by Tony Vidler
The most important business-building step is having a well-defined strategy, yet strategy is one of the most misunderstood concepts in professional services. It is an area that many advisory firms struggle with, and frequently find themselves without any clearly defined strategy for how they will achieve their business objectives. That is what “strategy” is of course: a clear idea of how one will compete.
One can’t design a great strategy without being really clear about what this means, and perhaps the easiest way to think of it is a deliberate decision on what not to do. Which is exactly what we do when giving advice: we figure out what “not to do”.
Most advisers recognise that when it comes to their area of technical expertise they actually go through a process of product or solution elimination, rather than a process of product or solution selection. This process begins by establishing clarity about the overall objective, or what we hope for. That is, we clearly establish what is trying to be achieved and then as we find out more and more about the prospect or client we are working with we are eliminating options and possible solutions until such time as we get to the point where there are only one or two genuinely appropriate options to put before them to achieve their objective.
So it is with defining a strategy for growing a practice. Decide where you want to be, then decide where not to compete, and what not to do.
A very simple example might be:
(that’s a decent turnover for an adviser, right?)
So if that is what we want to achieve, what stuff might we not do because it wouldn’t help?
Some examples might be:
Once we have figured out what needs to be eliminated we get down to the core elements of what our strategy should be. In this example it might take shape like this:
And so a strategy is created….and we now have a guiding principle which we can use to shape our thinking around marketing, promotion, client service, remuneration and fee-setting, and so on and so on.
We have defined how and where we will choose to compete and differentiate, and can make much better business decisions around the allocation of resources and energy – which will give us a much better chance of obtaining our business objectives. Which really is just like the professional adviser going through the process of establishing a strategy for a client isn’t it?