial solutions. What are the most innovative arrangements you have seen?

* Colin Jasper is Director of Jasper Consulting and one of the world’s foremost experts in professional services pricing

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business development, client relationships, executive leadership team, internal collaboration, key account management, professional service firms, Sales management, Training

The story of the leader, strategist and salesperson

In Articles, Commentary on 11 October 2013 at 12:37 pm

I was asked recently if there was ONE FACTOR THAT LED TO FAILURE of key client programs in professional service firms more than any other? My answer was that most firms don’t really understand the Relationship Manager* (RM) role and consequently make poor selection and development decisions. Their starting point is that the RM is a key point of contact for the client and a co-ordinator of client development activity. In my view, the starting point should be that the RM is a business builder with a profound strategic role, both internally and externally. They are the champions of building the firm’s relationship capital.

The way I see it, the RM is a blend of leader, strategist and salesperson. As a leader they inspire the internal client service team and all other stakeholders across the firm to collaborate and deliver on the promise. As a strategist they can think think big and dream large, beyond their technical specialisation, and craft a cunning game plan that will realise new value-creating and long-term relationship building opportunities. And as a salesperson they have fire in the belly to get things done and to influence fee-paying clients to say ‘yes’ more often than not.

As illustrated in the graphic below, when one of these characteristics is absent, the execution of the role is potentially compromised:

This idea has important implications for:

Selection – Most professional service firm tends to select RMs who historically have the best relationship with the client. While there’s obviously some merit in this, I’d argue that future growth of the firm-client relationship is more dependent on the RM being an effective leader, strategist and salesperson that any legacy factors. In reality this is often easier said than done given firm politics and client preferences. But I warn you, if you just persist with same old same old, don’t expect any fireworks.
Development – It is interesting to observe the emergence of a new breed of strategic account management training courses that are in effect leadership development programs with a client analysis and BD flavour. These courses have largely evolved because of the recognition of leadership capability being so crucial to the effective execution of the RM role. If your firm currently has a leadership development program in place, perhaps tailoring a module for the RMs in the group would be helpful. Similarly, if you’re running a sales/CRM skills initiative you should look to complement it with leadership and strategy elements.
Support – Your firm might not be blessed with an abundance RM Superstars to choose from. This potentially means fulfilling the role not through one person but a team of both Marketing/BD people and other practitioners. In this instance supporting the RM with the right people and getting the team to work effectively and efficiently is crucial. A good illustration of this comes from a mid-tier Australian law firm that decided to appoint a Client Relationship Partner or CRP (equivalent to RM) and a Strategic Account Manager or SAM for each of its key clients. The CRP had stewardship over the whole relationship but the SAM was a Senior Associate from another practice group also servicing that client. The SAM’s role was to do a lot of the ‘heavy lifting’ and support the CRP with leadership, strategy and sales activities. The firm adopted this model as its Marketing and BD Department comprised just one person.

Too many clients?

Perhaps the most profound implication of the Leader + Strategist + Salesperson hypothesis is rethinking how many GROWTH clients you should have. Maybe this decision should be based more on how many RM Superstars you have available (or could hire in) and less about the traditional client selection criteria of revenue, profit, service range, etc. Perhaps you should only have a Top 3 or 5 where you genuinely have those limited numbers of RMs with the capability to take a good relationship and make it great. Having 20+ GROWTH clients might give you a warm glow and receive wild applause from the equity holders, but frankly you’re probably setting yourself up to fail.

* The Relationship Manager is sometimes referred to a Client Relationship Partner (CRP), Client Relationship Manager (CRM) or Strategic Account Manager (SAM).

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account planning, business development, client relationships, internal collaboration, key account management, Sales management

From MY client to OUR client

In Articles, Commentary on 20 September 2013 at 11:08 am

What’s the prevailing mindset in your firm? Do people talk about ‘my’ clients or ‘our’ clients? Are client relationships primarily owned by individual partners or directors or are they viewed as assets of the firm?

My research indicates that many firms are still struggling with this idea of institutionalising their key client relationships. While there are attempts to cross-sell and refer others, it is usually done from the perspective of calling in a specialist to address a specific (often narrow) client need. The client is still someone’s client with others helping out when they’re asked to. It’s not an ongoing firm-wide collaborative effort to create the most value for the client and for the firm.

The problem of individual client ownership becomes particularly acute when firms attempt some form of succession or buy-out plan. The acquirers/investors will simply pay less or walk away from the opportunity if they deem there is no relationship capital in the firm. If future cash flows are predominately linked to the reputation and relationships of a person about to exit the business, then what’s left that’s worth paying for?

Five reasons

There are five principal reasons that underpin client hoarding:

Reward – the firm’s measurement and reward system incentivises the individual to hold on to the client and do as much work as they can for that client, regardless whether they are the most suitable provider or not. I recently heard of a case where a law firm’s commercial partner ran a major dispute for ‘his’ client, rather than refer the matter to the firm’s specialist litigators. A post-mortum of the file revealed the approach had not only exposed the firm to undue risk, the client landed up paying around 20% more for sub-standard outcomes and a very inefficient process. At the time, the partner’s bonus was principally linked to his personal billings and so there was a huge disincentive for him to involve others.
Power – in professional services a senior practitioner’s power base is often linked to their ability to make rain and drive revenue growth. Having personal ownership of high-revenue clients feeds this perception and power is increased from the implied threat of leaving the firm and taking a sizeable chunk of revenue with them. Similarly, being Mr or Ms Big with big clients is one way that large egos can be stroked.
Legacy – a vast majority of client relationships start out as one-to-one, person-to-person engagements. Very few commence as firm-to-firm collective pitches. The individual that wins the initial work tends to keep on going and over time develops strong personal relationships with key buyers and influencers. Whilst these personal bonds are great, they can become to define the overall relationship and limit others stepping into the frame and joining the club as equals.
Distrust – in some instances partners simply do not trust the quality of advice and service delivered by their colleagues. They feel the client would do better by going elsewhere. Some firms are in indeed challenged by very high variability in technical ability and inconsistent service standards. Client hoarding is probably a good thing in these cases! However, from my experience the problem of inconsistency is often overstated and the real problem is professional arrogance and distrust based on ignorance.
Control – recent Harvard Business School research by Heidi Gardner suggests that heightened performance pressures in professional services drive people to seek control and adopt a ‘go it alone’ mindset that ultimately undermines collaboration. Larry Richards‘ research work points to lawyers, in particular, having a strong autonomy and control streak.

Cultural versus process solutions

I often see firms trying to fix this problem of individual client ownership with process solutions. They put in new BD processes that require people to sit together and prepare and execute a client plan. They install new CRM systems and try get people to institutionalise client knowledge. They train staff in a new sales methodology that requires pre- and post- call planning. What happens is that people don’t pitch up to client planning meetings, they don’t bother to update the CRM and they fill in coloured sheets once or twice and then go back to good old days.

In professional services I believe one has to tackle this issue, first and foremost, as a cultural problem. In some instances it goes to the heart of the firm’s purpose or raison d’être. Is the firm there as a place for individual owners to practice their profession or is it a business that seeks to create and build shareholder and stakeholder value? If it’s more the former, it’s going to be a long hard battle trying to build the firm’s relationship capital.

Cultural solutions start with strong leadership and a commitment to live the firm’s values. If your firm’s values reflect something about respect, integrity, teamwork, service excellence, or similar ideas, then there’s enough ammunition there to start and win the battle. It’s really up to the firm’s leadership group as to whether they have the courage to fight!

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account planning, Audit, business development, client relationships, key account management, professional service firms, Sales management

Crazy about your clients

In Articles, Commentary on 2 September 2013 at 10:13 am

“Insanity: doing the same thing over and over again and expecting different results.” Albert Einstein

Are cobwebs the only things growing around your “Growth” clients? My recent research indicates many firms have clients they’ve designated as “Rising Stars” or “Future Leaders” or equivalent, but in reality many of these relationships have stagnated or even declined. What’s more it appears many firms are just doing the same things year in and year out and expecting a significant leap in revenue or profits. It’s just crazy to expect different results when you’re doing the same thing over and over again.

Barolsky Advisors has just launched a new service called A Good Hard Look which aims to [1] audit stalled growth client relationships, [2] recalibrate goals and expectations, and [3] advise on the changes to strategy, people and processes necessary to achieve superior outcomes. The ultimate goal of A Good Hard Look is to identify the critical changes necessary to get better results and to make a more informed and honest assessment of the growth opportunity.

A Good Hard Look

You can try A Good Hard Look yourself by examining the firm-client relationship from five perspectives:

The context of the relationship, including client industry trends, the client’s corporate and business strategy, their values and culture, their future capex and opex spend, their in-source/outsource strategy, and the nature and intensity of competition faced by the firm.
The client’s specific needs and expectations, including identifying the buying unit and influencers, their KPIs, their value drivers, value destroyers, emerging issues and requirements and unstated/unknown needs.
The client’s perceptions of the firm, including their views on the firm’s current expertise, service, people, pricing and value (absolute, long-term trend and performance relative to competitors), the strength and breadth of the person-to-person relationships, their willingness to consider the firm as a provider across other practices and locations, and the firm’s potential role in addressing other unmet needs.
The strategies and tactics used to develop the relationship, including what’s been tried and what hasn’t, what’s worked and what hasn’t, what the key financial and operations metrics tell us, and the proposed game plan for the next 12 to 18 months.
The people and processes involved, including the skills, confidence and drive of the Client Relationship Partner/Relationship Manager and Client Team, and the internal systems and processes used to prepare, execute and review their plan.

DIY or get outside help

Doing it yourselves (DIY) is less costly but having an external independent expert to assist can bring a fresh perspective and relevant benchmarks. It can also address sensitive political issues that are often a significant cause of the problem. In addition, some firms lack the time, discipline and/or skills to do a strategic audit of this nature. The Barolsky Advisors approach embodies a co-action style which gets the best out of both parties, optimises spend and transfers key skills and tools. Lessons learnt from a strategic audit of 2 or 3 clients can usually be transferred to other relationships and become imbedded in the way the firm operates as a whole.

Call to action

If you have any stagnated growth client relationships you should intervene sooner rather than later and make the necessary changes. Just keeping on doing the same thing is insane!

Click here to find out more about Barolsky Advisors’ A Good Hard Look or give me a call on 0417 305 880.

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business development, client relationships, internal collaboration, key account management, marketing, professional service firms, Sales management

What’s your mantra?

In Articles, Commentary on 14 August 2013 at 9:48 am

In a recent strategic account planning workshop, I asked the attendees to write down the firm’s three-year vision for the firm-client relationship. Some wrote a financial target, others a net promoter score and the rest were wishy washy measures of relationship strength. To me the lack of clarity and consensus around the vision for the relationship was a problem. Not being on the same page did not augur well for effective execution of the plan.

So, I ask you. Is there a clear and agreed vision for each of your firm’s top 10 client relationships?

While ‘vision’ is the convention, I prefer the idea of articulating a ‘mantra’, that is, your firm’s overall strategic intent expressed in a few words or a short phrase. A mantra can be both a future desired state (like a vision) or a description of a more immediate strategic focus. It’s a more flexible concept that can cover both outcomes as well as inputs.

When used well, a mantra can be a powerful rallying cry that inspires and activates all the troops. It can become the equivalent of the motto underneath the crest worn on your school/university/club blazer that binds the client community and shapes behaviour.

Mantras for mature relationships

Mantras for established client relationships will often reflect a strategic intent of protecting and preserving the relationship. Some examples might be:

Brickwall the relationship – there should be a ‘brick wall’ around the client with us on the inside i.e. no-one must get an opportunity to take our slice of the action.
Daylight – there should be a huge gap between us and the next competitor in terms of service delivery and client perceived value.
Manage for margin – while there is little revenue growth potential every effort should be made to lower cost-to-serve and limit discounting.
Make Procurement love us just as much – Procurement’s role in the next panel reappointment will be crucial; we need need to understand their value drivers and deliver on all of these.
KPI kings – we should lead on all the client’s KPIs in assessing their suppliers.

Mantras for growing relationships

Mantras for growing relationship will often reflect a strategic intent of expansion. Some examples might be:

2 in 2 – our two-year target is to grow revenue to $2 million across all practices and offices.
Ticks and crosses – ticks in current services and cross selling of service lines A, D and F.
Fight ’em on the beaches – a full-frontal attack with all our energy and resources to go from provider #3 to #1.
Zippered from top to bottom and side to side – strive for strong productive personal relationships across the organisation with the relevant people in our firm.
Soul-searched, Sole-sourced – get much closer to our client to ensure less of our work is contested.

The process

In my experience, the process of identifying options and agreeing on the preferred words is almost as important as the mantra itself. This process flushes out different stakeholders’ perspectives and engenders a degree of ownership of the final outcome. These perspectives are better out than in!

One might argue that having an overarching mantra for a large, multi-faceted relationship can over-simplify something that is complex and sophisticated. In this instance, the mantra would likely be too broad and bland to be useful. This argument might ring true but I often find it’s an excuse for [1] being lazy in a creative sense, or [2] the stakeholders not being able to agree on the underlying strategic intent. If needed, one can take a complex relationship and break it down into manageable parts and agree the intent and mantra for each of these parts.

Call to action

Take out a copy of the plan for one of your firm’s critical client relationships. Read the executive summary. Try for yet another higher level of synthesis. If can you encapsulate the strategic intent in a short phrase or in a word you’ve probably stumbled on a really useful mantra. Start sharing it, living it and loving it.

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A blog by Joel Barolsky of Barolsky Advisors

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