Services Safari

Professional Services Lessons

                 Point of View Selling in Professional Services

On June 11 (1 pm EST), Brian Sommer from Vital Analysis will be leading a discussion on Selling Professional Services via a Point of View style. The web-based seminar is being hosted by PSA (professional services automation) vendor OpenAir. Registration information and call-in details can be found at: http://openair.com/WebinarTechVentiveJune8-08.html  .

Title: “Point of View & Other Selling Styles - Winning Sales Practices in Professional Services”

If your services sales teams aren’t delivering the results you desire, maybe it’s the approach they use. Do they engage with the prospect or talk about your firm? Do they come back feeling they’ve validated critical client needs and can develop winning, relevant proposals? If not, attend this short but intense webinar by Brian Sommer. Brian was a long-time, successful Accenture partner who has trained thousands of sales professionals at leading software and consulting firms globally. He’ll discuss a selling style, Point of View selling, that’s far more deadly with CXOs than any other approach. In a tight economy, can you really afford to miss this?

Briefly, Brian will use humor, facts, experience and more to discuss:

    - the four common styles of selling services and where these are most appropriate

    - how CXOs (not service professionals) define how a consultative sale should work

    - the key elements of a point of sale approach

    - what should/shouldn’t go into your sales decks

Detox for Crackberry Addicts

                PricewaterhouseCoopers wants to Slow the Email Deluge

BusinessWeek reported (see: "Can't It Wait Till Monday", 5/19/2008) that audit and tax firm PricewaterhouseCoopers has been asking its employees to work offline on the weekends and not send emails to colleagues until the following Monday. Their thinking is that too many workers are catching up on the prior week's email during the weekend. Unfortunately, with so many people responding to emails on the weekend, they are causing a flurry of new responses (and more work) to be completed on those weekends. In other words, PWC wants to reduce the velocity of weekend email traffic.

I concur with the sentiment of this and wish them luck.

In my zillion years with a PWC competitor, I thought then that the overuse of voice mail and email was out of control and counterproductive. Since then, I watch in horror and amazement as colleagues still with that firm struggle to respond to IMs, emails, voice mails and phone calls while simultaneously listening in to a conference call or presentation.

Let's look at this from the client perspective as they are ones paying the bills for these consultants. When I'm talking to a consultant, auditor or lawyer, I expect that:

• you will give me your total, undivided and uninterrupted attention. If you pull out your laptop to scan emails, you're no longer my client.
• you will take the time, all the time you need, to thoroughly think through my business problem and give it the full attention it deserves. Anything else and you're no professional. That said, I'd rather you lock yourself away in a quiet space and do the research and big thinking you're supposed to be good at. I don't want you interrupted by a hundred, petty and irrelevant outsiders with their irrelevant and distracting points.
• when you attend a meeting at our firm, you will turn off completely your phone, your laptop and other electronic distractions. When you keep all these things on, you send me one clear signal: I'm not as important as other clients, employees, etc. that you want to have interrupt us.

Users of Crackberries and similar devices often confuse immediacy of information (no matter how banal it is) with importance. In fact, many of these individuals see these devices as esteem boosters or products that make them feel and look important. Clients are already paying you a pretty penny. They apparently thought you knew something when they hired you - so - you don't need to impress them anymore. If you think you look cool because you're walking around with a bluetooth headset (I recently saw one person at a trade show with one on each ear) while reading email and carrying on a phone conversation, you're not. In fact, you look like a tool - a pretty hilarious looking one at that.

While it shouldn't be necessary to say so, some of you need to go through Geek Detox. If your briefcase is giving you a hernia because of the weight of the electronic village you're carrying, you need help. If you must blog every minute of your life or think we all care where you are every minute (via Twitter, for example), you're wrong.

If you work for me, I don't want you to email me from your kid's baseball game or recital. I really don't want to be bugged 10 times in a day from you. Solve some of the problems yourself and put the rest in a single call or email to me.  I really don't want to be bothered on the weekend or late at night unless it is really important. I'm not being rude. I'm actually helping you learn to respect both your own time and mine.

I don't believe service firms should promote the disorganized, the frentic, the overworked. Instead, they should promote those who solve problems, work ever more efficiently and get their work done on time. The best people on your team respect their time and the time of others. If you can't get this, call me - just don't email, IM, Skype, etc. dozens of times. I will gladly respond when I'm not working with a client.

What's in a Name?

                Booz Allen Hamilton and Booz & Company

Now that the Carlyle Group's bid for the government contracting piece of Booz Allen Hamilton is going to occur, the new name is being announcement. The government contracting portion will retain the Booz Allen Hamilton name while the remaining corporate consulting practice will assume the name Booz & Company. For more, read this announcement.

Naming a consultancy is a very personable thing to the people within the firm but not so for most anyone else. It's one of the reasons old firms retain vestiges of their original names. Booz Allen Hamilton is 94 years old and both of its entities are keeping some or all of the old name. Andersen Consulting and Arthur Andersen are another example of this trend.

Consulting names can be literal (e.g., Software Installers Consulting Ltd.), aspirational (e.g., Big Results Finance Consultants), founder based (e.g., Dewey Cheatum and Howe) or an empty vessel. The latter is a madeup name that the company hopes to influence on its own. For example, what did Accenture or MarchFirst mean before these firms used them? What's interesting about empty vessels is that they are flexible, morph and adjust to the changing business offerings of a consultancy. Literal names are often straightjackets to consultants.

Booz & Company took an easy, safe approach to its name. I hope they didn't pay anyone anything for it as it is so obvious. But, it should have lasting power. Will the surviving company last as well? Time will tell...

EDS, HP, Booz, Carlyle - Additional Perspectives

                        Handicapping Recent Acquisitions

I wrote about the HP/EDS deal in the Software Safari blog last week. But Frank Hayes over at ComputerWorld has a pretty jarring post about the deal. He opines that:

• a sizeable number of EDS personnel will be let go. HP may accelerate EDS' plans to move more jobs offshore. The merged firm may have more services personnel than it needs. Hayes wonders whether 20, 40 or 60 thousand employees could be cut loose.
• service levels for EDS customers could fluctuate during and after the merger. HP may automate data centers more to reduce operating costs. They may also ship more data center management activities to offshore centers/workers.
• HP may cull the more demanding customers from its ranks.

It's an interesting read, particularly if you're an HP or EDS employee or customer. It's even interesting if you're a competitor of the merged firm.

Another good read is Phil Fersht's piece on the EDS deal. His chief observation is that it might stimulate a number of BPO deals to get done.

The Booz Allen Hamilton/Carlyle Group deal is getting some attention from Washington D.C. types. In a New York Times piece, the $2.5 billion deal is resurrecting feelings that Carlyle Group is using its political connections, etc. again to grab a significant amount of government contracts. The Booz deal makes it easier for them to complete the work as the part of Booz they bought was a such a top notch brand in government consulting.

What's not getting much discussion is the remainder of the Booz business: the commercial consulting practice. This firm, which may not get to use the Booz name, will be a shadow of its former self. It will have to compete with far larger competitors like McKinsey and they won't make it easy for them either. If I could bet on this, I bet that the remaining practice will also be acquired, soon, by another competitor but not until after the remainder loses a lot of good people.

I'd recommend BearingPoint (BE) go after the remaining fragment of the Booz business and do it now before people voluntarily defect in any quantity. BE could use the strategy talent and access to additional clients and client executives. Moreover, the addition of this strategy practice could be quite helpful to both organizations. Interestingly, BE has a pretty large government practice but their commerical sector could benefit from more help.

I don't see most Indian based firms interested in the commercial side of Booz. Contrary to their claims of wanting to build out more high-end services, the Booz commercial business may not fit their business model. It should but I doubt any of these firms will give it a serious look-see.

At the right price, I could see Accenture (ACN) go after the commercial piece of Booz but it would have to be at a really low price and might require the acquisition of the Booz brand. In Gartner parlance, I'd only give that one a 0.02 probability.   

Booz Breakup

                                              Is Booz Getting Split?

                            In what must be the worst kept secret around in professional services, Booz Allen Hamilton is rumored to be selling off its government consulting business to the Carlyle Group. In this story, first-rate publications like the New York Times, Washington Post and others are reporting the impending sale.

In reviewing these reports, it appears that Booz may have:

• to sell its brand name along with the government business
• most of its workforce tied up in the government business
• its steadiest earnings from the government business
• more top executives in its commercial business than its government business

There seem to be a lot of people reporting that:

• the commercial sector accounts for as little as 20% of the firm's $4billion in annual revenue
• the commerical sector generates greater margins (although some persons have vigorously disputed this assertion).
• the company is facing an internal schism between the executives in the two business units

When the top executives within a service cannot agree on a uniform strategy or direction all heck breaks out. I know this well. I am intimately familiar with a situation where:

• partners in one business unit resented the higher incomes that partners in the other business unit made
• those concerned partners saw their ability to control the firm (and their destiny) slipping away as the other business unit continued to grow at faster clip. The smaller but growing business unit would someday have more partners and the balance of power would permanently shift away from the other business unit
• the concerned partners wanted to sell the more prosperous business unit while they still could and recognize a sizeable profit for themselves

For a time, the two partner groups created a solution that created an earnings pool that would transfer some percentage of 'excess' profits to the partners in the lower earning business unit. The two business units were then legally separated with only a miniscule connection binding the firm's earnings together.

That deal eventually unravelled as the lower earning (but well subsidized) business unit used its transferred earnings to create a competitive business to its better run and more profitable sibling. Obviously, this created substantial friction and distrust. Eventually, one Business Unit's leaders had enough and filed for a divorce. Actually, they requested an arbitrator to finish the severing of the two organizations and terminate the excess earnings transfer.

In the Booz scenario, I'd recommend:

• Bring in an outsider, a tough independent person, to arbitrate the issues between the two factions. If Booz really has a 80/20 split between government and commercial business, then the smaller firm may suffer mightily post-split. Booz needs an outsider as no internal executive can play the role of King Solomon or the Great Uniter without any taint of bias to one Business Unit or another.
• When one group of partners think they are going to receive a windfall from selling off one of the firm's business units, bring in a group of Wall Street bankers to explain to them how this really works. Rarely are the benefits as big as the dollar signs in these partners eyes.
• Make sure everyone understands that the both business units must be made whole so that each can operate independently.
• Understand which professional staff and intellectual property will go with each entity post-sale. A lot of career-minded, advancement oriented professionals will not want to work in the business unit you want them to follow. Moreover, don't be surprised when some of them only want to work with the Booz Allen Hamilton branded business unit whichever that one is.

Yesterday, I received my subscription renewal form for Strategy+Business, the excellent magazine produced by Booz. I think I'll wait on renewing until I see how this situation unfolds.

Powerful Analogy

                  The Dead Sea Effect - IT and IT Services

I saw a great analogy used to describe the effect of continued outsourcing, offshoring and staff reductions on IT organizations. It's call the Dead Sea Effect.

This phenomena occurs when all of the best and brightest evaporate (along with a lot of others who are forcibly displaced/jettisoned) and all that remains is a residue that is unable to support life. In the Dead Sea, so much water has evaporated over the millenia that the brackish water that remains is too salty to support hardly any sort of aquatic life.

This metaphor is a powerful descriptor and one that management teams need to consider whenever they are planning significant offshoring or outsourcing initiatives or forced layoffs. 

A Tool to Improve Audits

              Comparing What Execs Say to What They Report

CFO magazine reported on the efforts of an associate professor at Virginia Tech and others to develop a tool to help steer auditors to look for potential fraudulent activity. In essence, this tools compares what executives say publicly and where auditors ought to look for potential fraud.

In a test using a blind pool of business data/results, the database tool identified within a 60-80% accuracy those firms that had committed fraud.

A longer story about this technology can be found on this Virginia Tech website.

Directionally, this is the sort of technology that the audit industry sorely needs and rarely funds. My hat's off to Greg Jenkins and Patrick Fan for devising this.

Think Before You Do That Layoff

                       The Flight of Great Talent Post-Layoff

BusinessWeek (4/21/2008 - "Think Before You Fire") referenced an Academy of Management Journal study of 200 enterprises. The study showed that a layoff of 0.5% of one's workforce triggers an average turnover rate (attrition) of 13% versus a 10.4% turnover rate for firms that didn't do layoffs.

Professional service organizations must constantly prune underachievers/poor producers from their ranks as their continued payroll presence is a financial and morale drain on the company. Poor performers do more to demoralize their peers than any other single act by management save a massive layoff. Even in the face of massive PR problems, the people of Arthur Andersen were willing to publicly support their employer as they believed in each other and the firm.

Layoffs are toxic to morale and workers. That's very true and I'm surprised the variance in the study wasn't greater. One thing is for sure though, once a company lays off workers, the very best and brightest workers will leave for greener pastures. In fact, they'll leave first as they are the people that every other employer wants. Post-layoff, all a company has left are the lesser grade employees. The lesson from this is that layoffs are short-term fixes that create long-term/long-lasting distrust with the rank and file.

Oh, the Things Auditors Do....

    Take a Tour on the Public Company Accounting Oversight Board Site

The PCAOB was setup by the US Congress as part of a number of post-Enron, SarbOx changes. The website, www.pcaobus.org is interesting although the age of some of the documents on the site would leave one to believe that:

• it takes years for this august group to make a decision
• change is really slow in the world of auditing

There are some nuggets in there, though. If you'd like to read about a Deloitte case, it's there. There are disapproval notices (although the most recent is 2005). One disappointing section of the site is the News/Events page. Most of the announcements deal with speeches someone is giving or accounting pronouncements.

For a group that was spawned from the tumult of Enron, there seems little relationship between its origins, it's raison d’être, and what they are doing. I'm still not sure how pronouncements and board or staff appointments are preventing more Bear Stearn collapses. In fact, I didn't immediately see anything on the site that addressed SPEs (special purpose entities) or CDOs or other instruments found in the Enron and/or Bear collapses.

Is this group effective? I'm not convinced. Comments?

see also Forbes 4/21/2008 "Auditing the Auditors".

Ouch - The Cost of Roaming

                              $693/Trip Roaming Charge

Vinnie at Deal Architect loves to chide service providers/systems integrators and outsourcers for their high SG&A costs. Likewise, Jason at Spend Matters is all about helping companies get a better grip on their expenses. When I saw this piece in the March 2008 issue of Communication News, I just about fell out of my chair.

The story reports on a Harris Interactive study that found businesses paying $693 per trip per business traveler for overseas cellular roaming. Worse, 61% of responding firms indicated that they had no plans to switch their overseas providers to reduce this cost.

If my employees submitted a bill like these, they'd be unemployed. Far lower cost options are available and should be used. Since almost any office or hotel they stay at will have internet access, Skype is clearly a lower cost option. Second, local SIM cards can be acquired for those essential calls that must be made locally. But, any employee that plans to use his/her cell phone overseas needs to do some homework in advance of the trip. Some carriers in the US will not allow calls to originate overseas. Some phones promise GSM compatibility but those claims are often in error. Some networks, I've discovered, don't work with anything we could pre-purchase in the United States.

Still, I've managed to survive just fine overseas without incurring bills of anything like those mentioned in this article. This is coming from a fellow who has logged as many as 48 international round-trips in a single year.

This looks like a ripe opportunity for sourcing pros to get involved.