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I've been offering business insight to help experts achieve higher financial performance, manage people better, staff appropriately, and provide services that their clients value. In the last 20+ years of doing this, I've observed a few practices that contradict expertise. Here are some things that I notice experts doing that seem to contradict how they want us to see them.
- Be Too Busy to Articulate Thought Leadership There are all sorts of reasons why experts don't write and speak, but none of them are legitimate. If you don't have the time, you aren't making enough money. If you don't know what to say, you aren't an expert. If you don't know how to say it, you haven't practiced enough. If you find too many audiences when directing your writing, you haven't focused enough. Aside from the content itself, having the time to write it sends just as powerful a message.
- Be Immediately Accessible to the Client Whether misguided or not, developed cultures prefer that their experts be largely...
As a leader, your job is to make decisions. There are other things, too, but that is your main job.
Warring against that, possibly, is your fear of making the wrong decision. Rest assured in knowing that there is greater long-term potential harm in not making decisions than there is in making wrong decisions.
So to be an effective leader, try to master the timing of your decisions rather than the criteria for your decisions.
Key Times to Make Decisions
So, when should you make a decision? Here are the four most important times to make a decision:
- When you see an opportunity you're small enough to pounce on. This is usually an opportunity that the big firm has to study, meet about, appoint a committee, assess the risks, get funding approval, and then build consensus around three times per week for five months. There are significant advantages around scale, but being nimble is not one of them.
- When your people are...
In the last blog, I covered the four advantages of vertical positioning. I want to finish that series by covering the four advantages of horizontal positioning.
As before, you can derive more value from this exercise by flipping each advantage around. For example, a primary advantage of vertical positioning is being able to locate your prospective clients. Flipping that around, a primary disadvantage of horizontal positioning is that it's hard to find your prospective clients because you usually can't purchase a list of them. Very few agencies who are positioned horizontally are also successful, but there are nevertheless many advantages and it is worth your consideration.
First, horizontal positioning brings more variety. This is in fact why eighty-five percent...Read More >
Positioning decisions probably last longer than most marriages, so let's get it right! Ignoring the dozens of nuances to consider, for a moment, let me help you think through the biggest issue: the pros and cons of positioning your firm vertically or horizontally. I'll start with vertical because the vast majority of firms who are positioned well have a vertical positioning. These are the four advantages of vertical positioning.
First, verticial positioning makes it so much easier to find your prospects. Whether you buy a list of prospects or not, think of it like this: can you buy a list. Conversely, if you cannot buy a list, you are likely going to struggle finding your prospects. That's because your targets don't share sufficient characteristics to be on the radar of the world trying to sell things to them, and from their point of view, their problems aren't so unique that they value working with an agency that specializes in solving them. If you can't buy a list, you are looking for a group of prospects that nobody else thinks is worth tracking.
Second, vertical positioning benefits from decision makers who...Read More >
In your mind, list all of the important metrics you'd like to track about your agency. Now tie each metric to one specific gauge and your dashboard might look like a hopelessly complex airplane.
At first glance it can be overwhelming, with so many things to measure that you almost don't know where to start. The key, though, is to make the more important gauges larger and then place them in the center. If we did the same thing with your agency's dashboard, here are the eight gauges we'd see right in the middle so that you never lost sight of how your agency was doing.
Performance No. 1: Billings/FTE
Take all employees (billable or not) and divide that number into your yearly fee base. The average, ordinary firm achieves $116,000 per full-time equivalent employee. The good firm is $160,000; the excellent firm is $220,000; the stellar firm is $275,000. This metric is useful because it concentrates on realized utilization, folds your hourly rate into the mix, and won't let you have a bloated administrative staff. From there...Read More >
Click here if you would rather listen to this blog entry (8:16).
Marketing firms have been understandably concerned about how digital they must be in order to remain sufficiently central to the marketing mix. We’ve lost something, though, by framing this discussion around whether we should actually develop digital properties instead of around the broader question of how we should learn from digital thinking. In other words, we might need to approach our work—digital or not—with a more digital mindset. I want to talk about that, but I also want to talk about how you might go about deciding the degree to which you do digital, too.
At the outset of this movement, there were so few firms developing digital properties that it was actually difficult to make a poor positioning decision. The tools were rudimentary, no one knew what good digital really was, and that world was there for the taking.
Developing digital properties, though, now shows more signs of being a mature market, meaning that there are few gaps to arbitrage. Strong tools are widespread, we have nearly twenty years of experience to inform our work, and suddenly kids in the garage don't seem to own this anymore. (They have gotten bored and moved on to social media.)
The last two decades have ushered in a new medium, but the true impact of digital is barely felt. Worst of all, even digital firms aren't thinking digitally. But—and this is so exciting to say—the promise of digital impact is at your doorstep. If you miss the promise of digital thinking, you'll suffer far more than missing digital itself. I'd like you to consider thinking digitally....Read More >
Click here if you would rather listen to this blog entry (7:39).
It’s too raw to talk much about yet, but I nearly lost my business in 2013. The entire year was largely an epic fail and only now--with the situation in the rearview mirror--can I see it with any sort of perspective. I’ll write a blog post about it shortly (or maybe a book), but one of the threads weaving through those events is this notion of remaining relevant, and for a long time. On the drive to the cabin yesterday, where I am now, thoughts began to flow about just that. I wanted to formulate a perspective about being relevant over several decades, and I was thinking of myself and of you as this began to take shape.
- Maybe it goes without saying, but I’ll say it anyway: it presumes that you are relevant in the first place. A certain relevance accompanies anyone making a living and helping employees make a living. That’s noble and rewarding, and it’s how developed economies thrive. But I’m talking here about rising from your peers as a leader, and that requires that you see all the same things they do but that you observe different things than they merely see. You develop a perspective that other people--not just you--believe to be unique and they pay you money to help them observe, too.
- Maintaining relevance doesn’t necessarily mean that you are consistently relevant to the same people. As your strengths deepen and creep, you may need a different audience if you want to remain relevant to anybody. Your audience will change organically, in good ways, and you will even lose part of your audience in that process. Just be sure it’s because they can’t keep up and not because they quit learning from you. This is one of the larger tensions I have struggled to navigate.
- It is solidly a privilege to remain relevant for decades and most definitely not a right. Doing great work once means that you have just one more chance to do great work again, and so the cycle repeats itself. But the cycle can be broken for any reason at any point in time.
- While I think that luck plays an outsized role in being relevant in the first place, I don’t think luck has much of any role in being relevant for decades. That result comes from....
My Declaration for Your 2014: The Year of Your Own Oxygen Mask
This year I will jot down some clever ways to peg the amount of "care" my clients bring to the table, and I will willingly match that level, just because it's the right thing to do. But for my own sake, I will not exceed that level, just because it's also the right thing to do.
I will quit pretending to solve the potable water crisis in Africa and I will take a glass of cold, refreshing water to a randomnly chosen employee on occasion. I am tired of the hypocrisy of wanting to change that world while being a #@%!) shitty manager in this one.
Not inconsistent with this, I will finally boot that one employee out of the nest. Yes, they have done every job in the place and been with me as the organization has matured, but they no longer have the presence, objectivity, ability, or hunger that we need. If I hear them tell one more new employee that they've been here the longest, have done every job, and know how and when to present things to me, I may just make a decision on the spot.
I will be so, so grateful for whatever health and intelligence I've managed to retain through these years. [Pause and be grateful, please.] I won't view life as something that happens after I fix it, but something that happens while I fix it. The journey itself must be savored, along with the control and freedom and opportunities I have to NOT feed the machine.
If what I've just said still doesn't...Read More >
These are the things I've learned about paying humans, most of which I didn't absorb until some time after I was managing them.
The two groups of employees who are typically overpaid are those who have been with you a long time and those who know what other people make.
There are five issues more important to good employees than money, and when they talk about money is when some of those five things have eroded over time.
No employees in the world are mature enough to know what other people make and not read "intrinsic value" into that equation.
Real power comes from shaping how and what someone is paid. Unless a "manager" is that same person, all they are really doing is making suggestions about projects.
Small, frequent adjustments are better than...Read More >
I owned a pedestrian marketing firm for six years (this doesn't mean I sold pedestrians, but that it was very average). I had never worked at a firm, knew not a single soul in the industry, and had no role models to mimic. Average financial performance (I paid myself $60,000 in 1988), below average ability to manage people (with employees teaching me how I could do better), and above average effectiveness of the work. One thing for sure: I had no special methods or research that I could build into a twenty-year consulting firm known around the world. Shoot, for the first few years I was drinking water from a waterfall.
I started ReCourses through an odd and fortunate series of events where someone else suggested I do it, and gave me a platform with plenty of opportunity. It never would have happened otherwise, and I will always be grateful to Cam Foote.
I felt like I didn't have much to lose, really. At least I thought so, until the first firm...Read More >
A "client concentration" problem refers to having a single related source of work representing more than 25% of your gross profit (fees + markup income). That's usually the point at which the yellow light should blink on your financial dashboard. That same light should blink red if it moves to 35%, because my research shows that to be the median at which one-half of firms fail. In other words, one-half survive the loss of a client that represents ca. 35% and the other one-half fail. Maybe not immediately, but they can usually trace it back to that point if they were not prepared for it. This is meant to prepare you for it.
You either had, have, or will have a gorilla client. Don't be afraid of it, and don't say "no" to the work. A problem like this almost always comes from something great you've done and you deserve the accolades in the form of even more work. Don't get a huge head, though, because unusually high spikes in your top line revenue typically stem from a client concentration issue and not unusual and sudden strong new business skills.
First Step: Honesty
When I talk about this to clients, the first thing they always say is this: "Yes, but all this related work is coming from different departments, and even different contacts in the same department. In fact, they hate each other and we'd probably get more work if we lost one department!"
That's bullshit, if you'll pardon me, because it assumes....Read More >
I don't think I've ever posted a blog entry this long, but if you read it like I did, you'll forget about time and be so engaged that you read it all. It's from a friend (Schuyler Brown) who consults out of NYC. She graciously allowed me to publish this. More about her work at the end. Broadly, the subject of this is money and life, and based on the questions I've been getting recently, many of you are thinking about just that.
Like many Americans post-recession, I've been taking a close look at my relationship to money. To my surprise, what started simply as a responsible exercise turned into a deeply instructive philosophical journey.
I'd been ignoring the task of addressing my ideas about money for years, hiding behind an image of myself as Bohemian, an artist, a spiritual aspirant. Money seemed something too concrete to factor into my flights of fancy. Even as an entrepreneur I never stopped to think much about money. I worried when I wasn't making it and was jubilant when I was...it was a roller coaster.
It was my daughter's birth two years ago that unexpectedly initiated a shift in my approach to money, because she shifted my entire perspective on the future. Her presence forced me to imagine a future I'd been happy to leave to chance. One day, exiting the subway on my way home, I caught myself with a furrowed brow worrying once again about the numbers in our bank accounts...this time with no regard for my own needs, but for hers alone. I heard a steely voice of resolve somewhere deep inside say, "I never want her to suffer the burden of financial strain." At that moment, I felt my actual walk change. I became more directed.
But it wasn't until an incident this summer....Read More >
There are thousands of tools for social media, and only a few dozen that strike me as useful. One of those is Tweriod, which analyzes your Twitter account, including when followers are most likely to interact with you, and thus when you should post. Best of all, it will auto-populate your account at Buffer, building the schedule for each of your accounts accordingly.
Click to download a 9-page PDF of the data from my account to illustrate what you'll see.Read More >
I had trouble getting to sleep last night, and for some reason I started thinking about how managing client relationships has changed over the years. I'm not talking about my clients, but your clients. Do you know the really important things about how to do it right? I'm not sure i would have figured all these out, but I have paid attention to the hundreds of firms I've worked with and tried to cull out the best practices that have been proven in the field.
Just for fun, I started writing these down as they came to mind in a stream of consciousness style. Here are a few of them:
- The only power you have in a client relationship is to withhold your expertise.
- The degree to which you have power in a relationship is directly related to how long it takes to replace you.
- There are only two ways to have more opportunity than capacity, which represents your ability to say "no" to prospects and clients: create more opportunity or reduce your capacity.
- The most important criteria in evaluating a prospective client is whether or not they've used a firm like yours before. Never be the first.
- Your cheap ass clients are the ones spending their own money. You want to work for clients with budget authority over someone else's money.
- The clients who trust you say: "I have $140,000 for this project. What's the most we could do with that money?" The ones who don't trust you say, "Here's what I need. What will it cost?"....
A great client recently asked me to outline my definition of success for their firm. I really enjoyed doing that, and below is a version that you can adapt to your own situation, putting your own stamp on it:
- Partner compensation equals or exceeds industry benchmarks.
- After that is achieved, you still 20% net profit.
- The more entrepreneurial employees are satisfied that their contribution to your gain is recognized and accounted for.
- Partners and employees in key roles will have already tasted competence in the area of your focus, or they will experience it within nine months of joining the firm.
- There will be few or no young employees who value variety over expertise.
- When employees talk about your firm, while still employed, their private comments will be complimentary.
- When partners and employees head out the door to work for the day, they look forward to the challenges, the companionship, and their participation in the overall culture.
- As a firm you will not require extraordinary people....