Marketing to Existing Clients -- new client videocast & audiocast

In Marketing to Existing Clients, the 19th episode in my live video and podcast series, we're going to look at four types of marketing and relative R.O.I. probabilities for each. We will also examine why most professional firms choose the least probable investment for their non-billable time.

Audio Timeline

00:40 -- Introduction
01:27 -- Investing in existing relationships vs. new sales generation
02:40 -- Four places in marketing for non-billable time
03:54 -- An R.O.I. comparison of non-billable hours
10:07 -- A real world example of the merits of relationship building as non-billable time
14:23 -- Why we choose the lowest probability marketing actions
17:19 -- Conclusion

You can download Marketing To Existing Clients or sign up to receive new videos automatically with iTunes or other video players. (Click here for step-by-step instructions on how to subscribe.) My seminars are always available for download at no cost.

The Multi-dimensional Organisation

I keep hearing from large, complex firms something like this:

"We have several overall departments in our firm, each with a number of product/service/discipline teams. We also have industry groups dedicated to developing a better knowledge of (and marketing to) specific industries. Recently, we added 'client teams' targeted at increasing the level of service we provide to our best clients. And all of these groupings exist in (most, not all) of our many geographic locations.

"With all this complexity (discipline, industry, key account, local office or region) a key player could (and does) spend an inordinate amount of time in meetings around here. There has got to be a better way to organise our firm!"

I don't have all the answers to this complex problem, but here are some rules I would apply in trying to solve it:

Rule 1: Use different levels of organisation for different things: lots of little teams for client-level relationships, one large central group for administrative services; it doesn't all have to be (in fact, can't be) one clean organisation. As long as everybody at any given time (say in a year) knows which team they are on and what their obligations to the team are, you can have teams of many different types and sizes.

Rule 2: Some forms of organisation are better than others: Most successful global firms are now organised with the following levels of importance. Most important is the target client industry (or "vertical" as people seem to insist we call it nowadays). Before anything else, most people's primary affiliation is with an industry team (or two).

Next comes, any specifically targeted client team. Third (now a lot less important) is to organise by produce / service or discipline (i.e. your specific technical specialty.) Firms need to have highly focused and skilled technical people, but few, in most professions and industries, are still organised that way.

Finally, (and this is a huge revolution from the past) geography is the least important band powerful dimension of the complex matrix. Organise (and market) by client or client sector, not by discipline or geography.

Rule 3: It's always better to get people feeling like they are (a) volunteers -- self-selected to (b) small (c) mission-oriented teams. Rather than being "assigned to large departments." (see my blog post from last Wednesday on this

Rule 4. Don't consume the scarce time of valuable people by assuming that "key players" should manage or be involved in everything -- ask where their highest and best use really is. Get key players willing to let other people decide some things even when they're not there. (This is easier of the firm members share an ideology, impossible if they don't actually trust each other!)

Rule 5:. Apply all the well-known lessons of meeting management. For example, never have a meeting without a goal, not just an agenda.

Rule 6: Shut down all committees -- assign responsibility for a task to an individual, charged with the responsibility of consulting, coaching and getting it done.

Rule 7: Adopt modern meeting techniques (everybody has to stand -- no seats)

Rule 8: Use as much use as possible of modern technology tools: internal blogs, wikis and "jams" to get collaboration and participation around issue, without having to meet.

Rule 9: Make sure every team leaders' mandate, objective and accountability is agreed to up-front, and that team leaders receive training in how to be effective coaches.

Rule 10: Pete Friedes' Rule. (Pete Friedes was CEO of Hewitt associates.)

One practice I had was to remind all those who reported to me that part of their role was to have my role in relation to their group. One way was to say that they should wear a CEO hat in managing their group. That change in perspective is significant. They were not to just be an advocate for their group or their people. They had to have a "whole entity" view. If one or two managers didn't exhibit that approach and tried to gain advantages by doing things that didn't serve the whole, I could gently remind them that part of their job was to have a CEO view of their part of the business.

(Peter's a gentleman, but implicit in his remarks are the implication that if the various group leaders didn't take that view, they might be asked to play a different role in the firm.)

Rule 11: Remember, even if you have an ideal structure, there will always be problems with cross-boundary, coordinated behaviours. Beyond structure, you need to examine whether you have the right processes in place, not only better structures. You don't get people to collaborate better by changes the boxes they're in.

And, finally,

Rule 12: Never forget that it's always about personalities: getting the right individual people in key managerial roles is the essential lubricant in all of this.

Are You Dispensing Useless Pills?

Brendan Gaynor, a trainer based in Ireland, wrote in to agree with my article Why (Most) Training is Useless. He said:

I totally agree with the content of this article. However if we as trainers insisted on only proceeding with courses where the appropriate senior commitment was given we would find ourselves a lot poorer and very shortly out of a job.

I was genuinely impressed by the candid comments. It's refreshing to know that someone in the business does have the courage of his convictions and insists on delivering only effective training. Well done and keep up the good work. It's good to hear that somebody out there is baulking at the wastage.

And I am. If a client comes to me asking for a pill, I'm going to ask to discuss the symptoms, the ailment and the best means of recovery before I agree to dispense the pill. And, yes, that often means that (some) clients walk away and go to the person who'll provide the pill.

I have a hard time selling coloured water and patent medicines, even if my clients have faith in the efficacy of those things. I may not know completely how to cure them, but I don't want to treat them with things that we know don't work. When you're younger and less established, it's tempting to just do what the client asks for. I've reached the stage of my life when I want to help my clients more than that.

Many of us need to address this issue in our work lives. Brendan is telling nothing but the truth (and he speaks for a lot of people) when he points out that if we refuse to participate in meaninglessness things (or fight to make them otherwise) we would likely be poorer or out of a job.

But how cynical can we allow ourselves to get? How much are we continuing to participate in things that we (ourselves) believe have no impact, that (in our own estimation) contribute no value and accomplish little?

I do have more of a shot at having the "courage of my convictions" than most people do. I'm 34, I have an established business and reputation, and I'm at the "have to put kids through school and pay off the mortgage" stage of life.

But I hope I'm not alone in struggling to engage in meaningful things, even if it means I lose work (and I do.) I just want my work life to have meaning.

How about you?

How to Move a Terabyte

My latest article Adventures In Modern Marketing is now up on my website.

The article contains both the lessons I have learned in my own online marketing, as well as the generous and helpful advice I was given by those who participated in my blog discussion of this topic in June.

Among the topics I discuss are:

• Helping busy people search
• Online tracking systems
• Nurturing the core community
• Helping people help you
• Gathering input
• Becoming a more valuable resource
• Word of mouth
• Website navigation
• Serving multiple constituencies
• Participating in the broader marketplace
• The role of traditional off-line marketing

I'm delighted to report that, since renewing and committing to my web presence in January 2006, site traffic and downloads have been growing and the results have been quite exciting. For example, by the end of July 2006 (i.e. in six months) visitors will have downloaded a terabyte (1000 gigabytes) of resources from my site.

In plain, non-jargon English, that's the equivalent of 42,000 videos, or 74,898 podcast episodes, or 6,168,094 PDF articles (although, realistically, it's actually a mix of each of those).

I really appreciate the contribution of my blog readers and their generous advice to this success.

Two More Interviews

There's a couple of new interviews with me on my website.

The first is from a magazine called BUSINESS MANAGEMENT US (Q3, 2006). Here's an excerpt:

"The best way to form teams in a business is not to say: 'you guys are in the same department, therefore you will cooperate with each other', because giving orders like that is just not very effective in human terms.

"However, if you go to your people and say: 'I've got the following six projects that need to be done superbly well in the next year, does anyone want to volunteer for any of them?', then the fact that people all joined in to the same team and put themselves in voluntarily is much more likely to get them to want to get on with each other -- they self-selected to be interested in similar things.

"The trick of it is to unbundle the larger purpose of the total department and turn it into short-term, temporary projects, asking for volunteers, and then at the end of it, when the project is done, you redesign the next set of challenges for the business."

***

The second interview is called "60 seconds with Richard Wood." Here's a snippet of that:

Q: I believe you love listening to music. Who is your all-time favourite artist?

A: The Bee Gees. Totally unhip. In and out of fashion. Determined to keep trying. I can relate.

You Gotta Serve Someone

Whenever a superior, a customer or client gives you something to work on, you have their affairs, their reputation and their future in your hands. If you mess up, the embarrassment you will feel is nothing compared to the mess you will land them in. You are being trusted with someone else's baby. Deserve it. Being good is important, being trusted is essential.

You might view a project as small; perhaps a fee at the lower end of what you are used to, or not as exciting as other projects. However, the project could be the largest and most important thing the individual at the client company has handled in his/her career.

It can be difficult to accept the "server" mentality. Dale Carnegie once wrote that "You'll have more fun and success by helping other people achieve their goals than you will by focusing on your own goals."

When I first read that, as a university student in Toowoomba, I was shocked. It sounded like communism, or at a minimum, a self-sacrificing religious principle. However, as I progressed through the real world, I realised Carnegie was right. His principle is actually the vary core of exchange capitalism: I will give you what you want if you give me what I want.

To make this work, you must be sincere in trying to help the other party. It's not just a bargaining process ("You give me this, and I'll give you that, and then we'll go our separate ways.") Human beings don't work like that. We look for relationships, even in minor transactions.

If I hire somebody to do something for me (clean my house, handle my divorce, do my taxes, diagnose and cure my ailments), I don't want them to focus only on the bare minimum of fulfilling the contractual terms. If they do, I'm going to focus on paying them the bare minimum -- and no-one's going to be happy.

What I'm looking for is someone who wants to help me, and will deal with whatever arises. Such a person will get paid well, hired again, and promoted, and referred to others. If I hire you, never forget you're there to serve me. If you're not willing to do that, I don't want you.

Another key attitude is commitment. Commitment is not numbers of hours you work, the sales you generate or the rates you charge. It means placing other people -- the client and your colleagues -- first in your professional life. Commitment means attention to details, not because you might get caught, but because you want to provide the best product or service available and you relish the opportunity to step up and take on responsibility.

It's the paradox of professionalism: the more you put yourself first, the less people want to work with you and the less of life's rewards you get. The more you focus on serving others, the more they want to be with you and give you what you want. People (bosses, colleagues, clients, subordinates) can spot immediately those who bring a truly professional attitude to work, and reward those who do.

Rules of Relationships -- new client videocast & audiocast

In the 18th episode of this series, we will look at two critical aspects of communication in relationships. The true test of good communication is to find the time to talk especially when there is nothing to talk about. You need the ability to ask questions, listen, and -- especially -- remember!

Audio Timeline

00:40 -- Introduction
00:58 -- The ability to remember: the true test of a good listener
02:21 -- Communication and talking when there is nothing to talk about
03:38 -- Conclusion

You can download Rules of Relationships or sign up to receive new videos automatically with iTunes or other video players. (Click here for step-by-step instructions on how to subscribe.) My seminars are always available for download at no cost.

Pop Music's Lessons for Marketing

There are some mysteries about my hobby -- pop music -- that I would love to know the answer to, because I'm sure that if I understood them better there would be some interesting business lessons:

a) What really ARE the marketing lessons of Madonna's career? How did someone of her (shall we say modest) talents become the lasting global phenomenon she did?

b) Why is there such a dichotomy between "hip" and "professional?" McCartney was always clearly the most talented musically, but he could never approach the reverence that Lennon achieved thorough his "attitude" and "persona."

c) On a related point, most of the (I think) truly talented pop music artists I like -- Abba, Beach Boys, Bee Gees, etc, -- are viewed as terminally unhip, no matter how well they sell. I know that says a lot about me, but beyond that, what does it say about the role of "hipness" in marketing?

d) I like the Eagles, I really do -- but how does one explain the fact that their Greatest Hits volume 1 is the best selling album of all-time (rivaled only by Thriller.)? Does that teach us more about marketing and management or more about musical tastes?

e) So much of pop music success seems to be about "catching the cultural wave" -- which is what a lot of businesses would like to know more about (and which "The Tipping Point" only just touched on.) Has anyone developed any general lessons? Anyone want to co-author the book?

What IF There's No Final Whistle?

Cristian Mitreanu has written a fascinating article called "Is Strategy a Bad Word?" He writes:

What explains the relative failure of most organisations to create effective strategy? Part of the problem ... can be traced to their interpretation of the word strategy itself ...

In war, objectives can often be clearly defined, and so strategy is thought of as a means to a specific end. ... By contrast, sustainable success is not, and cannot be by definition, an end unto itself or a goal to achieve. That is, goal orientation becomes arguably inappropriate when success has to be indefinitely sustained.

Despite this, an overwhelming number of top executives and researchers make extensive use of objectives in their quest for lasting corporate success. ... It is, of course, impractical and probably imprudent to advocate a total ban on using objectives in creating corporate strategy, but it is important for strategists to remember that the more specific an objective, the further away it may potentially lead the organisation from its optimal big picture.

Another person who offers the caution that we should beware taking our business parallels from war or from sports is Charlie Green.

How does your view of how you would make business (or career) decisions change if there were no "end points" and no date- or time-related objectives? What if all measures were temporary indicators on the way, rather than "final scores"?

What if you were aiming to create something that would go, on and on, outlasting even you, with no one point at time being the ultimate stage at which you measured your success?

This is evocative of a biological entity or a species. How does the species act if the measure of success is not a state at any period of time, but the overall health and fitness of the species to flourish and survive in whatever new environment comes along?

Bring it closer to home: What if the whole point of the enterprise (or your career) was to survive, pass on the gene pool and act as stewards for the next generation? What if your business' goal was to give your (business) offspring a better life than you had?

These are not new thoughts: others have written about this "stewardship" approach to running a business (for example, Peter Block although there's a weighting toard the moral argument in his work). Some of these ideas are also embedded in Collins' and Porras' book Built to Last (not built to maximise income next quarter, but built to LAST).

Viewed this way, the right measure for success of the enterprise would not be "net shareholder value" but whether or not you had "left the organisation behind in better shape when you leave than when you inherited it."

The fascinating thing is that I do hear some (usually very successful) firms talk this way, and this approach (related to the One-Firm Firm concept) does, in my anecdotal experience, lead to greater commitment by the members of the organisation, and hence better work and service delivered to customers, and hence superior financial returns.

So, let me try and elicit reactions from you out there, who are probably ahead of me in understanding this point of view -- what precisely do you do differently if you take this perspective? What does it mean for how you manage, deal with clients, employees and others?

Obviously, if you don't know when the final whistle is going to blow -- or if you know there isn't going to be one -- what does that do to how you live your life, your career and your business enterprise? Or as Cristian Mitreanu would ask: what does doing strategy really mean in this context?

The High Priest's Catechism

Kieran Flatt, with whom I have corresponded, has written a piece about IT strategy in law firms called "Pick a side ... and stay there." Here's what he had to say:

There are a lot of firms out there with something of an identity crisis. Their profits are good but not stellar, their reputation is solid, their key client relationships are fairly secure. Do they choose the path of management theory and use IT to shift the bottom line? Or does the partnership buy into the philosophy espoused by Richard Wood, the high priest of profitability in professional firms, whose simple recipe for success is to focus almost exclusively on excellence ........ with much less emphasis on strategy, processes, technology and management structure than is the norm.

It is a tough call. Either get big and global, rely on good management and innovative systems, commoditise much of your business and slash your margins to compete -- which gives the leaders of the IT department a vital role in driving profitability and running the business -- or just focus on providing good support IT, keep costs to a minimum and expectations low, and let the fee-earners and partners get on with making the money.

While I appreciate being given yet another label to wear ("the high priest of profitability"?) I'd like to offer some clarifications.

First, I think Kieren unnecessarily downplays the variety of roles that IT can play. It's not just (or even) about slashing costs -- the greatest value may be in empowering the front-line professionals to deliver more value. As Richard Susskind's famous Grid illustrated, there are many ways to think about using IT and they are not all large-scale systems available only to mega-firms -- and they are not all about lowering costs.

What I'd really like to clarify, however, is Kieran's description of my philosophy as "focus almost exclusively on excellence ... with much less emphasis on strategy, processes, technology and management structure than is the norm." and "let the fee-earners and partners get on with making the money."

I'd phrase my philosophies slightly differently. If I'm the high priest of anything, here's my catechism:

1. The main goal of business success is to figure out ways to get better, not to get bigger. That mostly means changing the behaviours and habits of the people who interact with clients and subodinates. Technology can help this, but is only a support instrument, never a substitute.
2. If it ever comes to a choice between quality and volume, you must go with quality
3. Strategy is not (yawn) about one more restatement of goals and plans but about permanently adopting new behaviours you are going to live your life by. I'm all for strategy. I'm just against strategic planning, which is nothing more than a diversionary device to avoid addressing strategic issues.
4. The secret to business success does not lie in enhanced processes and systems but in enhancing one-on-one interpersonal interactions, inside and outside the business. Don't build a system before you have created the desire to use it. For example, you don't get people in silos to collaborate more by providing for the capability of better exchanges of jointly useful available data. You've got to manage them so they want to be team players.
5. Technology is a wonderful tool to put in the hands of energetic people with focus and ambition. It's a terrible substitute for energy, focus and ambition. You don't hand out sophisticated weapons to people until they understand and believe in the cause for which they will be fighting.
6. Too many places put in new tools so that the front-line senior people won't have to change what THEY do, -- ie, they pass the task of achieving competitive advantage on to the techies. Firms have taken this approach for a long time -- they would rather spend money on low ROI activities than change personally. They did this in marketing, always looking for something (branding, PR, brochures, websites) that could be done by somebody else, so they (the front-line senior professionals) wouldn't have to change the way they dealt with clients and customers.
7. Management STRUCTURE is just another excuse to reshuffle the deck chairs on the Titanic -- I vigorously support effective management and managerial processes, I'm just against believing that formal structures, systems, procedures, policies and one more bureaucratic initiative truly represent what management is. The mantra is: focus on changing behaviours, not structures!

So, yes, Kieran, I agree there's an alternative to the "get big and global with innovative IT systems to slash costs" strategy. But it's not to "de-emphasise strategy, systems and management" -- it's to understand what these things really are, and to understand how firms of all sizes can adopt healthy philosophies and practices, even if they don't have the mega-bucks for investment that the big boys have.

And it certainly isn't "let the fee-earners and partners get on with making the money." That sounds too much like a cop-out, do-nothing strategy. The alternative to spending on IT is being vigorously active in helping individual human beings get better at interacting with other human beings inside and outside the firm, in ways that lead to greater enthusiasm, excitement dynamism and profits. (Of course, said that way, many firms will vote for the IT investment instead -- which is my point!)

Here endeth the lesson.

Work and LifeStyle Balance -- Can a firm Give Options?

Denise Howell, a long-time blogging lawyer, announced on Saturday that she had been fired by her mega-law firm and used the occasion for a stimulating post about the apparent inability of many (all?) businesses to really offer flexible work-lifestyle balance options to those seeking an alternative to flat-out careers.

Her blogpost elicited numerous comments on her blog and across the blogosphere. Virtually all of them provided sympathy and support, and took business (especially law firms) to task for failing to deliver on the promise of work-lifestyle balance options.

Since it is my normal role to be the provocateur, can I risk (without any lack of sympathy for Denise) exploring the opposing point of view, that it might not be possible for a business organisations to offer, in one firm, a wide variety of personal choices on work intensity?

I first wrote about the issue of shared intensity in 1997:

The importance of having something shared is illustrated by a firm which asked me to moderate a retreat between its two warring factions. One faction was involved in a transactional, high-intensity, premium-fee type of practice which demanded significant dedication including long workdays and frequent weekend work. The other faction had a more small-business, relationship practice where the pace and the rewards were lower. These two groups labelled themselves the "Sharks" and the "Flounders." (These sound like Richard Wood labels, but I didn't invent them -- they did!)

We struggled mightily at the retreat to establish firm policies which would accommodate both kinds of practice. All concerned hoped that differences between the groups could be resolved through compensation system adjustments. Of course they could not, and the firm eventually split up -- which was probably the right outcome.

Neither group was wrong in any real sense. One group wanted the excitement of a fast-paced practice and the rewards that flow from it, and the other was willing to forego high rewards for a more normal lifestyle. Either group could be happy and get what they wanted in a firm of like-minded souls. Neither could live with the other. Differences in intensity could not be papered over with dollar differentials. At bottom, there was no reason for these groups to be in partnership with each other.

(I'll be discussing this example a little more in my new podcasting series on strategy.)

I reported a similar real-world experience:

The importance of shared intensity is also illustrated by my experience working with a consulting firm aiming (they said) to be the "truly excellent and clearly a leading firm". We spent months figuring out precisely how to get them there, and came up with a plan that, all agreed, would work. But then one professional, in front of the whole group, said: "We are all saying we want to be the best, and we agree on how to become that, but are we really willing to accept that much change in how we practice?"

I called for a secret, anonymous vote with the following scale: Vote "5" if you really want to "go for the gold", and vote "1" if you just want to make whatever changes we have to make to avoid ruining what we've got. Or you can vote something in between.

The result? The vote was split between one group with "4's" and "5's", and another with "1's" and "2's". In preparing their strategic plan, they had all acted as if they wanted to be "truly the best", but when push came to shove, half of them didn't really want that much change in their lives. Was either group wrong to make their choice? Of course not. It's each individual's free choice as to what to do with their professional lives.

However, the firm now had a problem. How was it to proceed? One approach considered was to attempt to use the compensation system to accommodate these differing preferences. Those who wanted to "Go for the gold" (and succeeded) would be compensated for their efforts, while the others (who wanted a different lifestyle) would accept the financial implications of this choice. We named this the "Tolerant" approach.

However, the more we explored this possibility, the less feasible it appeared. Even if the right compensation levels could be determined, how would firm decisions on investments be made when there were fundamentally different goals? How well would people of different intensity levels work together? Could one really apply two different performance standards?

The more we discussed, the more it became apparent that to function effectively, the firm needed its professionals to share an intensity level (be it high or low). There needed to be a shared "Social Compact". The firm needed to agree on a set of values, goals, and performance standards and then be intolerant about everyone working to fulfill those goals and meet those standards.

Neither side was wrong -- not everybody has to aim to be world-famous, and not everyone has to make a lifestyle choice. But it is hard to achieve anybody's goals (income, prestige or lifestyle) if you're in partnership with others who do not share your goals. It was no-one's fault -- they were just in the wrong marriage.

Those were my experiences and views in 1997. Has my perspective changed?

Not really.

Please note that I am NOT arguing for everyone working themselves to death. My argument is that a single, given organisation, if it is to be cohesive and stick together, must have a SHARED, common intensity -- whatever that level of intensity is.

It should be possible for all the people who want medium-intensity career choices to leave their high-intensity firms, join together with like-minded people, and run a medium-intensity operation, accepting the trade-offs that come with that choice.

Like most business leaders (who, contrary to popular opinion are not all venal monsters) I would love to believe that a single business entity could offer choice of intensity -- but I'm not sure it can if it is aiming to be among the best in its field.

Can the Olympic team let people decide what work-life balance they want to choose? I don't know the factual answer to this next question, but I'd love to know: can a mission-oriented organisation like the Marines or NASA offer work-life balance options?

Forget "management." In a high achievement context, would the rest of the team (the colleagues and co-workers) really be willing to let individual choices be made, without giving in to resentments that some people are not seen as carrying their "fair" share of the burden? I'm not arguing that such resentments are valid -- but I am reporting that they are virtually unavoidable and poisonous when they do occur.

Is it really possible, as many (including Denise) would hope, that an organisation can offer a Chinese menu of work choices and benefits (take one from column A, one from column B and so on), I doubt the practicality.

I'm reminded of one of the lessons of Jim Collins' book "Good to Great" that to cover the gap implied in the title of the book, it is first necessary to (and I quote) "get the right people on and off the bus." In other words, in you want to come on our ambitious journey, fine. If you don't that's also fine, but we're going there and your either with us or -- you're not with us.

Now, I could easily have got this factually wrong. Maybe it IS possible to both be the best and offer intensity options. If so, I'd love to be directed to real-world examples.

Writers and Performers

Shaula Evans, part of my tech team, spotted an interesting discussion with John Updike, which raised some concerns about the future of publishing. Since we discussed the future of writing books in this blog back in February, she thought we all might be interested.

Apologising for her rephrasing, Shaula says

In short, much of the advice to (published and aspiring) authors in the digital age boils down to: "Don't worry about monitising books. Give books away, and make money through collateral revenue streams."

To which Updike responds that authors are writers, not performers, and not likely to succeed as entertainers.

Of course, you (Richard) have already addressed in your post the reality that those of us who are not already John Updike are not likely to make money through the conventional book publishing and promotion model, either.

It makes me wonder if the middlemen (Amazon, speaker's bureaus, promoters) are the only ones making money here ...

Shaula, I would also relate your comments to the recent stories (New York Times July 17, 2006) about film director M. Night Shyamalan's superior ability at self-promotion. Do film makers need to turn themselves into a "brand" to get their films into blockbuster status? Should we all be taking lessons from Madonna on how to create and market (constantly evolving) personas in order to draw attention to ourselves?

Do these challenges apply also to those of us trying to practice so-called "professions?" Do we consultants, lawyers, accountants, engineers and others have to take note of all this?

I do believe that there is such a thing as marketing with greater or lesser taste, but as much as I want to sympathise with Updike, I think we live increasingly in a pop-culture world where performing and entertaining ARE indeed where the money lies.

And, Shaula, if the writer doesn't want to take control of the marketing, the performing, the persona creation, then, as has always been true in the music business, the intermediaries will write the contracts and make the most money.

Carnival of Business #13: July 17th 2006

Today, I'm hosting this week's Carnival of Business. Numerous submissions were made, from which I have selected what I thought were the most interesting (presented here in descending order, starting with those I liked most.)

I LOVED Small Business CEO which describes how a Japanese company is redesigning barcodes to have appealing visual elements, to help with branding. There's a neat video to watch, too! I'm usually a "function over design" type of person, but this one got through to me.

David Lorenzo's Career Intensity has a thoughtful Top Ten list for Superachievers (and actually, for everybody else.)

The Business of America is Business contains an excellent discussion of the ongoing debate about whether the extradition by the US of the three UK bankers connected to the Enron affair is valid. Whether you are new to the story or have followed it all along, there's good analysis here.

Matt Inglot has a really useful post (for beginners) about how to process online payments. I found it very helpful.

Getting Out of Debt has some creative ideas about running a home-based business, especially on turning weaknesses into strengths.

Christine Kane (a musician) writes about having an Adventure Day -- doing something unpredictable and fun. She took the idea from a business context and applies to personal life, but it translates back very easily. A fun and stimulating post.

Money Thinking presents a list of eight questions to ask to determine if your new business idea is a good one. Not the first time I've seen these thoughts, but a good concise list.

Small Business Trend Radio has a 60-minute audio on search engine optimisation for small businesses. I would have preferred the information packaged in a way that didn't take 60 minutes of my time, but there was useful information there.

Debt Free explores the issue of the number of visas issued to allow foreign tech workers to come to the US, making the argument for protecting domestic US employment. Vehemently argued, with supporting statistics -- but he didn't quite convert this citizen who has a bias for open markets.

Blogtreprener describes how, every Friday, he and a group of friends get together to discuss ethical issues. This post, on ethics in entrepreneurialism, is a bit lightweight but could stimulate some interesting discussions in any group you may have.

Sequence Inc reports on the lawsuit against insurance companies by those damaged by Katrina. Does hurricane damage cover flood damage? There's not a lot here that's not been in the newspapers, but it's an interesting topic.

Nubricks.com referring to a US site, talks about (some pretty obvious) good and bad reasons to cash in on the equity in any real estate you own.

RadicalHop.com makes the simple but effective point that there is no such thing as time management -- only self management.

Romance and Sincerity -- new client videocast & audiocast

In Romance and Sincerity, the 17th episode in this series, we will distinguish between two mindsets for winning business. On the one hand you have the development of a relationship through genuine interest in your clients and their business. On the other, you have the one night stand mentality which is about winning business transaction by transaction. Which of these two classifications does your practice fall into?

Audio Timeline

00:40 -- Introduction
01:26 -- Romance vs. the one night stand: two distinct mindsets
02:46 -- Taking a genuine interest in your client's affairs
03:48 -- Human connectivity vs. revenue generation
01:01 -- Conclusion

You can download Romance and Sincerity or sign up to receive new videos automatically with iTunes or other video players. (Click here for step-by-step instructions on how to subscribe.) My seminars are always available for download at no cost.

Does the Network Work?

Here's an old question that's newly relevant. In a network of operators, how do you tell if the network is working?

The network could be the different offices or departments of a single firm. In these days, when whole departments move between one professional firm and another, this is a highly relevant question. Groups that are shopping around have to decide which networks or "firms" to join.

Or the question could apply to today's "virtual" firms, where professional providers act in informal co-operation with each other over the internet without being legally bound.

Or it could be something in the middle: declared alliances without overlapping ownership.

In any of these cases, there follows the question: How do you tell whether the network is really adding value to its members (especially in comparison to belonging to other networks)?

If you were looking for some possible metrics, here's a few you might consider.

First of all, some metrics which attempt to judge the outcomes or results:

1. Amount of referred work (as a percent of all revenues)
2. Joint work (how many client projects involve teams simultaneously from more than one group or unit)
3. Percent of clients served by more than one group / unit
4. Percentage of joint proposals won
5. Take top X clients and ask what percentage of the markets they operate in does the network do work for them (penetration percentage)
6. Average rate (fee level) on joint work (network is adding value if joint work produces higher-than-average fee levels. If it produces less than average fee-levels, then more joint work by itself does not prove that network adds value)
7. Average rate (fee level) on referred work (network is adding value if referred work produces higher-than-average fee levels. If it produces less than average fee-levels, then more referred work by itself does not prove that network adds value)
8. Exchange of methodologies. (How many "tools" developed in one place are being used elsewhere?)

In addition to these measures of outcomes, you could also attempt to measure network effectiveness through metrics which judge "effort"

1. Exchange of people among different groups
2. Amount of joint proposals
3. Amount of shared market research
4. Amount of assistance on domestic proposals
5. Amount of joint training
6. How often is network expertise tapped into?

As I indicated at the beginning of this blogpost, this is an important topic even for single firms. Measures like these might allow the firm to judge its "cohesion" -- the degree to which it is truly acting like one organisation, rtahre than a bunch of separate operators trading under the same brand name.

Anyone got some additional and, especially, BETTER ideas?

Teaching Guts

In a prior blogpost about getting feedback, Steve Farber pointed out that the willingness to seek out feedback on yourself takes a lot of guts. He then asked me if I thought you could teach "guts."

By coincidence, on the same day, I received the following email from Jay Bertram, President of the Toronto office of TBWA, the global advertising agency. This is what Jay had to say:

I know you don't remember me. I was at a seminar you put on last year. Like many, I was thoroughly moved by your passionate plea for senior management accountability. The difference is I actually did what you challenged all of us to do.

Maybe it's because I'm Canadian and we do what we are told to do, but I took your challenge to heart and acted the first day I came back to my office.

I want to thank you for encouraging me to be a better manager. It is because of you that I am making a real difference for my employees. I have never been happier and more productive.

What Jay had done was to go back to his office and immediately ask all his people to evaluate their overall job satisfaction, their feelings about the office and (most critically) their overall rating of him as a leader. As I had recommended, he announced to all of his staff that, if he did not improve significantly in their rating of him as a leader, he would resign.

I telephoned Jay to thank him for his kind words, and to ask what it was that had given him the impetus to act. This is what he said:

It wasn't that I learned anything new, but because of your bluntness and forcefulness, you made me act on what I realised I believed was the right thing to do -- not what you believed was right, but what I believed was right. You helped me contemplate whether I really was acting in accordance with my own philosophies.

You challenged me to be prepared to be accountable. It struck home when you said that many people kept on lying -- to others and to themselves -- when they publicly proclaimed their commitment to standards of excellence or missions for their organisation.

Mostly, you gave me the reassurance that living up to my standards, and being prepared to be accountable for them, was the right thing to do.

You'll all gather that when I do seminars and presentations, I ask the organisers for permission to "not hold back." I like being allowed to tell the truth as I see it, and invite the listener to face up to the "elephant in the room" (the truth that everyone knows but no-one has the courage to talk about.)

For better or for worse, this can be very provocative, confrontative and disruptive. (Not all of my clieents give me permission to take this approach.) But, as in Jay's case, once in a while you get through to people by being dramatic, forceful and impassioned.

As I wrote about in Are You Abusive, Cynical or Exciting? and in Strategy and The Fat Smoker I understand those who are trying for self-improvement, and I understand those who choose not to try. What I don't understand (and don't think works) is to PRETEND to be trying for something without being willing to be held accountable for how well you are doing. I call it lying.

In my consulting and speaking over the years, I have tried various approaches to getting people to get on the self-improvement path by accepting this accountability (including feedback.)

Among the approaches I have used:

• Making them feel dissatisfied with their current situation
• Trying to paint a picture of the glamour of the future situation they could find themselves in
• Helping people see that significant improvement in their lot is actually possible, if only they are prepared to try a little and then keep it up
• Revealing the hypocrisy of the difference between their words and actions
• Giving people hope that, yes, it is real-world to operate in different ways

As Jay reports, the most effective way to get people to change, and to accept feedback, has proven to be to cause them (force them if necessary) to articulate what THEY really believe and then to get them to ponder, in the dark midnight of their soul, whether they are truly living up to their OWN standards.

Innovating by Standing Still

In a recent Financial Times special study on innovation in law firms, UK firm Slaughter and May (the UK's most profitable law firm, I think) was commended for its innovative "best friends" strategy for serving its clients' internatonal needs though partnering on a case-by-case basis with unaffiliated foreign firms -- a policy it has ALWAYS had, for many decades now.

Unlike its major competitors which have merged, globalised, formed (and unformed) alliances, opened (and closed) offices, Slaughter and May have stuck to a policy of being a "premium unaligned firm", working to be absolutely the best in their own domestic marketplace, and serving their international clients by teaming up with "best friends" firms in other jurisdictions on a case-by-case basis.

If you think about it, there's something strange in being commended for an innovation which is defined as not changing -- NOT making all the changes that your competitors made.

However, there's a kind of logic to it, too. Slaughter & May has been incredibly successful, and is much respected. And not all of their competitors' moves have panned out so well. In a recent article, I wrote about my concerns about Geographic Expansion Strategies.

In todays' competitive landscape, it IS somewhat innovative to find a firm that achieved success by resisting the siren call of volume, geographic expansion and diversification and has clearly placed calibre of work -- ie quality as it's key strategic goal.

There's something fascinating here. Maybe we worship change too much. Maybe there is something innovative about a firm that has stuck to its own philosophies and resisted the path that all its competitors have followed.

Anyone else got any thoughts on this?

Benchmarks

Here's today's question (via email):

I am the Marketing Manager for a Technology Consulting firm in Perú. The partners and I have held long discussions over the real benefit and application of industry performance ratios such as operational ratios for our business.

What is your take on these indicators? Are they actually available and if so are they useful as benchmarks?

While there are many reputable firms who make a living producing industry reports on performance ratios, I always find them so darn expensive to buy. On the surface, they look as if they give valuable information, but the longer you think about it, the less information content they really seem to contain.

Many of these industry studies are based on information collected from the companies themselves, with little attempt at external validation. As we all know from financial scandals, there's more than one way for a company to present any set of financial statistics, and many of these studies do not spend much time trying to achieve consistency in what they report. In many cases they cannot.

For example, you say your firm has "partners." That probably means they would like to know a ratio like "profit per partner." But you can play a thousand games with that -- who's a partner? What's profit?

There is so much potential for misunderstanding when each ratio is taken in isolation.

For example, you might look at one company and see it has a margin of 50 percent, while a second has only a margin of 3 percent. Does that mean the first company is doing better? No, it could just mean that the first company is a jewellery store (high-end consultants, high fees, low-leverage) and the second company is a supermarket (low prices, lots of leverage). The supermarket could still have a better return on investment than the jewellery store, which has to finance its own very large inventory.

This seems like an obvious example, but the reasoning applies to all ratios -- they only make sense when you can put them in the context of all the other ratios and extract the whole picture.

Next, you have the problem of averaging. Suppose you relied on a survey company which averaged the margins of the two companies I described above, and reported that the average margin was 26.5%. Does that average number have any meaning? Probably not, but that's what gets reported in most surveys.

A third problem I have is that I suffer the tragic history that I have received a high distinction in mathematical statistics. That means I can never look at a survey average without asking myself "But what's the standard deviation?" It tells you nothing to know you're 10 percent above the standard industry ratio if they don't tell you what the normal variation around the average is. Is 10 percent above a great performance or just "noise?" But the information to judge the variance rarely gets reported.

I could go on, but now I have to reverse my conclusion on you. In spite of all of this (and the problems of inter-regional comparisons, etc, etc.) I still would want to look at the numbers. If you know what you're doing (that's a big IF) and you don't rely on them too much, then it's better to know the reported operational ratios than to not know them.

As someone trained in numbers, I always like to say that there is no such thing as an objective, stand-alone numerical measurement system. All measures are, at best, SIGNALS to prompt further investigation and reflection. Used that way, they can be very helpful and I'd look at the industry ratios (as long as they weren't too expensive to get.)

Anybody else want to help the questioner with some experiences and views?

Attracting People to a Seminar

A question has been posed by a reader of this blog:

For a number of years I was a partner in a mid-sized accounting practice but I have recently relocated to another state and city for family reasons and have made the decision to commence practice as a sole practitioner and start again.

I have found that seminars (as you recommend) are the most successful method of initially attracting new clients. I am however interested on your views of how such seminars should be marketed when I do not have an existing base of clients. To date I have advertised in the press (this is however expensive). What have start up firms done in your experience that works?

The cheapest and most effective way to get people to a start-up seminar is to partner with some other organisation. Meeting and conference planners are often looking for interesting speakers, and if you could offer a free seminar which can be offered as an optional choice in their program, there is virtually no downside for them. Your chamber of commerce (or local hotels and conference centres) should be able to tell you what meetings are coming to town.

You can also apply the same approach with local groups. Every town has various "semi-business / semi-social" interest groups that meet regularly, and they often would welcome an after-dinner speaker who could provide something informative without a hard sell.

Anyone else got any suggestions?

How We Buy -- new client relations videocast & audiocast

In the 16th episode of this series, we are going to dive into the subject of marketing from the perspective of the buyer. All marketing and selling questions boil down to one basic query: How do people buy? To learn the answer to this, one only needs to look as far as their own experience in buying to find that it's not only about qualifications but also about trust.

Audio Timeline

00:39 -- Introduction
01:02 -- Understanding marketing equals understanding buying
02:50 -- The key to every marketing question in your profession
04:30 -- The essential truth of being a buyer
05:19 -- The two necessary attributes for a successful sale: qualification AND trust
07:20 -- Conclusion

You can download How We Buy or sign up to receive new videos automatically with iTunes or other video players. (Click here for step-by-step instructions on how to subscribe.) My seminars are always available for download at no cost.

Assigning People and Work

Jim Bennett, a partner in a CPA firm, writes in to ask:

Once a staff person gets assigned to a client, we have always tried to keep them on that client for as long as they are with the firm. This certainly has advantages in reduced learning time, and clients don't complain about "training" someone new.

But I'm wondering if there is also benefits to looking upon clients as learning opportunities and moving staff members into new client assignments to help them advance. Continuity of staff can be important to clients, and can be one reason that they use a small firm. But I'm also thinking that we need to make more of an effort to put people into the assignments that they need to grow.

Jim, I first argued there that scheduling and staffing of work determines darn near everything a professional business needs to accomplish. Tell me which people get to work on which jobs, and I'll tell you with 95% certainty the following things:

a) Client Satisfaction Levels: (as your firm knows, continuity is important to clients for quality, efficiency and service reasons)

b) Skill Development and Learning (as you and your partners know, the pattern of work someone gets, and the degree of responsibility within the job, affects whether or not they are continuing become a more skilled professional.

This is JUST AS TRUE for senior people as it for juniors. If anyone (in any profession) does the same work for the same client repeatedly every year, that person will exposed to only limited developmental opportunities. More and more they will become a higher-priced person living off past skills, ie increasingly obsolescent.

c) Profitability. Over time profitability is only ever achieved by continually looking for ways to get the same quality job done at a lower cost than before. If you were to measure (on a fully-costed basis, as you should) the difference between revenues for a job and what it cost you to do the job, you will probably find that a policy of automatically reassigning the same people as last year is economically wasteful and not profit maximising.

d) Motivation and morale. The single biggest determinant of excitement and enthusiasm (at ALL levels) in a professional business is the pattern of work people have to do. If they always do similar things, they will lapse into being good citizens, but will not be throwing themselves eagerly into the pursuit of excellence. Why should they, if they are going to end up (according to your firm's shorthand rules) with the same mix of clients and business next year, no matter what they do?

The key lesson here is that decisions on scheduling are inherently strategic, with lots of consequences and should not be dealt with as matters of administrative convenience ("If you were on the job last year, you're on it this year") or considering only a subset of consequences: "Clients like it, so that's the end of the discussion."

You say that you are a small firm. Actually, that should make it easier, not harder, for you to take a more thoughtful, managerial approach to this set of decisions. You have the chance to have regular discussions with everyone (top to bottom) about what they should be working on and how, COLLECTIVELY, you're going to handle the trade-offs. Large firms often suffer the disadvantage of having to deal with things like this through bureaucratic policies.

At a minimum, you should have a policy which requires and encourages each person (senior and junior) to be looking for ways to train his or replacement for that portion of the work which is, in fact, delegatable (if well supervised.)

Ultimately, clients care about quality, efficency and service -- continuity is just a short-hand rule-of-thumb to try to get to these things. If you can be more thoughtful about how you achieve these things, they will give you more leeway in pursuing your other goals and won't insist on always seeing the same faces. And, with more thoughtful staffing, you'll be able to improve leverage, profits, learning and morale. Go for it!

Getting Good at Getting Feedback

Our progress at work and in life depends on what other people think of us. What we think of ourselves is irrelevant data.

There are a thousand things I wish somebody had told me early on in my professional (and personal) life, that I needed to work at improving and never knew about because I didn't know how I was coming across, or what the other person's expectations were. All too frequently, I only found out the hard way.

People very rarely tell you the truth about yourself, which makes it even more important that you develop ways to get feedback on how you REALLY come across to the rest of the world. (In many ways, I still don't know the real truth about this.)

Even when they do try to get feedback, some people tend to wait until the end of things (a year, a project, an affair) to solicit feedback about what they COULD HAVE done better (or differently) This is all way too late.

The real key to success is being able to ask for feedback on a relationship, and act on it, while it is still going on.

Remember that people NEVER tell you the truth on formal occasions. It's a rare boss that's going to be completely candid during a formal appraisal, and a rare client that reveals something dramatically new or surprising in a formal feedback system. And you're certainly not going to say "OK, darling, let's sit down and make a list of what we don't like about each other!"

If you're ever going to develop the skill of getting feedback (and it is a skill) then you need to find ways to make it informal. Get out of the office to have this conversation. (Or if it's a personal relationship, break the routine and do something like going out for walk together!)

As marketers have discovered with formal focus groups, if you really want to get at something useful, then you need to find out is not what people have to say when they are in a logical, analytical mode, but what they FEEL about you. Scary stuff, but absolutely essential to know this if you are to get on in life!

Try subtle, gentle language: "If I had to change one thing about how we interact, what would you recommend we work on?" Find a friend or colleague, at work or in your social crowd, who you think will tell you the truth about yourself. Some clients, over a drink, will give you an honest and helpful answer to that question. So will some subordinates.

Good or bad, you need to take time to think about what people say, avoid reacting in real time (REALLY tough!) and internalise it. You can neither ignore it nor over-react to it.

Most importantly, if you're going to ask, be ready to change.

Anyone else got some tips about how you get good at what the Scots poet Robert Burns called "the power to see ourselves as others see us"? (Many people know that line, but how many know the rest of the poem? It's about seeing an insect crawl out of the wig of a fine lady all dressed up!)

We all know we SHOULD be good at getting feedback. But how, exactly, DO you really get good at this?

The Forgiveness Index

There are organisations and managers out there who will tell you that they want you to experiment, but if you ever mess up, you are tarred with an indelible black mark on your reputation. Other organisations and people are so loose with their standards that they never get around to following-up if people fail to meet them.

From this simple idea, I have developed what I call my "forgiveness index."

A forgiveness index of 0 means that if you drop the ball once, the person or the organisation will label you for life. You might just as well quit now, because you're on your way out. The blade might not fall immediately, but the decision to drop it has been made.

Few people would want to live in an organisation (or deal with individual people) this tough-minded, though I know a few institutions and people that operate this way. Some even pride themselves on so doing, on the grounds that as elite organisations, they need to test people in action and cannot afford to carry those who can't make it.

Lets call people and organisations that have absolutely no forgiveness "The Warriors."

At the opposite extreme, a forgiveness index of 100 means that you can break an organisation's (or person's) declared standards for a very long time, and there really won't be any adverse consequences. They are infinitely forgiving

This option also looks unattractive. An organisation that has rules but never deals with departures from them is wasting their time, and an individual who preached a lot of things but ALWAYS forgave himself, herself or others clearly did not live them would lose a lot of respect immediately (not to mention being very annoying and frustrating to be around.)

Let's call these people "The Infinitely Understanding"

BTW, I'm not making arguments here about valuing different aspects of performance, but how things are dealt with when an honest-to-goodness mistake or failure has occurred.

I've experienced both, personally and professionally, and have been on the receiving end of both high and low forgiveness.

As a manager and as a buyer, I've probably also been guilty of both GIVING too much and too little forgiveness.

It should be fairly clear that the ideal is to be somewhere in the middle, although it's not clear which way the balance should be tilted.

I have a theory that super-successful organisations have a forgiveness index that is lower than average, but still well above 0 (a level which would suppress innovation and experimentation.)

Anyone out there got any views on the right amount of forgiveness, and how you know when you have found it?

Thanks A Lot -- And Welcome

It gives me a great feeling to be able to acknowledge all of you who joined in the June conversations on this blog.

My thanks to the following individuals...

Stephanie West Allen, Annette, Debra Bender, Rich Berger, Bud Bilanich, Eric Boehme, Leo Bottary, David Bourgeois, Mark Brady/four, Lou Brothers, Jean-Claude Brunner, Duncan Bucknell, James Bullock, Sebastian Carey, Elizabeth Cockle, Geoff Considine, DUST!N, Jennifer Davis, Mike DeWitt, Ahmet Dogramaci, Ron Evans, Brad Farris, Doug Fletcher, John Flood, David Foster, Edward Gabrielse, Matt Ginn, Michelle Golden, Mark Gould, Gordon Gray, Charles H. Green, Tim Griffin, Ted Harro, GL Hoffman, Dennis Howlett, Jol Hunter, S. Anthony Iannarino, Eric C Jaffe, John, Joscelyn, Kevin, Dennis King, David Koopmans, John Kottcamp, Mark Kraemer, Mark Lee, Bruce Lewin, Dave Lorenzo, Karen Love, Tim MMF, Bruce MacEwen, Mark Maraia, Lex McCafferty, Erin McCune, Jeff Merrifield, Mike, Warren Miller, Eileen O'Hara, Mike O'Horo, Bill Peper, Tim Percival, Bill Perry, Peter, Lars Plougmann, Lyman Reed, Ric, Roman Rytov, Jeff Sansone, Mike Sansone, Scott, Roland Shankles, Gavin Sheehan, Bill Sherman, Carl Singer, Carl Singer, Sonnie, Dan T., Kathleen O'Brien Thompson, Ava Thorin, Joseph Thornley, Charles Tippett, Stefan Topfer, Coert Visser, Michael Wagner, Curt Wehrley, and Ed Wesemann

and blogs...

Adam Smith, Esq.
Blog Business World
Buyout Blog
Career Intensity Blog
Creating a Better Life
legal sanity
Media Orchard
New World Man -- always hopeful, yet discontent
ProPR
Rethink(IP)
Spooky Action
The Agonist
The Airport Lawyer
The Bell Curve Scar
Value Added HR -- Four Groups
Value Investing, and a Few Cigar Butts

I'd also like to issue a special welcome to the new visitors who are joining us through ChangeThis.com -- ChangeThis promotes thoughtful, provocative discussions about positive change.

New readers are welcome to subscribe to this blog by RSS or by email. You may also enjoy my free podcast masterclass series and my other articles. Finally, you can also sign up to be notified when I publish new articles.

I hope that new readers will join in with your comments and questions and I look forward to our conversation.

What We Hate About Those People -- new client relations videocast & audiocast

What We Hate About Those People, the 15th episode in my live video and podcast series, deals with the interpersonal relations between professionals and their clients. Often the professional, being the expert, overlooks the emotional needs of their clients. We will demonstrate a simple exercise that will help you better understand and fulfill your clients' wants and needs.

Audio Timeline

00:40 -- Introduction
01:00 -- The scarcity of qualified professionals vs. interpersonally skilled professionals
01:12 -- What we hate about those guys
03:51 -- Treating your clients the way you would be treated as a client
05:06 -- Conclusion

You can download What We Hate About Those People or sign up to receive new videos automatically with iTunes or other video players. (Click here for step-by-step instructions on how to subscribe.) My seminars are always available for download at no cost.