Achieving Aggressive Growth in Tough Economic Times
Tuesday, December 09, 2008
By Wilbur Swan
The downturn in the economy has businesses of all sizes rethinking their growth strategies, whether they are in manufacturing or professional services. Some organizations are not even sure if they can keep their doors open, let alone grow in these tough times.
Yet studies confirm that successful leaders are not afraid to invest during recessions. According to the June 2002 issue of McKinsey Quarterly, “Some companies emerge from a recession stronger and more highly valued than they were before the economy soured.”
The report concluded that by making strategic investments, these businesses can increase their competitive position relative to those of their peers and gain more power to shape their industries.
While companies who see only risk during a recession tend to batten down the hatches, more successful competitors find opportunities and press their advantages. As the report asserts, companies should consider that managing risk doesn’t mean avoiding it all together.
So, if the experts assert this is a good time to strategically invest in your business, the next natural question to follow is: How do you invest wisely? How do you continue to grow?
Increased advertising, direct mailings, a better Web site or other traditional marketing are worth considering, but they may not produce the best return on investment when your prospect’s attention is focused on the Dow’s roller-coaster ride.
Capitalize on Existing Resources
Particularly in down times, firms rely most heavily on trusted relationships to generate and secure revenue. Oftentimes, data regarding these relationships within a firm is stored in a customer relationship management (CRM) system.
Other firms may rely simply on a Microsoft Outlook contact database and e-mail, or even spreadsheet upon spreadsheet of client and prospect data.
But while CRM, Outlook and related systems can help you manage your contacts, other solutions go further to help you manage the entire enterprise across a global field and capitalize on those resources.
Bill Penczak, chief marketing officer for Chicago-based UHY Advisors, a member firm of UHY International, which comprises 98 firms across 66 countries, understands the need to take that next step, and is currently investigating such a solution for his firm.
“Twenty years ago, business development for an accounting firm meant the partners sitting around a table on a Friday afternoon, discussing who they met with that week and who they were going to meet with the next week,” he says, “and figuring out if anyone at the table had a connection with any of the people mentioned. They just formed the connections organically among themselves.”
Penczak adds that today, with sometimes hundreds of managing directors in a firm, the Friday afternoon chat is obviously impractical.
The relationships have grown exponentially along with the number of people in the firm; however, the need for relationship management has not changed. “The way we apply relationship management certainly has changed, though,” he says. “You simply have to have the technology to be able to do the same sort of thing they sat around the table and did in prior times.”
The tax and business consulting firm of UHY Advisors, with 900 professionals across 20 offices, currently uses a number of tools that enable its practice areas to collaborate throughout all of its offices around the country. Penczak says, though, “We need to take relationship management to the next level in order to improve business development, cultivate contacts through our referral network, stay in touch with current clients and move warm leads to hot leads – across the board and throughout all of our offices in Texas, New York, the Central U.S., New England and the Southeast.”
Working toward that, Penczak is evaluating an Enterprise Relationship Management (ERM) system that will allow the firm to mine contact data based on industry sectors as well as the specialty skills of individuals in the firm, enabling users to determine where expertise and industry or company connections exist within the firm.
Taking Relationship Management to the Next Level
ERM systems can enable a firm to understand its extended relationship network to leverage strategic relationships to grow business in every office.
These systems analyze internal data, including address books, CRM systems, e-mail traffic patterns, human resources records, and time and billing systems to understand and map all relevant relationships.
Whether yours is a global or regional firm with aspirations for growth, you may experience these data challenges, and an ERM system may be the solution to address your needs.
These are precisely the reasons why Scott Jensen, director of sales for the accounting and consulting firm of Moss Adams, is looking at an ERM system as well.
As head of business development efforts for 20 offices on the West Coast, in Albuquerque, N.M., and in Phoenix, Jensen’s charge is really business development, or the integration of service, sales and marketing.
“People say that my job is to go out and get new business, and that’s true,” he explains. “But the way we do that is by focusing on relationships. All things being equal, if every firm meets the requirements of the client, how does the client make the selection? The difference really comes down to that personal connection and the trusted advisor role.”
As the 11th-largest accounting firm in the United States and the largest on the West Coast, Moss Adams has achieved its success, according to Jensen, thanks to its expertise in a range of industries. He believes even greater success can be achieved with the implementation of a relationship management system.
“We aren’t communicating as effectively as we could be with our clients and across the firm,” he says. “One of the great things about ERM solutions is their ability to map relationships to every client and every prospect. We have a lot of contacts within the firm, but if we don’t know who they are, there is no way we can access or benefit from them.”
Jensen gives the example of a firm wanting to pursue Company XYZ, but not really knowing anybody at the business – or at least not being aware of a relationship that may exist.
“If we know we want to pursue Company XYZ, using an effective relationship management system, we would be able to learn, for example, that a peer partner lives next door to the company’s controller, and we would have a relationship connection. But without a way to track that information currently, we don’t have the ability to make that connection. It ends up being hit-and-miss.
“What we do get a lot of times,” he continues, “are e-mails that flow completely around the firm, ‘Does anybody know anyone at such-and-such company?’ And that is a very inefficient way to try to access the strength of relationships we have, and it doesn’t document or share the relationship information with others.”
Identifying the Right Solution
Both Jensen and Penczak see a new relationship management system as part of the solution to their current, respective business development needs.
The key, Penczak says, is a solution that works with the technology they currently have in-house – that is easy to use and leverages their existing investments in related systems. “It really boils down to how quickly and easily we can implement the system and how well it is serviced,” he adds.
With big dollars at stake in the form of new business and revenue gained or left uncovered, these firms can use their existing relationships to aggressively sell and potentially take business from the Big Four firms by making use of resources they already have in-house. They simply need to tap into those relationships effectively.
Relationships, while intangible, are one of the most valuable assets of any firm. As the accounting industry continues to mature and better technology becomes available for managing relationships, the sophistication of using relationships as a strategic asset leads to greater business successes.
The success of ERM systems has been impressive. In just the last two years, over 70 of the largest professional services firms – in consulting, banking, advertising and investment management – have adopted the systems for social networking and relationship management.
More and more firms are putting these assets to work to make the best use of their many business connections. The results can be truly impressive – and revenue generating.