Dodging the Economic Bullet

Trying to figure out how your professional services firm can dodge the economic meltdown bullet? (Sorry to mix metaphors.)

The only thing that matters is what your clients need right now. Not what you think they need or might need.

And what your clients need is help in two areas:

1. Cutting costs, fast.

2. Boosting the productivity and effectiveness of key operations, fast.

That’s it.

Don’t pitch them services that do something else. “We help you achieve best-practice in managing employee retention.” Forget it. In a recession, most employees don’t jump ship (unless pushed).

And if you have services that achieve those two goals, speak clearly about how you achieve them, with proof points to validate your claims (i.e., client examples in which you name names and quantify results).

How many of you are doing this? What’s been the result?

If you aren’t doing this, why not? What stands in the way?

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Thought Leadership Lessons from the Recession of 1990-91

Recession. Accelerating layoffs. Postponements of capital equipment purchases (especially information technology). Cutbacks in consultants, IT services firms, legal advice, and training. Worries about survival and staving off bankruptcy. Fears about the onset of another Great Depression.

Thought I was talking about today? I'm remembering the acute U.S. recession of 1990-1991. But there are many lessons for professional services, IT and other firms to learn from those grim years. The recession of nearly 20 years ago provides a number of pertinent lessons on what it took for the consulting, IT and IT services sectors to survive and actually thrive.

In a phrase, it was this: rally behind reengineering.

From July 1990 to March 1991, the U.S. economy was in the grips of a deep recession. Economic growth hadn’t been as slow since the Great Depression. American companies severely cut spending on consulting, information technology and IT services – except in one area: on firms that could help them reengineer their operations.

Reengineering was powerful in showing how companies used IT to make dramatic productivity improvements. But it also demonstrated to consulting, IT, and IT services firms how they could greatly increase demand for their offerings: by creating thought leadership. In the consulting and IT industries, reengineering was the blockbuster management concept of the 1990s.

My firm, The Bloom Group, is extremely excited to announce the launch a multi-company sponsored study that we believe couldn’t come at a better time for the IT, IT services and management consulting sectors. Our study is called “How Big Management Ideas Move Technology Markets.” The topic is about understanding why the most successful thought leadership initiatives of the last 20 years worked – and more important, their lessons for creating demand in today’s economic downturn. Read more about the study here.

Consider how reengineering pulled the consulting and IT industry out of a severe tailspin in the early 1990s. The market embrace of reengineering fueled rapid growth of consulting firms, IT service companies, and technology firms (such as SAP and other ERP software firms) that had positioned their offerings as part of the reengineering solution. According to Gartner, companies in the 1990s spent billions on reengineering consulting services and the technology they required.

“How Big Management Ideas Move Technology Markets” will examine how business reengineering and a number of other management concepts became big successes, while other concepts were ignored.

Rob Leavitt (formerly a senior executive at the Information Technology Services Marketing Association (ITSMA) and I will lead the research. Three of my Bloom Group comrades will participate as well.

Let me know what management concepts you’d like us to research – both those have and have not moved technology markets.

And, overall, what do you think makes for a management concept that sticks -- or sinks?

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Thought Leadership Beyond Professional Services

Rob Leavitt (a Bloom Group affiliate) and I gave a presentation this morning to the Boston chapter of Sales and Marketing Executives International (SMEI), a professional group that assembles people from two camps, one of whom is often from Mars (sales) and the other from Venus (marketing).

The topic was thought leadership marketing outside of professional services -- in companies that sell products (e.g., software) and services (e.g., telecommunications) to other companies.

It was a small group. But our message seemed to resonate. We explained how showing customers that you know a great deal about a problem of theirs that your offering addresses wins many points -- especially if you can show how you solved the problem at other companies, with big ROI.

Despite the current hype, I don't see thought leadership as a panacea for all marketers -- only those whose customers are desperate for insights on issues that the marketer can address. I don't expect Dell or Lenovo to give me advice on how to write better articles on their laptop computers (nor would I listen to them if they did). I wouldn't expect a payroll service to advise me on how to structure pay packages for my employees. Those problems are just too far afield from what these companies do.

But I would listen to Dell or Lenovo advise my company on how to protect the security of my firm's laptops. And I would read advice from ADP or Paychex on how to make sure my firm is never out of compliance with payroll regulations.

At the same time, those firms still need good, old-fashioned marketing to tell me why their laptops are of better quality and why their payroll services are more cost effective. That marketing isn't thought leadership marketing.

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Time to Scour for Your Online Op-Ed Opportunities

One of the newest and best opportunities for thought leaders in professional firms to get their views in front of clients and prospects is the online world – specifically, the digital space that an increasing number of top-tier business and trade press now provide to outside columnists.

For many years, the print side of such business publications as The Wall Street Journal, Fortune, Forbes, Business Week and the dozens of top-tier trade press offered scant opportunities for op-eds and columns by people who weren’t on staff. Consultants, lawyers, accountants and the like had to focus their pens on academic journals in their fields (Harvard Business Review, Sloan Management Review, etc.) and their firms’ own publications.

No longer. Both general business and trade publications have woken up to the fact that their online publications have unlimited news space – and that attracting thought leaders can be a good way to build online traffic.

Just look at the range of columnists at the websites of Business Week and Forbes:

• Business Week. Features such outside columnists as Dov Seidman (CEO of a consulting firm called LRN), Paul Bennett (creative director at design consultancy IDEO), Jim Champy of Perot Systems, Ram Charan, and many others. Take a look here.

• Forbes: Harvard Business School innovation professor Clayton Christensen is among the outsiders showcased here. Looks like Forbes.com is serious about attracting other Christensens. The online publication just hired Tunku Varadarajan (former Wall Street Journal editorial features/op-ed editor) to attract top-flight columnists. He has already landed 16 authors.
  

Many trade publications are doing similar things.

Publications are watching their print circulations plummet and online viewership rise. Needing to generate even more traffic to the websites to generate online ads, many publications are hungry for good online content.

I’ve wondered for awhile why business publications weren’t more aggressive at getting outside experts to write for them. They don’t have to pay them anything. They only need to ensure the quality of their columns is high, and that their columns don’t become thinly disguised sales pitches.

Every marketing department in a professional firm should devote significant time developing relationships with the key online publications in their fields and getting their thought leaders’ articles in there.

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From “The More You Sell, the Less They Buy” Department

I just became aware of a 2007 Economist Intelligence Unit survey of 141 executives on marketing at companies that sell products and services to other businesses, so-called B2B firms. (I hoped that dot-com era term would have gone away like the thousands of Internet businesses that flamed out, but it obviously didn’t. I guess the term "industrial marketing" was just too 20^th century.) The survey respondents apparently were not just professional services firms, although I couldn’t immediately find a breakdown by industry.

The EIU report made a number of interesting points. Thought leadership had become a highly favored marketing technique of business marketers. After “building new business,” survey respondents ranked “positioning our company as a thought leader” as their second most important marketing objective over the next three to five years. Another recent EIU survey of more than 800 buyers of business services (including professional services) found that the three most effective marketing techniques were thought leadership techniques: conferences, original research and surveys/white papers.

The report also took advertising and PR firms to task (read page 17), saying those firms know little about thought leadership.

All well and good. (Whew, I think I’m in the right business.) But here’s where the EIU’s research report goes wrong: It turns into a sales brochure halfway through, on page 12. It thus erodes the credibility it created in the first 11 pages. On page 12, EIU shifts gears and discusses why it should be your “360 degree thought leadership partner.” Page 13 then tells you how good EIU is as a thought leadership partner. By page 14, they’re back to the survey statistics, which indeed are interesting.

My point is this: By inserting in a direct sales pitch in the middle of a research-based white paper, EIU committed one of my top 10 sins of thought leadership: Shifting too soon from an educational message to a sales message. Thought leadership marketing (when done well) lures prospects to you because it demonstrates your mastery of an issue they care about deeply.

Let your display of knowledge on an issue do your selling.

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Understanding the Ecosystem in Which Thought Leadership Creates Demand for IT

The growth of the consulting industry is flat. Many IT service and technology companies are reporting slackening sales. Even the white-hot expansion of the Indian outsourcing firms has softened.

Yet businesses need productivity improvements more than ever. The need for breakthrough ideas about how to make business more efficient is even greater today. But if the demand for consulting and technology industries is slack, doesn’t that suggest, as a whole, that the consulting and technology industries are having a hard time convincing customers they have what industry needs to become more productive?

I say this because during the early days of business reengineering (early 1990s), we saw the same dynamic going on: the U.S. was in a deep recession, the consulting and IT industries were in the tank – except for reengineering (and the demand for information systems that reengineering generated). Reengineering spread like wildfire, and the consulting firm (Index Group) I worked for grew rapidly.

So why was reengineering hot when many other consulting services were not? And why was there strong demand for the technologies that were often critical to reengineering (e.g., SAP's enterprise resource planning software) when demand for many other technologies was tepid?

It's because the "IT ecosystem" in which reengineering operated was firing on all cylinders. What do I mean by IT ecosystem? There are four elements:

• The business gurus who create management concepts that implore managers to make business process changes that require new technology (e.g., the late Michael Hammer, Tom Davenport, etc.) ;
• The consulting firms that create services that execute the concepts in corporations (i.e., help design the business process changes);
• The IT services firms which install the computer technology that the new business processes require; and
• The technology vendors that make that software and hardware, and which magically see demand for their offerings accelerating.

My firm is launching a study on this next week to shed light on this phenomenon (“How Big Management Ideas Move Technology Markets”). Bloom Group affiliate Rob Leavitt (ex-ITSMA), who is working on the study, and I see the research helping consulting, IT services and IT firms work better together to create the next blockbuster concept.

We’ll be looking for sponsors among the consulting, IT services and technology world starting next week. We’re aiming to begin the research in November.

What aspect of this issue would interest you? What would you like to know about such an IT ecosystem? Let me know.

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Michael Hammer, R.I.P., But His Impact (and Reengineering) Live On

It is hard to believe that Michael Hammer, Mr. Reengineering, is gone. Yes, I knew he was in serious condition the last two weeks after an accident while vacationing in the Berkshires. (His website had posted such a note since Aug. 25.) But today’s death notice was still shocking.

He was only 60, and he had many more years to contribute to his calling since the mid-1980s: teaching businesses how to become far more productive through process change and information technology. More important, he was a devoted family man, and his wife and four kids have suffered an enormous loss.

Mike taught many of those who had the fortune to know him (including me) the importance of relentless questioning of conventional wisdom, deep research of innovative practices in businesses to understand what really works (rather than research by literature search or shallow survey instruments), crystal clear communication, and personal integrity.

Michael Hammer was the most brilliant consultant and best business speaker I have ever met. To my knowledge, his approach to researching and developing management concepts – which enabled him to become the thought leader of the business world in the first half of the 1990s -- has never been studied. It needs to be, for two reasons. First, because his impact on the business world has been immense. Second, because I have not seen any professional services firm come anywhere near to replicating his approach to thought leadership R&D (which, in short, was in-depth, case study research comparing leaders and laggards on a very specific business issue). (Mike’s approach to thought leadership will be studied very soon; check back with this blog space in the next week.)

I started to get to know Mike when I joined Index Group in June 1987. (To be sure, I was not close to Mike then or since, but we probably met 20-30 times over the last 20 years to discuss marketing issues. I am honored to say I ghostwrote a couple of articles for him in his early consulting years.)

In his days with Index, he had his own company, Hammer & Co., which was basically Mike and a couple of assistants to run his conferences and book his speeches. His office was located within the offices of Index at 5 Cambridge Center in Cambridge, Mass. He and Index were partners in a research business called PRISM (Partnership for Research in Information Systems Management), which was sponsored by more than 100 companies at its apex around 1993.

It’s actually unfair of me to call Mike “Mr. Reengineering,” even though I believe the concept is largely what he’ll be known for. It’s unfair because reengineering was only part of Mike’s thought leadership portfolio. To be sure, it was his blockbuster. But he had many other intriguing ideas that I saw during his research partnership with Index Group. Even still, reengineering does – and will – live on. Whether it’s called reengineering or another name, many companies worldwide continue to apply Hammer’s principles of cross-functional, IT-enabled process change.

My memories of working with Mike as a ghostwriter will never leave me. He was the only consultant I know who could sit down with you for 30 minutes, tell you the article he wanted you to ghostwrite for him, talk the piece out, and have the thinking nearly 90% polished while he was telling it to you. That is, a transcript of the discussion was nearly ready to publish. Not an extraneous thought, no ideas out of order, no debatable assertions unsupported. Uncanny.

If there is ever an award for thought leadership in the 20^th century consulting world, Michael Hammer would have to be among the finalists. My deepest sympathies to his family and friends. Rest in peace, Mike. You will truly be missed.

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