The Balanced scorecard on YOU may be coming soon

Bruce MacEwan (blogging as Adam Smith, Esq.) reports on and discusses a article by Guy Beringer, a senior partner at Allen & Overy, the major UK law firm, on the inadequacies (and unfortunate consequences) of using PROFIT PER EQUITY PARTNER (PEP) as a measure (or, perhaps more significantly) THE measure of firm performance.

This is not a new debate, in the law or in industry generally. The weaknesses of PEP are largely the same as the weaknesses of return on shareholders' equity measures. As Messrs Beringer and MacEwan point out, many games can be played with both the numerator and denominator of PEP, but it's not exactly news that companies can and do play games with both reported profits and invested equity, in order to bolster earnings per share numbers.

Welcome, leaders of professional firms, to the wonderful world and revered tradition of managed earnings and media games!

The problem with PEP is not that it's a bad financial measure. ALL measures, especially financial ones, can be gamed. As a lot of people have pointed out over the last two decades, the problem arises when financial measures are not used as part of a "balanced scorecard." It's always been true that a firm needs to serve three constituencies to flourish: clients, people and owners.

Industry makes the same mistake that Mr. Beringer cautions us against: focusing on financials to please Wall Street, hoping that no-one will notice that (initially) degrees of client satisfaction and employee morale are allowed to slip. He's absolutely right to propose the broader use of client and employee satisfaction measures.

One of the things that may cause this to actually happen would be if someone REALLY developed and put up on the web a "JD Powers-like" evaluation system which basically said: "evaluate your law firm and your lawyer here," allowing ready access for future clients and people to check out prospective firms (and individual practices) they might consider working with.

There are beginnings of this out there: Vault.com tries to rate the employee experience, and Chambers (in the UK) has print and on-line versions reporting firm's and people's reputations. But it could get a LOT more explicit, and high profile. I suspect there's a great business available for anyone who wanted to develop that "Rate your law firm" web site.

Of course, I'd be nervous about a "rate your consultant" website, but that's coming too, of course! Someday soon, we're ALL going to be held accountable to a balanced scorecard, whether we like it or not.

Lead Generation Tactics

Rain Today.com has published the Future Of Lead Generation, in which they report on the answers given by over 700 professional service firm leaders about their lead generation activities -- what works, what doesn't, and what they are planning to do in the future in regards to tactics, offers, and budgets.

There is an excellent 20+ page free summary available and you should check it out. It offers the 6 key insights that come from the study:

1. Brand Matters. Firms that said they were very well known in their target market were also more likely to say they were good or excellent at generating leads.
2. It helps (a lot) to know the names of the key decision makers in the organisations you are targeting (and many firms do not.)
3. Cold calling can work -- if you use it to set a meeting to introduce yourself and to learn about the prospect, not to go into a detailed sales pitch.
4. The most effective mix of tactics reported were "warm" phone calls to existing contacts, speaking at conferences, running the firm's own in-person events, becoming members of an industry association and (most surprising to me) connecting with the press to gain PR.
5. Firms reported that 25% of their leads were considered "sales-ready", 50% required further nurturing and 25% of their leads were disqualified.
6. Actually, as you'll see when you look at the free summary, insight number 6 is a well-designed "teaser" entitled "Indicators of the Future of Lead generation" which does a good job of making you want to buy the full report.

Apart from offering substance, Rain Today.com does a superb job of marketing itself. They targeted me as a blogger to mention this report, and kept in touch (politely, but insistently) with helpful reminders until I responded with this blog. They can (and DO) give lessons in how to be effective marketers!

Do My Ideas Work?

It's always gratifying to hear stories about people who did (or did not) use your advice, and to find out what happened. Here's an interesting tale, received by email yesterday:

Dear Richard, It's extremely unlikely you will remember me, but I attended a management development workshop you ran in London in 1998. I had already read your articles and found the time spent with you very valuable. After one of the sessions you and I had coffee and you recommended I start my own market research company. Subsequently I returned to Australia, ran Taylor Nelson Sofres for a while, and then took the plunge.

We started Celsius Research in 2002. We carefully thought about our positioning (heavy-duty quantitative market research with a strong predictive component) and stuck to it. Things went great and I bought an Aston Martin.

In 2003 we recognised the opportunities presented by on-line data collection and, in line with your opening chapters, launched a separate company, Information Research Management, instead of attempting to use the Celsius skill set and culture to undertake the more operationally focussed tasks associated with fieldwork. Things went well and I travelled around the world with my family.

In 2004 Celsius undertook a segmentation study for Microsoft Xbox in Australia and New Zealand. Our advanced analysis produced a fresh view of this market, which Microsoft embraced. As a result of this success, Microsoft sent us a RFQ for the building and management of panels of gamers in 20 countries. The brief called for a large amount of sample build, with quite simple data collection, although on a grand scale. There was little need for Celsius Research's skills, although they appreciated our knowledge here.

Anyway, my partners and I had a meeting where we concluded that, "Richard Wood would say we shouldn't pitch on this work because it does not fit into the mission statement of either company". And, yes, you guessed it, we decided that you were probably wrong in this instance, and, after all, a $2.2 mill contract was very attractive. We pitched against the world's biggest firms, and we won.

I can detail for you the rest of the story, but it ended in us losing $250k, our attention was taken away from our core competencies, no-one here enjoyed the work, and the only good thing to emerge out of this is that our reputation in Microsoft's eyes is good.

You were right!

Please feel free to use this case-study as you wish. Maybe someone else won't make the same mistake; maybe they will listen to you! Next time you are in North Sydney, let's catch up for a beer. I owe you many. Regards, Martin. (Prof. Martin James, Managing Director, Celsius Research Pty Ltd.)

*****

For those of you who are not aware of the reference, the advice of mine that Martin is referring to was subsequently written up in my article Strategy Means Saying "No".

Does anyone else have examples of my advice gone right (or wrong?)

How to Set Fees

A reader asks:

In light of some things you teach, ideas from Rob Nixon, and the VeraSage institute; it seems a very bad idea to bill by the hour, especially if you are a new consultant just beginning your practice. Yet, most smaller clients one would probably start with would think in terms of hours. Ultimately, you would want to find some way for them to pay you according to value added, right? But how is this done?

The best I can come up with is offer a free consultation (a few hours or whatever) just long enough to show them you are worth your fees and long enough to find out if you want to work with them). Have in mind what your time is worth to you. Estimate with them the length of the project. Come up with a (fixed price) estimate. If they feel like the price is worth it to them, then you are essentially measuring the value added (maybe lower than value added). Then if it takes longer or shorter, it was based on their value and not your hours. And in the future, as you get more efficient, you still bill the same for the project.

Is this the right approach for a beginning consultant?

***

So, what does everyone think? This seems to be toay's conventional wisdom on pricing, but would anyone else provide different advice?

Strategy as Portfolio Management

A primary form of strategic competition among professional firms today is NOT the (direct) competition for clients, nor the (direct) competition for junior employees, but the competition for senior lateral hires who come in to the firm with a ready-made book of business, i.e. "warlords with a following."

Building client relationships one at a time is a long slog, and takes persistence and patience. It's hard to break in to new markets and locations solely by organic growth and patient investment: besides, market opportunities might move too fast to take that opportunity. How much easier to grow by bringing in people with pre-existing practices!

This approach is not unique to the professional sector -- it reflects what corporations have long tried to do: increase their corporate return on equity by buying their way in to profitable businesses (and dropping unprofitable ones.)

The success of this approach in the corporate sector has been mixed. The real success of this "portfolio" approach to running (and defining) a firm is not a superior ability to acquire successful businesses, but a superior ability to help them grow once they have joined the "corporate" family. How many corporations have met this standard? How many professional firms, with their focus on attracting "already successful" lateral partners, know how to do this?

My own observation is that firms are playing with fire with this approach. By building the firm on bringing in a high percentage of lateral hires, they compromise the identity, the group cohesiveness, the loyalty that defines a firm. When a firm is managed as if it were nothing more than a portfolio of practitioners, it is unstable. The VERY approach of bringing in lots of laterals works against the thing that would be needed to justify it -- the ability to exploit firmwide relationships and connections to expand and build upon the newly acquired practice.

Yet firms cannot have it both ways: they cannot be a cohesive unit and compete primarily by bringing in outsiders who "grew up elsewhere."

Or can they?

Do You Really Want Relationships? -- New strategy podcast episode available now

The sixth episode of my new podcast series, Strategy and the Fat Smoker, is now live and available for download.

It is dedicated to exploring the themes found in my article by the same name.  I encourage you to forward these to friends and associates who may be interested in the topics covered.

With "Do You Really Want Relationships?" we will start to look at Fat Smoker principles in the realm of client relations.  Businesses regularly claim to have a strong sense of "client focus" yet more often than not their client relations plans are in actuality, only sales plans, designed to get business.  We will look at ways companies can build true client relations plans and ways to build and nurture the asset that is a long-term, trust based relationship.

Timeline:
00:39 -- Introduction
02:28 -- The benefits of trusting relationships
07:44 -- Relationship building within the firm
10:10 -- Relationships vs. Transactions pt.1
14:36 -- Special Announcement:  The "Give A Copy To Management" Campaign.
15:06 -- Relationships vs. Transactions pt.2
16:17 -- Expert or Advisor:  Which are you and which do you seek?
23:11 -- Converting the firm

You can download "Do You Really Want Relationships?" or sign up to receive new Business Masterclass seminars automatically with iTunes or other podcast players. (Click here for step-by-step instructions on how to
subscribe).  My seminars are always available for download at no cost.

We Don't work for Jerks

As I reported in my article Practice What You Preach, one of the hallmarks of the most successful professional businesses is that they recognise that, for long-run success, you must not only delight your clients but also provide interesting, challenging work experiences for your people.

That seems simple enough, but too few firms understand (and implement) the logical consequence: that you must say "no" to clients who treat you or your people badly. Not only must you not employ jerks (as Bob Sutton keeps reminding in his new book), but you must also not accept them as clients.

Richard Ennis, the co-founder and Chairman of the Board of Ennis Knupp Associates (a 100-person consulting firm which provides advice to pension funds and other major investors on how to invest their assets) reports that the key to his organisation's success is that they have been very selective as to which clients they will take on. (They pursue only about 50 percent of the requests to propose that they receive.)

"Let's face it" he says. "Some clients are nasty. And you can't expect to hold on to good people, at junior or senior levels, if you bring in work where they are not going to be treated properly."

Oh, if only more CEOs and managing partners understood that simple principle.

Does your boss?

When you're the boss, do you always live by that principle?

The Three-Month Rule

Plans and reviews ought to be conducted on a once-every-three-month cycle.

Once a year is, of course, too infrequent. Saying I'll accomplish something in the next twelve months is like setting New Years' Resolutions -- the pressure for accountability is too little at the beginning of the year, and too intense at the end. Examining whether I did what I promised only after 12 months of effort is unlikely to ensure that I stay on the diligent execution path.

On the other hand, meeting with me and reviewing plans and activities once every month is micromanaging and doesn't allow for unforeseen circumstances. I can't ABSOLUTELY promise I'll get something done in the next 30 days. Who knows what existing client demands will change, what new client opportunities will arise, what staff emergencies and ill-health will affect output? Or (to be honest) how the ups and downs of personal intensity will flow -- as my clients keep telling me, you can't be a dynamo, learning new skills, every month.

But three months is ideal. It's long enough to work around the world's unpredictabilities both at work and in people's personal lives. It's a long enough leash to make me feel that I have a lot of autonomy in allocating my time, while still keeping me accountable in a period of time that won't let me go off the rails.

On the other hand, to make it work, the three month-review system mustn't slip. It must be scheduled, planned for, actionable commitments made and the review actually held. If you want to treat me like a true professional, hold really thorough reviews with strict accountability for action promises made every 3 months -- and get off my back in the intervening time period.

Ban monthly budgets!

Abolish annual performance appraisals.

Manage to a 3-month cycle!

(By the way, this rule works on client relationships, too.)

***

Agree, disagree?

Hold Issue-Solving meetings

I still get calls to help with planning retreats and other kinds of meetings. Alas, it's still the norm to schedule a lot of speeches and force people into listening mode. Worse, there really isn't much time planned for serious Q&A.

There's a better way. Hold meetings where you pose a subject and ask for everyone's input. Then build from there. People will get involved, they won't feel threatened and they'll come away understanding the subject. Even if there is not total agreement, there will be a greater consensus and willingness to try. Because, they always know there will be a point where they can challenge point/issue, etc if they feel the consensus point is not working.

This form of meeting also works to building loyalty -- everyone feels they have played a part in the development of a solution. When they feel that what they are doing is their idea -- they take pride and ownership in it and are more apt to work harder and be more dedicated to making it work.

Of course, if you're the boss (or an outside speaker) and see yourself an "expert" in the field, it can take great self-discipline to do it this way! YOU always want to present YOUR latest and greatest idea. Tempting, but ineffective, usually.

I'd like to thank the academy

With the entertainment industry spilling over with award ceremonies in the past few weeks, there have been a lot of thank you speeches flying around. Well, I'm taking my turn to thank the academy, too.

Following on yesterday's post about the audience participation that drives the top 5 posts of the month, I'd like to take a moment to offer a genuine and heart-felt thank the many people who comment and link here, and also the "silent participants" who may not leave a comment but are loyal readers, for your support and engagement in the month of February. You truly make up an academy of passion, people, and principles.

Commentors

Susan Abbott, Roma Ahuja, Greg Anderson, Andreas, Basquette, Richard Becker, Harry Binswanger, Austin Bob, Wally Bock, Pepita Bos, Jerk Bosses, Bob Brown, Eric Brown, Duncan Bucknell, Shawn Callahan, James Cherkoff, Chuck, Geoff Considine, Ctd, Krishna De, Kathleen DeFilippo, Deborah, Chris Denny, Stephen Downes, Lance Dunkin, Francis M. Egenias, Heidi Ehlers, Eoecho | Greg Magnus, Christopher Marston, Esq, Jordan Furlong, Tom Future, Adrian G., Edward Gabrielse, Heather Gallegos, Gautam, Michelle Golden, Marcel Goldstein, Phil Gott, Mark Gould, Charles H. Green, Greg, Lisa Guinn, Sudhir Hasbe, Gl Hoffman, PreSchool Hopeful, Dominique Hubart, Alan Hudson, Huey, Carl Isenburg, Jennifer, Jill, Timothy Johnson, Rami Kantari, Tim Khaner, David Kirk, Delaney Kirk, Alexander Kjerulf, Ed Kless, Ed Kless, Howard Krais, Greg Krauska, John Labbe, Dave Livingston, Stephanie Lunn, Carolyn Manning, Jim Markham, Andre (Redbeard) Mazerolle, Pat McGraw, Jim McHugh, Peggy McKee, Francine McKenna, Patrick J. McKenna, Merusavarni, Mike, Warren Miller, Maggie Milne, William Moon, Janet H. Moore, Karen Morath, Kobus Muller, Tom Nixon, Pd, Peggy, Robert M. Randall, Anne Reed, Lyman Reed, Steve Roesler, Sarah, Bryan I. Schwartz, Shamelle, Mark Shead, Steve Shu, Andrew Smith, Dan Smith, Srini, Alan Stevens, Terry, Kathleen OBrien Thompson, Todd, Tom, Tom "Bald Dog" Varjan, Penelope Trunk, Rick Turoczy, Peter Vajda, Marjorie Vincent, Ashutosh Wakankar, Ashutosh Wakankar, Ellen Weber, Susie Wee, Joerg Weisner, Ian Welsh, Mary Wynne-wynter, Mary Wynne-wynter, Liz Zitzow

Trackbacks

A Passion for Result
Accountants Round Up
All Things Workplace
allinthemind
Beyond Blinking Lights and Acronyms
BIZ GROWTH NEWS
Book Novels
Bryan C. Fleming
Burst Creativity
Business for enjoyment's sake
Client Service Insights (CSI)
Connecting Technology, Strategy and Execution
CPA Success
Creating a Better Life
CRM Lowdown
Cultivate GREATNESS | Personal Development
David V. Lorenzo
Deliberations
DIGITAL STREET JOURNAL
Frontline Leadership TRENDS
Gautam Ghosh -- A Management Consultant's Blog
GNIF Brain Blogger
Hakim Abdullah
Half an Hour
Health Care Law Blog
Home Business Opportunity
HomeBusinessWiz.com
Innovate Rotary!
Innovation | Trust
InsureBlog
?????????? @ ????
Johnnie Moore's Weblog
Kent Blumberg
Kishore Balakrishnan?s Blog
Laura's Winning Ideas
MabelandHarry
Managing the Professional Services Firm
Managment by Matrices
Mary Books
Mighty Bargain Hunter
Misleading Advertising Law
More than a living
MyRetailCareer
Online Guide to Mediation
Peter's ponderables
Pick the Brain
political Calculations
Possibly?maybe?.baby!
Reading Recommendations by Stephen Hicks
Redbeard Marketing
SalesMotivation.net
SalesTeamTools
Savoir pratique
Searchlight Crusade
Simplify This
SmartCoolRich
Software Project Management
SOME ASSEMBLY REQUIRED
StartupSpark
Strategic Design | marketing & branding thoughts by Nick Rice
TamsPalm-the Palm OS Blog
texanomex
Text Books
The AntiSyphus Effect
The Book's Den
The Dragon Slayer's Guide to Life
The Engaging Brand
The Organic Leadership Blog
The Probabilist . com
Thoughts & Philosophies
Three Star Leadership Blog
Towards Better Life
TrackKnacks: Aptitude Wizard Watch
Uncommon Knowledge.
Unjustly
Verve Coaching
Web Worker Daily
Widows Quest
Working at Home on the Internet
Young-Manager

Podcast Trackbacks

Accountants Round Up
All Things Workplace
Burst Creativity
Cultivate GREATNESS | Personal Development
Frontline Leadership TRENDS
Home Business Opportunity
jbstens
MabelandHarry
Managment by Matrices
SalesMotivation.net
SmartCoolRich
SOME ASSEMBLY REQUIRED

Admirable

I don't usually pay attention to press releases that I receive, but this one I thought was worth passing on:

PITTSBURGH, February 28, 2007 --Bob Gallagher, a Pittsburgh CPA and management consultant to CPA firms nationwide, appears on The Oprah Winfrey Show, Friday, March 9, 2007, with author/movie superstar Denzel Washington and WNBA/Detroit Shockers basketball all-star, Swin Cash. This show originally aired on October 31, 2006 and the producers have decided to re-air the show.

Cash lovingly calls Gallagher her "Paps" and writes:

"He was always telling me to give back, always preaching about the cycle of poverty and bad decisions and hardship ... He's always in the background, always just a great cheerleader and supporter ... Bob never had an agenda other than to help me become the person, the basketball player, and the woman I am today ... There's so much that comes down to race in our society today. But a beautiful story like this one -- a white man reaching out to help a young African-American girl -- had nothing to do with color of our skin."

Gallagher and Cash met through the Western Pennsylvania Youth Basketball Club, Inc. (www.usagirlshoops.com), which he founded in 1990. At the time they were introduced, Cash was an 11-year old living with her single mother in McKeesport, a suburb of Pittsburgh.

After Cash's developmental years in McKeesport, she went on to play basketball at the University of Connecticut, winning two national titles; captured a WNBA title in her second season with Detroit; played in the 2003 WNBA All-Star game; and won the gold medal with the U.S. women's basketball team in the 2004 Olympics.

Gallagher is the former managing partner of a CPA firm in Pittsburgh, and a former partner with a Big Four firm, and for the past 20 years has consulted with more than 700 CPA firms as well as led many workshops for more than 1,200 CPAs on leadership, business development and management.

Gallagher has continued to support the basketball club by raising more than $1 million to help it continue to fulfill its mission. He has maintained this passionate support in memory of his young niece -- his twin brother's daughter -- who died in 1992. His over-arching goal for the past 16 years has been to provide inspiration and better choices for underprivileged girls.

Feb Top 5 Roundup

In Trite Formula? I asked why performers always thank their audience. Sometimes, it's actually because they ARE grateful! And sometimes it's because the audience really is a major part of the experience and the show!

So I'm going to offer a special thank you here to all those who contributed to make these posts the most read, linked and discussed ideas here in the month of February. And to the "pure audience" members: don't just sit there, clap your hands!

1. Perspectives on Careers
   Twelve tips to seize control of your career and take responsibility for your own success, with a collection of great responses and reactions from readers.
2. What Managers Do Least Well
   A discussion of why managers are perceived to do such a bad job of dealing with underperformers.
3. Ayn Rand
   Ayn Rand's philosophy of enlightened self-interest remains a major influence on my thinking -- and clearly resonates with many readers of this blog as well.
4. Self-Promotion
   A lively discussion about why we find it hard to market ourselves, and what we can do about it. (Don't miss out on the Business Masterclass podcast episode, Self Promotion which incorporates reader's contributions on the same topic.)
5. A Case Study in Professional Ethics
   Do you have the guts to "take it on the chin" for mistakes on your team, even when it is a junior's fault, or your client hasn't noticed the mistake?

If you still have ideas or opinions to add in to these or any other discussions on the blog, please join in!

Watch out!

A manager I once worked with said that his key talent was not listening to people, but WATCHING them -- clients, colleagues, superiors and subordinates -- and understanding them better than other people would be able to do just by listening.

I was reminded of this insight as I reflected on my experience as a juror. The more I thought about it, the more I realised that I had been put into a strange situation for me. For the 5 days of the trial, I was forced to be an OBSERVER, not a participant.

Until the time came to deliberate on the verdict, I could not ask questions, I could not intervene, I could not discuss things. I was forced to be a WATCHER as well as a listener.

It taught me a lot. I earn my living through words, but I am increasingly coming to believe that we don't best reveal ourselves (or judge others) through words, but through other means.

I've never been trained to "observe", I've never read a book on it, and I don't have a natural proclivity for it. My wife can be with people at a party or family gathering and tell you things about what they are feeling that were never said out loud. She just "notices."

Try this exercise: Just watch people in a meeting and see if you can answer these questions about them:

• How self-confident is this person?
• How would you describe their level of optimism or pessimism?
• What emotional needs do they have?
• What type of role would they function best in?
• Is this someone you would trust?
• Would other people want to work with this person?

Even if you've never been trained in psychology and never read a book on body language, I'll bet you'll get very close to the truth.

Which raises a series of interesting questions:

1. How good a watcher are you?
2. What makes someone a good observer?
3. Can YOU figure someone out by observing them?
4. What do YOU look for?

What Am I Supposed to Know about?

Penelope Trunk, in her wonderful blog Brazen Careerist, launched a discussion about going out of your way to show interest in (or learn about) things that don't necessarily interest you (such as popular culture or sports) "just" as a means of being able to relate and interact with those around you.

It's a great discussion, and it got me thinking a lot about "fitting in" and how hard one should try.

Should you, as many of Penelope's commenters suggest, learn a little about sports (even if, like me, you have zero interest) just to be able to relate to clients? Is that just being sensible (or sociable) or is it "pandering" and "phony" to pretend to interests you don't really have?

Penelope uses the example of college teachers telling us we "should" read Homer's Iliad because "well educated" people will have read it, and we wouldn't want to be left out, would we?

Oh, how I remember that challenge when I first went to college! I remember being completely overwhelmed at the extent of my ignorance. Not only had I never read Homer, but I knew nothing about poetry, politics, philosophy, art, classical music, public affairs, literature, history, let alone the ‘popular' culture topics – as I said, I knew nothing about sports.

How intimidating it all was! Where do you start? Or do you?

I recall with memories that still sting that, (especially in class-sensitive Britain), making choices among these things was a serious topic. By choosing to "get up to speed" in certain areas, you would be placing yourself in one social group or another. Was I going to make myself into an "intellectual?" Was I going to be a ‘trendy' who knew all about Jazz and the Beat poets? Was I going to be "one of the lads / guys" who knew all about football and the latest pop releases? Was I going to like – or pretend to like – classical music?

These choices scared the heck out of me because they involved – it seemed to me then and seems to me now – an act of conscious self-creation. It was about choosing one or more social circles, and learning enough to "fit in" to that social circle.

Since I had no idea who I "really" was, nor who I wanted to be, I took the "Cliff Notes " approach – I learned a little about a lot of things. I used to read the introductions to novels, rather than the novels themselves, so that I could understand what they were about without having to invest the time (or learn to enjoy) them. I read biographies and histories, so I could recognise the names of all the major philosophers and give you a one-liner or two about most of them. I learned to name a couple of Mozart's operas, and so on and so on. I learned enough to pretend to fit in with a wide variety of social circles.

In one sense, I suppose that's good. You meet a lot of different kinds of people as you go through life. But on the other hand, it felt superficial and, on many occasions, a lot like "faking it." Who was I really? Where did I fit in really?

I have found that this challenge exists throughout life. As Penelope said, you probably kind of have to know a little about a lot of things to relate to people.

For example, here's a quiz. If you went to a dinner party, could you keep your side of a conversation going on:

1. Local politics?
2. National Politics?
3. International affairs not directly involving your own country?
4. The latest tech gadgets
5. The latest fiction best-sellers?
6. The latest non-fiction best-sellers?
7. What's hot on television?
8. The latest art exhibition to open in your town
9. The popular music charts?
10. Yo-yo Ma's latest album?
11. What's good on Broadway this season?
12. The latest movies?
13. Local sports teams?
14. Sports events not involving local teams?
15. Latest theories of child-rearing?

Should you know about all of these things? Where, if anywhere, is your "obligation" to keep up?

And, to relate it back to the business and management specifics of this blog, could you, at the lunch or dinner breaks in a business meeting:

• Talk about what's on the cover of the latest business magazines, from Forbes to Wired?
• Talk about the other stories there?
• Discuss what's been in the Wall Street Journal recently?
• Compare and contrast the views of three or four of the recent best-selling business authors?
• Say something sensible on the business consequences of, say, globalisation, the continued war for talent, web 2.0, who the emerging business heroes are and who doesn't deserve his or her reputation?

I don't know about you, but I still can't do ALL of this, and find myself doing what I did in college: furiously skimming headlines and summaries so I can pretend to participate in conversations. My intentions, I hope are good, and I don't mean to misrepresent myself, but, just like in college days, it feels like I'm only skating the surface and "faking it" a lot of the time.

It's an uncomfortable feeling, and I don't know the solution, except maybe to have the courage more frequently to say "Sorry, I don't know about that."

Trite Formula?

Musical performers always thank their audience for "being a wonderful audience."

They often do this even in mid-performance, not just at the end of their act.

What's going on here?

It often comes across a phony and false modesty. After all, it's the performer's job to entertain US.

Do they really think the audience is being "wonderful" or are they just flattering us into liking them (the old reciprocity trick)?

Should those of us in business be copying the approach?

In the middle of an assignment should we say "I want to thank you for being a wonderful client / boss / subordinate?"

What's Our Deal? -- New strategy podcast episode available now

The fifth episode of my new podcast series, Strategy and the Fat Smoker, is now live and available for download.

It is dedicated to exploring the themes found in my article by the same name.  I encourage you to forward these to friends and associates who may be interested in the topics covered.

"What's Our Deal?" focuses on with how many companies strive for a climate of commonality and coordination, but fall short in practice due to a lack of commitment or even for a lack of clearly stated goals or rules.  This episode takes a look at how a company can build solid, non-negotiable rules of membership in order to create unified, forward momentum at all levels of the organisation.

NOTES FOR THE EPISODE:
00:42 -- Introduction
01:38 -- A hierarchy of concepts
03:44 -- The importance of purpose
08:35 -- Management and commitment:  The key to a mobile organisation
11:44 -- Will they follow you?
16:38 -- No final whistle:  excellence into the indefinite future
19:05 -- Revisiting values over time
21:40 -- Creating rules of decision making
23:26 -- Conclusion

You can download "What's Our Deal?" or sign up to receive new Business Masterclass seminars automatically with iTunes or other podcast players.  (Click here for step-by-step instructions on how to subscribe).  My seminars are always available for download at no cost.

Performance Appraisals

Here's a question about performance appraisals:

We are in the midst of generating year-end reviews for our associate (ie non-partner) lawyers. We have moved away from a standardised report and have been coaching all year. The report we will give them will merely be a re-cap of all the coaching sessions for the year. We will of course be addressing monetary rewards and we are in a heated debate about one issue. Should we address the billing amounts of each lawyer at this review? Should one be congratulated over the others for doing more individual billable hours? Isn't there a risk that we will set up an unhealthy competition and seem to encourage less teamwork?

I have a few responses:

1. If you have been coaching all year, why do you need a year-end review?
2. If there is a need for something year-end, shouldn't it be less of a "review" and focus almost entirely on looking ahead as to what each person can and should be doing to enhance their career? What's the point of looking back?
3. In a law firm, aren't the number of billable hours determined by what the partners assign to the juniors? If so, what do high personal billable hours reflect? Popularity among the partners? A more dependable person? Someone too dumb to hide out when they are already busy? I'd discuss the personal billable hours and try to understand them, but I would stay away from using them as a performance metric.

Jury Duty

Having mentioned I served on a jury, I received an email asking me to reflect on my experience as a juror.

I'm afraid I don't have much to say that is profound. The case involved a labourer who was asked by the pastor of his church, he claimed, to perform some basic renovation work on a recently purchased building to make it fit to hold services. There seemed to be no argument that some amount of work was done, but the labourer claimed that all his receipts were stolen (along with his tools) from his truck, and hence could not submit them to the pastor (or the court). We had to decide whether the pastor had promised to pay the labourer, and how much the labourer was owed.

The plaintiff's case was presented very efficiently by his attorney, supported by testimony from some of the assistants the labourer had hired to help with the work. The lawyer told us what he planned to contend, and called witnesses to back up those specific contentions.

Things started to drag out when the defendant's attorney took over. As jurors, we were confused as to what it was and what it was not that he was contending. He seemed to taking scattergun potshots at whatever he could think of.

Astoundingly, for a case where less than $80,000 was in dispute, this whole thing dragged on for five days (9am to 1pm).

If there lessons to be learned, they were these:

• If a parishioner is suing the pastor and you want us to believe the pastor, have at least one other parishioner appearing court on the pastor's side

• Don't be mean, attacking witnesses as to whether they have ever been arrested, or ever had a drink of alcohol. It backfired.

• If you're trying to make a case, tell us up front what you what you are going to try to prove. We get lost easily.

• If you don't contest an issue, topic or fact, we the jury are going to assume you concede the point.

• It's amazing how the lack of organisation -- fumbling through papers -- affected our view of a lawyer's credibility.

• Body language mattered -- the defendant slumped and scowled and dozed throughout the plaintiff's case. It turned the jury off

• In post verdict discussions, all the jurors agreed we had formed a strong opinion on the character of the individuals involved within the first 30 minutes of the 5-day trial.

I know this is all obvious stuff, that's all five days out of my life offered me. What a waste!

---

Does anyone else have (more informative) lessons from their jury experience?

Lions, Wolves, Beavers and Humans

Back in August of last year, I posted a blog about Corporate Strategy and Personality Profiles. The basic argument was (and is) that many firms are incapable of firmwide strategy because the key players have not agreed either to (a) collaborate or (b) invest in their mutual future.

I have now expanded my thoughts into a full-length article (Are we In This Together? The Preconditions For Strategy), which has been posted on my website and can be read or downloaded now.

The article describes four kinds of people

• Type 1 is the solo operator who values independence, wants to make little investment in the future, but is willing to bet on his (or her) ability to catch fresh meat each and every day. I call this the Mountain Lion approach. "Pay me for what I do today (or this year)."
• Type 2 is the individual who prefers to act in coordination with others, but doesn't like to invest (or defer gratification) too much. I call these people (collectively) the Wolf-Pack. "If we act together we can kill bigger animals, but it had better pay off soon or I'm joining another Pack!"
• Type 3 is the individual who wants to be independent, but is interested in building for the future by investing time and resources to get somewhere new. Such people remind me of Beavers building dams to provide a home for their (own) family.
• Type 4 are individuals who want to be part of something bigger than they can accomplish alone, and have the patience, the ambition and the will to help the collective organisation invest in that future. I call this group "The Human Race" since one of the rare things about Homo Sapiens that differentiates it (at least in scale) from other species is its ability to act collectively to build and develop. (It's called civilisation.)

I don't have a precise metric to measure the differing orientations described here, but I have found two proxy questions to be useful.

On the issue of independence versus team-play, I ask people whether, in general, they would prefer rewards in their organisation to be based (compared to the current arrangements) a little more on individual performance or a little more on joint rewards for joint performance. I then ask whether, compared to the current arrangements, people would like their firm to invest more in its future, even if this meant they would have to accept less current income in the form of salaries and current bonuses.

These two (imprecise) questions tend to cause people to reflect on their true preferences. The underlying issue is not really about pay schemes, but phrasing the questions this way tends to crystallise the issues for many people.

The article then explores the question: what can be achieved if you have a mixture of all types in your organisation?

Defending Your Life

I'm sitting as a juror this week in a (civil) trial, and it made me reflect on an old Albert Brooks movie called "Defending Your Life."

The main character goes to heaven and has to bring witnesses to make the case that he has lived a good life.

Who would testify for you?

Who would testify against you?

How comfortable / confident would you feel that your "jury" would find in your favour?

A Case Study In professional Ethics

This (true) story was researched by Julie McDonald O'Leary, my former business manager.

She interviewed a property management company, whose client was a hospital. In dealing with government agencies regarding hazardous waste, the paperwork submitted has to be exact. In many cases, the paperwork is incidental to actual importance of cleanup work being done, and it can be more time consuming and costly than the actual work itself. However, it's more than required -- it's mandatory.

The property management firm (let's call them Acme) realised there was a mistake in the paperwork regarding a specific cleanup for the hospital. Basically, the paperwork said that waste was dumped in one particular site when it actually went to another. Both sites were the same type, but a clerical error had been made. No actual harm done because both sites accept the same type of waste -- but in these situations paperwork is supposed to be exact.

This was Acme's mistake, but it would be a costly one to rectify. The team involved knew that they could say nothing and no one would ever know and there would be no actual harm done.

They asked their CEO what to do, and he said: "We will meet with the hospital and take it on the chin. We'll look like fools -- it's a silly error. The hospital has had a lot of bad press lately and the last thing they need is any kind of environmental error going to the press."

Up until now, the relationship with the hospital had been a great one (representing a $0.5 million account) and admitting this mistake could become a real thorn in Acme's side, making them look incompetent. They could lose the account and the word of mouth publicity that would follow would hurt future business in health care circles.

Acme's CEO decided to meet with the client, bringing along to the meeting the whole team who had worked on the project -- fom the most senior person to the most junior. He revealed the error and told the client that action was already in progress to fix the error. The meeting lasted 4.5 hours, adjourning with no outcome.

The next day, the CEO received a call from the client saying that they had discussed it further and that it was obvious to them that Acme could have swept the whole thing under the carpet and the hospital would never have known the difference.

They also said that they recognised that Acme made a lot of extra work for themselves by honouring what they knew the wishes of the hospital would be and that is to fix it. They said "We totally trust you to do the right thing."

Another firm may have elected to go honest route as well, but may have been reluctant to do so with their juniors as an audience. By witnessing all of this first hand -- lessons in professionalism are usually learned first hand this was better than any training session. The juniors had a taste of what "owning the problem" really means.

Acme's young workers saw first hand the meaning of "ethics in action." They saw the CEO "take it on the chin" rather than be anything less than completely excellent to very high standards. They also saw that because of this, they had probably obtained a client who will work with them (and advocate them to others) with total trust.

Now here's another interesting question. A CEO might take the decision to handle things this way, but would a middle manager inside a company ever feel empowered enough to make a similar decision (absorb a significant expense to make right an error that no-one outside the company would ever know about?)

Or is this kind decision, which requires guts, courage and ethics, always kicked upstairs? Are any companies so "ethical" that a middle manager wouldn't need to ask permission to "do the right thing?"

Comments?

Would your CEO do this?

Has your CEO ever done this?

What about your "middle manager?"

What about you?

We're All Dentists

Well, not all of us, but many of us are.

The point about dentists is that while we may need them, we never WANT them. While they do very honourable, helpful caring things for us, their patients, we patients would rather avoid them if we can.

I believe the same is true of my profession -- consulting. I doubt that anyone ever said "Oh, goody, the consultants are coming in." Or "Oh, joy! I get to work with the HR department today."

Similarly, I doubt that anyone said "It's my lucky day, I need to bring the lawyers in!" (or the accountants)

And, of course, the same is true of IT technicians, PR people, and a whole host of other professionals, (internal and external.)

As providers, we see what we do in a positive light (solving problems and bringing about improvements.) However, from the users' perspective our presence signals pain, disruption, inconvenience, expense. Ultimately, we may benefit from the provider's activities, but I'd rather not HAVE to deal with them at all.

We need to remember our place. We're not glorious "saviours" of clients with problems: we are an unfortunate necessity.

***

Does anyone have stories to tell and when they learned this truth, and what changes in behaviour they had to make as a consequence?

Ayn Rand

When I posted last Friday's blogpost, making the point that "No-one will look after you, you have to manage your career yourself," my wife reacted by saying "Wow, Richard, that's tough! You usually write upbeat, inspirational material. What's going on?"

She is right that there was a different tone to last week's post, but I'd like to try and reconcile what I said then with the (more inspirational?) things I have previously advocated in my books and articles.

The key message is that the willingness to take responsibility for what happens to you, and to make things happen, is the beginning not only of healthy thinking and exciting productive careers, but also of a life of integrity, standards and relationships. These things, I believe, are connected.

Ayn Rand was (and remains) a major influence on my thinking, although I'm not sure she would recognise and endorse even a small fraction of my current thoughts and writings.

For those who need an introduction, Ayn Rand was an author who wrote "The Fountainhead" and "Atlas Shrugged," two novels that communicate her philosophy of "enlightened self-interest." She also wrote non-fiction books about her philosophy -- objectivism -- but it's the novels that have had the biggest impact. I first read her books when I was 17 (and met her briefly when I was 9.)

It would be hard to summarise an entire philosophy in a few words, but one way might be to say that she thought that each person should stand on their own two feet.

This doesn't mean you never help others, nor accept help from others -- just that you should never EXPECT it as a matter of rights or obligations. Others may choose to help you, and you may choose to help others -- but the key, is that it's a matter of choice. In a truly free society, nobody has a "claim" on your efforts, nor the "obligation" to help you -- unless they choose to.

When taken up to the societal level, this leads to a political philosophy of "libertarianism," but I don't want to discuss politics or political philosophy here. This is a blog about business, professional life and professional services.

Contrary to what many people think at first, "no-one owes you and you don't owe anyone" is NOT a pessimistic message of dog-eat-dog, where we're all against each other. It's a point of view that says "Not much can be done unless I get people to help me, but I have no CLAIM on their help, so I have to learn how to make them WANT to give it freely."

If you start from the assumption (or the real-world observation) that everybody else is a free agent, you can't expect others to give you what you want unless you deal with them in ways that make them WANT to give it to you.

That means the only way to really succeed in a society of free people is to be a person of integrity, honour, skilled at earning relationships and trust -- to be someone others want to work with.

If no-one OWES you anything as a matter of right, then you need to work at making them want to give you things -- and that means giving them what THEY want, in fair, enlightened exchange. And that means being consistent, dependable, intimate and not too immediately self-oriented: All the things that make up the trust equation in THE TRUSTED ADVISOR.

This is meant to be GOOD news, not sad news. If the negative aspect is that you can't rely on any one else to clear the path for you, the optimistic, positive, healthy thing to say "I'm in charge of me -- I can make things happen for myself if I accept the responsibility to do so."

As Ayn Rand would point out, there's great liberating power in that way of thinking (especially in contrast to an opposite which begins by saying "I can't achieve things because other people don't give me chances.") People who think the world (or their firm) "should" be looking after them will probably fail to develop important attitudes and skills, as they wait for others to act. As Ed Kless wrote on my blogpost: "When are we going to recognise that Ayn Rand was right in a lot of ways -- 'The man who lets a leader prescribe his course is a wreck being towed to the scrap heap.' "

As I see it, there's nothing in the "Take responsibility for yourself and expect that of others" that prevents you from being a generous person -- with those you choose to be generous with.

So that's my argument. It's the very fact that you ARE on your own that leads to the conclusion that you need to be an honourable, caring, high integrity, relationship-building person. Being generous, kind, trustworthy, attentive to others and a person of high integrity is not, I believe, inconsistent with the philosophy (and the REALITY) that you must take ownership of what happens to you, but a logical consequence of it.

But maybe, in the eyes of some readers, I'm trying to have it both ways. I start from the proposition that I don't OWE anybody anything (and they don't OWE me anything) and end up saying that FOR THAT VERY REASON those who will succeed are those who take the initiative to build bonds of relationships with the bosses, clients and employees that you CHOOSE to have relationships with.

1. Does anyone out there have a different view of all this?
2. Are there others out there who were influenced by Ayn Rand and have struggled to live by her principles (pure or modified) in their daily lives?
3. Or those who have rejected her philosophies as a guide to personal and business life?
4. Do you agree that Ayn Rand's core philosophy is not only consistent with idealistic, high-standards behaviour, but can be (is?) the cause of it?

Are We In This Together? -- New strategy podcast episode available now

The fourth episode of my new podcast series, Strategy and the Fat Smoker, is now live and available for download.

It is dedicated to exploring the themes found in my article by the same name.  I encourage you to forward these to friends and associates who may be interested in the topics covered.

"Are We In This Together?", the fourth episode in this series, focuses on disparate preferences amongst players within the same firm.  All too often, firm-wide strategy assumes firm-wide consensus.  However, it is rarely the case that all players within any given firm are team oriented.  We will discuss some of the widely held player preferences and prescribe alternatives in dealing with them.

NOTES FOR THE EPISODE:
00:37 -- Introduction
04:23 -- 4 types of individual and firm wide practice preferences
09:00 -- Are we in this together?
11:13 -- Bridging the gap:  organisational strategies managing a broad range of preferences
17:23 -- Conclusion

You can download "Are We In This Together?" or sign up to receive new Business Masterclass seminars automatically with iTunes or other podcast players.  (Click here for step-by-step instructions on how to subscribe).  My seminars are always available for download at no cost.

Perspective on Careers

1. The cold, hard, truth is that you've got to look after yourself.
2. You can't assume that anyone is really looking out for your best interests (in spite of what they may say.)
3. There may be a human resources department in your firm, managers, coaches and a mentoring system. But don't get fooled. Your career is up to you and you alone.
4. No one will tell you what experience you should be obtaining, let alone help you get it.
5. If you want a specific experience, ask for it.
6. Better yet, just go grab it.
7. Do not expect that you will be promoted because you deserve it -- it is unlikely that anyone is really keeping track.
8. If you want to be promoted, ask to be promoted.
9. Generally, things do not come to those who do not ask for them.
10. None of this means you should be rude, disrespectful to others, or fail to be a team player. It just means don't be naïve.
11. In spite of what they may say, it's up to you. You're on your own, kid.
12. Manage your own career. No one else will.

Anyone disagree that this is both the right philosophy to have and the cold, hard reality?

Pricing and Promoting a PreSchool Business

Here's today's question from a participant on this blog:

We are moving to a new area, and my wife wants to start a preschool out of our home (which we have yet to purchase). Our question is how to price and promote such a business.

Most preschools in the area are more like "day-cares" (more like a baby-sitter than a private school education). The businesses may or may not be licensed (from what we hear), and the teachers are not certified. The highest end "institutional" preschools in our area charge as much as $100/month. My wife knows of someone who has run a high-end "home-based" preschool for years and charges $240+ per month, has 40 students per month and has a waiting list. Like my wife, this teacher is state certified.

My wife would like to have 20 students, all signed and committed by August 1. As we will purchase a larger home than we would normally need (to accommodate the preschool), the earlier we can receive cash flows the better. It would help if we could commit families to "terms" of about 4 to 5 months, but we feel like we probably would have to charge them monthly rather than up front (like a traditional school).

Extreme versions of your principles ("Earn a relationship by giving something free first") would tell us to give everyone a month for free and then charge a steep premium after they fall in love with my wife's teaching of their kids. Yet we feel we might get a bunch of free-loaders that way.

In addition, if we did start out at a discount to "earn and deserve the relationship" how would we then raise the price if people are willing to pay for a premium? Should we wait until we have a waiting list? We could also try the variation mentioned in one of your books of charging a minimum payment of (say) 80% of target fees, subject to parents agreeing to paying us a satisfaction payment at the end of term.

How should we think of marketing and pricing this business in an area that will be new to us?

It sounds to me to be very ambitious to aim for a "full-house" within 6 months in a new business in a new area where you are not known. And I don't think you can solve it with creative pricing schemes.

I suspect that your big challenge is not pricing but establishing a marketing presence; i.e., being accepted as a credible supplier -- particularly if people have to trust their kids to you. Is there any way of doing a deal with one or more of the current high-end teachers who have a waiting list? Paying them a commission or going into partnership with them? Since you're new and they're established, teaming with them for the first few years might make the most sense.

Since prices are set by supply and demand, I have lots of questions about both. Why aren't there more high-end certified preschool teachers? Is the fact that the one you know about has a waiting list evidence that there is a shortage of supply? Or is it just one anecdote? Are people unhappy with "institutional" preschool, thereby creating a pent-up demand? And what are the rule in your state -- can parents qualify for programs that get the state to pay (some of) the fees? State bodies might also be a good "partner" to get you launched in the new area. They certainly would be a good source of "market intelligence."

If it is a shortage of good teachers is the issue, where are the kids that you hope to attract going now? Will you be "stealing them" from the institutional preschools ($100 per month), from other high-end teachers, or from situations where the parents keep the kids at home? Which is the most likely source?

As to pricing structure, I don't know if "freebies" would work here -- they may be viewed with suspicion and a sign of low quality. Instead, I suspect you want and need to create an image of being "special", so a high fee with a money back guarantee might work better than agreeing to a discount up front.

Anybody else got some initial views about how to launch and price a business like this?

What Managers Do Least Well

Kathy Sierra, on the fabulous Creating Passionate Users blog, argues convincingly that managers should be getting people excited about the kind of work they do, not trying to get them to "do it for the company." She's right, but there's a very telling (joke) picture she uses at the top of her blogpost.

One person is saying to another: "Hey, isn't that Jim pulling out of the parking lot? He only worked ten hours today?" The other person responds: "We have a client demo tomorrow and he's only working a half day? I'd fire his ass."

It's meant as a joke, but there's an incredibly important and serious lesson here.

For decades I have been involved in conducting upwards evaluations of managers by their subordinates. Consistently, over time, geography, profession or industry, and size of firm, the one aspect of managerial performance that is consistently rated as done most poorly is "tackling underperformance promptly."

Subordinates, it seems, are rarely satisfied with how well their superiors do this. What's fascinating is that the result is subject to interpretation. Is it that managers, everywhere, always, are relatively poor at this compared to other aspects of managerial performance?

Or is it that, no-matter how well they do it, this issue is particularly annoying to co-workers.

Naturally, I think the answer is a little of both.

Many of us, as managers, find confrontation emotionally difficult, so don't want to tackle issues until we "have to." If a subordinate is only "average" not yet "failing," why bother making a fuss?

The reason is the effect that one person's underperformance has on the motivation, morale and energy of those around them. If management can't (or won't) enforce the standards and help underperformers achieve competence, then why should the rest of us try for excellence? It's hard to feel like part of an energising, exciting team if there are passengers (or what are seen to be passengers.)

This is not about management being rapacious and trying to get the most out of everybody, but the simple recognition that a team cannot form if group norms are not clear and adhered to, and it's a manager's job to ensure that that happens.

Your views? How well would you rate your manager at "tackling and dealing with underperformance in your group?" Do you have any theories about why it's often done so poorly?

Self-Promotion

I received two emails at opposite ends of an important spectrum yesterday. The first, from Bill Paul, Author (Ex-Wall Street Journal and CNBC energy reporter) read, in part:

As a former Wall Street Journal staff reporter, I'm not big on self-promotion, but I thought you might be interested in knowing about a new book just published by Wiley about the future of energy ... Title is: Future Energy: How the New Oil Industry Will Change People, Politics and Portfolios. Sorry again about the self-promotion.

The second email was from Keith Ferrazzi, the author of the best-selling Never Eat Lunch Alone, one of the most successful recent guides to networking and self-promotion. Here's (part of) Keith's email:

I really wanted to maximise the opportunity for readers to actually start using the advice (in LifeCoachTool 1.0) in their own lives, I also had my team put together a simple online quiz/survey/tool that doesn't cost anything and only takes a couple minutes to complete.

If you visit this link

You can:

• Watch a brief video of me explaining what it is
• Try it for yourself
• Even enter a contest we're running that rewards you for helping make others more successful -- prizes include personalised coaching calls with me, signed books, and DVDs. Should be fun.

What struck me about these two emails is not just the extra thought and investment that has gone into promoting Ferrazzi's new venture, but (no surprise here) his utter self-confidence in putting himself forward.

By way of contrast, Bill Paul, (in common with many people including myself) actually feels so bad about letting me know about his new book that he apologises -- twice -- for doing nothing more than politely informing me of the availability of something I might be interested in.

But here's the interesting thing. While it's clear that Ferrazzi's approach is going to get more response, I'm not sure I could do it on behalf of myself. Like Bill Paul, there is something in me that holds me back from the more explicit forms of self-promotion.

Like many other professionals, I'm comfortable with showing my material and saying "Let the work speak for itself" but I've been around long enough to know that more than that is required. I'm just not comfortable doing it.

Those who are in marketing often laugh at the people who don't want to "get out and network," but the reluctance to self-promote is something many of us were brought up with. We can read and be impressed by Ferrazzi's book about networking, but find it hard to do personally. (Maybe that's why we try to hire other people as our marketers for doing it for us -- which rarely works out too well.)

These are the things I am reflecting on:

1. Where does the reluctance to self-promote come from? Is it a "social graces" thing that we were taught by our parents? A psychological characteristic we are born with? Is it a class-based thing?
2. How many of you out there are like Bill Paul and me -- fundamentally uncomfortable with self-promotion?
3. Can non-self promoters be taught to get psychologically comfortable with it? (I know I can be taught to DO it, but can I be taught to get comfortable with it?)
4. Are the Keith Ferrazzi's of this world -- stellar, skilled, unabashed networkers and self-promoters -- born or made?
5. Can, or should, I be doing more of what Ferrazzi advocates (eg., Never Eat Lunch Alone)?

January Top 5 Roundup

Thank you to everyone who contributed to make these posts the most linked and discussed ideas in the month of January.

What a Company Needs Most
This discussion of the most important key ingredients for an organisation stands out for eliciting some outstanding comments from readers.

Can We Be Manipulated?
A great discussion on how to discern between convincing hucksters and actual trusted advisors.

Politics Part II
Readers weigh on on how to cope with, or avoid, office politics.

How Polite Are You
Readers report that they are a very polite group of professionals in this discussion on replying to phone calls.

Managing Up
A collection of great ideas from readers on how to deal with a less-than-perfect boss. (Don't miss out on Managing Your Boss, the careers podcast episode based on this blog post as well.)

If you still have ideas or opinions to add in to these or any other discussions on the blog, please join in!

It Takes a Virtual Village

It clearly takes a virtual village to run a blog, because this month the site has been teeming with support and participation from at least a village worth of people (and a big village at that).

It is my pleasure to acknowledge the contributions of everyone who joined in here during the month of January.

Commentors
Adnan, Adriana, Lora Adrianse, AdsBay, Jerome Alexander, Stephanie West Allen, Allen, Ann, Kishore Balakrishnan, Ann Bares, Jason Bates, Richard Becker, Nagesh Belludi, Stuart Blake, Wally Bock, Breakingranks, Eric Brown, Rob Brown, Duncan Bucknell, James Bullock, Shawn Callahan, Johnny Canada, Brian Cassell, James Cherkoff, Clarke Ching, Brendon Connelly, Carmine Coyote, Jef Cumps, Krishna De, Kathleen DeFilippo, John Dillard, Bill Dotson, Stephen Downes, Bill Dueease, Lance Dunkin, Heidi Ehlers, Judith Erickson, Doug Ferguson, David Foster, Adrian G., Robert Gagliano, Gautam, Paul Gladen, Mark Gould, Charles H. Green, Lisa Guinn, Rachael Heald, Ken Hedberg, Heidi, Brad Hendricks, Scot Herrick, Dennis Howlett, S. Anthony Iannarino, Jennifer, Jim, Timothy Johnson, Danielle Keister, Dr. Delaney Kirk, Matthew Klein, Howard Krais, Greg Krauska, Peter Linton, Stephanie Lunn, Bruce MacEwen, Carolyn Manning, Arnoud Martens, Marti, James Mason, James McGee, Bob McIlree, Arthur Mcbeth, Ann Michael, Mike, Nitin, Emmanuel Oluwatosin, Erek Ostrowski, Peggy, Bill Peper, Tim Percival, Steve Portigal, RJON, Brady Reed, Rob Reed, Steve Roesler, Stephen Ruben, Rich Saletan, Bryan I. Schwartz, Daniel Scocco, Stephen Seckler, Tracey Segarra, Shank, Maureen Sharib, Mark Shead, Pamela Slim, Stephi, Ed Strickling, Bilal Succar, Charles Tippett, Tom "Bald Dog" Varjan, Tim Travers, Heidi Tryon, Peter Vajda, Raj Waghray, Michael Wagner, Ellen Weber, Ian Welsh, John Wesley, Gerald Whyte, Randy Yniguez, Liz Zitzow

Trackbacks
A Girl's Guide to Managing Projects
Accountants Round-Up
Afficionados of Ink
All Things Workplace
Anecdote
Aridni
Balanced Life Center
Be Excellent�
BIZ GROWTH NEWS
BizInformer
Blawg Review
Blog Business World
Blog Critics Magazine
Bob Brown's Consulting Intelligence Briefings
Bryan C. Fleming
BurstCreativity: Personal Development Blog, Innovation training, Creativity and Self Help community
Business Growth Network
businesspundit
buzzflash.net
carpe factum
Chief Innovation Officer
Clarke Ching's I Think Not, Baby Puppy
Common Ground
Compensation Force
Connecting Technology, Strategy and Execution
Conor's Blog
Converstations
Copywrite, Ink.
Creating a Better Life
CRM Lowdown
Cultivate GREATNESS | Personal Development
Data-Scribe Blog | Musings & News
David Crow
David Jacobson's External Insights
Endless Gibberish Personal Finance Blog
Execupundit.com
Fat Pitch Financials
Flooring The Consumer
Free Money Finance
Gautam Ghosh -- Management Consultant
Half an Hour
InsureBlog
JainTech Blog
Jarango
Jorge Arango
Lead and Gold
Legal Andrew
MabelandHarry
Managing the Professional Services Firm
MANGROVE ROOT GANG.com
marketingLEGAL
McGee�s Musings
Minor Wisdom
Modern Marketing -- Blog by Collaborate PR
MorePartnerIncome
One Man Band
Organize Your Home and Office
PMToolbox.xom
Positive Psychology Blog
Pro PR
Public Defender Stuff
purple motes
Re: The Auditors
Roth And Company, P.C.
SalesMotivation.net
Searchlight Crusade
sellingbrand
Software Project Management
Stark County Law Library Blog
Startup Spark
Strategic Design | marketing & branding thoughts by Nick Rice
SuccessJolt
The Agonist
The AntiSyphus Effect
The Benin Epilogue Part I: Africa-Ready for Busine
The Career Encouragement Blog
The Changing NHS
The Conway Group LLC
The Dragon Slayer's Guide to Life
The Engaging Brand
The Entrepreneurial Mind
The General Counsel Blog
The Lawyer Coach Blog
The PR place
The Sales Blog
Think Happy Thoughts
This is not
Towards Better Life
TrackKnacks: Aptitude Wizard Watch
Trusted Advisor Associates
Verve Coaching
Victus pro Scientia Opus -- Food for the Knowledge
Your Trusted Selling Brand

Podcast Trackbacks
Accountants Round-Up
Balanced Life Center
Burst Creativity
Creating a Better Life
JainTech Blog
Michael's Thoughts
Re: The Auditors
SalesMotivation.net
Think Happy Thoughts
Towards Better Life
TrackKnacks: Aptitude Wizard Watch
Verve Coaching

These lists represents a collection of some tremendous blogs and professional experts. If you are looking to add to your reading list, take a moment to click through and visit everyone on their "home turf."

Sad Truths for Leaders

I find that I keep needing to repeat these points:

• Those you lead will never have a longer-term horizon than you do
• Those you lead will never operate to higher standards than you do
• Those you lead will never be more optimistic than you are
• Those you lead will never live the vision if you don't

Business Development in Professional Businesses

Here's another email question I received. (By the way, I LOVE receiving them -- it ensures that I blog about real-world topics of interest to at least ONE person!!):

Things seemed to have shifted since you wrote Managing the Professional Service Firm.

In that book, you described a world where it was the partner who was tasked with developing business. Today, in many professional firms, including the Big-4 accounting firms, it is dedicated Business Development Managers (BDM) who work hand-in-hand with the partners. I am curious to better understand how such a relationship works.

I currently work at a large IT manufacturer which, over the years, developed a services arm. Dedicated business development people (and even departments) are a lot more common in my industry, but over the years, a lot of people who came up through our services area have found their way into this type of positions at the Big 4 (and seem to have succeeded well.)

My current role at the IT firm services group involves developing and maintaining key relationships with six major accounts and setting the strategy or direction in how we work with them. While there are various sales representatives and specialists across the country working with various contacts, it my responsibility to see we all march in one direction and that we are providing solutions to these customers in a uniform or consistent fashion. The interesting, and sometimes challenging, aspect is that none of these folks report to me, but instead to the local company operations.

Are things now similar in Big-4 accounting firms?

In most professions, things have changed significantly since I wrote my 1996 article. Many professions (not just large accounting firms) have made significant transitions in getting organized for marketing, selling and business development, with marketing departments being established with significant roles, responsibilities and budgets. The teaming you describe is now a lot more common than it was in 1996.

However, I must report that it really is firm-specific, and can easily wax and wane. When the Big-4 accounting firms had large consulting practices, they successfully made a big transition to hiring dedicated salespeople who worked, as you say, hand-in-hand with the partners. In addition to people hired for sales activities, there was a sensible investment in marketing support, so that the firm could efficiently keep the partners informed (in real time) on industry trends affecting their clients. This teaming made it easier for partners to research their clients, prepare sensible proposals when needed, keep up to date, and allowed for wise allocation of tasks between specialists.

This teaming could and did work in some firms. However, when the regulatory environment changed (post Enron) and many firms sold off their consulting businesses, their commitment to marketing and sales teaming between the remaining audit and tax professionals and the marketing professionals sometimes was weakened. Some firms cut back their commitment to marketing and the use of marketing professionals.

The situation has also been "muddied" in the current climate. Many large accounting firms in the post-Sarbanes-Oxley environment have more demand for their services than they can handle. Marketing is now less about looking for new clients than it is about ensuring that key major clients are happy. This is EXACTLY the role you say you are now performing in your IT firm: co-ordinating activities for major accounts without having "formal" powers.

By the way, the same should be true in other professions like law firms, although there is still the common mistake that marketing professionals are more often used to hunt for new clients, rather than help in nurturing existing relationships. What you say you do in your current IT firm is very sensible and important, but it is less common in some other professions.

You will obviously know that the role you currently play can be either very fulfilling or a nightmare: it depends on whether the firm you join is serious about (a) cross boundary coordination; (b) investing in client relationships and (c) teaming between partners and marketing professionals. As always, culture and seriousness of intent is crucial.

My advice is to tread cautiously. Some firms are serious about all three of these things (cross-boundary coordination, investing in relationships and teaming with marketing professionals.) When they are serious, it's working very well. However, some other firms are only pretending. And guess who wins when the firm is only pretending? It isn't the marketing professional.

Stylists

I received this extensive case study from "NexLevel" who would really like our help to save him from bankruptcy. Please offer your ideas.

Your article, "The One-Firm Firm" addresses my current situation. I own a salon and spa in Texas. I acquired the business 18 months ago and have faced resistance to new strategies almost from day one.

As you may know, most stylist / technicians wield power by threatening to leave and take clients with them. They are the rainmakers. Therefore, most salons are what you call "warlords" shops.

I fear I do not have much time in order to implement an employee development program. Attracting other rainmakers is difficult even though we offer full "back office" support. We provide assistants, front desk, bookkeeping, etc. They do not even sweep the hair clippings as we have a housekeeper on staff. With all of the above services, the stylists still want full commission (55%). Industry analysts show that salons cannot be profitable with payroll / commissions over 45%-50%.

Clients are very loyal to stylists and very vocal in giving their opinions, likes and dislikes. I need to terminate one of the rainmakers for insubordination, but it will hurt cashflow so much that I would have to close.

The staffing model of the salon since the early 70's has been to have a hair-stylist up front servicing clients at full commission. Support people were hired to work in the back, shampooing and applying colour and perms, washing towels, sweeping hair, cleaning the bathrooms, etc. for hourly min wage + tips. In most salons, these tasks would be a part of the job.

The irony is that the stylist received full commission but do not have do all the work and resist contributing to the overhead cost of the assistants. They know it, the clients know it too. Until 6 yrs ago none of the stylists made a great deal of money. As others retired, they took on the clients of the retirees. Now they are making money, but have no loyalty to me.

The Company at one point was a $2.8 mil dollar business and could easily afford the overhead costs. Today, I can't. With overhead payroll and commission, total payroll is 67% of revenues. We are in a high profile strip centre and rent is $8400/mth for 3600 sf. We do $800,000 yr, but there too much going out the door.

Raising prices on the existing client base would be greatly help. However, the stylist will most likely resist as they did before. That battle started the riff leading to 2 employees leaving. We retained 100% of the clients, so we have a feather in our decision making management cap. All dissenters were proved wrong.

Stylists who are afraid that they will lose clients by raising prices do not understand supply and demand or their value to the market. They only want to work harder for the lower prices. And they do this because of the assistants that perform the time-consuming tasks that they do not pay a whole lot for.

This fear becomes arrogance if the stylist has sufficient clientele to support them going independent. They will then have to accept losing clients or work more hours because they are working all alone without assistants. If they pay an assistant they are in my boat and will not make the money they want.

Among the solutions I have considered are to budget and implement regular advertising and measure results to improve, implement aggressive recruiting and training program. With a regular flow of new clients and home grown employees, I, as the owner could always have foundation and build a firm, not just a collection of independent warlords. By the time the existing stylists begin to resist policy and process changes, I will have more stability and can manage the any insubordination or non-collaboration head on.

What advice do you have for "NexLevel?"