Strategic Planning & Marketing Strategy | Sales Management Strategy
I had the challenge of working with a large firm whose growth had flattened out during the preceding three years. (In contrast, in the previous five years the firm had experienced double-digit growth.) Owner earnings in the most recent two years had decreased. During our strategic assessment process, I learned that the firm had engaged a well-known strategic planner prior to the three-year decline and had followed his advice.
“Standard” Advice for Squeezing Profits and Quality
What advice had this planner given the firm? It boiled down to this:
In order to improve partner earnings, you should increase partner charge hours.
Decrease the hiring process and focus on high chargeable hours from your staff.
Use technology more to help reduce the size of the administrative staff. Instead of one administrative person for every owner, reduce it to one for every three.
Delay investments in technology to replace systems every five years rather than every three.
Bring all training in-house.
This highly regarded strategic planner had given the firm a plan for disaster. Short-term profits were squeezed from training, technology, and marketing. Within only three years, the prospect pipeline dried up and the owner’s computer network had become “clunky” compared to what was now available. While owner profits soared for two years, by the third year profits began to slide as the owners worked harder than ever.
The owners were now looking inward, rather than out to the market.
Work with the Market
Successful strategic planning should always begin with the market outside the firm, not the internal processes inside the firm. Yet, when owners retreat to discuss strategic plans, the agenda items frequently include staff evaluations, raises and bonuses, owner compensation, admission of new owners, the financial results for last year, the budget for next year, new office space, recruiting efforts, and other issues that do not fall into true strategic planning.
Conclusion
Just as your “market” is more than your clients, strategy must be more than a way to get more profits in the short-term. Strategy should focus on building the balance sheet of your firm so prof- its will be strong for the long term. When setting the agenda for your firm’s strategic planning session, first start with the market, then look internally.
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