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40+ insights from 40 years in the trenches

December 29th, 2020

Prioritizing procedure over purpose portends a high probability of piss-weak performance and should not be permitted to prevail.

Most SMEs need, but don’t want, advisory services. This is a strong positive for your business development progress.

A successful transition to advisory is a dual transformation with a third bonus.

Too often people get to leadership positions because they are good producers which inevitably causes innovation and opportunity discovery to stall.

Growth potential needs to be explored with reference to capabilities not acquisitions, product lines or geographies.

Partner compensation schemes constrain innovative growth opportunities and governance integrity.

Short term planning and mindless execution prevents long term value creation.

SaaS stands for software as a service NOT software as a solution. Failing to understand that is what causes most firms to fail as business advisers.

Advisory tool makers suggest that their applications create an opportunity for “strategic conversations” with clients. That sounds impressive but if you haven’t formally studied the discipline of competitive strategy, you’d be better off not conversing because your opinion is no better than the punter next door.

Where there is no vision the people perish (Proverbs 29:18). Stephen Covey’s 7 Habits of Highly Effective People represent a perfect foundation for designing a business strategy.

Different leadership styles are required for each of the three lifecycle stages of a professional service firm.

Niching is a key to high profitability, but it often requires geographic reach in many markets and can expose you to significant risk e.g. gymnasiums or food service are decimated during a pandemic.

Client selection is the clear leading (but largely ignored) driver of firm profitability. It will determine the services you can offer, the talent you can attract and retain, and the value you can create which drives the value you can capture. Random client selection leads to a transactional business model which, when properly executed can be very profitable, careful client selection leads to a relationship business model which, when properly executed can be very profitable. Trouble starts when you attempt to blend transactional and relationship business models. In business model design you can’t have your cake and eat it too.

The harder you work the luckier you get is a dangerous unproven cliche. There is no doubt luck plays a very significant role in business and personal success but it is serendipitous. You get luckier when you’re observant and have a clear vision in your mind of what you want to accomplish. This is determine by how smart you work not how hard. But here’s the interesting twist, when you combine luck with passion, skills, and balanced, sensible work effort you seem to get luckier and your passion, skill, and work effort all move to another level so it appears that the harder you work the luckier you get but it’s actually the reverse. The really important point is the more effective your work effort the luckier you seem to be.

What you say NO to is what makes it possible to say YES to. And what you say YES to means you’re saying NO to something else.

All products and services ultimately commoditize. Commoditization occurs when customers demand and get more value (as in benefits) at lower real prices. Effectively it reflects loss of pricing power.

Collins is right – Good is the enemy of Great; and so is Porter – the sole pursuit of Operational Effectiveness never confers sustainable competitive advantage.

Because of its operating culture, legacy systems and revenue streams a business can’t disrupt itself. To continue on a new growth trajectory when it faces an industry disruption it must create a new entity while it harvests the remaining value from its current business model.

The interaction between the elements of a firm’s business model is where the special sauce of success is to be found. Intra-industry benchmarking studies rarely (if ever) reveal either the intensity or proximity of these interactions and serve little more than a vanity purpose.

If you want to take rank with mediocrity in your industry and wallow in a sea of sameness take more than a passing interest in industry benchmarking studies.

In a knowledge economy the way to success is to out think (innovation), out learn (knowledge), and out run (energy) your competitors.

Luck plays a critical role in a firm’s success. This applies to both good luck and bad luck. However, it’s not luck that creates success, what makes the difference is how you respond to luck (good or bad) compared to your rivals.

There’s a saying “one man’s garbage is another man’s treasure” and variation on that theme is “one man’s bad luck is another man’s good luck”. What makes that interesting is you get to choose which man you want to be.

Managers who understand opportunity cost as well as operational cost drive profitable growth the rest create firms that wallow in mediocrity.

Make your mess your message.

An 1800 shift in management focus is required in a rapidly changing and volatile environment where the focus needs to be on resilience not efficiency. In the past 100 years there has been a high degree of predictability which lent itself to reductionist systems design that suits a command and control management model designed to pursue efficiency. Today, in the face of technological singularity and the certainty, but unpredictability, of Black Swan events, the capacity for business entities to rapidly respond to volatile change is essential to their survival and growth.

There was a time when we would say the people closest to the customer know best what to do best. Today we need to say the people closest to the customer and to each other not only know best WHAT to do best, but know HOW to do what’s best.  Therefore, responsibility and authority needs to reside there and the key to that is team trust.

They say there is no I in TEAM. But there can be and usually is. However, there is definitely no I in trust only ‘US’.

“Good is the enemy of Great” applies everywhere and is a huge barrier to innovation, risk taking, and growth… a Jim Collins’ observation and the reason for ordinary.

In goal setting we’re told we should identify SMART goals but what’s really needed today are SMARTER goals where E stands for Energizing and R stands for Related to your strategy. The SMART bit represents specific, measurable, actionable, relevant, and time bound.

The financial results you get this quarter are largely the consequence of decisions you made at least 12 months ago and probably before then.

Persevering with problematic people is a principal predictor of pending poor performance.

You can change the (your) world when you change your mind. I don’t know who said that but I agree; in fact it’s the only thing that will change the world and certainly the only thing that will change your world.

It’s what you do in practice that wins games.

When you get good enough at throwing, catching takes care of itself. A juggler’s credo.

The key to your success has been well documented. Readers are leaders. It’s likely that anything you would like to master has already been mastered by someone so don’t waste time re-inventing the wheel. Learn from their mistakes and improve on their successes. Success leaves clues.

The value a customers experiences from professional service providers depends as much on how you make the customer feel as it does on the price of your service.

A lesson I have learned which is not taught in business school is when you help a client believe something is possible it becomes possible … in fact that’s usually the ONLY time it’s possible.

In the advisory industry, we sell confidence as well as advice and usually the confidence bit is the most important part of our value proposition.

It’s not time utilization that drives success, it’s energy utilization. You can never get more time than all the time there is but you can get more energy by using your time better.

What you can measure you can manage is a cliche that has some practical relevance but it’s not a universal truth. There are some things that can be measured that can’t be managed (e.g. temperature). This is sometimes called a measurement. And there are somethings that can be managed that can’t be easily measured (e.g. culture or degree of team engagement). This is sometimes called a metric. The important thing to understand is that you can always choose your response whether you’re dealing with a measurement or a metric and it’s that response that yields a result which is either a success or a learning experience.

It is said, the tool used to measure an object does not change the object. In some situations and for some types of measurement devices that’s not universally true.

Success is the personal satisfaction you get from the knowledge you are making steady progress towards a worthy goal by doing the best you can with the personal and other resources you have at your disposal.

Some wisdom from Edwards W. Deming: It is not necessary to change. Survival is not mandatory.

Some Jim Rohn Wisdom: If you work hard on your job you can make a living. But if you work hard on yourself you can make a fortune.

Some Jim Rohn Wisdom:  Don’t wish it was easier, wish you were better; Don’t wish for less problems wish for more skills; Don’t wish for less challenges, wish for more wisdom; Don’t say “If I could, I would”, say “If I can, I will.”  

Some Jim Rohn Wisdom: You cannot change your destination overnight, but you can change your direction overnight.

Some Jim Rohn Wisdom: For things to change you have to change.

Some Jim Rohn Wisdom: You become the average of the 5 people you spend most time with.

  1. January 14th, 2021 at 05:22 | #1

    Thank you Mark. I dropped this note on my blog site as a place holder – I didn’t think anyone read my stuff any more. I’m still thinking about the things I’ve learned over many years in the trenches while I’m putting together a book on how to successfully create and grow an advisory business on the back of a successful compliance business.

  2. January 13th, 2021 at 10:39 | #2

    Some great points, thank you Ric. Very thought provoking. Thank you.
    I have only recently come across Jim Rohn’s work – some great work!

    I trust you are well.

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