Building a client centric strategy that works
Most organisations spend time on developing their strategy. In many cases, however, there is a gap between the aspiration of the stated strategy and the reality of the capabilities of the organisation. This means that effective implementation of the strategy is very hard, resulting in the “strategy execution gap”.
In the professions, many firms have elected to go to market by client segments (as opposed to practice area) in an attempt to eliminate that gap. Experience indicates that, although this approach can help to streamline and enhance business development activity, it does not in fact resolve the gap issue.
Simply enabling potential clients to self-identify when they visit your website and using language that resonates with them may be necessary in today’s world. It is not, however, sufficient to achieve real client centricity.
Client centricity is more than “customer focus”. It is about developing a culture that demands excellence at all levels in delivering a limited range of services that are of immediate and direct relevance to your firm’s preferred clients. It also demands continual refreshing of those services so that they remain relevant and valuable. This tends to differentiate the firm, cement client relationships and lock out competitors. All of this contributes to sustainable improvements in profitability.
I suggest that five factors are involved in achieving this position:
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Clarity, internally and externally, about the real value you deliver
By developing a set of clear Possible Value Propositions (PVPs) that are immediately relevant to your preferred clients, you can highlight the firm’s distinctive capabilities. This can be supported by the development of detailed client personas and client journey mapping. Your firm’s distinctive capabilities enable you deliver on the PVPs. They also inform the development of a portfolio of services, each of which makes use of those capabilities.
This focus on the firm’s strengths helps to guide progress in today’s rapidly changing world. If every member of the firm understands these drivers, they can focus on activities that set the organisation apart from competitors in the minds of clients. They will also be encouraged to fine-tune their approach in undertaking these activities so that they improve over time.
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Focused excellence
Many organisations seek to achieve success in a broad range of fields. This is hard to do in practice. Firms that are recognised as leaders in their field tend to focus on a small number of key areas of expertise where they can demonstrate clear competitive advantage in delivering value for clients.
These firms spend time up front on the detailed design of the relevant services and their delivery. The aim is to keep the delivery process as smooth and error free as possible so that the client experiences maximum value and minimum hassle. The firm then looks for opportunities to make incremental improvements, each of which is tested before being hard-wired into “the way we do things here”.
This serves to reinforce a culture of excellence. It also helps to develop a team of virtuosi as opposed to a group of individual stars. By recognising that this approach may have a relatively long payback period, the firm creates a barrier to competitors whose focus is more short-term.
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Leveraging your firm’s culture
What can be perceived as cultural friction in organisational change is usually a symptom of a lack of strategic focus. Leading firms typically seek to develop and then leverage organisational cultures that reinforce their strengths. That culture will also usually seek to build individual commitment to excellence and mutual accountability for delivery.
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Cutting costs to grow (where it matters)
Cost cutting across the board tends to stifle development and progress across the board. Indeed, to my knowledge, no firm ever cut its way to sustained profitability: top line revenue must also be addressed.
The trick is to allocate resources to those activities / developments that really matter in delivering excellence to preferred clients and hence matter deeply to the firm. In so doing, you may need to cut resources allocated to less important areas.
In this approach, cost cutting becomes a way to enforce your strategic choices. You significantly increase your bets on areas you feel are of strategic importance to you in adding value for clients and halve them (or eliminate them completely) on other areas.
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Design your own future
Firms that seek to identify and address the most fundamental needs and wants of customers can use their unique capabilities to enable expansion into new markets. They seek constantly to anticipate changes in markets and customer needs. They then redefine the ways in which their capabilities need to change in order to address these different requirements.
This tends to lead to the development of special relationships with key customers, which repositions your firm as a business partner rather than a supplier of services.
As Warren Buffet said of investment management, “It’s simple, but it’s not easy!”.
