Best Practices in Business Development

1. Manage total marketing time as one aggregate time budget, reviewed monthly, so that the overall balance between competing marketing activities can be monitored. Don't fragment it among many decision-makers.
2. Require that all staff contribute some time to organised marketing efforts.
3. Establish regularly reported metrics to assess the calibre/ quality/strategic value of new revenues, and not just their volume.
4. Have an organised, regular program of inviting clients in to talk to your people.
5. Establish research department to keep delivery staff informed on a regular basis as to trends, developments and latest news in each client's industry (monthly updates.)
6. Have one of our people attend every client industry meeting that exists, and have our person write up what they heard, both in formal sessions and at breaks.
7. Train all client contact staff in client counselling skills, how to earn trust and how to deal with difficult situations. Shut down "Sales" training programs.
8. Develop (constantly updated) workbook of tips and tactics for how to render greater perceived value (give the client a better experience with us) at all stages of an assignment.
9. Top management follow-up with clients on all client feedback that is less than "all top scores." React to anything that is less than excellent.
10. Use results of systematic client feedback in setting bonuses at all levels.
11. Offer an unconditional satisfaction guarantee.
12. Ask satisfied existing clients to give endorsements on video (put on website).
13. Have an organised program for all clients to be visited regularly by senior officers.
14. Inviolable, explicit non-billable investment budgets established and planned in advance to invest in individual client relationships by doing something for the client (not selling.) Monitor the execution.
15. Systematic program to offer to attend internal client meetings, critique their internal studies, put on free internal seminars for their staff.
16. Establish a program of seconding your staff to work in the clients' organisation.
17. Organise a regular program of proprietary research, surveying clients and their views and concerns, so you can regularly tell you audience what their peers are thinking about and doing. Use surveys to publish articles, give seminars and speeches with proprietary business (not technical) content. Be THE source of new information and ideas for your clients.
18. Develop screening form to evaluate new client pursuit opportunities. Turn away junk work. Stick to it.
19. Pursue fewer targets with greater level of effort each.
20. Sales process designed to give value, be generous with ideas and earn trust.
21. Make your website full of content useful to clients (and little else.)

A Matter of Trust

Whether dealing with clients, colleagues or associates, the success of working relationships depends crucially on how much trust exists. Yet levels of trust are often surprisingly low in all of these contexts.

Trust Among Partners

In spite of firms' efforts to promote cross-boundary co-operation, many partners do not trust their colleagues in other departments, and they avoid bringing them into their client relationships. As (short-term) merit-based compensation systems have spread, and as firms have grown through mergers and lateral hires, partners in different departments or offices know each other only marginally and are less inclined to do favours for, or work well with, each other. They don't trust each other to "do the right thing."

There is less sharing going on, more hoarding of work and clients and less willingness to do things for the general well-being of the client or the firm. Partners are afraid to abandon their own self-interest in order to do things for the benefit of the firm as a whole because they do not trust that others will do the same.

Firm management is frequently mistrusted by partners. For example, partnerships frequently discuss the benefits of investing in various non-billable activities for the long-run health of the firm. Yet implementation is usually poor to non-existent.

Again and again I hear partners say that while they see the wisdom of these activities, they do not trust the firm's management or compensation committee to treat them appropriately if they engage in such activities.

"They say they want us to do these things, but the rewards continue to flow in the same old directions. We don't believe what they say, only what they do."

Practice group leaders often choose to retain their full book of business (that is, serving clients) rather than spending some of their time coaching and helping other people in the practice group succeed.

When asked why they do this, one of the most common replies is, "But if I reduce my personal practice in order to have the time to manage, how will I re-enter the practice when my time as leader finishes? I don't trust my partners to help me rebuild my practice or to protect my income when I go through the rebuilding phase."

If practice group leaders distrust their partners, the feeling is often reciprocated. When considering whether they would accept a coaching system whereby one partner would be responsible for the success of the group and spend more time managing, the feelings of many partners are captured by the individual who said, "I'll accept coaching from someone I trust, but that's not every one of my partners. In fact, it's a very limited set. For many of my partners, I'll never believe that they are acting predominantly in the interests of the practice group as a whole, rather than for their own interests."

The cost of such lack of trust is high. It leads to diminished teamwork, ineffective management and under-investment in those activities that benefit the firm. Clearly, a highly trusting society would accomplish more, both for the firm and the individuals within it.

Trust Among Junior Professionals

The level of trust among junior professionals is also desperately low. In many firms, juniors used to believe that if they worked hard the firm would make sincere efforts to train them and help them develop. They believed that the firm cared about them and wanted them to succeed. Few juniors now trust partners to do this, and they think (accurately, in many cases) that the firm views them as fungible production machines.

Typical are comments such as these:

"It wouldn't take a huge effort to get the most out of us, but they treat us so badly [that] you just give up. I'd be prepared to make a bigger effort, but I can't see what it would get me. It's all take and no give. They regularly preach about their commitment to our development, but it's all lies."

"It truly is sink or swim here. There's no feedback, no training, minimal supervision and no help in building your career. Partners care about themselves and their income, with the client's interests a distant second. We don't even get on the list. They visibly don't care about us, so you can imagine how much we trust them."

Sadly, these quotes are not rare exceptions, but the norm in many professions. Many firms are aware of these attitudes, but few have done much to address the situations described. Apparently, the fact that their juniors almost uniformly distrust them is a situation that many otherwise excellent firms accept.

Does all this matter? It certainly does. A lack of trust creates problems in retention and turnover, and (since the word spreads quickly) it also affects recruiting. Low trust breeds lessened motivation and commitment, and this leads to lower productivity, efficiency and quality.

Notice that it does not necessarily lead to less production because the brute force of targeted billable hours can ensure compliance with the quota of sausages to be made. While short-term profits can be protected by micro-managing the amount of production, it is efficiency and quality that ensure long-term success.

Trust and Clients

The need for trust in dealings with clients should be obvious. Consider your own purchases of professional services. Whether you are hiring someone to look after your legal affairs, your taxes, your child or your Porsche, the act of retaining a professional requires you to put your affairs in someone else's hands. You are forced into an act of faith, and you can only hope that they will deal with you appropriately. You can research their background, check their technical skills and attempt to examine their past performance. In spite of all this, when it comes down to making the final decision on whom to hire you must ultimately decide to trust someone with your baby -- which is never a comfortable thing to have to do.

What you and I (and all clients) want when retaining a professional is someone who will put the client's interests ahead of their own. We want someone who will care. We want someone we can trust to do the right thing by us. Getting hired is about earning and deserving that trust.

Yet signs that trust is declining among clients are everywhere. With ever-increasing frequency, clients conduct a microscopic examination of their professional provider's bills, challenging expenses, questioning how projects were staffed and how much time various tasks required. They force even long-term suppliers to compete for new work through beauty contests and other proposal activities, and they mandate increasingly detailed reporting from their firms so that they can monitor what is going on.

What a change this represents! There was a time when clients trusted professionals automatically, based solely on their honourable calling. Sound character and reputation were assumed, and business was conducted with confidence on a handshake. Great firms and institutions were born out of the natural expectation of trust.

That world has gone, but the need for trust has not gone away. What has taken its place is the necessity to earn it (and re-earn it) throughout a professional's career.

How to Win Trust

If trust is so important, how does one go about winning it? How do you get somebody to trust you? It is clear that this is not accomplished by asserting, "Trust me!" Nothing is more likely to get the listener to put up his or her defences!

The key point is that trust must be earned and deserved. You must do something for the other person to give them the evidence on which they can base their decision to choose to trust you. You must be willing to give in order to get.

A perfect illustration was given when I had to find a lawyer to process a relative's will. The first few lawyers I talked to tried to win my business by telling me about when their firm was founded, how many offices they had and how much they would charge me. None of this inspired much confidence. Finally I encountered a lawyer who, during my initial phone call, asked how much I knew about what was involved in processing a will.

My reply was, "Nothing!" He then suggested that he would fax to me a comprehensive outline of the steps involved: what I needed to do immediately and what I should forget about for a while because it was not urgent. The fax also provided the phone numbers of all the governmental bodies I needed to notify, even though this had nothing to do with his legal work (or fees).

All of this (immensely helpful) information was provided freely, before I had retained him. Naturally, he got my business. He had earned my trust by being generous with his knowledge and proving that he was willing to earn my confidence.

Trust can be earned by the simplest of gestures. I have a dentist who frequently recommends that I permit him to perform various procedures on my teeth. Like many buyers, I'm never sure whether he is recommending additional procedures because I really need them or because he is just trying to increase his revenues (through cross-selling).

However, my view of him has been significantly affected by the fact that after every office visit he always calls me at home that evening to inquire whether I am in pain, whether I need a prescription and so on. I will confess to being very impressed by this. He is acting as if he cares. I don't know if he really does care or not (I do prefer real caring) but in a world where finding someone you can trust is becoming harder and harder, I'll even accept "as if" he cares. I usually accept his recommendations for additional work.

For me to trust you requires that I believe you will do what you say you will do -- that your actions will match your words. This is a simple-sounding notion, but as noted above, partners often do not believe it of firm management, clients often do not believe it of partners and associates long ago gave up believing it of partners and firms.

How do you make employees think that you can be trusted? A perfect illustration is given by the professional who, together with his team, conducted an assignment for a client that wasn't as good as it should have been (and everyone on the team knew it). It was competent rather than excellent. Rather than deliver the work to the client, the professional turned to his team and said: "Look, you'll all make mistakes in the future and so will I. But let's not send out something that is less than we are capable of. I'll absorb the losses on this project, but let's work on it until it really meets our standards."

Is this some kind of crazy, un-businesslike behaviour? Not at all. This single act energised the whole team and made them believe that this professional stood by his principles (his frequently espoused commitment to quality). Thereafter, they trusted him. They knew what principles he believed in, and they knew he would stick by his principles. He put his money where his mouth was.

He was more than repaid in the ensuing years by the profits generated through the juniors' energy, commitment and dedication to the quality for which he stood.

This simple story teaches some important lessons. People will trust you, be they client, colleague or employee, to the extent that they know what your principles (or deeply held values) are, and to the extent that they know you can be relied on to act in accordance with your principles. If people don't know what your values are, or worse, suspect that you have none beyond your own short-term self-interest, they will not trust you with their business, their loyalty or their co-operation.

Trust is about relationships. I will trust you if I believe that you're in this for the long haul, that you're not just trying to maximise your own short-term benefits of our interactions. Trust is about reciprocity: You help me and I'll help you. But I need to know that I can rely on you to do your part and that our relationship is built on shared values and principles.

Alas, values and principles are scarce in today's world, and the consequent decline of trust is all too visible. That this should be so is truly a paradox, since the more you are trusted by your clients, colleagues and subordinates, the more you will get from them and the more you will thrive professionally and personally.

How much are you trusted by those you deal with?

The Courage to Manage

In my experience, the single biggest barrier to implementing strategy is courage. What makes superstar managers so impressive is not what they are doing but the fact that they are doing it all.

Many people (and firms) lack the guts to stick with the plans and goals they have set for themselves. They lack the courage of their own convictions.

I first learned how hard it was to stick to one's own strategy some time ago, when I set for myself the goal of trying to become a strategic advisor to international professional firms. Shortly thereafter a firm asked me to accept a project conducting sales and marketing training courses for their people.

The assignment was very attractive: a large volume of familiar, comfortable, enjoyable work that would provide a significant portion of my revenue target for the year. However, it was obvious that spending most of my year doing sales-skills training would do nothing to help me achieve my strategic goal. Rather than becoming a strategic advisor, I would, by the end of that year, be a sales trainer.

Neither you nor I can build a reputation for being one thing if we visibly spend our time in the market doing something else.

Taking the easy path (accepting the sales job and postponing my efforts to develop my career) would not have been immoral, but it would have meant that I would not have obtained the benefits of my declared strategy. In fact, if I kept making the choice the same way every time, I would never get around to my strategy.

Obviously, resisting the expedient path is hard. You have to really bet on yourself and believe in your own vision. You have to have the courage of your own convictions.

Believing in the benefits of your aspirational goals is one thing; living by the diets that are necessary to achieve those goals is another.

So which did I want? Easy cash or an ambitious strategy that would require hard work to create? Did I want a comfortable, well-paid year or one where I had to accept the burden of generating an equivalent number of days of "real" work that would move me toward my strategic goal as well as generate income?

I decided to stick with my strategy and pass on the "easy money" opportunity. I arranged for a friend to look after my client and worked hard (and successfully) to bring in the kind of work that was "on strategy."

Situations like these are not unusual. In fact, they are inevitable. All strategies, at sometime or the other, involve a trade-off between short-term cash (doing what's expedient) and executing the strategy (living the vision of excellence you have set for yourself.) If you're going to pursue a strategy, you must be willing to make hard choices and act as if you truly believe in your own strategy.

In short, executing a strategy takes courage. You must be willing to practice what you preach, when it is convenient and (most important) when it is not.

Most firms do a good job of figuring out what needs to be done to improve their own success. Drawers and shelves are stuffed with clever plans, strategies and action items that, if implemented, would significantly improve the firm's success. However, the hard part of strategy is not coming up with clever ideas. Rather, the difficult part is finding the discipline, the will and the determination to act as if you were serious when you outlined your strategy.

Business life is filled with daily temptations, short-term expediencies and wonderful excuses why we can't afford to execute our strategy today. Accordingly, that new article never gets written, work is delegated only when it must be (not when it can be), the junior staff remains only "adequately" supervised and the marketing principle is "We never met a dollar of revenue we didn't like!"

There is absolutely nothing wrong about making this choice, but you must not fool yourself. If you are willing to sacrifice a few degrees of quality to earn more cash, you will not create the market reputation for superior quality that you say you seek. It takes courage to believe that a reputation for excellence is worth more in the long run than incremental current cash. In their vision, mission and strategy documents, firms say that they are aiming for excellence, but that's not how they operate.

In describing this trade-off in one firm, a person asked, "Are you really saying we should turn down new business?" "Only if you don't have the capacity to do it to high standards," I replied. "But does anyone ever do that?" she inquired.

"Only the most profitable firms," I replied. "We wouldn't have the courage to do that," she said. "Precisely," I replied, "You don't actually have the courage to believe your own mission, vision and strategy." "Oh, I do," she said, "but I don't believe that our firm management does."

There lies the real difference between the average firm and the super-achieving businesses reported in Jim Collins' Good to Great (Harper Business, 2001).

In the book, hard evidence revealed that successful companies, firms and individuals don't preach standards that are different from those preached by others; they just live those standards.

And the reason they do is not found in clever business systems but in the strength of the convictions of the individual managers who run those offices.

In many firms, people do not believe that their leaders truly want them to act strategically. Whenever there is a choice to be made between strategy and short-term cash (and there always is), most people feel under significant (if not irresistible) pressure from management to go for the cash.

They believe that the message from firm leadership is clear: strategy can wait for tomorrow. Rather than firm leadership being a source of encouragement to stay the course and pull off the strategy, it is all too often the biggest obstacle to the implementation of strategy. The courage to bet on the articulated strategy, even when it is management's own strategy, is almost entirely lacking.

The principle of courage is not meant to be an inspirational point but simple logic. You reap the benefits of what you actually do, not what you hope to get around to doing some day if it is convenient and you're not too busy. If you want to be known as excellent at something then you have to be reliably, consistently excellent at that thing.

One could argue that you don't have to be "slavish" about your strategy. For example, couldn't you occasionally take in too much work, as long as overall you were excellent?

This is a tempting argument, but in the real world it fails for two reasons. First, once you start forgiving yourself a little ("just this once") it is remarkable how easy it is to find reasons to forgive yourself for being expedient the next time (and the next, and the next...). Before you know it, your standards are no longer standards but are just aspirations.

Second, the harsh reality of market-places is that it is very hard to develop a reputation for excellence for something that you do "most of the time." Even if you depart from excellence only a few times, you quickly become known as inconsistent or unreliable. If you can't be depended upon, few buyers will single you out as special.

Many people believe that you can rely on reward systems to encourage the implementation of strategy. This is rarely true. Take, for example, the strategy of excellence in managing people, an approach to doing business that is ardently preached in most firms and is rarely enforced.

"Well, we pay attention to it; it's one of our key strategies," one of my clients said. "We reward those people who do it well." "And what do you do to those people who don't do it well?" I asked. "We just don't reward them," he replied.

"In other words, you allow them to carry on as before?" I commented. "Well, yes," he said. "In other words, they don't have to do it, if they don't want to?" I queried. "I suppose not," he said. "Then how many do it?" I asked. "A few," he admitted. "So you're not achieving firmwide excellence in this area?" I concluded. "Not really, I suppose," he said.

The lesson is clear. To make something happen, it's not enough to reward those who choose to participate. You must tackle those who do not. As long as it's optional (even if rewarded), it isn't going to be done at the level at which the commercial benefits will kick in. "Are you really saying that I need to speak with all those who aren't doing it?" he asked. "Only if you want the benefits of your declared strategy," I replied.

"I'm not suggesting that you play boss, cop, Attila the Hun or dictator. Go remind them of why you chose that strategy. Help them. Encourage them. Give them some tools to make it easier. Set targets for small improvements that will at least get them on the virtuous path. But whatever you do, don't ignore them or leave them alone. It's not a standard in your firm if there are no consequences for noncompliance."

"But it would take an enormous amount of emotional energy to do all that," he said. "Welcome to the wonderful world of managing," I said.

Managerial Courage

Many managers believe that they add their greatest value when they ensure that a strategy (or vision or mission or direction) is developed. However, this is patently false. The greatest value of a leader is in ensuring that the strategy is implemented. This is revealed by the very origin of the word "manage," which derives from Old French and, literally translated, means "the holder of horses." The manager's key role is to ensure that all the horses are moving in the agreed-upon direction at approximately the same pace.

Over the years, I have been trusted to see the strategic plans of many direct competitors. Remarkably, they are almost always identical. Everyone figures out correctly which client sectors are growing; which services are in rising demand; and which dimensions of competition (client service, innovation, etc.) the clients are looking for. The strategy documents are the same not because people are being dumb but for precisely the opposite reason: everyone's smart! Everyone knows what needs to be done.

If this is so, then what is competition really all about? In my experience, it is about who can best get done the (obvious) things that need to get done. And this, in turn, is determined by the following set of closely related concepts:

• Energy
• Drive
• Enthusiasm
• Excitement
• Passion
• Ambition

Where these exist, the discipline can be found to engage in diligent execution and thereby outperform the competition.

The role of the manager, then, is to be a net creator of enthusiasm, excitement, passion and ambition. Any manager who can create these things will launch the "service-profit chain" that Heskett (et al.) wrote about so convincingly in the book of that name.

Alas, all too often, managers are net destroyers of excitement. If all they ever talk about is finances ("How are your billings, what's happening to receivables?"), it can be deadening to the spirit. Which doesn't mean they don't need to talk about these things. They do. However, they must not talk only about these things. Financial discipline is the bedrock of business success. It is not all of it.

It is the manager's job not only to manage financials but to inspire, cajole, exhort, nag, support, critique, praise, encourage, confront and comfort as individual people (and groups of people) struggle to live their work lives according to this new structure, the strategy.

Of all the qualities required of managers, the most essential is courage -- the courage to actually manage and enforce the standards that are preached.

Managers must have the courage to maintain a long-term focus, the courage of the convictions they espouse and the courage to intervene personally whenever there are departures from the values and vision that create excellence.

The single biggest problem in the implementation of strategies is the absence of consequences for non-compliance. If the manager doesn't have the courage to tackle the individual who is not behaving in accordance with the strategy, then all the other people will quickly realise that the new strategy is not something you have to do. They will quickly cease striving to comply. And thus the benefits of the strategy will never be attained.

The single question remains: "What is the manager going to do about non-compliance?" Hundreds, if not thousands, of eyes are watching closely to see if the announced strategies are real or are discretionary.

What is often underestimated is that the problem of the non-conforming person is not his or her own nonparticipation in the strategy but the adverse effect that he or she has on the motivation of others to participate in the new initiatives.

Afraid to intervene, many managers wait until the problems become serious -- until they have to deal with them. It is, after all, emotionally easier to deal with problems only when you must. This is, however, insufficient. Managing is not about dealing with problems once they have become unavoidable. Rather, managing is about uncovering issues and dealing with them before they become problems.

To make a new strategy work, the manager needs to demonstrate visibly that he or she is prepared to be intolerant about departures from the strategy.

The earlier you deal with problems, the easier it is to tackle them and the more options you have. The most obvious "consequence for non-compliance" should be an informal, unscheduled, private office visit from the manager. "Mary, it's come to my attention that you're not participating in the team meetings that we agreed to have. Is this accurate? Is there a problem? Is there something I can help you with?" (As always in managing, the best strategy is to describe the situation and ask for an explanation first.)

If the person is reluctant to go along, it is possible to ask for help: "Fred, I know this isn't something that you enjoy or that someone with your skills needs, but I really want to help and encourage others in this area, and your participation would carry enormous weight. Would you do it as a favor for me?"

Having these conversations is never easy and takes significant interpersonal skill, particularly when the problem is not yet a serious one. But that's what managing is! While skill is involved, courage is even more essential.

More managers have the skill to conduct these conversations than have the courage to actually engage in them. The manager is never adding as much value as when he or she is influencing individuals to adhere to agreed-upon actions. Managing is less about figuring what should happen than it is about actually making it happen.

It should be clear that the more the word gets out that non-compliance will result in an office visit from the manager, the less often the manager will need to make those visits. People will stay in compliance just to keep you out of their offices!

A successful manager must not only have the courage to manage; he or she must also have the ability to instill courage in others. The central problem in most firms is that things are "pretty good so far." Few firms are hurting badly. And, as the old saying goes, the good is the enemy of the best. Why bother stretching for excellence when things are (at least) acceptable as they are. Do I really want to suffer the rigours of a new diet in order to achieve the (uncertain) benefits of a new goal? Or, in summary, do we really have to do this?

It is often said that only two things motivate people: fear and greed. The best managers make use of a third motivating force, the glamorous dream. They are able to convince their colleagues that life could indeed be significantly better, that greater accomplishment is possible and that, yes, they can do it.

Great managers give their people the confidence that, individually and collectively, great(er) success, fulfillment, accomplishment and profits are, indeed, attainable. They give their team members the courage to try.

Change is threatening, and many if not most people operate well within their comfort zone. They are understandably reluctant to abandon the old habits that brought them to their current success. If managers are often demanding, they must also be supportive. They must manage with a style that sends the signal, "Come on, you can do it; I will help you!"

While the first part of this ("Come on") is common enough, the second two, personal encouragement and personal support, are often absent in the styles of many managers. Again, it is necessary to note that doing this kind of one-on-one management (the only form of management worthy of the name) takes not only skill but also the courage to actually do it.

Just as management involves a delicate balance between being supportive and being demanding, it also requires a style of insistent patience: patience that "Rome doesn't get built in a day" and insistence that "We are building Rome."

To find the courage to keep trying to attain new levels of performance, people must believe in their heart of hearts that the manager actually does believe what he or she says about the firm’s standards, mission, vision and strategies.

People must believe that the manager has the courage to believe in something and, more important, the guts to stick with it. There is no greater condemnation of a manager than to say that he or she is expedient, and no greater commendation than to say that he or she truly lives and acts in accordance with what he or she preaches.

The Trusted Advisor Interview

by Andrew Gluck 2001

from Financial Advisor Magazine, 2001

Gaining trust would seem to be an intuitive skill, not something that you can acquire. How can you teach people to gain trust and have personality qualities that they do not have now?

RW: You can avoid the things that lead to distrust and develop certain habits -- if you are willing to put in the effort. Let me give you an example of something that I myself used to do. One of my bad habits was that when someone described a situation to me -- a client, let's say -- I often recognised the issue and in my eagerness to please I would interrupt their narration and start to provide the answer. My hope was that I would impress them by proving how smart I was.

But I have learned over the years that this habit, unfortunately, has the exact opposite effect. By interrupting and trying to show that I have an answer, I prove two things to them: one, that I'm not really listening to them, and two, that I'm a little over-eager to treat their problem like a generic one, i.e., not treat them as special. Over the years, I have learned as a matter of habit to suppress my enthusiasm and let people finish their description before I reply.

I know that you are talking about me, right? Actually, you're probably talking about most people. It is pretty common to interrupt and not listen well.

RW: It's very common, and goes to the heart of what I write about in the article. Unfortunately, because we are all wound up in ourselves, our mental focus is always on me, me, me. When someone else is talking, rather than really listening we are sort of mentally rehearsing what we are going to say in response. And the essence of trust is convincing the other person that you are sincerely trying to help them rather than trying to get what you want.

This is not a new thought. It is as old as Dale Carnegie, who wrote back in the 1920s and 1930s that you have more fun and success if you help other people achieve their goals than you will by focusing on your own goals. When I first heard that, it struck me as either communism or some kind of inspirational religion. Over time, I have learned that everything you want in the world -- whether it is riches, fame or respect -- has to be given to you by other people.

To get another human being to give you what you want, you must first give them what they want. If all you do is say, "Me, me, me -- please give me what I want," you get less. If you spend more time focusing on giving people what they want, you get more of what you want. It is a basic human paradox.

Is it fair to say that in your view, being an expert, a technician, is not the main thing that you need to be successful?

RW: Finding somebody who can solve your problem is not that difficult. But finding somebody that you want to work with, somebody that you can trust with your problem, is in fact quite hard. It is scarce in the marketplace. I in no way want to minimise the importance of being skilled at what you do. But technical content is not that scarce in the marketplace. Finding a lawyer that can write a brief is not difficult. Finding a doctor that can do the operation is not difficult. That does not minimise the importance of the technical skill of the personal financial planner who can prepare a discounted cash flow statement. You need to have the skill.

But you can't make yourself special on what is common. You can't earn a high income differentiating yourself on things that everybody can do. The skill is an entry fee. You have got to be smart and skilled at what you do. But by itself it is not a sufficient condition for success.

Okay. So having the extra little bit of skill and knowledge is not what makes you successful. But don't you need that specialty skill for the really complicated situations?

RW: Imagine that financial planners are in a sort of a health care business, and that a client is trying to buy brain surgery. The client has a one-of-a-kind need for something innovative that no one has ever done before. Then indeed there would be room for the frontier supplier, the brain surgeon of the business.

All I'm trying to point out is that the people who need true brain surgery probably make up less than 5 percent of the population. Most of the rest of the populace trying to buy financial advice, rather than trying to buy brain surgery, is trying to buy an aspirin. They've got a headache and their financial circumstances are like millions of other people's. The actual service is needed, but it is not customised to a particular individual.

Or sometimes they are trying to buy a nursing service, someone to go through the process with, hold their hand, answer questions and understand the pros and cons of the choices. Discussion and helping people understand choices are essential parts of the value that is rendered. But it is not primarily a technical skill. It is an interactive skill.

You say in your article that it is like teaching. Is that correct?

RW: There is very big difference between being the expert and being someone's advisor. I started off in my consulting career after many years as a university student, thinking that I would earn my income by being the expert. What I discovered very quickly about my clients is that they did not like me coming in and saying, "Here is what you are doing wrong." My clients felt as though I was being a little pompous, patronising and condescending.

As smart people themselves, clients don't want advisors to tell them what to do. They want you to tell them their choices so they can make their own decisions: "Help me understand my options. Help me understand the pros and cons. Give me a recommendation. Help me reason through to a decision." That is very much like being a teacher, and it is very much different than knowing the answer yourself.

It's making the client find the answers.

RW: And it changes the focus of attention, which means that those of us who have ego needs, which includes me, sometimes find it hard to remember to do this. It's so much more fun for your ego to show off and prove that you have the answer so you can say to people, "Aren't I smart?" However, the client doesn't want to focus on your smarts, but rather on his problems. The issue on the table here is not your ego.

But aren't there times when you do want to be forceful, when you do want to say, "This is what you should do, Mr. Client"?

RW: If you try and say to the client, "I'm the expert here. Shut up, client, and I will tell you what you should do," you will only get away with it if your client fundamentally trusts your motives. Notice that there is a very big difference between trusting your competence and trusting your motives.

Let me give you a short story from the article. My dentist tells me I have to have root canal work in three parts of my mouth, and this is very disruptive and very expensive, and the question becomes, "Under what circumstance do I accept his recommendation?" If I think that he is being an honourable, caring person, and that he is trying to help me with what is in my best interests, independent of his financial interest in the issue, then the odds that he gets my money go up.

If, on the other hand, I don't believe that his motives are honourable, the odds that he gets the work and my money go down. The point is you can be more insistent when a client believes that you are truly trying to help and are not after their money.

How do you know when you have that privilege?

RW: You can never know for sure. So you must earn your relationships. You need to spend time and make occasional gestures toward earning your clients' trust, proving that you truly are trying to help. And you must do it without asking for anything in return. If you do this three or four times, you can put it in the "trust bank" and draw down on it later.

If you try and insist that what you have to say is the right answer before you have made gestures of goodwill, you are too early in the relationship and it will backfire on you.

Let's talk about some of the details of what is in the article. Explain some of the core skills of an advisor.

RW: One of the skills is giving advice. There are certain language skills needed when you try to frame what you have to offer. We have already hinted at this. It's the difference between saying "You have got to do this," and "Have you considered the following alternatives?"

This may sound like a small detail and playing with words, but whenever anyone is thinking of using a financial planner, they are highly concerned. Their savings and their cash flow are at stake. This not a comfortable, easy conversation. If you work hard to put people at ease, it is appreciated. So work very hard to think, "How can I give my advice in such a way that it comes across as being supportive?"

The second set of skills involves earning trust. Let me give a real example that happened to me only two weeks ago. My wife and I are redecorating our house.

Historically, I have not been a fan of decorators. This particular woman we are currently using, however, was a genius in earning my confidence. We were choosing wallpaper, curtains and carpet for a room. At the end of the discussion, when we had made our decisions, we were having a cup of tea and it was mentioned that my wife's sister was coming in from out of town to visit. The lady finished her tea and left, as appropriate.

Three hours later, the doorbell rang, and there she was with a window frame in her hands with swatches from the curtains, wallpaper and carpet. She handed it to my wife and said, "I heard you say your sister is coming and I'm sure you will want to discuss with her what the room is going to look like, so I thought you would like to have this." And then she left.

Now, you decide how much impact that would have on you, but it had a lot of impact on us. It was thoughtful and supportive. This woman was trying to earn our goodwill by making a substantive gesture. It was a work-related issue -- she didn't show up with flowers and chocolates and try and make friends. So there is an example of earning trust with a gesture. It is acting as if you care.

You say there are 11 rules of relationship building for advisors. Give us the highlights.

RW: One of the things that all people in business have difficulty with is realising that every interaction they have with a client or a potential client always has two consequences. One is the result that comes from the transaction itself, and the other is what you have done to affect your long-term relationship.

You need to understand which game you are playing. There is a difference between being good at a one-night stand and being good at building long-term relationships. Many sales people become skilled at the one-night stand, but this involves a different set of activities and a different set of talents from building mutually beneficial, mutually supportive, long-term relationships.

Relationships in life are drawn on the same principles whether they are personal or business. The way you build relationships with your spouse or children is to spend time with each other, especially when there is nothing to talk about. If your spouse or child has something substantive to say, then you had better get together and talk and deal with the substance of the conversation. But you won't be building your relationship.

You are building the relationship when you find the opportunity for 15 minutes to go for a walk together or have a cup of coffee and catch up with each other's lives. The same is true in business. That's when you build relationships with your clients.

What do you mean, spending time together with clients when you are not doing business?

RW: When the business is finished, instead of dashing off, say, "Let's go for a cup of coffee." Take the opportunity, if it is presented, to find out a little bit more about the person as a person, not just as a source of business.

Then aren't you trying to make your business relationships friendships?

RW: No. There is a difference between being friendly and turning people into friends. Let me use my own experience to illustrate. For 5 years, much of my business has been global, and many clients at the end of a day's work have said, "How about coming to dinner with us, Richard, just to chat."

And I've been foolish enough for 5 years to say, "I'm tired" or tell them I'm busy, and I've tended to turn down those opportunities to have dinner. I now realise that I have been making a very big mistake, that while I have had successful transactions, what I failed to do is turn that transaction into a relationship because I was not willing to socialise. My clients were not trying to turn me into friends -- they were being gracious enough to be friendly.

I now understand that business is about human beings, and if you are not willing to show a little interest in the human being behind the transaction, you will not do as well.

You say that earning trust requires action. Explain.

RW: Other human beings will give you what you want if you give them what they want first. In other words, you earn your relationships by making small gestures.

My wife is a genius at doing this. When we were first dating, years ago, she found out that I had some work in Egypt, and she really wanted to be invited on the trip. But we had only been dating for three dates or so. Now there are stages in a relationship, and you can't push too far or too fast. So how did she get invited on that trip?

Well, she invited me to dinner at her home. When I showed up, there was Egyptian music playing. She had cooked a full Middle Eastern meal served in traditional style on the carpet, and there were guidebooks to Cairo scattered around the floor. The sale was made. What she did there was to say, "I will earn your goodwill by demonstrating to you in advance that I'm a fun person to be with and will be an interesting companion."

You encourage advisors to "go first," to make a gesture or share personal information about themselves -- even before a client does it. That's risky.

RW: How do you build relationships with another human being? It is risky. It is like dating in high school. You have to pick up the phone, and it may sound silly. And the way you build relationships is to make the first move. If you are unwilling to make the first move in business, you will be sitting home alone on a lot of Saturday nights.

Is there an easy way for advisors to get into the right mindset to behave in ways that will encourage trust?

RW: If you are not sure that something you do will work when you're the supplier, ask yourself, "Would it work on me if I were a buyer?" The key to doing well in business is to understand that clients are "us." They are not "them." Thinking about clients in the abstract, almost like aliens, will slow down your ability to understand them. "Clients are us" is a very simple rule when you are in doubt about any selling tactic.

Let me tell you a story about what happened to me when I had to choose a lawyer to probate my relative's will in Brooklyn. The first lawyer I called tried to get my business by saying that his firm was founded in 1927. My reaction: I don't care. The second lawyer tried to get my business by saying that he had 15 offices in the tristate area.

My reaction: I really don't care. I thought to myself, "When are you going to stop talking about your firm and start showing an interest in me?"

Finally I got through to a lawyer who was a genius. He said to me, "Before we go any further, let me ask you a question. Have you ever been involved in processing a will in Brooklyn?" I replied that I had not. He said, "Do you know what is involved?" I said I did not have a clue. He said, "Forgive me, but I don't think you are in a position to choose an advisor if you don't know what you are getting into. So let me send you a three-page booklet that describes exactly what you are getting into."

The booklet was the most valuable thing I could have received at that point. It contained all the information I needed to know about the process. It told me what was urgent and which documents I needed to find among my relative's affairs.

And the last paragraph really got me. It said, basically, "Even though it has nothing to do with our legal services or fees, you are required by law to notify the following city, state and federal agencies and here are all of their phone numbers." That guy had my business because he earned my trust by going straight to being helpful, as opposed to promising to be helpful if I paid.

You say there are four components of trust. What are they?

RW: The first component is credibility. You can't be trusted if you are not credible. But credibility doesn't just mean capable. It means that you can take what you know and apply it to a client's world. Most advisors approach this component with relative competence.

Next is reliability or dependability. Some people think that you can earn trust with one clever gesture. Most of us see beyond that. We trust people who can be depended upon to maintain consistent behaviour. My dentist calls me at home, for instance, to see how I'm feeling after a procedure. The fact that he does it every time builds trust. You don't have to do everything for a client. But what you say you are going to do, you must do. It is not about doing more. It is about being absolutely reliable and dependable. This way, I can go about my business and forget about a task because I know you are going to deliver what you said you would deliver. That sounds small, but not a lot of people live up to that.

What are the other components of trust?

RW: Intimacy is a fancy word for saying that from time to time you will switch your role and start to get acquainted with the client as a human being. It's the willingness to drop your role and relate to the other person as an individual human being, not as a salesperson. A lot of people never credibly drop their sales role, never successfully relate to the client as a human being.

While these three components build trust, the last one reduces trust. It is self-orientation. If I think you're only in this for you, and that you will sell me whatever you want to make a good commission and that you don't really care about me, very obviously I don't trust you. So what I'm really looking for in this fourth factor is a person who can suppress self-orientation and focus on me.

A lot of financial advisors get paid on commissions. Is that inherently bad for trust building?

RW: It is a huge barrier. Not because people are necessarily acting unethically, but just because it builds a suspicion. Many financial advisors face a really difficult time because, from the time they walk in the door, clients feel they had better stay on guard because the advisors' incentives are structured in such a way that they are not interested in the client.

At a minimum, the principle of full disclosure must be applied. That goes a long way. The professionals I have talked about -- my dentist, lawyers and others -- get paid based on the consequences of their advice. Conflicts are everywhere, and financial advisors are not unique. What builds trust is complete, open disclosure. Tell the client he needs to know how you get paid and the alternatives. Anyone who does that would have my trust.

You say there are five steps to gaining trust. Explain them.

RW: First you must be sure that the client wants to talk about the issues. That's the engagement phase. You can't move forward with a client unless the client has clearly signalled that he or she wants to talk about this topic with you. Once engaged, and before telling a client what you know, you should spend a lot of time encouraging the client to talk.

Listen and try to understand more and more about his or her preferences, risk profile and what the company has tried before. Don't show off what you know. Stop talking until you know the client's preferences. Otherwise, you risk coming across as being insensitive, and the client will lose trust because you are showing off too early.

The third and best way to help a client is to help them think about their problem in ways they never have before. You help them frame their issue. A large amount of the value you add is when you can say, "I bet you never thought about it this way, but ..." You cement relationships this way. But you must listen well before you can frame an issue.

What's the fourth step?

RW: Envisioning. It is an old concept that entails getting the client to imagine what it would be like in the future state that you are trying to get him to. You can't get anyone to do anything unless they desire the outcome. Unless I really want the benefits of a diet, then I will reject the diet. It is the ideal.

And the fifth step goes to the opposite extreme. You must discuss all the barriers that might get in the way of reaching the ideal. It's getting a commitment. It is explaining what the client must do, the choices he must make, the money he must come up with. It is making sure that you don't have a false agreement by creating the desire for the dream without an understanding of what it takes to get there.

No minimisation of these issues should be made. This way, clients are not disappointed with all of the things they have to do to get to the ideal. And you must get them to agree to do their part.

You make the point that every client meeting must have a stated goal. Why?

RW: We all have too many meetings where we don't know why we are meeting, and we waste a lot of time. The key is to have a clear understanding of the goal of each meeting.

You say advisors should be like Columbo, the television detective. What do you mean?

RW: Columbo was incredibly smart and he always knew the answers. But he knew that the trick in life was to get the other person to say it. The way you get the other person to say it is that you play dumb. The trick is saying, "Could you please explain this to me?" In both sales and advisory situations, if the advisor says it, you may doubt it. If I can get you to say it, it is true.

Many advisors feel uncomfortable with the touchy-feely family issues, with dealing with clients' personal problems. Do you have ideas on this?

RW: Don't invade a client's private life. But also recognise that business is about people. If you are not comfortable with people's issues and emotions, and all you are comfortable with are numbers, you will fail.

Giving financial advice is about people, people making scary, risky decisions. If you can't deal with emotions, you are dead. The truth is, there is not a more emotion-filled business than financial planning. If you are not comfortable with emotions, you won't get on very well.

The Problem of Standards

A speech I recently delivered at the Legal Solutions Conference, The Hague, Netherland. It includes many topics addressed in other articles, but shows how some of my themes were combined in a single presentation.

Technology is potentially wonderful, but professional firms will never capture its benefits because there is no point in giving advanced tools to a group of people who do not have the discipline to do the basics.

If you really want to get the commercial benefits of any strategy, you must put in a system that forces you to execute that strategy. The tragedy is that they will not accept accountability for standards. Giving them technology is like giving a machine gun to a baby. You first teach the baby that there are certain standards to live by, and only then can you give them the advanced tools.

You have all heard of EDS, the computer services giant. It is about a $15 billion company. They have a web-based project management system that records everything about the project -- the next due dates, what's been done, what's on time, what's delayed, how much of the budget has been spent and accumulated. Here is the key point: This information is entirely accessible by the client! At any time, the client can log in and see where his or her project stands, with budget, due dates and deliveries.

They ask their clients to log in every two weeks to indicate on a simple scale of one to four their level of satisfaction with the client project so far. The chairman of this $15 billion company (EDS) can log in and see the feedback from every client for the entire company, and that is the first thing he does every day.

The likelihood that you will do good project management and great client service with this system in place goes up 1000 percent. The system keeps you honest by introducing an unavoidable accountability.

What's impressive about EDS is not the technology but the willingness to be held accountable to high standards. Most professional firms haven't even got an internal project management system, let alone one where you would give access to the clients.

Professionals say, "Well, I am not very good at project management. Can't I ignore it?" Oh yes, the firm replies, we forgive you as long as you're good at your discipline (or bill a lot of hours).

Another Example: Client Service

Take the topic of client service: You all have in your mission statement, or on your website, a commitment to client satisfaction and client service. But how many of you have a feedback system where you regularly ask clients at the end of every transaction how happy they are? (About one-fifth of audience members raise their hands.)

How many of you publish those results, with the name of the relevant partner, to everybody in the firm? (Two people raise their hands.) What you have is a belief that client service is very important, but except for one or two shining examples, there is a refusal to accept accountability to do it. You leave it to self-discipline to accomplish the standard, and that doesn't do the job.

Firms often have inspirational speeches at their partner meetings about service and commitment to clients. But if there is no system that keeps people honest about actually doing it, then you don't get the benefits. The only way to get the benefits is to accept the discipline.

Like all of you, I believe in outstanding client service. The way I try to make that real for me is that even though I charge obscene fees I give an unconditional client satisfaction guarantee. Every invoice that goes out from my office (I don't discuss it with my business manager; it's a standard invoice) says, "Here is the bill in the [obscene] amount that we agreed on. However, if you are anything less than completely satisfied pay only what you think it was worth." That's my system.

Now, if you think about that system you can see where the benefit comes from. It doesn't come because it's a marketing tool; it comes because I have no choice but to do my best. The key is, if you really want to make something happen, don't leave it to self-discipline. If you really want to make something happen, create an external discipline.

And if you don't want to try that hard, if you don't want to be held strictly accountable, then fine -- drop that strategy and move on to something else. But if you can't find anything you're prepared to actually commit to, then recognise that you're probably never going to be anything other than no worse than anybody else.

There are times when I get my client service wrong; I'm not saying I'm perfect. All I'm saying is that I'm prepared to be accountable. Now, I blow it occasionally, and all I ask is that people tell me why. And if they tell me why, I can say, "You know, that's actually fair." I probably should've done that or done this differently. And then I'm going to carry on working for them.

I'm not that good. I don't always get it right. But I'd rather have a system that forces me to try because over time I'm going to make more money on a system that forces me to try.

If you don't want to try that hard, you don't have to. Just don't announce client service as your strategy. That's my message. You can pick whatever strategy you want. But if you're not prepared to be strictly accountable for what you declare your strategy to be, you're fooling yourself and you're wasting time. Pick something you actually believe in.

Supervising Work

Consider another topic: meeting the following standards in matter supervision. Imagine a world where I come to your firm, let's say six to nine months from now, and I stop every professional that you have working for you and ask, "What's it like working here?"

And they say, "In this firm, one thing you can bank on, guaranteed, is that you will be superbly supervised on every transaction because it is a matter of professional principle with us. We don't do work unless we supervise it superbly."

Tell me what commercial benefits would come to that firm if it were true that this was always done superbly. Where would the firm see the benefits? [Audience: Clients would notice.]

Which is terribly scary because maybe that means they notice now that we don't supervise their work superbly.

What else can I write down? [Audience: We would retain people.] Of course. Do you think the quality of the work would go up? [Audience: Yes.]

If we always supervise, the quality would go up. What else? [Audience: We would spread skills faster.]

Is that good for the law firm? OK, what else can I put up there? [Audience: Clients might be less fee sensitive if they found someone who always supervised the work well.]

That's your theory? So incrementally we get higher fees. How else does profit go up if you do it? There would be less wasted time and rework, right?

So the direct profit effect is that you have lower write-offs and higher realisation because there would be less work done that we could not charge for because we had better supervision.

Also, if I knew that every junior had been treated this way since the day they joined the firm, I might actually trust those people and delegate, whereas if I am living in the normal firm where nobody ever does this, then it's quite logical never to delegate because the juniors are untrained, unguided missiles. You get better leverage because people would feel more confident to delegate to trained people. So you get lower write-offs, better leverage, higher rates.

There are two lists on the screen now. A handwritten list of benefits: higher profits, greater client satisfaction, more retention of people, more motivated staff. And what do you have to do to get the benefits? Basic supervisory actions!

When you give somebody a piece of work, make sure they know what they're doing. If you've got more than one person on the job, make sure the left hand knows what the right hand is up to. This is not advanced PhD stuff; even your tax partners could do this!

So here is the issue: Why are firms not getting these benefits, when the benefits are everything we say we are after -- quality, professional pride, money, great work environments -- when to do it requires only a set of very basic skills that can be taught in a weekend with a copy of the One Minute Manager? Why does the average firm not enforce this standard? [Audience: We can get away without doing it.]

That's called professionalism, right? We will only do what we are forced to do. Professional firms are completely unprofessional. They have no standards of quality whatsoever that are actually enforced. They have wonderful standards of quality that are preached. But we forgive any partner who does not do this as long as he does not go to the opposite extreme and do something ugly -- like sexual harassment or getting us sued.

As long as it is not the other extreme, we will let anybody live who does a sort of okay job of this. Business is a lot simpler than everybody thinks it is. If you are not supervising your work it doesn't matter which market segment you go after.

Reading Clients' Trade Press

Take another topic: You go to the typical firm and say, "How many partners in this firm could put hand on heart and say they regularly read every issue of their main client's trade magazine?" Not all your clients, just your main client.

Anybody want to guess in a typical firm, whether it is in Lithuania or New Zealand or the United States, what percentage of partners could honestly answer, "Yes," to that? [Audience: 3 percent.]

The percentage is in single digits, isn't it? The lesson is pre-biblical that clients like us to show an interest in their business. Do you act as if you care about your clients? In the typical firm the answer is, "No, our partners don't like clients. They love the work; they hate clients."

What Team Do You Want to Belong to?

Let me give you a piece of biography that illustrates the point.

My friends' first teaching job was at a good, solid regional university. They were really nice people and as a result it was friendly, supportive and collegial. But part of the consequence of that niceness is that it was a very tolerant place. If, as an individual, you wanted to go for national fame, then people would be friendly and supportive and collegial and help you do what it takes.

But if you didn't want to do that, if what you wanted to do was teach introductory economics for the seventeenth year in a row that was okay, too. They said, "Oh, that's covering your billable hour target; that's acceptable."

Then the tragedy in his life occurs. The phone rings and a voice says, "How would you like to be a professor at Harvard Business School?"

You can probably guess the emotions. The first emotion is, "Somebody has made a mistake but I am not going to tell them." And the second emotion is, "I can't wait to tell Mum."

But then the third emotion kicks in: "Oh my goodness, this is a life changing choice. Am I willing to give up a firm that has only the basic standards in place and voluntarily join the Olympic team, where I know from the start that it is run on intolerant principles because it's actually trying to win Olympic gold (and the consequence of that is the standards are real)?" And the questions to ask are, "Which game would you rather play?" and "Which team would you rather belong to?"

You can see attractions on both sides. My friend can stay with his tolerant institution where it's impossible to not meet the standards. In fact, it's impossible to get fired because they don't believe in that; they believe in keeping the family together. So no matter what you do, as long as it doesn't actually involve indecency with a child, you are one of them. Other than that, no other standards are enforced -- though they are preached. They preach client service, they preach supervision, they preach collaboration, but which ones do they actually enforce? None of them -- because different people have different strengths and therefore they try to understand each other. It's a wonderful environment. You can do what you want and as long as you cover the basics you are left alone. You do things your way and nobody ever bothers you.

The question now is, why would he join the Olympic team where you've got to show up for practice and if you don't you are off the team, and you've got to accomplish certain standards and if you don't then you're out? It is not that the Olympic team is unfriendly. They say, "Well, where else do you want to work? Tell us what you want to do. Take your time. We will help you with whatever you want to do, but we are actually serious and our standards are real. If you can't or won't meet them, you cannot be a member of this team."

The question is, why would people want to choose a team with high standards, strictly enforced? You can argue that it's neurotic behaviour. That's what my friend at the regional university thinks of me. He says, "Richard, why are you writing another book? The last book's selling well; the phone's ringing." And I am saying, "Look, I am the kid from the farm in Queensland. I've got a little bit of recognition, which I never expected. I want to see how far I can go if I try." And my friend says, "Richard, that is insecure, paranoid, schizophrenic behavior. You're doing well. Why don't you enjoy it?" And I say, "But I want to see how far I can go."

So here's the choice that you have to make: Which firm would you rather belong to -- one where they are going for the gold, seriously, or one where the slogan is, "Let's not mess up. As long as it's not broken we don't have to change anything"? There's nothing morally wrong with either side. But it is the height of idiocy to keep running your firm, pretending you are going for the gold when you know you don't have the discipline to do it. If you know you don't have the discipline, stop making New Year's resolutions. Enjoy the choice you have made.

The only sin, I believe, is hypocrisy. The only sin is lying to yourself and pretending you are going to do something when you are not. It's okay to have no quality standards. Most firms do not. Seriously, you know, most firms don't have any requirement of energy. If one of your partners hasn't written an article in ten years you don't care. You don't actually have any expectations of each other but you still shine. Your expectation of each other is that you are not completely messing up. There is nothing wrong with that. That's okay. Feel good about it -- just stop coming to conferences. Stop listening to consultants.

Your Lives Are Miserable

I can usually get a firm's partnership to vote for the "going for the gold" by proving to the partners that their lives are miserable. I say to people, "Please be honest with me, or at least semi-honest. I want you to tell me about your work and divide it into three categories. Category one: Is this work where you say, "God, I love this. The hairs on the back of my neck stand up every time I do a transaction like this"? It's not a strategic question or a moral question -- it's a taste question. "I just love this stuff" and you're allowed to love what you love. You're allowed to love tax; you're allowed to love wills. The only question is, are you doing stuff that you love?

The middle category is, "I don't love it; I can tolerate it." That's why they call it work. My passion I save for my family. This is work, and I'm a responsible, conscientious, dutiful citizen, so yeah, I do what I'm supposed to do. I'm a good player, but do I have any positive charge from this? No, this is what I do for a living. I'm just waiting for 65 to come. My enjoyment comes from things that are outside the firm (if the law firm ever gives me any time to enjoy it).

And the last category is this: "I cannot even tolerate it. This portion of my work here is junk. How the hell did I end up getting stuck doing this?" If I asked the partners (and if they were honest with themselves and with me) to give me three numbers that add up to a hundred that describe their lives, what do you think the average is for the typical established firm? What percentage of partners can say, "God, I love this"? What percentage says, "I can tolerate this"? And what percentage says, "You know, this is crap"? Anybody got a reasonable guess? Don't be stampeded up or down. Give me a reasonable guess. [Audience: 10, 80, 10.] Is that good enough for discussion for everybody? Can I use that for discussion?

Now the question is, having told me what you think about your work, please tell me what you think about your clients. And I'm going to make this a hard test. Category one is, "I like these people." I don't have to defend it or justify it to anybody -- I'm allowed to like who I like and dislike who I dislike. I happen to like these kinds of people. And notice, this is a tough test. I'm doubling a few things up; not only do I tend to like the people who are my clients, but the sector they are in fascinates me. I read their trade magazines for fun. Notice again, it's a taste question; you don't have to justify it to anybody. I happen to like this sector -- for my own idiotic reasons. But the key point is, is it a company or a government sector that energises your own passions?

The middle category again is, "I can tolerate them; they're clients." You know, throw engagements, throw money, bend over, let me get to work. I'm a good citizen, I will do all the right things, I'll be responsible, but do I have any care that this is this client versus any other? No. I'm responsible. I'm going to do the proper thing, but I have no positive energy to add it.

And the last category as you can see is, "I can't even tolerate them." You know, it's not a strategic question. It's not a moral question. There's always mismatch. I'm sorry, but by my taste these clients are idiots in boring businesses. Possible? Yes.

Give me your best guess; again, without exaggeration. Don't be negative; don't be optimistic. Best guess, what does the typical lawyer feel about his or her clients? What are the three numbers that the typical professional would give me? [Audience: 5, 85, 10.] Boy, you have really added an inspirational note to the proceedings. Good enough for discussion?

Just look at those numbers, and if those guesses are correct, tell me what the implications of those guesses are. What flows from the fact that the average professional in the average successful firm loves what he or she is doing about half a day a week and likes the people they are doing it for about a quarter of a day a week? Tell me what the implications of that are. [Audience: They won't be doing their best.] They'll be good citizens, they'll be conscientious and they'll be at half energy -- and that means what? Go to the next level for that.

[Audience: They are never going to achieve excellence.] Is that fair? They'll do okay. They'll have the famous slogan that every firm should put on its website, "We are no worse than anybody else." That's the main strategic plan of most firms. What else is an implication if those numbers are true, if they are true?

[Audience: Turnover.] We're going to get a lot of turnover because it's not an inspirational environment. Well, what you're saying is, the partners are telling us that they are basically bored to tears. And you want them to get excited about marketing and growing to bring in even more junk work that they don't care about! You guys are making the money. Most of the average firms pay good money. The issue is not that you're not making the money. The issue is that you've got an entire firm filled with incredibly intelligent, incredibly qualified people who have miserable lives.

If those were my numbers I would slit my wrists. I'll tell you why. Because I am not going to reach my tombstone with it saying, "He did tolerable work for tolerable people because they paid him." I'm not that much of a whore. These numbers say that the basic operational principle is, "Pay me and I'll do it but don't expect me to care. I'll fake it if you want me to." That's the dictionary definition of prostitution.

I hope I'm making clear that this is not an anti-commercial argument. You cannot pull away from the pack as a firm if this is how you view your work and your clients. The only way to pull away from the pack is to do stuff that turns you on for people you can care about. Because if you are doing stuff that excites you for people you can care about, you will get re-hired, you will get the premium things, you will get the referrals. You can go back to the dictionary definition of what it is to be a professional, which is putting the client's interests first, caring about your clients.

Deciding on the Level of Commitment

I will report to you that I can get eight out of ten professional firms to get an 85 percent majority vote to go for the gold -- because I can prove to the partners that they are very, very bored; that they are living in a world they can't stand; that they are sick of having no standards; and all it's about is billable hours. And how about we live in a place that's got high standards and we help each other achieve the standards?

I had a Dutch firm (I won't tell you where in the country) but it was a consulting firm and we went through this and I said, "Now, okay, we're going to have a vote. Which firm would you like to belong to?" And there were about 16 partners in this firm and we did a scale of one to five, with one being, "Let's not mess up," and five being, "Let's set and enforce high standards." Half the partners voted for one, and half voted for five. Now you're all advisors in one way or another. Give me your business advice. What would you advise that firm at this point? [Audience: Split up.]

See how easy the answer is when you are not personally involved? There is only one answer that is not about you, which is that the people on the left are not morally wrong. If they want to serve their local clients and just socialise locally, and the other people on the right want to be the hyperactive egomaniacs and write an article a month and get famous -- you can't argue about who is morally correct. All you can say is [that] these people should not be partners with each other. They want different things. It's like a bad marriage. You don't have to be unkind to your spouse but sometimes you just marry the wrong person. The best thing you can do is say, "We made a mistake. We don't actually want the same things. We need to be as nice to each other as we can and separate as fast as possible, so we can each get on with what we want in our lives."

Now, my point is, you all saw the answer when it was about somebody else. I'm going to say that this is your firm. You've got partners who want to really go for excellence and are prepared to accept the disciplines to do it, and you've got partners who just don't want to accept those disciplines. And the only right solution is to split the firm. You cannot run a firm if its partners fundamentally want different things, and you don't have enough guts to make that happen. Whenever there's an issue like that, you say, "Well, let's not address that issue. Let's bring in the IT people to develop something new."

Dynamos, Cruisers and Losers

I've talked about supervision. I've talked about quality. I've talked about liking the client. You can reject all of those and maybe it's something else. I'll just give you one more standard: the level of energy and ambition. I talk about meeting three kinds of partners -- dynamos, cruisers and losers. Please allow me to define these my way. It's not about business getters versus those who only do billable hours -- that's not the definition.

A dynamo is somebody who is always acting like they have a career, but in addition to taking care of this year, every year they are doing something to bring about their personal future. Am I making sense? Every year they're always saying, "Where do I want to go next and what do I do today to make that happen?" Am I making sense on what a dynamo is? Somebody who is acting as if he or she was in the middle of a career.

Losers -- this, by the way, is not about different people -- this is all of us at different stages in our lives. My theory is that you don't get through life without being a loser sometime. If you were Australian, it would be the usual reasons: divorce, alcoholism, cocaine, manic depression, the kids have been arrested again. You know that things happen, and at some stage in your life you're probably a loser. If you're lucky you deal with it and get back; if you're unlucky you get stuck.

Now the cruisers are a very important category. You can see by definition that the cruisers are not losers. The cruisers are your good, solid citizen partners. They come in each week and they make the sausages. They come in next month and they make the sausages. They come in next year and they make the sausages. And everybody knows those sausages are fabulous. You've got a sausage job, call Henk, because Henk is fabulous at sausages. The quality is there. The hard work is there. But Henk isn't actually going anywhere. All he's done for the last seven years is make sausages. In other words, he's acting like he's got a job, but if you said to Henk, "Where do you want to go next, Henk, with your career? What kind of transactions do you want to be doing three years from now?" he'd say "sausages." Henk has no particular desire to advance his professional career. So if you accept my definition, a cruiser is a good solid citizen, meeting every standard you've got, but acting as if he or she has a job, not a career.

Another guess from you, please. In the typical firm -- don't get optimistic on me, don't get pessimistic, give me your best guess -- what percentage of all the partners might fall into those three categories? [Audience: 15, 75, 10.] If that guess is correct, tell me what it means. If that's the makeup of the typical partnership in the typical firm, what flows from that fact? That only 10 percent of the partners are trying to get somewhere. Seventy-five percent are absolutely good solid citizens, let me say that quite clearly now. What flows from that mixture if that's accurate?

[Audience: They're not going anywhere.] So just don't waste your time with strategic planning. Just don't bother. Leave them alone because strategic planning in that environment is like trying to figure out which way should we point the thundering herd when the herd isn't thundering. The issue is not direction or strategy. The issue is, do they or do they not have the appetite to go somewhere? You can get by. I know 75 percent of partners who have never wanted to go anywhere for the last 30 years. And they're on not a bad income. But if you've got a partnership made up of three quarters who don't want to go anywhere then don't come to conferences on technology and strategy and marketing and branding because these people are not interested.

We come to the choice again. The choice is in which gang you want to belong to. The tolerant gang says, "If you want to cruise, that's okay. Not only is it acceptable, but it's actually the overwhelming norm," just like your law firms. The overwhelming norm in this law firm is that everybody cruises. And if that's what you like, stay with it, God bless. Or you could say, "How would you like to join a law firm where the rule is that you've got to be learning and growing or otherwise you're not meeting your requirements as a partner? It's something we have a right to expect of each other, that we are all continually learning and growing." Notice there's an option here. The choice is whether you want that standard in your partnership agreement.

What it Really Takes

I'll give you one more, very silly example. Some high school students I know say, "Richard, how do I do well at university?" And my answer is always, "Go to class; do the homework." And they say, "No, what's the secret?" "Go to class; do the homework." "But there are these parties, Richard." Well, if you want to be a party animal and work at Burger King for the rest of your life, do it. You know, I'm not going to tell you what to do with your life, but if you want me to give you dispensation to say you can get the benefits without doing the work, sorry, I won't play that game. If you want to get a benefit in life, you've got to do the work.

You keep getting seduced by consultants like me who come in and develop the next strategic slogan or the next branding or the next positioning because you think that as long as you just announce it you'll get the benefit. You get no benefit by announcing anything. You get the benefit of that which you actually do. I'm sorry that it's so intellectually trivial but it's a lesson most of you still need to learn. You get the benefit of that which you actually do, not that which you encourage. Just don't pretend. You pretend to have a commitment to client service, you pretend to have a commitment to supervision and you pretend that your partners are energetic. Your partners are not energetic -- they're asleep. And pretending gets you nothing.

The way you make money in business is not to be good at managing the money. The way you get money in business is that you decide what you want to compete on, whether it's quick delivery at McDonald's or fabulous cooking for some cuisine connoisseur or whatever it is. You don't have to be McDonald's and you don't have to be the best restaurant in town, but you had better decide which you want to be, and once you've decided which it is you want to be, the key to making the money is enforcing the standards appropriate for that choice. The thing that makes the money is not the money. The money is an outcome of how high your standards are. He or she who has the highest standards wins.

You get the partners together and say, "What standards do we want to live by? Should we all be expected to be dynamos? Should we all be expected to learn and grow? Do we think we're prepared to accept accountability for supervising the work? Should we be accountable for our clients' satisfaction?" You do not say, "Is it a good idea?" The question is, are we willing to be accountable? Quite simply, what are the rights and responsibilities of a partner? What do you have to do to be a member of this firm? That's all I'm saying you should debate. And at the moment all it is, is be billable and don't get us sued.

Notice the topic applies no matter what the issue is we're talking about -- collaboration, client service, supervision -- be energetic. Your problem is not those topics. Your problem is the inability to pass a law, the inability to establish a standard that you're actually willing to enforce. That's the problem. It's not what the standard speaks to. It's the fact of a standard, because you've bought into this medieval notion of a partnership, which is that a partnership is a place of no standards and the partner can do what he or she wants to do.

All I'm trying to say is (and I hope this is clear) that this is what a strategy is for. It's something we all agree to do and are prepared to be held accountable for. But notice, that last clause must be there. If I agree to do it, but don't hold myself accountable, that is not a strategy. This is not a moral point, just a simple fact of life. If people aren't willing to be accountable for it, it's not going to get done well enough.

That's a recommendation I suggest you do with your firm. Take your mission statement off the website, turn it into a questionnaire and say, "How well are we living up to this mission?" Now that is my point. You've probably got a great mission -- I do not recommend changing it -- I'm just saying there is no point having a mission if you never live up to it.

So the real next step for you is to put in place something that keeps you honest and is sent around every quarter saying what all of us think about how well we're living up to our mission statement (and is sent to your clients, too). And again, that's not a moral point. If you really want to live up to it, make it as embarrassing as possible not to do it. If you really want to make something happen, the best way is public exposure -- you'll do it.

Making yourself a promise that you'll lose weight this month doesn't do anything compared to turning to your spouse and saying, "I give you permission to withdraw marital favors if I don't do it." You know, if you really want to make something happen for yourself, the way to keep yourself honest is design an embarrassment mechanism by making the commitment even more public.

The Research Results

Let me tell you about the results reported in my latest engagement. I went to one of the global marketing conglomerates and said, "Will you give permission for me to survey everybody, in 139 offices around the world, in 29 different businesses, and will you also give me the financial results for every one of those offices for the previous three years?" Some of these companies are high leverage, some of them are very low leverage, some of them work for the CEO and some of them are just dealing with purchasing officers -- there's a huge mixture of the types of businesses they're in.

I threw all the answers to 74 questions from 5,500 people in 139 offices into the computer. (I asked them, basically, about the culture of their office.) Then, as I told you, I got the financial results of the office for a three-year period. So I threw all the financial results in, and I said, "Dear, beloved computer: I'll stay out of it. Don't let me interject any of my biases. Are there some things, some attitudes of people in the business, that are more predictive of profits than others?"

It's pretty simple technology and the computer said, "Yes!" Nine factors account for more than 50 percent of all profit differences:

1. Client satisfaction is a top priority at our company.
2. We have no room for those who put their personal agenda ahead of the interests of the clients or the office.
3. Those who contribute the most to the overall success of the office are the most highly rewarded.
4. Management gets the best work out of everybody in the office.
5. Around here you are required, not just encouraged, to learn and develop new skills.
6. We invest a significant amount of time in things that will pay off in the future.
7. People within our office always treat others with respect.
8. The quality of supervision on client projects is uniformly high.
9. The quality of the professionals in our office is as high as can be expected.

Look at number 7. If the people in the firm, in the office, agree with the statement, "People treat each other with respect around here," then I can prove you will make more money than if the people in the office don't agree with that. It plays to a hell of a lot of values that many of us share.

Here's the test. In order to get that benefit, you must not only advocate that standard -- the message of the data is you make the money when you enforce that standard. What it's saying is [that] if you've got a partner who does not treat others with respect you must counsel that partner, and if the counseling doesn't work you must fire that partner. We do not accept as a partner somebody who does not treat others with respect. If you're prepared to go that far, you'll make more money.

Again, look at the others; number 2 is teamwork. The news is the team players are winning. It doesn't say, "We are team players around here." I can prove you will not make more money if people agree, "We are sort of, kind of, team players." I can prove you will make more money if people in your firm say, "We have no room for any individualist who puts him or herself ahead of the team." If people in your room say that's us, I can prove you'll make more money. Teamwork wins. And again, that's not a new idea. This is not meant to be an intellectual contribution that I'm making. This is boring old rubbish.

"Around here you are required, not just encouraged, to learn new skills." Now again, I'm not a moralist; I'm purely reporting data. If the people in your firm say, "Yeah, that's us. In our firm you are required, not just encouraged, to learn new skills," then I can prove with hard data that you will make more money because people who are always adding to their skills make more money. This is not hard, intellectual stuff.

You can see the rest of the list. Care about your clients, act like team players, supervise the work -- do you see that one coming in at number 8 there? You make more money if the people in your office say, "The quality of supervision is high around here." Again, my whole point and my whole message is this is pre-biblical. This was the work manual for the pyramids. If you want to know how to make a lot of money, stop looking for the latest consultant's intellectual contribution. It's not the latest technology, but technology will help you do all of these, just like EDS. Let's have a web-based client feedback system so that when the client logs feedback, every partner and junior staff member in our firm can see what the clients think of every partner. Now, all I'm saying is I'm not moralist. I'm not saying that's a morally good idea. I'm just saying [that] the quality of client service will go up if you do that. The technology will offer you new ways to enforce old ideas, but you've got to really believe the old ideas first.

Now again, please notice -- these are not my values. I did not choose these. This is purely numbers. I said to the computer, "What best is correlated with profit/performance?" and the answers are these things. Now again, I must confess I like it. It makes sense to me; it's basics. But I didn't choose them.

In other words, we have evidence that you win if you enforce standards on basic things. It's not about pay. We should all be in this together, all committed to each other, and what makes us in this together is that we enforce our common standards. Personally, I believe that's how you make the most money. Unfortunately, law firms don't want to manage that much. The idea of actually having to manage partners makes them break out in spots. So they stay tolerant and often introduce a differential reward system. "We'll still be tolerant. We'll just pay the higher achievers more and the low achievers less and leave everybody alone." And personally, I'm not sure that's as good a solution because you heard me say the issue is not compensation; the issue is standards.

Morale and Company Performance

by Editors at BRW 2001

from Business Review Weekly (Australia), 2001

Why don't enough companies care about the issue of low morale, especially considering its impact on the bottom line?

RW: Most managers do care about morale (or at least want it to be higher), but whenever there's a trade-off between morale and short-term cash, cash wins every time. The issue is expediency. So rather than take the time to coach someone who needs it, the manager dashes off to make the next sales call. There are very few bad people out there with bad intentions, but there are lots of managers with bad habits.

Second, most of us who were trained in business were taught nothing about dealing with people. We were taught analytics, systems, processes. How do you energise someone? How do you enthuse a group? How do you get people to buy into your vision? It's actually a skill that many of us lack. Most of us (including me) are not naturals at it, and as a result it's hard emotional work, which is much tougher than intellectual work. And when we fail, instead of saying "I'll try harder next time," we tend to react by saying "Ah, forget it. This ain't my thing." So we fail to improve.

How much does it cost to "fix" morale?

RW: Nothing. If you've got an enthusiastic, excited, motivated, enthused, driven, passionate, ambitious workforce, you'll save a bundle on recruitment and retention costs; you'll be hugely more efficient; and, since the people will work harder, your unit labor costs will go down. That's what it looks like once you're there, so what does it take to get there?

Contrary to common belief and practice, it has little to do with extras like free day care, concierge services, beer bashes at the beach or things like that. (Although they don't hurt at all!) What I've been able to prove with my global statistical study is that it's all about the character, beliefs and behaviour of the local unit manager. In other words, if you've got managers in place who actually know how to manage, you can take the same market conditions and the same employees and make a lot more money. That's not going to cost a lot of money (except for severance pay for existing managers who can't change.)

In many businesses, the manager is chosen because he or she was the best business-getter, or the best technically, or the most senior, or the most comfortable with financial reports. It turns out that none of those are key. You need to choose that person who best has the ability to challenge, cajole, excite and enthuse a group of people into doing what is truly their best. They then serve your customers extraordinarily well, and that's how you make the money!

How did you uncover the link between employee satisfaction and a company's performance?

RW: I approached a conglomerate that has 139 offices in 15 countries and asked them if they would not only let me send out a 74-question survey to all their people worldwide but also give me the financial results (profitability and growth) of each office. And they did!

I then threw it all into the computer and, using standard statistical techniques, asked which employee attitudes, if any, were correlated with financial performance. Financially successful businesses did better than the rest on virtually every employee attitude. I was able to prove that attitudes affected the financial performance, and not the other way around. The big message is that success is not about any one employee topic of, say, coaching or training or pay. Financially successful companies did it all better. It's all about where you think the main lever is to influence your business. We all say that we care about clients, profits and people. But which causes which? Which should occupy your attention? I've been able to show that there is an order and it's this: managers excite people who serve customers who pay money. So if you want the money, focus on what produces it!

From your experience, what is the happiest workplace you have encountered and why?

RW: What's happy? I used to work at one place where everybody was content, glad to be where they were, and none of them were really striving for excellence or to achieve anything else with their careers. The place was doing OK. They were content.

Is contentment the same as happiness? Not for me. I've also worked at places where everyone was challenged, stretching themselves to the limit, and all felt proud not only of themselves but of their colleagues. They acted like a group of people who really were out to win the Olympic gold. Were they happy? You bet! Yet they were working harder than the other folks, to higher standards. The key point (and this comes out of the study in my article) is that the people who are making the most money and are the happiest are those who are treated like they are part of a team that is going somewhere, is doing something meaningful and takes their standards seriously. Not everybody wants to be part of that, but those are the guys who are winning financially.

From your experience, what is the worst workplace you have encountered and why?

RW: There are many types of "worst." One is the Dickensian sweat shop that just wants to hire output machines that happen to be biological entities (hence the term "human resources") to churn it out. I know a lot of those places. But for me, I can actually develop a grudging respect for that, because many of the employees working at those places don't want more. They wouldn't want to be on the Olympic team. Too much like hard work! They just want a job, a paycheck and no hassles. It's a deal with the devil, but if both sides understand what the deal is, who am I to say no?

Far worse, in my view, are the "muddle-through," "it's all right," "mustn't grumble" kinds of places filled with bright people who are operating far below their potential. They're spending their lives doing tolerable stuff for tolerable customers because "it's a living" and "what else can you expect? It's just work." These are companies that are always pretending to be going somewhere, but never do because the managers have no follow-through, no theory of the business and no real standards. "It's about the money. If you pay me I'll do it!" There's a word for that, of course! I think that's a human tragedy and I see it all too often.

In what ways do some consultants fail when they come in to "fix" morale? e.g., what are your competitors doing wrong that you are doing right?

RW: I don't blame consultants, I blame the managers that hire them. There's an incredible appetite for quick fixes and add-ons because they allow you to think that you don't need to change the way people are actually being managed. I mentioned some before, but here are others: dress-down days, tinkering with benefits and reward systems, focus groups and employee surveys. All good ideas, but none of them the real point, which is to improve the quality of management. The data I have is very clear: success is about personalities, not policies.

I've got many, many suggestions, but here's one. Survey everyone in each operating group and ask them if their manager

1. Enforces the values articulated in the company's mission statement
2. Acts more like a coach than a boss
3. Gets the best out of everyone in the group
4. Ensures that everyone in the group treats people with respect
   
5. Refuses to tolerate individualists who disrupt the group's teamwork
6. Makes client or customer satisfaction the top priority of the group

Then publish the results openly to everyone in the company, and let every manager know that if he or she cannot get top scores within, say, 18 months, then he or she will be removed from a managerial position! I absolutely guarantee that if you did that, employee morale would go up and you would see a dramatic increase in profits.

Notice, none of this is about being nice, or gentle, or undemanding. That's not what produces high morale. I can prove it! It's about what my article is about! Set high goals that people can believe in and actively work to help them get there. That's motivating!

Is it possible to estimate how long it will take to rebuild morale?

RW: You can turn it around very quickly (in three months) with a great (new) manager. All he or she has to do is fire the selfish SOB who makes a lot of money for you but who treats people around him or her badly. Tell everyone why you did it. I've seen this in action, and it's incredibly powerful. At the opposite end, tell the lazy buggers that they can have any support they want (training, coaching, tools, personal attention) for 18 months, but that if they don't shape up in that time, they're out. The vast majority of the rest of the employees will be cheering. Standards at last!

It's almost impossible to turn morale around with the existing manager, because everyone has come to disbelieve that this person actually cares about them (or anything else except themselves.) Leopards don't change their spots, or at least people don't believe that they do.