Wayne Wilson on Companies in Transition

The demise of professional services firms

The headline of a recent article read, “Consulting Firms Must Become Real Businesses to Survive”.

The theme of the article is obvious and the author went on to enumerate some of the areas in which professional services firms must change their ways. Like all periods of transformational change, there is good news and bad news here.

Improving business practices has clearly been necessary for many professional services firms including architects, accountants, attorneys, and consultants. I have advised and worked in such firms and the opportunity for improvement has been enormous.

On the other hand, most professionals join professional services firms to “do the work” rather than run or be part of a business. Something important is at risk of being lost when clients become “customers” and not “clients.”

Advisory professionals have a higher calling than just making sales and booking hours or fees.  Their job is to be there when you need them and do for you what is in YOUR best interests, not what is in theirs.

Truly good advisors become successful because their clients become successful. It should not be any other way.

The flywheel begins to turn

A few weeks ago I wrote about a new business development project in which I am involved. The flywheel is finally beginning to turn, but there is still a lot of panting and I’m wheezing for breath (mentally) some days.

Project activities have become more routine (read: several hours of grunt work each day), but interest is building slowly, bit by bit, and a few other people have signed on to carry part of the load. Missionary work is slow, tedious stuff.

That chance lunch encounter last month brought me three business opportunities last week, none directly related to the biz dev project and yet all were potentially complimentary. I had to pass on the first due to a conflict, the second sounds really exciting and the third can only help the cause.

And to top those off, a fourth opportunity appeared in last night’s email!

What would we do without a bit of serendipity?

Doing the Biz Dev Dance

Someone invited me to lunch recently to pitch their concept for a new business service. I am familiar with the target market and therefore was a reasonable sounding board. [1]

Obeying the Golden Rule – Having recently pitched a new biz dev project myself, I was keenly sensitive to listen intently and respectfully to the new idea. The concept is high-minded and potentially of high value, but I questioned whether the market timing was right for the proposed offering.

I offered several suggestions for test marketing the proposed service, including targeted roundtables and an email survey, to see if it might develop some legs. The conversation was engaging and stimulating as we massaged the growing variations on their original theme, but I also sensed some disappointment that I did not personally embrace the proposed service.

It’s a delicate balance – you don’t want to get a reputation as a naysayer lest you lose out on the opportunity to hear early on about interesting new ideas. On the other hand, concepts left unchallenged can become expensive failures, and that’s not in anyone’s interest.

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[1] Lesson #1 from Biz Dev 3.0 Fundamentals in 5 Easy Lessons

Biz Dev 3.0 Fundamentals in 5 Easy Lessons

Biz Dev 3.0 [1] is hard work. There is all that messy business of actually talking to potential customers, and even worse, having to modify your grandiose plans to conform to external reality. What a pain…

Biz dev would be a lot less painful (and costly) if you followed a few simple rules. Herewith are my Biz Dev 3.0 Fundamentals in 5 Easy Lessons.

Lesson #1 – What’s the concept? Does it make sense? Does anyone care? What’s the customer value proposition? Better yet, will anyone actually pay for it? Talk to some smart people in the target market. If no one salutes, it may be a mirage (in your head).

Lesson #2 – Is it feasible? Can you actually: design it, develop it, build it, and sell it? What should it look like? What will it cost? How long will it take? Rapid prototyping or iterative development can keep the costs of this phase manageable. Accelerate the learning process by a series of rapid failures. Figuring out what doesn’t work can help you zero in on how it might work.

Lesson #3 – Develop it – Now comes the hard part of actually translating all of that feasibility work into a high performance product or service. Time to turn on the investment spigot while staying flexible to fine tune, fix mistakes, and re-focus as necessary on the target customer value proposition.

Lesson #4 – Launch it – Contrary to popular opinion, a new product or service launch results in still more costs, not profits. The investment bulge in your P&L has merely shifted from development to sales and marketing. Your new “whatever” may in fact be the second coming of sliced bread, but if potential customers cannot see it, try it, and test it, they are not likely to use it, let alone pay you for it.

Lesson #5 - Promote it – And you thought launching a new product or service was the hard part! Sustained promotion over the long term is essential for any new product or service to attain a favored position in the eyes of customers. You must create value for your customers before you can expect to create value for yourself.

Only after the new product or service is well established with lots of customers singing its praises do real profits begin to flow. Think Amazon. Think Apple’s iPhone. It’s called long-term value creation for a reason.

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[1] The Coming of Biz Dev 3.0

The Coming of Biz Dev 3.0

Business development (biz dev) is one of the most amorphous, even shadowy, of business functions. What is biz dev anyway? That depends on who you ask and when.

During the late 90’s tech boom, biz dev often meant strategic alliances and partnerships. The goal was to partner with a big guy who had big bucks and market presence. The little guy would then ride in the wake of the big guy’s fountain of funding to glory and profits. (Or was that just a big market cap?)

Before the onset of the current ice age (circa 2008 – 20xx), biz dev usually meant acquisitions funded by cheap money and high stock prices. The mantra – get bigger, quicker. Managements often touted (believed?) that it was cheaper to buy than build whatever it was they wanted or needed. Never mind that many of them did not know what their customers needed, nor did they really know how to build whatever it was. Besides, doing deals was flashy and fun compared to the difficult task of building a business one day at a time.

Now comes Biz Dev 3.0. Return with us to those thrilling days of yesteryear when biz dev meant inventing stuff, thinking up new products and services, actually engaging with customers to figure out what they might want or need, and then actually developing or building something useful which could also be sold at a profit. What a novel concept…

There is no lack of opportunity to build successful new products, services or businesses; there is only a lack of imagination and a willingness to put your head down and work – for however long it takes.

Brain streaming

You’ve probably participated in brainstorming at one time or another – one of those strategic offsite retreat exercises where you try to solve a problem by coming up with as many potential solution ideas as possible in a short amount of time. No analysis or commenting on each other's ideas is allowed. That’s for the staff/management team to crank through back at HQ after the session is over.

But have you tried "brain streaming"? No, this does not involve hard-wired video streaming directly into your brain, although someone, somewhere is probably working on an app for that.

I am blessed / cursed (depending on your point of view) in being an external thinker. External thinkers do their best thinking while interacting with others. Few deep thoughts occur in the solitude of your office. But connect with someone else in a mutually stimulating discussion of a challenging topic and it’s like sticking your finger in an electrical socket. Your brain goes into overdrive; it’s been zapped.

Brain streaming is most exciting in a pitch or sales meeting when you find yourself connecting with the personal across the table and the ideas begin to flow about how they could benefit from your product or service. (What did I do with that order form?!)

But brain streaming is probably most effective in the context of a finely tuned management team where several senior members are external thinkers. (Internal thinkers don’t need a team – they get their ideas directly from the cosmos.) When this group bears down to tackle an issue, it’s like everyone just grabbed onto a hot electrical wire – the kind you can’t turn loose of until someone turns off the juice. (It’s a fantastic endorphin rush without all that sweaty exercise.)

If you are an external thinker and your teammates are not, a consigliore will do just fine. In a prior life, I had a close adviser who tended to be more of an internal thinker, but he was very good. When I wanted to develop an idea, I would call him in, shut the door, and work the whiteboard for an hour or so. I would sketch out the ideas / options. He would comment, elaborate or push back.

The beauty of this approach was that he (like all good advisers) had no agenda other than helping me develop the idea/issue at hand. Nor was he invested in any of the options. His was a pure intellect; he was only interested in what would work.

Brain streaming is not for the faint of heart (figuratively or literally), but try it. You might like it.

Stacking the (slide) deck

Business development projects are built on PowerPoint, right? Well yes, and no, unless you want to kill the deal before you start. Let me explain.

The Goods –

• PowerPoint helps you organize, re-organize and refine your pitch.
• PowerPoint forces you to be parsimonious with your words (if you expect anyone to be able to read them).
• PowerPoint creates a nice handout / leave behind – I prefer two slides per page, readable while reducing the paper poundage.
• I also like to send the slide deck in advance of the meeting – some people actually read them! More time for conversation and less time for sitting in a circle while reading the slides.

The Bads –

• When under pressure / on deadline, the technology will defeat you every time; take handouts for everyone.
• Too much pressure to put more stuff on each slide or, worse yet, increase the number of slides. 20 slides should be the max – at two minutes per page if you actually present them formally, that’s 40 MINUTES!
• If you can’t cover your idea in 20 minutes or less, think about going back to the drawing board before your prospect sends you involuntarily.

The truly Ugly –

• Contrary to popular belief, PowerPoint will not, and cannot, close the deal for you. Only you can connect with your prospect, communicate your value proposition, answer their objections and close the sale.
• The profit is in the preparation, not in the presentation. In numerous recent pitch meetings, I have yet to complete even an informal presentation of “the slide deck.” Every meeting has turned into a whirling, spinning conversation about the value proposition and how it can help the prospect get to where they want to go. [1] That should be your objective – to engage your prospect in a fruitful conversation. The slides are props and nothing more.
• If you cannot tell your story without a slide deck, the slide deck will not save you. I have watched people practically drooling (not salivating) when forced to sit through a very smart person reading his/her slides.

Now if I can just find that cord for my projector…

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[1] This outcome presumes that you are speaking with a qualified prospect to whom you have been properly introduced.

Spinning up the fly wheel

I am currently involved in a new business development project – you know the kind: Constant wheel spinning trying to get traction while at the same time sucking all of the oxygen out of your life.

And there are good days and bad days. Good days when you feel euphoric and bad days when you just want to stick your head under a faucet. This week has finally seen two good days in a row where pitch meetings with potential partners went very well. (They will sign up officially, won’t they?) I can feel the wheels occasionally grabbing hold a bit even if they are still spinning a lot.

And then you have one of those kindred spirit encounters that really put a glow on the end of a long week. I had one of those yesterday.

A brief chance meeting turned into a quick lunch and three hours later we were still sitting at the window table of this little café delving into the who, what, how, and when of a significant potential business initiative tangentially related to the biz dev project.

The new initiative may or may not click, and it may or may not leverage the biz dev project, but it was one of those exhilarating intellectual moments when you feel yourself connecting with someone, whom you have previously known only casually, on multiple levels at the same time with ideas flowing rapidly between you as the energy and excitement about the prospects build.

Now if I good just gen up a day like that every week or so…

Invest During Hard Times

-         Craig Barrett, former Intel CEO

Owner/CEOs often find it difficult to invest during difficult economic times. And yet, it is the investments made now which will drive revenue growth when the current economic recession ends. The challenge is to reduce spending while preserving or increasing investment. What’s the difference?

Investments support or drive increases in revenues and profitability. Spending is the cash disbursed for everything else which does not meet the investment definition. Like politicians, spending sponsors will argue vociferously that their particular program / budget / personnel are necessary investments and are absolutely essential for the health and even the survival of the enterprise. It is simply not true.

Finding funds for investment requires reducing large amounts of spending. Most managers are tempted to start with the free coffee in the employees’ lounge and the travel budget. There is often not enough money here to make a difference. Instead, challenge programs, markets, product lines, customer concentrations, and significant research and development programs.

Can the particular program or activity make a difference in the trajectory of the business and if successful will it be big enough to matter? The chief decision maker must be brutal in choosing among all of the good ideas. Only the very best should be funded; everything else must be jettisoned. The future of your business depends on it.

Applying ‘The Only Three Questions That Count’

I have been reading Ken Fisher’s The Only Three Questions That Count: Investing by Knowing What Others Don’t. Ken’s focus and business is managing stock portfolios at Fisher Investments but his questions and methods can also be applied to running a business.

Here are Ken’s three questions:

Question 1 - What do you believe that is actually false?

This one really set me back because it can be applied to everything you do. Life, investing and business are filled with myths. You think you know what your customers want, but have you asked them? You think you know what your competitors are up to, but have you gone into the market to see? You suspect that some of your employees are not happy working for you, but have you tried to find out why?

Question 2 - What can you fathom that others find unfathomable?

This is classic specialist, niche marketing for business owner/CEOs. How can you own a particular market segment? What products or services could address an unmet need? Or meet that need better, quicker, or cheaper? What knowledge, organizational, facility, design or production investments need to be made to position your company uniquely in that market?

Question 3 - What the heck is my brain doing to blindside me now?

This question could be summed up as “we see what we expect to see and we are simply blind to what we do not expect to see.” Each of us have pre-conceived notions or screens that filter the information we receive from our environment. Problems arise when the information we expect to see is incorrect or irrelevant to our situation, or worse, the information we filter out (are blind to) is warning us of impending disaster!

Business success is partly about the ability to challenge and vet what we see and hear. We might do well to start by challenging ourselves first.