SERENDIPITY AS A MANAGEMENT TOOL
Or, Why Strategic Planning Is Better
The problem with conventional wisdom is that it’s usually wrong, and that, like a computer virus, it keeps getting repeated until everybody accepts it as gospel. A case in point is the conventional wisdom on strategic planning for professional firms.
Strategic planning for the professions is a relatively new practice. In the days before competition entered the picture, planning was primarily a function of showing up. In the pre-marketing days, how could you plan if you couldn’t do very much to enhance your practice, beyond networking and serendipity?
Most of the recent articles on planning for professional firms start from the end of the process, and not the beginning – a process that may work for the MBA or the corporation, but is certainly a mythological process for accounting, law and consulting firms. Too bad. In today’s competitive and dynamic business environment, running a professional firm requires comprehensive planning to a greater degree than ever before.
One recent article has, as its first point, to Develop A Clear Mission Statement. It’s second point is Assess The Firm’s Strengths And Weaknesses. You have to get to the third point in order to discover what should be the first and most important step – to analyze the market.
You don’t become a business, or a practice, or even have a reason for existing, except in terms of your market. Your professionalism is not an abstraction that functions in a vacuum, with the people you serve ancillary to your practice. You can write mission statements until you’re blue in the face, but if they’re not written in terms of the needs of the marketplace you’re addressing, the mission statements become nothing more than fantasy wish lists. And a wish list is not a business plan.
Your firm’s strengths and weaknesses, as well, can’t be defined except in terms of the needs of your market, and your ability to meet those needs.
What so many professionals, and the marketers who serve them, fail to understand is that all business plans begin with the market, whether you’re a lawyer, accountant, or plumber. A business plan is a plan to capture a market, and not just a paean to your profession, nor an academic exercise. In building a practice, the strategic plan can make a significant difference in whether you succeed or fail as a firm in today’s economic environment. How should it go, then?
1. Start by understanding your market. Not just the demographics, but the kinds of problems, the kinds of businesses, the industries, the companies by size. Understand the number of companies in declining, static, or emerging industries. Look at the market in terms of your firm’s experience and expertise. Look at your competition – who they are, how they serve the market, how they reach the market. Understand the economic conditions that affect your market. Understand the vehicles for reaching the individual companies in that market – the media, the trade journals, the trade associations. The more you know about your market the better you are able to build a strategy to penetrate tat market – to build a practice.
Has your market changed in recent years? New Companies? New industries? New competition? New management structures and systems? Do you see too many companies in declining or static industries? Are companies demanding skills or experience that you don’t have, or facing problems that you’re not prepared to solve?
In fact, without a thorough knowledge of the your market, there is no way you can possibly plan anything except where to place the furniture in your office.
2. Analyze your firm in terms of the market. What skills do you have that you can use to serve the market? Are you prepared to serve the market as you’ve defined it? If your skills or depth of experience are not sufficient to the needs of the market, will you have to hire new people, or retrain your current staff? In view of the market, will you have to release people?
3. Consider your personal and firm goals. Bringing together the needs of the market and your ability to reach and serve that market requires substantial planning and effort. That effort can best be defined in terms of what you and your partners want, individually and collectively. What do you want of your firm, and what are your personal needs and desires? Are your firm and partner objectives realistic, or dreams? In view of the difficulty and cost of fostering growth or change in a professional firm, is achieving your goals worth the effort?
4. Devise strategy. In view of the first three points, the strategy is developed in realistic terms. What changes must be made in administrative and professional staff? How must the firm restructure, short and long term, to address the dynamics of changing markets? What new skills must be developed or acquired? What parts of the practice address declining or static industries, and how shall the firm deal with the problem? What industries are emerging, and what must the firm do to pursue those industries? What specific target markets will be addressed? What vehicles will be used to reach those markets? What position should be developed that addresses the needs of the target market, and that demonstrates your ability to serve that need? How shall resources be allocated, both internally and externally, to project your capabilities? What should be the short term and long term marketing goals? What are the tactics that will drive the strategy?
5. Manage the effort. Who is going to do it – internally and externally? What are the roles of the partners, internal staff, the internal marketing staff, and outside consultants? What internal structures have to be changed or developed to manage the strategy? What resources – money, staff, time -- will be dedicated to making the strategy effective? How will the strategy be monitored, and corrected as experience with the strategy dictates? How will the firm’s people, on all levels, be kept informed?
Strategic planning, then, is not casual, nor random. Nor is it a superficial process, as so many articles seem to imply. In today’s economic climate, growth -- and even sustenance – is likely to be achieved only with planning.
Oh – forget the mission statement. It’s a fad thing that impresses no one, inspires no one, and rarely drives anything internally or in the market place.
In today’s competitive environment, random growth is no option. Not when efficient competitors are designing ways to get your clients.