Are Your Industry Experts “Competent”? A guest post by Paul Gladen of Muzeview

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Jeff here.

Does your firm have an industry program?  Most firms would answer affirmatively, but do they really have an effective and sustainable approach?

I began my professional services marketing career at Arthur Andersen and led marketing for one of the firm’s industry teams.  Arthur Andersen, the firm’s founder, believed industry specialization was the key to superior auditing and client service. Almost all of the firm’s competitors followed Andersen’s example. After Andersen, I held senior roles at several of the top human-capital consulting firms. None of them had industry programs because management believed that “people are people” and that employee benefits and rewards were universal.  There is no right or wrong answer.

But, if your firm decides to go to market by industry, know that you either commit the resources and focus or you get out. Clients are smart and see through veiled “industry expert” claims. An ineffective industry program can destroy your credibility and erode your brand.

To shed light on what it takes to build and sustain an effective industry program, I have asked industry expert and former Andersen colleague, Paul Gladen of Muzeview, to be a guest blogger on Prudent Pedal’s blog this month. I know you will find his insight powerful and actionable.

Be prudent.

Are Your Industry Experts “Competent”?   by Paul Gladen Paul Gladen photo

Has your firm defined what constitutes industry expertise for your professionals? Does the firm have an industry competence model?

If your firm is going to position itself as industry-focused and establish teams of niche professionals to serve its industry clients, then it’s vital to set parameters around what industry expertise means for your clients, your firm and its experts.

There are three categories or levels of industry capability or competence that we’ve found to be essential to effective industry-focused client service and practice growth (see below).

This hierarchy builds on itself and loosely maps to a professional’s career development.  Typically junior professionals can focus on Level 1 capabilities and as they become more experienced develop their Level 2 skills to deliver industry relevant advice and services. Level 3 capabilities become essential as professionals become partners and are expected to take on lead client relationship and business development responsibilities.

Industry Knowledge and Awareness (Competency Level 1):

▪       Competency Statement: the ability to be conversationally competent and aware of industry fundamentals and industry issues.  This is “table stakes” for the firm to credibly claim an industry focus.

▪       Observable Behavior: Ensuring that professionals do not need the client to teach them their business and equipping professionals to effectively listen for and identify industry specific issues that a client is facing.

Client Knowledge and Application (Competency Level 2):

▪       Competency Statement: the ability to understand a client’s industry specific business goals, opportunities and challenges and connect those to the firm’s expertise (and vice versa).

▪       Observable Behaviors: For example, identifying and exploring the various business risks for a food & agribusiness client making an acquisition in Brazil, or alerting energy clients to the business risks and obligations of a development such as the recent Executive Order on Improving Critical Infrastructure Cyber-security.

Build Client Relationships (Competency Level 3):

▪       Competency Statement: the activity of talking to clients and prospects and sharing insights around key industry issues and proactively engaging them in dialog around those issues and the firm’s insights.

▪       Observable Behavior: Teaching or alerting the client to something they don’t know, but which is likely important to them and the achievement of their business goals.

The over-arching principle here is that you can’t offer the most appropriate client advice if you don’t understand the industry processes, terminology and issues that shape the client’s business and provide the context for the issue or opportunity you are advising on.

Here are some areas of expertise that should form part of an industry competency framework:

▪       Industry terminology

▪       Industry composition and structure

▪       Industry skills

▪       Industry key performance indicators (KPIs)

▪       Industry specific business processes

▪       Industry specific technologies

▪       Industry specific laws and regulations

Defining the specific knowledge and capability requirements at each competency level for an industry is a process that can draw upon multiple internal and external resources.

  1. What is the knowledge that your more experienced industry professionals have found important in their client work?
  2. What are the industry issues, processes or terminology commonly involved in the work you do for clients in that industry?
  3. Talk to industry clients and contacts about the things they consider to be important to understand about the industry.
  4. Look at industry news and research and explore resources that industry associations provide, which may include competency models.

Are industry competence and expertise assessed and tied to recruitment, performance evaluation, and career development?

With your competency model in place, your firm can begin using it to round out both team and individual skill needs.

Looking at the members of your industry teams, you can assess whether or not there is an appropriate balance of competency. Every team member doesn’t have to have the same set of industry skills.  For some it may be important to address strategic industry issues, whereas others may be more focused on industry specific technologies or regulations. However, as a team it’s important to have a healthy balance of industry knowledge and expertise, closing industry skill gaps by setting development goals for specific professionals or hiring outside talent to close those gaps.

Clearly, industry specific skills development or recruitment goals need to be aligned and coordinated with the firm’s overall development and recruiting skills.  An experienced hire might be able to bring both industry and technical skills to the firm.

On an individual level, on-going industry skill development can be tied to yearly performance evaluations and incentives. (This, of course, assumes that your firm has a system in place for reviewing its professionals on a regular basis.) Professional’s should work with their supervisors to agree on specific development goals for their continuing industry education.  This might, for example, involve setting aside time for them to attend conferences or exploring opportunities to be seconded to a client in order to gain hands on industry knowledge and experience.

Does the firm have formal programs and resources to develop the industry competence and expertise of its professionals, including keeping them abreast of the latest trends and developments in the industry?

Since professional service firms have relatively well-defined career paths, you can help your experts pinpoint what it will take for them to move up the ranks, including what industry skills may be important to their development. Based on your competency models for each job, what do they need to bolster their skills and expertise? How can you help them? What training and support do they need from the firm to move up to the next level?

Learning and development needs can be addressed in myriad ways: Industry seminars and webinars, in-house brown bag lunches with multiple practice groups, conferences, internal networking sessions, courses, or even informal mentor relationships with senior professionals will all effectively strengthen your experts.

Bottom Line:  You can’t really call your firm industry-focused if you haven’t defined what that means and don’t have the mechanisms in place to ensure your professionals can live up to the statement.  However, making industry expertise a reality can be achieved in a structured and organized way by defining and then applying industry competency models.

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Curing I-didn’t-know-you-did-that-itis in Professional Services

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Frustration

It happens time and time again. You learn through the grapevine or through a loyal client that another client has just chosen a competitor for a service that you provide. When you  ask your client why he chose a competitor, he says, “I didn’t know you did that.” You feel frustrated and perhaps even angry or threatened by this change to your relationship.

When these situations occur, consultants often blame a lack of marketing volume or effectiveness for the lost business.  While this may be the case, the primary cause of “I-didn’t-know-you-did-that-itis” is more frequently a discombobulated brand architecture—one that confuses and overwhelms clients and prospects.

What is brand architecture? Brand architecture is nothing more than a systematic way of organizing the identity of the products and messages of an organization so people understand how clients are served.  Here is an example of a familiar company:

FedEx Brand Architecture

It is simple and straightforward and shows clearly a manageable number of channels and services.

Here is an example of a typical mid-sized professional services firm’s list of services (sans industries):

  • Communication
  • Strategic HR and benefits communication
  • HR branding
  • Employee listening
  • Learning programs
  • Global communication
  • Change management
  • Corporate communication
  • Communicating green
  • Mobile apps
  • Comm.Unity
  • Compensation
  • Board advisory
  • Equity compensation
  • Global compensation
  • Management advisory
  • Nonqualified deferred compensation
  • Performance and rewards
  • Sales effectiveness and compensation
  • Surveys and benchmarking
  • Total remuneration
  • Valuation services
  • Global Investment Advisors
  • Global Technology and Delivery Solutions
  • Defined benefit administration
  • Health and welfare administration
  • Global equity solutions
  • Kinetic application technology
  • Separation solutions and administration
  • Health and Productivity
  • Health and welfare plan management
  • Clinical strategies
  • Consumer engagement
  • Health and welfare audits
  • HIPAA compliance
  • New directions in health care management
  • Health and welfare administration
  • Specialized services
  • Retirement
  • Plan strategy and design
  • Defined contribution plan consulting
  • Plan governance and fiduciary responsibility
  • Compliance and regulatory risk management
  • Actuarial consulting and financial management
  • Multi-employer and governmental plans
  • Investment management and consulting
  • Ongoing plan operation and administration
  • Talent and HR Solutions
  • Talent planning
  • Talent deployment
  • Talent engagement

At which word did you stop reading? (I made it to “Kinetic Application Technology.”) Most firms believe that in order for clients to understand a firm’s full breadth of services, it must list them all. As this list illustrates, the strategy overwhelms people, and they stop listening. This is an issue that plagues large and small firms alike.  Large firms want to represent a full breadth and depth of services. Small firms want to look bigger than they might actually be.

There is an axiom among marketers that clients do not buy drill bits; they buy holes.  Most firms are just selling ¼ inch, high-speed, titanium drill bits! Clients just want a ¼ inch hole fast, easy and cheap; whether it is made with titanium, laser or water jet is less important. If we intuitively know that simple is better and that clients buy benefits not features, why do so many firms fall into this trap?

There are two answers:  opportunity costs and partnership.

Opportunity costs– Many firms believe that if they limit marketing to a core set of services then they limit their growth prospects. Again, firms think that the more they promote everything, then the greater the chance that something will stick. The opposite is true.

Partnership– Firms promote and reward based on an individual’s ability to build a growing practice and keep a lot of mouths fed. By not “listing” a practice on a webpage or brochure, a potential or existing partner feels that he/she is penalized in the business development game. No one wants to put someone at a disadvantage or create a political firestorm.

The fact of the matter is that there is a simple way to overcome these issues. All it requires is strategic, collaborative leadership and answering some key questions. Ask yourself the following:

  • What is our current brand architecture and does it align our business strategy and brand positioning for the future?
  • Does our current brand architecture focus on our current/future client perspectives or our internal organization structure?
  • Does our current architecture foster increased demand generation or confuse the market?
  • What is our firm’s value proposition and positioning? Is it clear to the market and our people?
  • What should be the driving precept for our brand architecture?
  • Does our current brand architecture position us for changes in the industry/category and support our company strategy over time?

Here is a nice example of a client-focused firm’s architecture that speaks the client’s language and makes it easy for the client to see how the firm can help.

  • Creating the high performing organization
  • Successful M&A
  • Global expansion
  • Driving and encouraging innovation
  • Employee engagement
  • Workforce productivity
  • Developing top teams
  • Attracting and retaining talent
  • CEO succession

This firm is from the same industry as the prior example. Which firm do you think makes a stronger impression, is more memorable and clearly demonstrates how it can help?

Takeaway

One of the consistent drivers of firm selection is that the client feels heard and that the firm demonstrates that it understands the client’s business. To make it easier for your client to see how you can help, you must speak to the client’s issue or aspiration and communicate your core capabilities in a simple, straightforward way.

Developing an effective brand architecture is a firm-wide effort, and it requires firms to make strategic choices and investments. These decisions involve opportunity costs and require political capital to prioritize.  As you evaluate your brand architecture, keep these goals in mind:

  1. Business success depends on aligning your firm with your clients and their needs.
  2. Brand architecture should support your client-focused business strategy and play a defining role in how you communicate your firm’s value.
  3. As a client-centric firm, your business and marketing messages should articulate and reflect the needs of your clients by making your offer simple and relevant to your clients and prospects.
  4. Your brand architecture should be composed of the elements that you deem the most important to support and extend your brand in the marketplace (not just the biggest practices).
  5. Your brand architecture should exist to help the marketplace understand the many elements of your offer and not reflect your internal structure.
  6. Brand architecture will influence and inform all of your brand activities –- from people to process, products, services and environments.

Remember these key goals and you will go a long way in curing “I-didn’t-know-you-did-that-itis.”

Be prudent.

Pope Francis’ Message for Leaders of Professional Services Firms

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Some might say that it wouldn’t be prudent to mix business and religion.  I’d argue the opposite.

On March 13, the Roman Catholic Church elected a new leader: Pope Francis. From the start, he has created quite a stir. As a Catholic, I have a vested interest in his new role, but anyone– Protestant, Jew, Muslim, Buddhist or atheist– can learn from his leadership style.

Pope FrancisHaving witnessed and been a part of leadership changes at some of the world’s top consulting firms, I noticed as I watched the transition in Vatican leadership how fundamentally different the shift was– and what great lessons professional services firms could take away from the example Pope Francis was providing.

Here are my observations:

 1.    Know who you are and what your priorities are.

Before his installation, Jorge Bergoglio, bishop of Argentina, selected the name Francis for his papacy.  In 500 years, no pope has selected the name of St. Francis of Assisi, a noble turned beggar, as his name. Pope Francis chose the name to set the tone and demonstrate his priorities for the Church: humility and service to the poor.  This was not a focus chosen in committee or one that resulted from strategic planning. It was the result of a lifetime focused on living the Gospel and serving the downtrodden in the slums of Argentina. Many would argue his priorities should have been the abuse scandal, women priests, gay rights or contraception. These are all important issues within the Church, but they are divisive. Serving the poor is the Gospel call and a positive unifying vision for both progressives and conservatives.

One of the biggest challenges for professional services firms is focus. Partnership structures and desired growth present opportunity costs. Most firms are loath to choose a focus on a market, capability or attribute for fear of giving up growth opportunities.  In doing so, they choose the lowest common denominator and relinquish the chance to create something unique and meaningful.  Focusing and prioritizing provides clarity and creates energy. Pope Francis makes no attempt to be all things to all people. His focus is clear, and in his first three weeks he energized the Church in a way it had not been in decades.

 2.    It is not what you say; it is what you do.

This is cliché, but it is so true in this case. Pope Francis has 2.4 billion Catholic eyes on him. Shortly after the puff of white smoke, the pope addressed the throngs of people in St. Peter’s Square (and around the globe). This was the world’s first glimpse of the pontiff.  What did Pope Francis do?  He rejected the ornate trappings of papal tradition (exquisite red and gold vestments) and appeared in a simple white cassock. He broke with another tradition by refusing to use a platform to elevate himself above the cardinals standing with him as he was introduced to the world.  Instead, he said,  “I’ll stay down here.”  He kept his comments short and spoke only in Italian, whereas most popes use Latin. And, before he blessed the crowd, he humbly asked the crowd to pray for him!  This pope is a humble man. He takes public transport every day.  He has chosen to live in an apartment instead of the papal palace, has passed on a chauffeured limousine, has paid his own hotel bill and has cooked his own meals.

Firms spend countless hours developing the right brand, tagline and creative communications. These things are important, but they are a distant second to the firm’s culture.  Every successful firm is built on a clear vision, strong values and the bold actions of its founder and subsequent leaders. Brand is nothing more than a firm’s reputation, and that reputation is shaped by the behaviors of its people. People model the behaviors of leaders and behave in a way that is consistent with the rewards they receive. Firms that spend time creating messages inconsistent with leaders’ actions and rewards are doomed to fail.

 3.    If you aren’t making people mad, you aren’t doing anything.

Pope Francis was installed just in time for Holy Week (the week preceding Easter). It is a time filled with solemnity, tradition and ritual.   Each year on Holy Thursday, priests, bishops, cardinals and the pope, reenact the Last Supper and wash the feet of 12 people during mass, just as Jesus did with his disciples. Church tradition and law dictate that the feet to be wash are all men, since Jesus’ disciples were all men.

What did Pope Francis do?  He washed the feet of women in a juvenile detention center.  Not only were the recipients of his grace women, but one of the women was Muslim.  The controversy he created was enormous!  A day later, Francis reached out with friendship to “Muslim brothers and sisters” during a Good Friday procession dedicated to Christians who were suffering the results of terrorism, war and religious fanaticism in the Middle East.

On Easter Sunday, Pope Francis once again wore a simple white cassock and presided over a shortened mass.  The new pope has made clear that he prefers his masses short and to the point.  He was even caught checking his watch during his March 19 installation ceremony.  Pope Francis is establishing a pattern of not only challenging church tradition, but also Church law. And he has lots of latitude. After all, he is the pope.

As a firm leader, you too have more latitude than you may think. Sometimes it is necessary to slaughter some sacred cows.  Doing so shows vision; it demonstrates that it is safe to take risks, and it encourages people to grow.  Often, operating “in the past” keeps firms from challenging themselves to reach higher and achieve latent potential. Making significant changes to the status quo, even though it can be upsetting, can unleash opportunity and the creativity to achieve it.

Take away

Leadership inspiration can come from many places.   Pope Francis has demonstrated that clear, decisive, even controversial actions, can fundamentally and quickly shift the trajectory of an organization.  The Catholic Church is plagued by a massive abuse scandal, is accused of being behind the times and it is losing members. By setting a clear vision, speaking through actions and taking risks, Pope Francis has reinvigorated the church and set a strong example of leadership that anyone could benefit by following.

Be prudent.

The Fallacy of Professional Services Productization

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Next to cross selling, “productization” (or the act of turning a successful engagement into a commercial product) is the holy grail of professional services firms.  Productization allows firms to package repetitive processes, achieve scale, increase profitability and drive new growth–all great outcomes. Unfortunately, the way firms often go about developing products means they are seldom realized. Here’s why.

Professional services firms are filled with smart, driven, client-focused people.  They spend their lives building and honing capabilities and expertise that are uniquely theirs.  They take their skills and apply them to big client problems with the hope of producing excellent results. Often, when consultants see that one client is happy with their results, they surmise that there are a whole bunch of clients who will want the same solution and they begin developing a “product” that meets everyone’s needs.

The process normally looks something like this:

Step 1:  Name it:  A cool product deserves a cool name. A huge amount of time is spent creating a catchy name.

Step 2:  Package it:  A product, with a name so special, requires it owns unique packaging.  That means a new logo, maybe even its own brand identity.

Step 3: Protect it:  This product, name and logo are so different and important that they have to be protected. Trademarking the name and process are obvious steps.

Step 4:  Market it: This product, with its unique name, naturally deserves its own URL and website, four-color brochure, press release, 10-city tour, seminars and webinars. A product with this much power and creativity also needs to be featured on the firm’s home page.

Step 5:  Sell it: Consultants say to partners, “This is the best product ever. All your clients need this.  Set up cross-sell appointments for us to get out and talk to your clients about how they need this cool, one-of-a-kind solution.”

Step 6: Start over. Sales stunk because, strangely, no one wanted the product.

Does this process sound familiar to you? If so, you’re not alone.

Let’s retrace the steps and see where the process broke down, where the fallacy reared its head and how the approach can be improved.

Fallacy 1:  Naming a product is fun and exciting (kind of like naming your baby), but naming the product should not be step one.

The first step in developing a product should be creating a hypothesis about the product-market fit. This process begins by making some guesses about who the “ideal” client or market might be for the product. This is where you would detail the needs and challenges the solution would address (i.e. your value proposition). Then you would test the hypothesis by doing what Steve Blank, author and serial entrepreneur, calls “getting out of the building” and meeting tens, if not hundreds, of potential buyers. Talk them through your hypothesis, ask questions and adapt your hypothesis. The goal is to identify the “minimal viable product” for launch to ensure that you are not just wasting time “packaging” your core capabilities instead of creating a viable product.  For more on Steve’s phenomenal process, check out his class on Udacity.

The fact of the matter is that the name really does little to promote or sell the new product. Most clients are inundated with catchy names, and they forget them right after they hear them.  Worse, most professional services products are relegated to a meaningless three-letter acronym in less than three months and all the naming effort is wasted anyway!

Fallacy 2: “Branded” products can dilute meaningful firm-wide brand building.  Clients only have so much bandwidth to consume marketing messages. Firms already want clients/prospects to know the firm’s name, its value proposition, its values, its industries, its practices, its sub-practices, its geographies AND now its products?  Most firms simply do not have the resources to go that deep and clients have little interest. When you look at most firms, their product portfolios are mishmash because they lack a brand architecture to manage the products’ relationships to the firm’s brand.  Adding brand names simply confuses clients when a simple descriptive name will do. Deciding whether to brand a product, and how, should come later in the process.

Fallacy 3:  Look through your list of intellectual capital assets. Count the number of proprietary names you invested in and are still using. I suspect the number is very small. What was the ROI on the time and legal fees?  Save your money. If you are thinking about investing in a proprietary name, then make sure that the product meets these criteria:

  • Does the product advance the business strategy?
  • Does the product offer competitive advantage? (i.e. it gives you a clear advantage over your competitors and allows you to generate greater sales or margins and/or retain more customers than your competition.)
  • Does the product offer a high growth opportunity that alters the service make up of your firm?
  • Have you developed and committed to a three-year marketing plan and budget to build the brand for the product?

If it does not, give it a simple descriptive name and get moving.

Take your minimal viable product, or proposed product, to “friends of the firm” who meet your ideal client profile. You do not need brochures, websites or other marketing materials for this step. A Power Point deck is sufficient to explain the benefits and the concept. Implement the solution again and again. Learn, refine and substantiate. I recommend 10 successful engagements. If your market is viable and your process is scalable, getting to 10 should be relatively straightforward.  Once you are through 10 engagements, think about launching and marketing the product.

Fallacy 4:  Next to the time consumption of creating a name, the marketing step sucks up the most resources.   Trying to build demand for a product takes time and money. A launch is just the beginning, and the initial “launch” effect wears off quickly. Building demand requires substantial and sustained resources. Most firms have an initial push and then move on to the next practice’s priority.  This is why it is critical to establish firm-wide support and commitment to a minimum three-year marketing investment. A marketing plan is much more than a press release, a few webinars and a vanity URL.  Your marketing plan should leverage your firm-wide branding efforts, but focus on nurturing leads for the product. This means a comprehensive approach that educates prospects on the issues, builds demand and seamlessly moves them through their buying process.

If you have done the new steps, getting appointments with existing clients and cross selling should be the easiest part of the exercise.

Take away

Developing new products and services is critical to the livelihood of a professional services firm.  However, one successful and exceedingly satisfied client does not a new product make. Don’t dilute your core capabilities. Firms must use a rigorous product development process long before “launching” a product. Don’t think that a brochure and a catchy name get you there.  It’s a fallacy.

Be prudent.

Professional services brands and the Tiffany box

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How many times has your firm rebranded? Maybe a downturn in business or the arrival of a new marketer has signaled to someone that it’s time for a new visual identity: new colors, a new logo, a new tagline. If you’ve been around for awhile, you have probably travelled this path more than once.

Professional services firm brands

When I speak about branding, I often begin by presenting a small box from Tiffany & Co.  All of the ladies in the audience lean in, while all of the guys (but one, generally) look perplexed. Several women will ask if the box is for them, and someone almost immediately asks what’s inside. I ask those gathered how they know it is a Tiffany box I’m holding and why they are so interested in its contents.  They identify the box immediately by its distinctive robin’s egg blue color and white ribbon. They want to know what’s inside because they’re confident that it’s going to be something exquisite.

I use this exercise to demonstrate the two dimensions of brand. The first is visual: in this case, a robin’s egg blue box tied with a white ribbon. The second is experiential: a Tiffany & Co. box holds the promise of an extraordinary gift. What does this have to do with professional services?

Professional services firms have their boxes too. A solid visual identity makes it easy for prospects to recognize your firm when your messages cross their desks. But the experiential dimension of your firm is where the real money is!  Your firm’s culture, expertise, results, relationships and your great ideas should do the talking in the same way the contents of Tiffany & Co. boxes talk for that company.

Branding is important. Marketers love branding, and I have never met an agency that didn’t think a brand needed a “refresh.” It is fun, creative and visible. But, branding is also all-consuming and very expensive. In addition to out-of-pocket costs, the opportunity costs are huge. Rebranding efforts consume partner time, leadership team time, marketing time, training time, marketing resources and marketing budget.

Firms often get hung up on colors and logos and waste valuable resources trying to get the brand “right”—usually to its own satisfaction.  One partner says, “I think the color should be blue.” Another says, “It should be orange.”  One says, “The logo looks like (fill in the blank’s) logo.” And another says, “It is not edgy enough.” Back and forth, the debate rages. There are no right answers; it’s all opinion and emotion. In the end, most firms’ brands are the weakened result of compromises and watered-down choices.

There is a time and place for the level of effort and commitment it takes to rebrand a firm. It is called a strategic inflection point: a new strategic direction, an acquisition, a new mix of services, the addition of new markets. This occurs when the change to your firm’s direction is relevant to the client.

Takeaway

Yes, it is important that your firm establish your “box” (a logo, company colors, etc.). Tiffany has used the same little box since 1878! But it’s what’s inside that really counts.

Pick a brand and stick with it.  And, the next time you are inclined to rebrand your firm, ask yourself why it is relevant to the client and what the opportunity costs are.

Answering these questions will make your decision to rebrand a lot easier and ensure that you keep your firm focused on your clients.

Be prudent.