by James Mason, Managing Director, Mindshop
What if professional service firms were like boats and the global pandemic a lowering of the water level? Many are now forced to face head on the rocks (or hidden challenges) that have lurked under the surface.
Firms with challenges firmly under control have successfully sailed through 2020, weary from the extra work, but not as severely impacted as those who have failed to navigate hidden obstacles.
No one knows what businesses and the worldwide economy will be like post pandemic, what is certain is continued acceleration of change and innovation. Procrastination is now not an option.
In this article I will uncover hidden obstacles faced by professional service firms, how they can be avoided and discuss the trends driving business advisory towards 2025.
Obstacle 1: Not adapting the firm’s model
Not adapting to the changing needs of clients can be like a slow car crash for a professional service firm. Rigid overhead structures, complex models and inflexible approaches to business advisory will constrain the agility essential to stay connected to the needs of target customers and continuously adapt to market trends. Innovation and continuous improvement are needed to prevent a slow decline of the firm’s performance.
Larger firms who seek to service small to medium sized businesses will find this especially difficult as traditional brand loyalty wanes in favor of deep relationships, authenticity, trust and niche industry knowledge. More business owners will choose to work with a firm that is not too big and not too small so firms need to reflect on whether they will disconnect with customers if they go for ‘growth for growth’s sake’.
Larger firms will need to understand emerging trends and build teams or bring in specialists to meet the needs of more complex clients for marketing, digital consulting, legal and wealth management.
Obstacle 2: Missing the advisory services ‘glue’
Compliance activities will force clients to keep coming back but advisory services will be the glue that binds and deepens the relationship, driving referrals to other service lines. To ensure this happens, business advisory capabilities need to be deepened and broadened across the entire team:
a. An ‘advisory mindset’ will be critical for success across all client-facing team members. No longer will a team member be able to say, ‘but I’m just an accountant’. All should say ‘we are advisors to businesses’ with the ability to have robust conversations and facilitate problem-solving sessions for clients.
b. Age and experience will become less relevant than a strong capability in questioning, problem solving and strategy skills.
c. Business advisory is not a standalone service but a capability driving greater client loyalty and more compliance work. Internal advisory champions will continue to move up the value chain, tackling increasingly challenging client issues or opportunities, driving greater revenue for the wider firm.
Obstacle 3: Too much marketing, not enough capability
Often firms focus too heavily on marketing their way to success with business advisory services, relying on large events, buying databases or implementing extensive social media campaigns rather than investing in capability building. This can often provide a short term lift in revenue but rarely lasting success.
Internal referrals are unlikely if peers are not confident the team can deliver a successful solution. Capability and confidence should be built, targeting ‘low hanging fruit’ before pushing ahead with specific marketing strategies.
Obstacle 4: Analytics but no business acumen
Innovations in technology will continue to commoditize tasks that can be automated putting a greater emphasis on blending technical business analysis skills with the experience and business acumen to attract and retain the right caliber of business advisory clients. Firms who can find the right level of technical leverage to support an agile advisory offering will be in a good position, but business acumen and advisory capability are mandatory if you wish to push offerings up the value chain.
Obstacle 5: Retaining experience and knowledge
Quality advisors no longer see retirement as mandatory in their mid-60’s instead see this time as an opportunity to hit peak effectiveness with a wealth of high value experience and acumen.
If new internal and client-facing advisory roles are created senior for mentors and strategists succession for emerging leaders in firms is possible whilst not losing the firm talent, revenue generators and client connections.
Obstacle 6: Missing the advisory service evolution
Basic business advisory services will continue to be essential in 2025 to drive problem solving, to diagnose issues and develop strategies with clients. Leading into 2020, 20% of this work was done online and 80% face-to-face. In 2025 this model will flip to 80% online and 20% face-to-face opening up capacity and the ability to deliver valuable ‘just in time’ advice for those ready to evolve.
Advisors will become facilitators rather than consultants, simplifying the complexity and driving business change. Each client will have slightly different needs so a scripted or cookie cutter approach will not work and more a ‘modular’ or ‘bespoke’ one is required. It’s rare customers want a generic offering rather more personalised and relevant to their needs, advisory is no different in 2025.
Advisors will need to be skilled in adapting their approaches and workshops to suit the needs of each individual client by assuming their default support services and tools are 80% right and tailoring 20% during delivery to suit customers.
Obstacle 7. Putting borders on clients or team members
Opening offices in new regions to access new markets and insisting on fixed working hours in centralized offices is no longer appropriate. Clients are now looking for the best firm or advisor regardless of location, so rather than establishing new offices in new regions, the strategy will be to use technology to offer remote access to skills. Enticing new employees, who may be outside your local region will allow retaining a broader talent pool using advancements in technology to support life balance.
In summary, whilst the global pandemic has undoubtedly cast up challenges, there are many opportunities for professional service firms who seek to create or improve on their business advisory offerings. Watch out for the hidden rocks and take the opportunity of steering a new course to succeed where others may fall short.
Good luck.
For those of you who would like to read more about the now, where and how of business advisory towards 2025, I invite you to read the full paper which you can download here.
If you have any specific questions about this article, Mindshop, or how we can assist you with business advisory support, please don’t hesitate to drop me a line at jmason@mindshop.com
