Rainmakers Seat In The C-Suite

One of the things that fascinates me about advisory firms in their search for profitable growth is the “beliefs” top management have that govern their attitudes and behaviours about being seen to the outside world as a “specialist” or a “generalist” firm. This is never more evident than when the amount of uncertainty within the business and the competitive threat levels are dramatically ratcheted up. Should our value proposition address all areas of client improvement or a very narrow set of improvements? What is more important to our clients and prospects our content knowledge or our process knowledge? Where is the “safest” position for our people and the firm’s health and well-being? Where can we make money?

My observation in many professional service, insurance and financial service advisory firms today, is that they have a hell of a lot of people (“specialists”) who know a lot about a little. They have very few people who know a lot about a little. Where they have people with the latter attributes, very often they have modest levels of power and influence on the strategic decision-making process. I am talking about the rainmakers with the “real world knowledge”, not the Chief Strategy Officer, Client Strategy Director and so on, whose insights and ideas although valuable are largely conceptual. The people with the skills, volition and trusting relationships to profitably grow and expand the firm’s value provided to clients and prospects. These are the individuals who are “vested” with the responsibility and have the capability to make it happen. The Formula 1 drivers in the organisation.

Yet so often I find advisory firms do their level best to neuter their ability to apply their knowledge to the organisational issues that are critical for accomplishing the firm’s strategic vision. There is no accountability beyond short-term performance goals (sales target or budgets). There is little involvement in setting and implementing strategic goals. Obstacles are put in their path (vested interests, management information systems, accounting system, internal feedback and communication). The Firm’s rewards system is largely designed to motivate a rainmaker’s short-term performance and behaviours. There is little or no conscious development of the rainmaker’s skills to address clients’ future needs, beyond adherence to compliance standards.

These firms are characterised by leaders, who have a high propensity to manage with a microscope (focus on next quarter’s sales target), not a telescope (focus on strategic vision and constraints).

Consequently, they find it very difficult to adapt to significant changes in demand or competitive threats. Indeed, whole advisory sectors such as private banking, wealth management, reinsurance and the law, have an abundance of advisory firms undergoing merger and acquisition activity as a defensive tactic to fend off adverse winds and tides.

Shouldn’t firms first ask their rainmakers to apply their knowledge to:

  1. How broad or narrow the value proposition needs to be to attract new prospects and retain existing clients? (Hard evidence, anecdotal insights)
  2. What skills and technology should we upgrade, adapt or abandon? (Lend a “client experience” perspective)
  3. Triage client relationships: those in a “profitable growth” mode, those with some nurturing that could be in a “profitable growth” mode and those flatly that cease to be supportive of the firm’s growth plans (Inclusive approach to “change” in key client relationships and the constraints on profitable growth)
  4. How best to create and promote new, relevant expertise to buyers: new value propositions, new offerings, changes to relationships and so on in advance. (Intelligent preventative and contingent actions)
  5. Future competitive threats and uncertainties that may impact the firm’s ability to improve the client’s condition (More powerful internal feedback and communication)
  6. Rewards that would align key constituents’ demands for short- and long-term profitable growth (Stronger alignment of the rainmaker’s contribution with value creation, not just revenue or profit targets)

Today there are far too many leaders and middle managers “guessing” at where to head for profitable growth when many of the answers lies in the heads of the firm’s rainmakers. The imperative today is to distill the rainmakers’ knowledge into a set of wise decisions consistent with the firm’s goals. If you need external help, hire qualified expertise. Move with speed. Put the rainmakers at the centre, not the outskirts of the strategic decision-making process.

© James Berkeley 2014. All Rights Reserved.

 

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