Organizing Your Firm for Growth

Professionals’ lack of participation in business development is typically a result of either not knowing what they should be doing, or not knowing how to do it

Sales management - that is, the function of coaching, accountability, measurement and evaluation relative to business development-is critical in creating a growth culture for CPA firms and law firms. One of the sales manager's (usually the Managing Partner's) most difficult challenges in leading the growth effort is engaging everyone in business development activity.

In my work with firms throughout the US and Canada I find that it's rare that professionals won't participate in business development. Most often, professionals' lack of participation is a result of either not knowing what they should be doing, or not knowing how to do it. Some firm leaders make the mistake of assuming people know their roles, so they never define or communicate it clearly. Most accountants and lawyers are not trained to know their business development role intuitively.

Sales managers can overcome these objections by first defining the firm's approach to growth.

Strategic Growth Alternatives
There are four ways for a firm to grow as illustrated below:

The alternatives are comprised of the intersections among the firm's core and expanded services and the firm's current and prospective clients. The definitions of core and expanded services are:

Core: The fundamental services for which the firm is known and has the capacity to deliver to all or most clients.
Expanded: Those services the firm does not deliver as widely because they are newer and/or the firm may not be as well known for offering these services.

These intersections create the four strategies firms can use to grow. As seen in the illustration above the four growth strategies are:

Penetration - look for opportunities to drive more core services into the current client base. This is the least expensive, shortest term, most predictable way to find growth.
Service expansion - look for opportunities to introduce expanded services to current clients. This is the second easiest way to find growth because of the client relationship.
Market expansion - prospect for new client relationships. With this strategy, the firm attracts new clients by taking advantage of its current brand recognition. This requires more hard dollars to be invested and is less predictable and longer term in producing results than either penetration or service expansion.
Diversification - create new opportunities for the long term either through expanding into new geographic markets or developing new services. This is the strategy that requires the most patience, as the expectation should be that results will occur in the long term.

Once the firm defines its core and expanded services and its target market for market expansion, the management team can decide where the firm's best opportunity for growth exists, and allocate portions of the firm's overall business development time and effort to each strategy. Once the growth strategy is defined the appropriate business development activities can be determined.

When the firm has developed a solid plan for how to achieve growth and identified the activities and roles associated with implementing the plan, firm leaders can then effectively communicate specific business development responsibilities to everyone in the firm.

Larry Bildstein is president and CEO of The Whetstone Group, Inc. Whetstone's mission is to help companies in the professional services market find growth and hone their competitive edge. Whetstone provides clients a variety of simple, yet effective tools for this purpose.

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