The indecisive employee

A reader from Russia wrote in with this:

After reading Strategy and the Fat Smoker, I made a research in our company to find out the types of people who work with me.  It was very positive because I found out that we have:

• 75% of employees with long term and team motivation
• 15% -- wolf pack
• 5% -- individualist
• 5% -- spider

It was funny that after this research two managers -- individualists left the service at once and other employees were very happy about it.

I have one question to you:  how can we determine the type of person if he can't clearly answer the questions about his motivation, for example:

1. 1. He wants to be motivated 50% by team result and 50% by individual result
2. 2. He wants to invest time to have long term result but don't want to lose money in short term period

***

I'd suggest taking him out to dinner and pointing out that he cannot get what he wants in life if he doesn't make choices!  If he continues to go back and forward, I'd point out that he won't be comfortable with with the rest of the team, and they won't be comfortable with him.  It might be time to move on.

What do the rest of you think?  Would you be more "accomodating"?  Does everyone have to be oriented the same way?

Pricing Consulting Services

Raintoday.com has just released a new study Fees and Pricing Benchmark Report:  Consulting Industry 2008.  645 respondents in the consulting industry completed the survey.  Among the findings:

Firms that are well-known in their target markets receive higher fees, see their revenue grow, and earn higher profits than their lesser-known counterparts.  Brand leaders were more likely to price their services at a higher level than their competitors in the market (42% of brand leaders were premium-price vs. 28% of lesser-known firms).  And, they were more likely to actually get higher fees by up to 35%.

While most consulting firms (and consultants to consulting firms) criticise the use of discounting, 65% of consulting firms report that they do indeed discount their fees.  Even the most profitable firms discount -- 49% of firms, with 25% or more firm profit, report that they discount.  The average discount level:  11.7%.

When it comes to premium-price firms and what sets them apart, it is not their size, the amount of repeat business they are able to get, or the region of the country in which they are located.  As a matter of fact, none of these had an effect on a firm's ability to charge premium fees.  The factors that matter most to premium price firms are how valuable their work will be to the client upon completion, and whether or not the firm can deliver superior results versus the other providers -- 36% find this "extremely important"

Verbatim Comments From Respondents:

Pricing Strategies:

"We do not compete on price.  Ever.  If we can't compete on value, ability, talent, and, frankly, if we can't create a better value proposition for the client, we don't want their business anyway."

"We are aware of the potential need to reduce cost to gain access but also believe that the selling process should effectively focus on value and reference capability to deliver.

Introductory Service Pricing:

"We've found that the first project creates pricing expectations for future projects, and that the work is valued more when it is priced at full rate."

"The introductory pricing strategy is not necessarily a lower price, but a smaller or pilot project which makes it easier for the client to accept without prior experience with our work."

Why Do Use Value-Based Pricing?  Respondents Say:

"Our work, approach and value delivered are unique enough that value-based pricing is the ONLY way in which we are compensated fairly.  A time-based approach simply makes no sense for us -- one intervention/coaching session often causes a change in direction that's worth millions of dollars to the client -- how many hours of our billing would that be worth?"

"Part of our approach is to address the business's issues and value of any potential solution to the bottom line of the business or business unit.  Our pricing is provided in relation to the benefit.  We also use this approach to minimise work in low value areas of the business/org."

"Provides income far beyond hourly billing availability."

Standard and Realised Fees:

"Our pricing model almost always ensures that the standard hourly rates are realised, hence the zero difference in the numbers above.  Sometimes we will cash in a little more on the senior levels, and provide juniors cheaper, but on average we end on the standard rates (which are not public)."

"Difference between published and realised rates is due to discounting to get the business and/or project taking more hours than estimated to complete.  Often this is due to client being unable to supply content or time when needed."

"I do not even keep track of time, nor is time a factor in establishing value to the client.  I simply don't think this way.  Managing capacity is about being extremely effective, not about focusing on time."

Service Guarantees:

"It is a great source of competitive advantage.  We offer to solve a specific business problem with a specific technical solution at a specific time and price (price includes expense and travel).  No excuses, just deliver.  Using this philosophy, we are slowly taking work away from competitors who don't know we exist.  We are also charging 2 to 3x more for projects than competitors are bidding on an hourly basis."

"We find that our consultants rise to the expectations, so the service guarantee has not cost us much but has led to a higher level of personal dedication to meeting client expectations."

A Entrepreneur's Lessons

GL HOFFMAN, Chairman, JobDig, and Linkup has created a free eboook about the 100 "learnings" he has experienced after 25 years in starting companies.

Katter's Philosophy of Doing Business

In correspondence with me, Wilson "Bill" Katter offered the following views, and gives permission to us all to circulate (as long as we acknowledge his authorship and copyright.)

BUSINESS DEAL BASICS

To avoid many of the problems which arise in business relationships, here is a set of prerequisite criteria with which all parties should enter the discussions/negotiations.

Much time, money and effort can often be spared with the conscientious practice of these criteria.

Without them, the negative impact of misunderstandings, aggravation and emotional wear and tear can also sometimes cause an almost incalculable loss.

1. The goal of a win/win result, defined as such by all parties
2. The skill of understanding the position of all the parties
3. A keen appreciation for the relative value which each party brings to the equation
4. The use of reliable, authoritative resources
5. An "I may not know it all" attitude
6. The willingness to have "facts" challenged
7. Finely tuned listening skills
8. Consideration of all points of view
9. Impeccable integrity
10. Transparency and honesty
11. Keen analytical faculties and good judgment
12. A mature sense of fairness
13. Compliance with high legal, ethical and moral standards
14. Clarity of both oral and written communication
15. Timely replies/responses in the exchange of information
16. The ability to "disagree agreeably"
17. Humble acceptance of the required modification of one's position
18. Patience to do it right the first time so it doesn't have to be done over
19. Equitable compromise without the sacrifice of principles
20. A long-term perspective which looks beyond the near-term benefits
21. Respect, respect, respect

REMEMBER, IMPROPER MOTIVES WILL MOST LIKELY KILL THE DEAL

ALTHOUGH CHALLENGING AND SOMETIMES TOUGH, DOING BUSINESS THIS WAY CAN HAVE THE GREATEST REWARDS

Web 2.0 and law firms

A question from a reader:

Though plenty of examples of "Enterprise 2.0" show tangible ways that social media can improve business, I have not been able to find many examples of law firms taking advantage of Web 2.0 technologies.  In the UK at least, it seems that although some niche blawgs are very popular and have done quite well in establishing the author(s) as authorities in their respective fields, law firms as organisations have yet to take advantage of new platforms in substantive ways (as have eg investment banks with internal use of wikis/ social networking).

Am I right in thinking that this is pioneer territory for law firms?  If not, could you please point me to some good examples of firms that use social media -- internally or externally -- to improve productivity/ efficiency/ client services (ie beyond business development/ HR/ recruitment functions)?

Client Responsiveness and Compromised Quality

A question from Joseph A. Heyison of the Legal Department at Daiwa Securities America Inc.

"Richard, a thought sparked by April 11's WSJ front page, describing Moody's alleged move to client-friendliness and possible debasing of its ratings process.

"This is a repetitive theme in professional services:  the most rigorous firm builds its reputation but is considered client-unfriendly.  Then a new management enters, vowing to be more responsive to customers, and the partners learn that yes, their incomes rise and they get better client relationships by bending a little.  Then a lot.  Examples:  Arthur Andersen, KPMG (tax shelters), various law firms, lobbyists (Cassidy &  Co.), etc.

"Question One:  How do we differentiate client responsiveness from compromising the quality of our work, and what other than moral suasion works?  (Tyrannical regulators?  In theory, an internal incentive process would be best, but I've never seen it done workably.  Despite your advice, I think that firm culture in most cases is simply too weak to rely on).

"Question Two:  How does this affect the economic "gatekeeper" theory?  (Firms maintain standards to establish a brand which effectively vouches for the client and thus have sufficient economic incentives to police fee-earners against dropping standards for short-term gain).  Is that realistic in an environment where fee-earners are mobile and short-term oriented?  Or is the only way to maintain gatekeeper standards the threat of regulatory and criminal action, or ruinous civil lawsuits?"

***

What think you all?

Satisfaction Guaranteed

For more than a decade, I have preached (and practiced) the policy of giving all clients an unconditional satisfaction guarantee.  Most of my clients have thought the idea impractical and idealistic.

So, I was delighted to be made aware of the Valorem Law Group who make this statement on their website:

"If you're interested in seeing whether we are right for you and your team, try us on a matter.  What separates us from our competitors is that you have our value promise on every invoice.  If you don't think we're worth the amount you agreed to pay, you make whatever adjustment you think is necessary.  If your other firms don't walk that walk, it's time to try Valorem."

(Thanks to Gerry Riskin for drawing my attention to this firm)

Collaboration Tools and Technologies

The Law Practice Management Section of the American Bar Association has just published a book entitled "The Lawyers guide to Collaboration Tools and Technologies:  Smart Ways to Work Together".  It was written by Dennis Kennedy and Tom Mighell

Here's a list of the Chapter headings:

1. Getting Started
2. Collaboration at the Crossroads
3. Collaboration Inside the Office
4. Collaboration Outside the Office
5. First Steps
6. Benefits of Improving Document Collaboration
7. Basic Collaboration on Documents
8. Creating a Document Online
9. Working Simultaneously on a Document
10. Hidden Dangers, Security and Metadata
11. Benefits of Collaboration in Lawsuits and Transactions
12. Instant Collaboration -- from Conference Calls to Instant Messaging
13. How to Hold a Meeting on the Internet
14. Simple Project Management:  Basecamp
15. Setting up a Simple Extranet or Deal Room
16. Email as a Platform
17. Sharepoint
18. Extranets and Intranets
19. Adobe Acrobat
20. Wikis:  Web Collaboration
21. Other Web 2.0 Tools
22. Specialised, High-End and Alternative Collaboration Platforms
23. Must-Have Features for Your Collaboration Tools
24. Collaboration Tools:  Free vs. Pay
25. Involving Clients in Your Decisions and Choices
26. Determining Which Factors will drive your Strategic planning
27. Getting the Word Out to Your Collaborators
28. Ethics, Metadata and Other Practical Issues
29. Ownership, Control and Other Legal Issues
30. Potential Pitfalls:  Where to be Wary
31. Implementing Collaboration Tools
32. Recommended Choices from Solos to Large Firms
33. Creating a Culture of Collaboration
34. The Future of Collaboration in the Practice of Law

All this in 250 pages plus some appendices!

Ending the relationship

A reader asks:

"I think it's time to leave my job (where I have been for a number of years) and move on.  I don't have anything lined up;  I'm just burned out.

"Do you have an (unconventional) advice for how to leave on "good" terms?  I want to make this as positive of a resignation as possible.  The firm tends to take these things personally."

***

I'm not sure whether my advice is unconventional or not, but I'd try to draw on what we know from relationships in the non-work environment.  If you wanted to withdraw from a personal relationship (a marriage?) that you had been in for many years, how would you do THAT?

Here are a few of the rules I'd try to apply:

1. Don't use your announcement as a basis for bargaining.  Once you've told the others, don't go back.  (But be prepared for vigorous attempts to get you to stay).  Make it a clean break.  Set a specific date for your last day.
2. If you don't want it to come across as personal, rehearse your exact words so that you remove any personal references from them ("It isn't you, it's me")
3. There's no point trying to re-interpret history.  Refuse to get drawn into a discussion of the past, and who could have done what (and to whom) differently.  It's about your individual future not your mutual past.
4. Be prepared to apologise -- a LOT.  No matter how you look at it, you will be letting them down and causing substantive problems for them.  There's no avoiding that.  Don't try to minimise the real and emotional hurt you will cause.
5. Do everything you can to help them find your replacement.

***

What do the rest of you think?  How do you end a relationship?

Do You Kindle?

A couple of weeks ago I received my Kindle from Amazon -- an electronic book.

I love it already.

I love the fact that if I want a book, I can have it within less than a minute or two, downloaded wirelessly.  No longer do I have to wait for overnight delivery. 

If I'm doing some research, I can download four or five books that seem to be relevant, quickly skim them (the machine is GREAT for skimming) and then only order (if at all) the hardback or paperback that I want to have on my shelf.  (My shelves are already saying Thank You)

I can set the type size to what I find easiest, rather than what the book publisher chose.

I can get on a plane or be stuck in a hotel room with a wide variety of reading matter, ready (like my iPod) to switch to something else according to mood.  No more last-minute scurrying to wonder what I'm going to pack for the trip, and no more buying trash at the airport book stall because that's all they have.

I have subscribed to the Kindle version of the New York Times and the Wall Street Journal, so I have my own copy, even if the hotel I'm stuck in on the road either doesn't stock them or has run out.

I'm hooked!

My worst habits

In my previous blog post, you were invited to say what the worst habits of partners in porofessional firms are.

But you know what?  It's always easier, as someone very important once said, to see the speck of dust in someone else's eye than the plank in your own.

So, it may be a more meaningful (and honest) question to ask "What are YOUR worst habits?"

I'll go first.  I plead guilty to

a) Procrastination (leaving everything to the last minute)

b) Failing to show as much interest in other people as I should (it's not bad intentions, just bad habits -- I forget to call and check in as to how things are going)

c) Blowing hot and cold on ideas, thereby confusing people who work with me

Anyone else want to join in on this one?  What bad habits do YOU have?

Bad Habits

One of my correspondents asked this question:

"I am looking for the top 10 bad habits partners within professional services firms display -- and hopefully some answers on how to correct them"

Anybody want to propose some suggestions?