Are you a ‘firm of the future’? Discuss…
Not too long ago, 16 firms received a copy of an article produced by Ron Baker on his Verasage website
7 points are raised in the article that warrant thought, discussion and of course action.
Assuming, of course, you want to drive your firm forward and achieve even better results this coming 12 months you would do well to consider these 7 pointers.
Nigel Bennett, Managing Director at Hallidays in Stockport, has already responded, you can see his thoughts in the comments section below.
I’d welcome your thoughts and contributions too.
Point 1 – Perceived value for money
Traditionally clients were billed on an hourly rate for services provided, but times have changed and success lies in giving the customer value for money. It is essential to identify what the client needs and offer services that they will find of value. The value may be in financial terms or value perceived by the client.
Point 2 – Meaningful dialogue with clients about what they need
It is essential that dialogue with the customer is used to identify the client needs, and this needs to be discussed and agreed with on an annual basis with the client.
Point 3 – Meaningful dialogue with clients about value for money
It is important to recognise that each client is different. Therefore, the services provided will be valued differently. These need to be discussed with each client so each side can agree what service and what standards are expected.
Point 4 – Pricing processes that reflect true value
Creating a pricing policy for clients is essential. As work is not done on an “hourly rate” therefore a pricing policy needs to be discussed across the business and agreed upon. It is important that this remains a fluid process which is continually looked at as services are continually improved and dialogue with the customer continues. There are some major structural and process/system implications for your firm on this one.
Point 5 – A people focus can make all the difference
In offering excellent service it is important to ensure you have the right staff to make this happen. Having the “right people on the right bus” is essential. Knowing your employees and putting them in areas to best utilise their strengths will ensure the business runs smoothly and ensures happy motivated staff.
Point 6 – Measures that build a performance culture
Building a performance culture requires great measurement. KPI’s that connect your people’s behaviours with what matters most to the customer provide the best model. And please note that we are discussing key PREDICTIVE indicators. Indicators that best predict results – for your clients and your firm. By using KPI’s to assist with how we see our staff we are able to ensure they are providing top quality service.
Point 7 – A process that builds ‘value’ into every aspect of service delivery starts with your client
The introduction of a Value Creation Agreement to clients is an important step to ensuring value is discussed with clients and agreed upon. This is signed by both sides and ensures everyone is happy with the standards of service in advance. The Firm Of The Future (by Ron Baker and Paul Dunn) is a book about process innovation in your firm. Changing processes so that they work better for your clients, for your team and for the results of your firm. All pretty simple stuff but not so easy to implement. Please add you thoughts and comments to this blog and let’s see where this discussion can take us all.
DISCUSSION FROM NIGEL:
Nigel – Point 1: “How do you identify and measure value? How do you consistently deliver it?”
Paul: “This is occupying a lot of my thoughts and I believe three things are worth testing: a. Establish crystal clear expectations from your client at the start of the year. I’m sure we could design a crib sheet together that enabled every team member (within reason) to “ask the 7 expectation questions” that sets the parameters for measuring Hallidays’ performance. Over deliver (timing, Proactivity, etc) at the agreed price and you have surpassed their VFM expectations”.
Nigel: “I like the sound of this – definately something we should develop”.
Paul: “b. A report that captues all the actions that have been done during the year/period on behalf of the client. If this can be produced by your work-flow software all the better (minimum people involvement other than inputting what’s done as they already do?)”
Nigel: “Yes workflow can do this easily – subject to the data being entered – this is a discipline that some are better at than others”.
Paul:”c. If you could then, prior to a client meeting, assess the monetary and emotional VFM on the big/key issues of the year you could have a great client discussion about value. This requires some balls as it’s not a black and white discussion as value is open to interpretation. However I’m sure we could design a simple system and training process for this.”
Nigel: “Also like the sound of this – I am happy to dive in with this however I tink a simple system would help. The delivery of Times U was dramatically improved when combined with Steve’s “Heart Selling” technique.
So soft skills can be systemised to some extent”.
Nigel – Point 2: “How do we get FPA’s plus ll work quoted in advance across the firm. Resistance is present at various levels for a variety of reasons.”
Paul: “One person at a time mentored on this issue will slowly but surely get you there. Telling ’em won’t work. Showing ’em won’t work either. Doing it with them, involving them will work eventually. (NB: I know there are those exceptions to the rule – just leave them until last).”
Nigel: “OK. This requires a plan. The problem will be gettng to know when they are having the meeting at which the FPA should be delivered. Something for further discussion.”
Nigel – Point 3: “There are some weaknesses in the firm which I prefer to address by working on the development of the team on all levels, which may result in people either stepping up to the mark or leaving”.
Paul: “I’m glad this is your approach – your people will respect you for it (as long as behaviour does not undermine the vision and values of the firm).”
Nigel: Point 4 – “There is an indication in the article that one firm has dropped appraisal meetings. I am not sure about this. These are used to give people a boost and to formulate action plans going forward and are part of the development process. They are tie consuming but would not be happy dropping them unless they were replaced with something better.”
Paul: “I was also uncomfortable with the idea of no appraisals for PDP’s or CDR’s too. If the purpose is to grow the people then CDR’s make eminent sense because if the people do not grow the firm will not grow.”
Nigel – Point 5: “See response to point 3 above.”
Nigel – Point 6: “This is fine but the article doesn’t clarify how they are assessed and measured. The list of KPI’s looks to me like a list of behavioural attributes we might use as part of the appraisal process.”
Paul: “Ron Baker’s book ‘Measure What Matters To Customers’ throws more light on this issue because he makes the point about the best measures being directly connected to the customers’ experience. Like the Continental Airlines – from worst to first story. They dropped all but three measures (that were tracked and reported to every team member) – on-time arrival – luggage arrival – complaints. I’ll let you have a copy of the book if you fancy having a read.”
Nigel: “I have read the synopsis provided by AVN – happy to read the whole book if there is more to be learnt. Critical lesson is what KPI’s to choose. We have reduced the team KPI’s to three per team already – may be worth only reporting at firm level to the team on 3 – however I think people like to see the OPP and see how the firm is doing.”
Nigel – Point 7: This sounds great however, how is it defined, explained to the client and delivered? This would need to be overwhelmingly persuasive to get the whole team on board and doing it.
Paul: “a. I went in search of an example on the web sites of the firms in the article to no avail unfortunately. b. But my view is that a process (see 1a.b.c above) is worth creating and testing to find the ways and means of making this happen. Speed of production is relatively easily tracked.
Nigel: “Already tracking this.”
Paul: “Proactivity similarly can be tracked too.”
Nigel: “This isn’t so easy to make automatic and would be interested to hear your thoughts on this.”
Paul: “Value combines these two with both an emotional element (thinking about your ##### story) and the expectations each client has. There seems to be no choice but to go in search of client expectations if we are going to get anywhere near capturing the VFM of your services with your clients.”
Nigel: I agree but simple system/7 questions would definitely be a help. The general point is that the principals above are generally understood and by and large accepted but firms practices do not consistently apply them. It would be disingenous to say that there had been no progress, as clearly there has, but as always progress is slower that I would like”.
I hope you have found this provoking and would value any further comments or discussions on this.
Ron Baker, author of — wrote in response to this post…
Thank you for discussing my article with Nigel. I would just like to make one very important point on the implementation of Value Pricing.
Firms must have a pricing panel (cartel, council, call it what you will). They must remove the pricing function from partners who are lousy at pricing, as most are. This may be a blow to the ego, but it will be an enhancement to the pocketbook. All the firms in the article have given responsibility for all pricing over to a council, and most have also appointed a Chief Value Officer, so this is one throat to choke.
If firms don’t do this, and the other functions the pricing council does, their transition has a much higher probability of failure.
We have lots of resources on our Web site, including more case studies from firms that have made the transition, as well as an “Ask VeraSage” section on our Community Blog that answers all of Nigel’s questions.
And of course, O’Byrne & Kennedy in your backyard has been operating successfully for nearly eight years without timesheets, and Paul Kennedy is one of our senior fellows.
Ron Baker, Founder
…and I replied to Ron as follows…
Thank you Ron for your insight and suggestions
I am having several discussions with several firms on tackling the issue of value for money and how it is demonstrated to clients. I’ll have a deeper look at the VeraSage website on this issue and point Nigel to them.
If you have any suggestions on where to look please let me know.
I’d be really interested in opening a dialogue with Paul Kennedy and will drop him a line.