This article is for coaches who work with Business Leaders who want some real business numbers and such, as the foundation of the coaching experience. I am using the 80/20 rule applied to Professional Firms as an example. The conclusions apply in most business situations.
The pundits have been saying forever that it is highly likely that 80% of the revenue earned at Professional Firms (like Accountants, for instance) comes from only 20% of their clientele. And yes, some say it is more like 70/30, but the principle remains.
Further analysis suggests, then, that 20% of the profits come from 80% of their clients. But is that really so? Let’s see, on a per dollar of profit basis, we have more staff, more office space, more computers, more paper. Some studies show that the best 20% of the clients actually generate over 100% of profits – meaning the other 80% are actually costing money. At best, some say, they constitute a zero addition to profit, yet are 80% of the clients. Hmmmm?
So let us parse out the goats from the sheep and somehow get distanced from the mass of clientele that produce that measly 20% of revenue and none of the profits (in some cases actually erode profit). The pundits all applaud. Then they say now just concentrate on better serving the high profit group, the ones who remain. After all, there is suddenly more time on hand. Serve them well, over-deliver, make them feel embarrassed by how little they are paying. The idea is that two things will happen. One is that they become so pleased that they ask the Firm to do more good profit work for them. Two is that they become so pleased that they become rabid fans and tell everyone they meet how wonderful the Firm is. Their Net Promoter Score goes up. They get introduced to new clients against a backdrop of a very strong referral.
Simple?
Maybe not so simple. The success of this seemingly great idea pivots on increasing what is delivered to present clientele. But what if that requires ‘selling’? “Yuk”, is what most people say and feel and the selling does not happen, even though they already know these clients. It comes back to answering the question of, ‘exactly how’ does one over–deliver, etcetera and do it without the squirm of selling? Most people become deer in the headlights at this point. Oh sure some brainstorming and flip charts and excitement (alcohol is often involved) ... but a few weeks later, not much. It may sprout but it rarely grows. Yet this over-delivering is the nexus of it all. If the Firm doesn’t do that, and not just a one shot deal here, if they don’t over deliver on a consistent basis they may soon be foraging through the garbage bin for the contact info on those goats.
Think of the typical consulting model. Invitation to solve ‘big problem’, followed by intense application of high expertise, followed by thick report and invoice. End. What if the consultant could be thoroughly involved at the company strategy and planning and problem solving sessions, be right there in the Boardroom? Would that make a difference to any part of the typical model? What if the solution that the consultant recommended was actually derived mostly from listening to and interacting with the Principals of the client company? Refine their solutions. What if there were weekly contact, an accountability and tweak the implementation and get past the potholes kind of contact, for the foreseeable future, even out to many years? Yes, every week. (starting to sound familiar to us coaches, eh) What if that session in the Boardroom was not a singular annual event, but every few months, where ‘few’ could be one or whatever number of months suited to the company involved, and was scheduled out, for instance, two years, a schedule that was continuously updated? What if the consultant was actually a coach and facilitator instead? Something changes.
The ‘something’ is that the ideas of analysis and strategizing and planning and accountability become the culture of the company. Profit increases. And by the way, YOU get to lead it. They are flying and seeing you as a material part of the reason for flight. Now we have the situation that the pundits speak of. The coach is vital to the business, welcomed, involved, in the midst of it all and expected to be so for the long haul.
How? By introducing, as appropriate, a systemic increase in analysis and strategizing and planning and accountability to their, and your, existing clientele. Not rocket science but it has not been accomplished with any consistency… until now. Baker Tilly, one of the top ten Accounting Firms in the world, took on the challenge of sorting this out. HWL Innovation Ltd is the arm of that company dedicated exclusively to increasing the profits of Advisory Firms through the introduction and ongoing use of systemic support tools, tools that ‘facilitate the ask’ and work ‘beside’, and that have been proven again and again to make the promise of 80/20 come true for the clients of Advisory Firms and btw for you too, the business coach. Selling is not needed.
I have become involved with this system because the underpinnings are coaching, yet there is this lovely business eye of analysis and a gently relentless and public, accountability that injects a huge dose of objective business measures plus business energy into the coaching without in any way compromising the essence of what a coach brings to the party. It has surprised and pleased me in offering just the right parts of it to existing clients. Doing so has caused some to invite others on the Executive team to interact with the numbers and with me. It has provided me a wonderful lever when I introduce myself to potential new clients. What’s wrong with this picture? Nothing, it is all good.
Joseph Seiler CPCC PCC has been a Professional Business Coach since 1999 and uses the byline Coaching the Best in Business (and those who could be). Joseph was one of the founding members of Coaches Canada which has become Coach Spotlight.
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Joseph Seiler Joseph inspires people. Folks catch his enthusiasm, love his zest for life and grow from his Acceptance and encouragement. He has experienced many an adventure, including buying and selling companies, running his first a marathon at age 47 and authoring a book. Full Profile & Contact Information...
Tanya Geisler, CPCC
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Pearl’s clients become better leaders, and better people. They are better at having the real conversations that create results. They are better at moving their organization towards the changes they believe in. They are working more collaboratively and learning to thrive in teams and partnerships.
Brett McBurnie comes to coaching from a diverse and unique background. Born in Toronto in 1951, he attended school in East York and eventually went on to study Classical Studies (Greek and Latin); at the University of Toronto , with the purpose in mind of pursuing a general but well rounded education.
Bob is President and Co-founder of Synchronicity Performance Consultants, that has coached some of North America's most successful financial advisors for the past 14 years.
