The next big downturn may or may not be just around the corner, but when it comes, and it will, will your firm be ready?
Many would argue that the next Great Recession, or worse, is just around the corner. It may feel like a long way off with the Dow Jones soaring, firms overloaded with work, and the biggest problem being the recruitment of qualified individuals. But now is the time to figure out how to position your firm to thrive in the next downturn.
What is the difference between the firms that succeed in troubled times and those that don’t? The successful firms are market leaders and thought leaders that know how to take care of clients. And being in that position is more about who you are than about what you do. It is your value set and principles that inform your actions which, in turn, attracts talent and clients. This is not a comprehensive list, but let’s talk briefly about a few things that your firm can do to become recognized leaders long before the downturn starts.
- Removing friction for clients. If you want your clients to be passionate about your firm, the key is to remove obstacles in their lives. Keep it simple. What are the roadblocks your clients face when buying your services, figuring out what you do, or contacting you? When was the last time you updated your website and social media? Each step that makes your clients’ lives more difficult or time consuming leads to decreased motivation to do business with you.
- Organize your firm to align by market sector rather than geography or service discipline. The first step in the process is to identify the specific market sectors that make sense to establish as areas of differentiation. Once determined, the next step is to identify market sector leaders within your organization who will function as the “CEO” of the market they lead. They should be visible on panels, in white papers, and on the firm’s website or blog. They will be charged with creating business plans that will be presented to the firm. These annual business plans should include financial projections, staffing needs, marketing opportunities, expansion initiatives, and research into their market sector’s evolving challenges for the clients served. It will become a retention, recruiting, and staff development tool as well as an accountability tool.
- Cultivating discipline to achieve greater freedom and flexibility. A firm that has disciplined standards and procedures allows a firm to operate as a flatter organization and requires less centralized decision making. This frees up leaders to think more strategically and employees do not feel micromanaged. A careful balance must be maintained to ensure that discipline does not impose artificial constraints or restrict thought, but contrary to what you might be thinking, this approach will allow you to be more flexible, adaptive, efficient, and creative. Operating within a set boundary, you can change people, plans, or leadership on a project because each person understands the expectations.
Implementing these ideas will position your firm as a recognized leader and will differentiate you from your competition. They will also help you survive troubled times and build a scalable organization.
Phil Keil is a consultant with Zweig Group’s M&A services. Contact him at email@example.com.