Today’s guest post is by Lee Frederiksen, Ph.D. of Hinge Marketing, a leading branding and marketing firm specializing in the professional services. In addition to being Hinge’s Managing Partner, Lee is also its chief strategistand growth expert. He is the co-author of the excellent book, Spiraling Up: How to Create a High Growth, High Value Professional Services Firm. Get your complimentary copy of the book here.
Most firms believe that they have a strategy behind their plans for growth. Based on my direct experience and the research we have done on professional services firms, I would venture that that is largely wishful thinking. On some level, executives know that having a strategy for growth is a something they’re suppose to have, so they schedule a “strategic planning session.” This usually involves one day in a conference room, exchanging opinions and filling up flip charts. The results of the exercise are dutifully recorded, then ignored until the next year. Sound vaguely familiar? The predictable outcome is that most firms end up reacting to business opportunities and pressures as they arise. Their growth is unfocused and their valuation is average. Ho Hum. There is an alternative. True strategic growth is built around a clear, easy-to understand strategy. It is perhaps the single most important element in building a firm that can command a premium valuation. That’s not just my opinion. It’s what our research on high value companies demonstrates. So how do you make sure that you are pursuing strategic growth? Here are five key questions to ask yourself:
- What is the market and need for your service? Can you clearly document it? Do you understand the need you are addressing or are you just taking what comes your way?
- Is it a healthy and growing segment? It doesn’t have to be to make a decent living. But having a clear focus on a segment that is in good shape and is likely to grow is a great foundation for a solid strategy.
- Why will you succeed when other firms will not? That’s a good question isn’t it? What makes your firm more likely to outperform other firms? Hint: wanting it to isn’t enough. Other firms want to success as badly as you do. Do you have any sustainable competitive advantage?
- What will success look like for your firm? What will your firm be like if your strategy succeeds? Can you describe it? If you don’t understand where your strategy is taking you, it is hard to tell if you are on the right track.
- Can you describe your strategy clearly and succinctly? This is another good test. If you can’t, it will be hard to get everyone in your firm pulling in the same direction. Most successful strategies are easy to understand and communicate. If yours is not easy to explain, it may be difficult to implement, too.
If all of this is sounding like a lot of work, you’re getting the point. Good strategy can be challenging. After all, it’s not easy to gain a competitive advantage with a professional services firm. Often it involves some specialization and taking some risks. The good news is that a well crafted growth strategy brings a rich harvest of rewards.