Posted by Chuck Reynolds on April 25, 2017 - 2:33pmEdited 4/25 at 2:35pm

Becoming the Expert

The difference between success and failure

is often not in knowing what to do, but in doing it. One of the areas where the getting it done problem routinely arises is in living the firm’s positioning. When working with a firm I routinely see this pattern: We’ll narrow the focus of the firm, we’ll craft a consistent claim of expertise, we’ll identify the assets the firm has to support the claim and begin adding those it’s missing. Then, when it’s time to start selling, the business development person, whether principal or employee, will continue to bring back all the wrong types of engagements – from tiny tactical projects to assignments that have nothing to do with the firm’s new focus. The positioning has changed in language only; not in reality.

It’s in Business Development where the firm begins to live it’s new positioning (strategy) and transition from order-taker to expert. You can only reinvent your firm one new client at a time, and if the size or nature of the client engagements is not moving you toward your positioning, you’ll never get there. Sometimes the challenge is rooted in the innate hard-wiring of the individuals involved – asking them to do things they just cannot, but most of the time the challenges are institutional.

My colleague Cal Harrison at Beyond Referrals sites the 85-15 Rule from William Edwards Demming, the father of Total Quality Management. “Demming’s rule suggests that when things go wrong, there is roughly an 85% chance the system (management, machinery and rules) is at fault. Only about 15% of the time is the individual employee at fault.”  So, what is it about the system (firm, management, policies) that is impeding success in implementing the strategy?

For employees, it could be their compensation (pay) plan. I’ve previously written that the incentives in most business development employees’ pay plans are not properly aligned to the goals of the firm. But there’s more going wrong than poorly constructed pay plans. What is that keeps people and firms from making the positioning real?

Thankfully, the guru of all professional service firms has written a book on the question and its answers. David Maister’s Strategy & The Fat Smoker is all about, as the subtitle says, Doing What’s Obvious But Not Easy. For you as an agency principal and for me as a consultant, the million dollar question is How do we get you and your people to do what we both agree needs to be done? The short answer is meaningful measurement and a willingness to incorporate that feedback into performance appraisal and rewards. The shorter answer still is the Business Development Scorecard, described below.

The Scorecard

For every new client you bring in, large and small, ask yourself these few questions and grade the client/engagement to see if it’s moving you toward or away from your strategy. At the bottom, I’ll explain how to ensure that the feedback from the scorecard keeps moving you forward.

Does doing this work add credibility to, rather than detract from, our consistently articulated claim of expertise (positioning)?

Add Credibility?

Everything you and your firm does – everything – either sharpens the perception of the firm as an expert or muddies it. Generalist firms can try to claim that pretty much everything they do adds to their positioning, but they’ll suffer when answering the remaining questions. Any firm that has properly declared a true specialization will have less leeway when answering this question, but this is the gut-check question: does taking this work deepen our expertise or does it merely broaden our focus?

Is this client aware of our minimum level of engagement (MLOE approx. 10% of annual fee goal) and is he likely to meet it over the first 12 months?

Meet our Minimum?

This one is tricky to score; there are two variables. First, is the client aware of your MLOE, meaning, did you tell him that you’re not in the project business? Did you tell him you’re looking for a small number of new clients who will spend $x with you over the year? If yes, then you get to score at least zero. The second variable is the question, Is he likely to meet that minimum? If this is a one-time project that will not lead to other work or meet your minimum but you did tell the client about the minimum and he understood you made an exception for him, then score a zero. If the client understands your minimum and has committed to meeting it or says he is likely to meet it, then give yourself a point. No and no equals -1.

Were we able to direct or affect the buying process, instead of being forced to follow the client’s?

Affect the Process?

You can answer this question in one millisecond. Little control in the buying process means you were not seen as the expert and you will have little control in the engagement. Any short-term gains (money) came at the cost of impairing the firm’s ability to do it’s best work and move it toward the expert firm. You’ve probably left margin dollars on the table, too. If the client didn’t allow you to lead and didn’t make concessions in his own process for you then your firm wasn’t seen as different enough to merit the inside track. If you did lead or the client did make concessions in the buying process, score 1.

Were we able to secure the engagement without parting with free or poorly compensated strategic or creative advice?

Free Thinking?

Be honest. Free strategy is free pitching, too.

Did the engagement begin with us being paid to first diagnose the problem and recommend a strategy before we developed creative?

Paid to Diagnose?

If you were allowed to lead in the buying cycle then you will be allowed to lead the engagement, and it will show up right here. Were you allowed to begin at the beginning or were you forced to jump right into a creative brief and execution? Did the client dictate the working process or did you? The real proof is in your first invoice. If the amount billed ended with anything other than three zeros, then you were billing tactical work by the hour.

Using the Numbers

If you really want to live your declared strategy, simply use this report card for every new client, publish the scores within the firm, and tie incentives to it. Track your annual average and your moving 12-month average. Further, if your business development people have any incentives in their pay plan, make sure they are at least partially tied to the scorecard results.

The goal isn’t necessarily to score perfect every time, rather, it’s to drive continuous improvement, and to be aware of how each new client is either moving you toward the strategy of living your positioning or taking you away from it. There will always be compromises – project work, even when not actively pursuing it, and occasional prostitution where you do something just for the money. But the scorecard should help to reduce the compromises and keep your occasional prostitution from becoming your career.

Chuck Reynolds
Contributor