Recently in Professional services Category

Gideon Gartner has just posted a great article titled Advisory Industry, a future redesign: the “Payment” Model, in which he draws on investment banking research pricing as a model for IT analysts and their clients. Gideon writes:

So in the Wall Street model The buy-side “analysts” will work closely with their most helpful and favorite sell side analysts, and buy-side “portfolio managers” will work with sell-side salespeople who funnel ideas and information from their research departments to the buy-side clients. During the year, when investment issues arise (many dozens of times each day), the BofA money managers and staff analysts will call several(!) appropriate sell-side analysts, and may even effectively triangulate among them until a level of understanding an issue, or a decision to buy or sell stocks or other investing instruments with traders, can be reached.

Not until the end of the year do the buy side money managers and analysts “vote” for those individual sell-side analysts and salespeople who were most helpful and influential during the past twelve months; and when this process is completed and the numbers added up, the decision is made as to the percentage of trading volume (e.g. money) to be generated for each of the brokerage firms for the next year! Thus the compensation will vary somewhat each year based upon trading volumes and perceived relative performance. Most important perhaps, new sell-side firms and analysts are added to the list since innovative and effective research and interactions will be recognized! (the sell-side firm will have sent all its research, and its analysts will accept phone calls hoping or expecting that content and interactions will be recognized and therefore compensated for their value).

He wraps up:

I was recently interviewed for a report created by the executive forum Vistage, titled 12 Trends That Will Define Business in the "New Normal".

One of the key trends covered in the report in which they drew on my thoughts is reputation management, excerpted below.

Trend 7: Reputation Management

I am just back from Phuket in Thailand where I facilitated the offsite session of the top 120 executives of a major professional services firm in Asia. This is staple work for me. My role at these kind of events ranges from delivering a keynote presentation that brings forcibly home the key themes of the event, for example change or innovation, to in some cases designing and facilitating the entire event, particularly when it is focused on strategy development.

While executive offsite sessions are common to business around the world, there are a few specific dynamics to take into account for organizers of retreats in Asia.

Diversity
Asian countries, economies, and cultures are far more diverse than those, for example, in Europe. There are often different priority strategic issues across country operations, and management structures need to vary between operations. Offsite objectives and structure should reflect that.

A few months ago I wrote about The shift from corporate brands to personal brands, referencing Jeremiah Owyang's move from Forrester to the newly-founded Altimeter Group with former colleagues.

This is a long-term secular trend - in fact last week when I spoke at the Online Marketing by Design event I pointed to it as one of the three most important trends for this year. I was discussing it in the context of marketing, where companies must recognize that trust resides in individuals not institutions, and use this to shape their external engagement. However it is just as important in the context of attracting and retaining talented people. I wrote:

Now, as personal brands grow in relative strength, corporations need to consider how they can best reflect and tap the influence of the individuals working for them. As Jeremiah notes, social media means that personal brands are immensely portable, as are personal networks.

This is about power to the worker, absolutely, but those companies that understand this and tap this shift can do extremely well. They can attract those with strong personal brands and create immense value from their influence, simply by focusing on building the brands of their key staff as much as they do their corporate brand.

In this context, I find it striking that Forrester Group has decided to ban personally-branded research blogs by its staff, as reported by analyst-watchers SageCircle. It says:

Earlier this week I did the opening keynote at the AMP Hillross annual convention, with the title of Embracing the Future. Hillross, one of the most upmarket of the wealth management networks, is seeking to lead the rest of the market by shifting to a pure fee-for-advice model, and rapidly developing a true professional culture. My keynote was designed to bring home the necessity of individual and firm leadership at this key juncture in industry structure.

One of the central themes of my talk was the increasing importance of reputation for professionals. Clearly reputation has always been critical for any professional, and there are some parts of professional services markets where reputation is already highly visible, such as prominent M&A lawyers, who are identified by numerous client surveys. While clients of other professional services (for example audit or management consulting) tend to be more focused on engaging firms rather than individuals, there is a fundamental shift from corporate to individual reputation under way.

I have been interested in the field of expertise location for over a decade, from back when knowledge managers were building 'corporate yellow pages' and other tools to find the best expertise in the organization.

Unless a large organization can bring the most relevant expertise within the firm to bear on the problems and issues at hand, it really has no reason to exist. A smaller more nimble organization could do as good a job with lower costs.

I have written about expertise location frequently over the last years, both in looking at how enhancing organizational networks can generate greater revenues and efficiency, and how social technologies can support effective expertise location, including on the role of enterprise social network software and several years ago about the use of blogs to support expertise location.

Today the Wall Street Journal has an interesting article called Who Knows What? describing the issue of expertise location and explaining how blogs, wikis, social networks, and tagging can support finding the most relevant knowledge in the organization.

This is hardly new stuff, but large organizations are now reaching the point where they understand that social media are important organizational tools, and have begun implementing some of these tools. This means there is in many cases the breadth of uptake required for effective expertise location.

In large, geographically distributed, professional organizations, expertise location can be a 'killer app' which provides immense return on the implementation of social computing. We have reached the point at which this could get real traction.

These issues are also addressed in detail in my book Implementing Enterprise 2.0.

[Hattip to @ariegoldshlager]

Was just catching up on Ray Wang and Jeremiah Owyang joining Charlene Li's Altimeter group from Altimeter.

Jeremiah is quoted in the New York Times:

Mr. Owyang said that his story holds lessons for other companies. “I think this is an interesting trend that many companies are going through — personal brands are here to stay, alongside corporate ones, and the key to success is to make sure they help each other,” he said. “But now the power is shifting to the workers, because they can take their network and a lot of what they know with them, with these social media tools.”

The third trend in my recent Five key trends in how influence is transforming society is:

Reputation shifts from the corporation to the individual

I strongly believe in Jeremiah's point that individuals and corporations need to support each others' brands. In fact one of the important reasons I have pointed to as to why companies should support use of social networks is that it helps their employees to build their own brands, to the benefit of both individual and company.

Now, as personal brands grow in relative strength, corporations need to consider how they can best reflect and tap the influence of the individuals working for them. As Jeremiah notes, social media means that personal brands are immensely portable, as are personal networks.

This is about power to the worker, absolutely, but those companies that understand this and tap this shift can do extremely well. They can attract those with strong personal brands and create immense value from their influence, simply by focusing on building the brands of their key staff as much as they do their corporate brand.

I had a very interesting meeting yesterday with Deloitte Digital's CEO Peter Williams, someone who is always on the vanguard of innovation in professional services. A few things he mentioned about what they're up to:

* Yammer (enterprise micro-blogging) has taken off and is getting substantial use across Deloitte Australia. They did a security test on Yammer for some clients and it came out solid. They are still using the free version though are talking to Yammer about a paid version.

* Deloitte has implemented an internal 'Innovation Academy' which among other functions enables idea submission and voting, which they've created by mashing up several tools. The system has generated ideas already worth $15 million to the company.

* One of the ideas was GreenID, a joint venture between Deloitte, Edentiti and Global Data Company that provides fast online identity verification for clients who have traditionally done this offline.

* They have also created an XBRL gateway to facilitate conversion of accounts into XBRL format.

* A collaboration with Cooperative Research Centre ACID yielded an interesting visualization and view of the mental models of how ideas are generated in the professional services frontline. Unfortunately this is not available online yet.

Lots of nice things happening here.

I recently wrote from my own experience about Six high-return initiatives for driving innovation in professional services, and Chapter 9 of my book Living Networks is primarily about how digital channels are changing how professional services firms operate.

Over the last years I have spent significant time assisting professional services firms to drive innovation. This year I am finding that the economic climate is intensifying the focus on these issues rather than pushing them to the background.

The pressures that commoditize services are intensifying, local and global competition is increasing, and clients are seeking value in different forms than they have in the past. Another critical driver is the war for talent. Young, talented professionals show little interest in continuing to plough the furrow of long-established processes, however wax enthusiastic about creating new approaches to their work.

However there are many barriers to innovation in large professional firms, including billing imperatives, strong functional specialization, and often highly risk-averse cultures. Much of the management literature on innovation focuses on product development and design, and is not always relevant to a professional services environment.

I’ve written before about innovation in professional services, including the White Paper I wrote for SAP on Service Delivery Innovation and in Chapter 9 of Living Networks.

Here are some reflections on where I see the greatest potential for value-creation in the space.

DOMAINS FOR INNOVATION

There are several key domains for innovation for professional firms:

Services and products. In a rapidly changing business environment, providing the services that are most relevant to clients’ needs can provide real competitive advantage. The issue is not just in quickly generating new offerings, but also in packaging these so they can be readily communicated to clients by front-line professionals.

The existing logo for Advanced Human Technologies was designed in 1997. Not only has the world changed a lot since then, it is now becoming a very different company. It is time for a complete rebranding, starting with the logo, and including a complete redesign of the website, which is also sorely out of date. More on all the updates later – in brief Advanced Human Technologies will go far beyond being a consulting company to also being a publisher and supporting several new start-up ventures.

I have chosen to use 99designs to get the logo done. I have long written about and explored online service exchanges such as elance, Guru, and rentacoder. In fact the subject of my next book is about the global talent economy. As such I’m keen to try new models, and since 99designs seems very interesting, I’m giving it a go.

The way it works is first you put up your brief for a design such as a logo and you set a budget for what you’re prepared to pay. The interesting part is that all of the designers’ submissions are visible to all, and you rate them and give feedback on them until there is a winner. See How it Works.

This iteration process with multiple designers promises to give better results than the process on the other service exchanges, where you have to go through that process with one designer. In one case I selected a bid on elance to design a flyer, and it quickly became apparent that no amount of feedback would create a worthwhile result, so I paid the bidder half the bid amount to close out the arrangement.

SO: If you are a designer, please submit your ideas. Or if you know designers who would be interested, please let them know.

Click here to see our logo brief and submit your designs.

The September issue of the Consulting News magazine of the ASTD (American Society for Training & Development) includes an article I wrote on Building Better Client Relationships. The article is below:

Building Better Client Relationships
by Ross Dawson

In an increasingly money conscious and global economy, where consultants often spend large sums and substantial energy in obtaining new clients, the key issue they face is how to build long lasting and deep relationships with valuable clients.

There are two main types of consulting: black-box services and knowledge-based services. A black-box service is one where something is done for the client, but they aren’t party to the process or activities involved. In a black-box situation, the client hires your expertise; they want you to do a specific task, but they are not engaged in the process. On the other hand, knowledge-based services engage both the client and the consultant, who work closely together to create an outcome that neither could have created alone. One impact of this process is that the client is different as a result of the mutual engagement, and the company can make better decisions due to this increased knowledge transfer.

It is necessary to understand how positive client relationships progress in order to position yourself to maintain the clients you attract. Relationship development can be broken down into four stages: engaging, aligning, deepening, and partnering.

Media Trends+Strategy magazine (click on the link to access the magazine in interactive format) includes a piece titled Media: The State of Play - Expert Analysis which features edited interviews with a variety of participants in the media space, including John Sintras, CEO of Starcom, Belinda Rowe, CEO of ZenithOptimedia, Collin Segelov, Executive Director of the Australian Association of National Advertisers, and myself.

My interview is below. You can also read it and the other interviews by going to the magazine from the link above - my interview is on page 30.

Further context on some of my comments is available from the Seven Driving Forces of Media and Creating the Future of Advertising.

What does the ongoing consolidation In the industry mean for marketers?

The first thing to understand is that the most powerful broad trend in media is fragmentation and while mass media remains, it is becoming a smaller and smaller proportion of the overall media landscape. So within that context, what we see is that there is consolidation within particular segments and in some of the larger players. We have seen more and more cross media ownership as regulation has eased. One of the implications for marketers is that they are increasingly being offered media packages across different segments from the same owner. This is obviously not a new trend, but as we get more and more cross media ownership, more and more marketers are being presented with these offers to access an audience through a multiplicity of different channels. From a marketers or media buyer perspective , these can only be judged on their individual merits. It really needs to be driven by the media buyer as to what is the appropriate set of media channels to reach their audience with the right message, and that may or may not tally with what is being offered by some of the larger media owners.

Last week I delivered a keynote in London on behalf of LexisNexis to a select group of senior executives of large professional services firms. The broad theme was the future of professional services and in particular practice management. In my speech I emphasized the network perspective on professional firms.

In an economy where value is increasingly based on deep professional knowledge and relationships, it is increasingly valid to ask why professional firms exist. Why don’t professionals practice as individuals, and collaborate with other professionals simply as client situations require it? In fact there is currently a significant shift to professionals working independently or in very small groups. Of course there are a number of good answers to this. Most importantly, the existence of professional firms should facilitate different expertise to be brought together seamlessly to address clients’ issues and create uniquely valuable offerings.

However this is only valid if the firm is well connected internally. Professionals need to be aware of each others’ expertise, and actively bring that together in teams to meet client needs. I have described some of the key issues underlying that in my presentation Tapping Networks to Bring the Best of the Firm to Clients that I did at the Network Roundtable conference last November.

Yesterday I gave the opening keynote at the Managing Partners Forum at Byron Bay, on the topic of Creating the Future of Professional Services, focusing on how to create differentiation in a highly competitive globalized market. The event brought together a small and exclusive group of the Managing Partners of a wide variety of major law firms. The two presentations following my keynote were from Gavin Bell, the Managing Partner of Freehills, Australia’s largest law firm, and David Childs, the Managing Partner of Clifford Chance, the largest law firm in the world. The organizers, Chilli, told me they’d turned away many registrations, keeping the attendee level exclusively at top executive level.

Unfortunately I was only able to stay for these first three sessions, however the themes of the presentations and the subsequent free-wheeling discussion between attending managing partners underlined some of the major issues for law firms today:

* Effectively developing and implementing strategy in a partnership, and the degree to which the strategy process is centralized.
* Strategic choices in geographical expansion (e.g. into China) in a world of law firm globalization.
* Defining the role and ability to enforce policies of the Managing Partner in a broad-based partnership.
* Choices between lock-step (seniority-based) and performance-based compensation, taking into account propensity to collaborate and retaining senior partners.
* Whether and how to outsource both back-office functions and legal support to low-cost countries.
* New capital structures, including public listing.
* Managing cultural change in firmly established organizational structures.
* The ability to attract and retain talented staff as the ultimate driver of firm success, in the face of global competition for talent.

The UK magazine Legal Week has just published an article co-authored by myself and Josh Bottomley, the Managing Director of LexisNexis UK, titled Managing a Law Firm: A networked world.

The genesis of the article is that I will be delivering the keynote to a group of Managing Partners of major law firms in London in late February 2008 for an event organized by LexisNexis. As a prelude to the event, I wrote this article in collaboration with Josh.

The article is available on the Legal Week website, and also below.

Managing a Law Firm: A networked world

Five key factors are driving today’s economy:
* client sophistication;
* connection;
* transparency;
* governance; and
* modularisation.

These forces are steering the professional services sector towards commoditisation, where clients perceive minimal differences between most offerings and often squeeze their suppliers on fees. Only legal services suppliers that actively engage their clients in deep, collaborative relationships are able to differentiate themselves.

We suggest four approaches to improve management, customer service and ultimately profitability.