At Sage’s partner conference, Insights, I will be presenting a session entitled Moving Toward the Firm of the Future (GEN34) on Thursday at 1:30pm.
In order to begin the conversation even before the conference begins, I am posting the abstract and inviting all possible participants to share their ideas and questions.
Peter Drucker coined the term knowledge worker in the 1950s, but we are only beginning to understand the impact of the transformation on business and society as a whole. This session, delivered by Ed Kless, will walk you through the transformation that you company needs to make from being a professional service firm to becoming a professional knowledge firm. If you are not interested in completely changing the way you look at your business, please do not attend.
Most professional service firms today operate using a variation on the following theoretical equation: Revenue = Capacity X Efficiency X Hourly Billing. This equation is hopelessly flawed in that it confuses causes and effects.
In this session we will create a dialogue around moving to the firm of the future or what I like to call a professional knowledge firm. The theoretical equation for this firm looks like this: Profitability = Intellectual Capital X Effectiveness X Pricing with Purpose.
Specifically, we will have conversations about making the following transitions:
- From focusing on revenue to focusing on profitability
- From focusing on capacity to focusing on intellectual capital
- From focusing on efficiency to focusing on effectiveness
- From focusing on hourly billing to pricing with purpose
While there are no quick fix answers to any of these transitions, we can begin to lay the foundation for change within our organizations. In order to prepare for our dialogue, please spend some time reading at the VeraSage Institute.
Also, please post thoughts, questions, comments below.
Despite what you are hearing the media about the plans of governments and large corporate entities, the economy will recover in any large part not due to their efforts, but rather from the efforts of small businesses – from entrepreneurs. They have been,are, and always will be the creative force in the world.
Whereas large corporations tend to worry more about the numbers (mostly their costs), small businesses focus on the creation of value for customers.
Whereas governmental agencies can only spend money that they have first taken from others, small business risk everything even their own personal nest eggs in their belief in that their product, service or knowledge is of value to others.
Entrepreneurs are the ultimate altruists. They are the most purely other-centered people on the planet. They believe that their ideas will make the world a better place.
To see the economic recovery in action, look no further than your neighborhood.
I genuinely believe that most people in the world desire only good thing for their fellow man and are trying to do good. What is disturbing is that we all tend to dismiss any facts that are contrary to our own belief system, rather than investigate them further and resolve the contradiction. To quote Ayn Rand, “Contradictions do not exist. Whenever you think you are facing a contradiction, check your premises. You will find that one of them is wrong.”
As a consultant one of the first things I learn about a prospective customer is if the are open to the possibility that they are wrong. Not that they necessarily are wrong, but just if they are open to the possibility. I will not work with anyone who does not respond positively to this idea. Of course, I reciprocate and state that I am open to this possibility myself.
One of my all time favorite quotes is from a little know business/psychology author named Edwin Friedman. He opens his book A Failure of Nerve: Leadership in the age of the quick fix, with this gem, "The colossal misunderstanding of our time is the assumption that insight will work with people who are unmotivated to change."
He demonstrates how this applies to all levels of human relationships: parent/child, spouse/spouse, neighbor/neighbor, employee/boss, company/company, citizen/government official, country leader/country leader. It is only through lowering our own level of anxiety, thereby increasing our own ability to think creatively and remaining connected to those we hope to change, can any transformation occur.
Advancing the dialogue requires the ability to self regulate your own anxiety level.
Go-to-market Strategies posted an article entitled The truth about selling value: you must ADD Value.
While there is much in the article with which I agree (Value is subjective; It is hard to get to value, etc), there is one key point to which I object strongly. The writer’s definition of value is "the amount of money or relative worth that is considered to be the fair equivalent for what is to be received in return." (Emphasis mine.)
This continues the thinking of business-as-zero-sum-game. The value the customer is getting should outweigh, in some cases significantly, the price that they are paying. This is the beauty and morality of the free market. Wealth is created on both sides of every transaction because they are a) mutually beneficial and b) entered into with the freedom to choose. The buyer benefits more than the price they pay and the seller benefits because they provide the good/service/knowledge for less cost than their price. Of course, this is called profit.