Many professional services firms continue to rely on a small group of clients for repeat work and the occasional referral from those clients and close intermediaries.
However, if a firm wants to be serious about profitable revenue growth, a well-structured approach to business development is needed, says Joanna Gaudoin. An approach that aligns the entire firm and which makes sure there is an effective business development culture.
Over the coming weeks, I will cover the key component parts to a results driven business development culture in a series of articles. This one is all about strategy.
Many firms have a strategy document, often one that metaphorically is collecting dust in an online folder. However, to be useful the strategy needs to be the result of careful thought and be communicated to the entire firm.
What should a strategy include?
Fundamentally the strategy should set out several elements clearly:
– What is the revenue/profit/headcount growth objective.
– In what time frame.
– The proportion that is organic growth versus by acquisition.
– Source of growth by department/service area.
Doing this work will help a firm to have a clear vision and mission. Sometimes this clarity will come first and the elements above will flow from that, depending on how focused a firm is already.
From this can flow all the planning related to:
– Talent management.
– KPIs and strategy review
– Technology required
– Operational changes
– Marketing
Why does it matter?
Setting out a clear strategy is key as it creates a firm and department/service area focus. It means each area can clearly look at what the objective is and work on the detail and what that means for:
- Growth planning in smaller time segments than is likely to be in the strategy. For example, what revenue are we looking to hit in the next quarter?
- Which services are to be the focus. This should be looked at in terms of market opportunity, current and future personnel capability, as well as profitability. For some firms, this may be a great opportunity to create a niche service based on expertise and clients they already service well.
- Which type of clients will be the focus. This should clearly look at which clients the firm wants to service with what it offers. Niching can often feel hard but it’s an excellent way to really talk to certain segments of the market. “We can do a will for anyone” is likely to be true but, “We specialise in doing wills for individuals in complex family units” will really help that market feel like you are an expert in these situations and can give them high quality advice and key points to consider.
- Opportunities to develop existing clients, cross-selling, relationships with intermediaries and other sources of brand-new clients. These are all important sources of growth but it’s important to decide whether the focus should just be on a couple to start with, and a concrete plan built against the focus areas. For instance, if cross-selling is a key opportunity (and it is often a missed one in many firms!) then careful planning of the biggest firm opportunities is needed, followed by relationship building, collaboration and planning with other departments/service areas.
Having a clear strategy helps to keep everyone on track. It’s a reference point when a firm thinks about doing something differently. If it aligns with the strategy, then that’s a green light in its favour. If not, it might still be worth doing but probably needs more thought.
The other important element is to communicate the strategy. This needs to involve the whole firm, even junior people. This contributes to a more positive culture, gets everyone aligned and hopefully motivated to contribute. People like to feel valued and have a sense of belonging. Firms also need to set out when and how progress against the strategy and decisions about any changes to it will be taken. Once this has been done, individual departments/service areas can develop their detailed plans based on the firm’s strategy.
More articles on creating a business development culture will follow but if you’d immediately like to think about what you need to do to grow your firm then take my Successful Business Development Indicator. It takes 3 minutes and within 5 you will receive a report highlighting what you need to focus on first, based on your responses. It is aimed at law firms but is applicable more broadly to professional services.
Joanna Gaudoin runs Inside Out Image. She specialises in helping Professional Services people excel at professional relationships in all work situations, ultimately to improve the performance of their firm and to progress their careers.
She is the author of Getting On: Making work work and a co-author of two books published by Globe Law and Business: Business Development for Women Lawyers and Essential Reads for the Modern Lawyer.