A-E of cultivating a culture of relationship management
On 1st July I went along to the lovely riverside offices of Norton Rose in More London to help lead a discussion on the topic of relationship management for a group of senior marketers and HR practitioners from legal, property and accountancy firms at the Managing Partners Forum. I co-presented with Christopher Masters, presently Director of Marketing and Business Development at sjberwin. Whist I am not at liberty to describe what Christopher said or to disclose some of the really interesting points raised during the discussion, I can share the main points that I used to open the debate.
Why is relationship management so important?
The reasons why relationship management is so critical to a professional firm are obvious but for the benefit of the HR people present we touched on the impact of a consistent high quality service on reputation, the economics of retaining and developing existing clients (rather than chasing new ones), sustainable growth dynamics and the role of service delivery (of which relationship management is a key element) in differentiation and branding and thus profitability.
So why is it so difficult?
If it’s motherhood and apple pie – why is it so difficult? I mentioned that the misunderstandings about CRM technology often poisoned the entire debate about relationship management behaviours and that sometimes the purpose of relationship management (service enhancement, client intimacy, cross selling etc) gets confused. Many nodded when I mentioned the silly situation where those often best able to help with relationship management – marketing and business development people – are kept away from the clients. Talk about keep a dog and bark yourself.
We touched on the difficult transition that many fee-earners have to make when it comes to moving from technical specialist to account manager role and the lack of structured skills training programmes that provide practical guidance on relationship management (and selling and account management) behaviours. And, of course, the pressure to record billable work making it hard to justify time spent developing relationships – particularly if the results are not immediately apparent and they may ultimately go to a different department or office. We also mentioned the “dinosaurs” that might lurk in the practice who will insist on clinging to the way that they have done things since time immemorial.
And we thought about how good relationship behaviour is so hard to define (although we are pretty sure when we witness bad relationship behaviour) – and, to make matters worse, how it can vary so dramatically depending on the particular individual at a particular client organisation.
I mentioned that many years ago I formulated an acronym to summarise all these barriers – MICROSCRIPT (TM) - motivation, interest, complacency, reward, ownership, skills, culture, risk, information, politics and time.
What can we do? An A – E guide
To provide a framework for the subsequent discussion I outlined five areas which I have found, from experience, will help embed the relationship culture within a professional firm.
A is for Aims
Set objectives to gain buy-in from senior management, manage expectations and help you select the right strategies and programmes. Provide an analysis of the expected return on investment – whether this is in terms of increased fees, improved profitability and/or reduced cost of winning new clients. Knowing your current position makes it possible to set SMART objectives against which the programme can be measured. A key element of this exercise will be to identify those clients where relationship management improvement is to be targeted – so client categorisation and profiling, key client analysis, client dashboards and relationship mapping may be used as well as historical and service line financial analysis. I mentioned several examples but drew attention to the time that can be involved – one firm took six years to get the average client revenue amongst its top 250 clients from £75K to £370K.
B is for Behaviours
Identifying, encouraging and propagating the right behaviours that exist within your practice was felt to be a good way to avoid the “top down” approach of trying to impose a system from the marketing, business development or client service team. The importance of focusing on the seniors – who sometimes pay lip service to such initiatives – was mentioned as being important to set good role models that younger professionals will follow.
I talked about my experience at a large property practice where we had “sitting down with Bob” sessions to get a senior partner with exemplary relationship management practices to share his knowledge, insights and approaches in the context of specific, real scenarios. The difference between strategic and day-to-day operational relationship behaviours was discussed. Mentoring, buddy systems and action groups were noted as ways to help fee-earners work together and motivate each other. The use of pilot projects, training and one-to-one coaching were considered as ways to provide a safe environment for senior partners experimenting with “risky” (to them) behaviours and for youngsters to break down the process into bite sized pieces. Mirror and match programmes for major clients helped include younger members of the team in the relationship management process.
C is for Carrots and Compensation
Most agreed that the present reward systems – whether the annual appraisal and pay increase systems or the partnership promotion track – often worked against the relationship management culture although property practices were felt to have more flexible systems to encourage the right behaviours. The need to avoid purely negative communications about relationship management (i.e. where it goes wrong) was balanced with the need to see regular, positive communications about where relationship management is working effectively. Systems for recording blue and green time (short term billable hours, long term business development hours), bonus systems on internal referrals, league tables for client satisfaction scores improvement, reduced fee targets for relationship partners and time/agenda allocation for relationship management at all meetings were also touched on.
D is for Development programmes
Firms need to be explicit about what is expected of its fee-earners and this needs to be articulated in best practice guides and training programmes – and tailored to the different levels of experience and seniority amongst fee-earners and with special support for those with specific relationship responsibilities. Sometimes there was confusion about how selling and account management training fitted into programmes that taught client care, service delivery and relationship management skills. The use of service storybooks, relationship legends, reverse client seminars and structured, focused workshops were explored. The need for marketing/business development to work closely with human resource and training teams was stressed.
E is for Establishing systems
To truly embed relationship management into a firm’s culture requires systems to be established that measure both the effort invested and the results. Capturing, managing and sharing the information to support such systems can be a challenge as can the processes to prompt, remind and chase further action. Without established systems, there is a danger that relationship management becomes “this month’s initiative” and quickly loses momentum.
Monthly reports that show progress against relationship goals should be as important as the monthly financial pack. Some firms have used the balanced scorecard approach to ensure that client measures are considered with the same importance as financial, process and people measures. The fact that larger firms, particularly the accountants, employ highly paid account and relationship management staff to work alongside fee-earners shows how far some will go to embed the right relationship behaviours.
Why is relationship management so important?
The reasons why relationship management is so critical to a professional firm are obvious but for the benefit of the HR people present we touched on the impact of a consistent high quality service on reputation, the economics of retaining and developing existing clients (rather than chasing new ones), sustainable growth dynamics and the role of service delivery (of which relationship management is a key element) in differentiation and branding and thus profitability.
So why is it so difficult?
If it’s motherhood and apple pie – why is it so difficult? I mentioned that the misunderstandings about CRM technology often poisoned the entire debate about relationship management behaviours and that sometimes the purpose of relationship management (service enhancement, client intimacy, cross selling etc) gets confused. Many nodded when I mentioned the silly situation where those often best able to help with relationship management – marketing and business development people – are kept away from the clients. Talk about keep a dog and bark yourself.
We touched on the difficult transition that many fee-earners have to make when it comes to moving from technical specialist to account manager role and the lack of structured skills training programmes that provide practical guidance on relationship management (and selling and account management) behaviours. And, of course, the pressure to record billable work making it hard to justify time spent developing relationships – particularly if the results are not immediately apparent and they may ultimately go to a different department or office. We also mentioned the “dinosaurs” that might lurk in the practice who will insist on clinging to the way that they have done things since time immemorial.
And we thought about how good relationship behaviour is so hard to define (although we are pretty sure when we witness bad relationship behaviour) – and, to make matters worse, how it can vary so dramatically depending on the particular individual at a particular client organisation.
I mentioned that many years ago I formulated an acronym to summarise all these barriers – MICROSCRIPT (TM) - motivation, interest, complacency, reward, ownership, skills, culture, risk, information, politics and time.
What can we do? An A – E guide
To provide a framework for the subsequent discussion I outlined five areas which I have found, from experience, will help embed the relationship culture within a professional firm.
A is for Aims
Set objectives to gain buy-in from senior management, manage expectations and help you select the right strategies and programmes. Provide an analysis of the expected return on investment – whether this is in terms of increased fees, improved profitability and/or reduced cost of winning new clients. Knowing your current position makes it possible to set SMART objectives against which the programme can be measured. A key element of this exercise will be to identify those clients where relationship management improvement is to be targeted – so client categorisation and profiling, key client analysis, client dashboards and relationship mapping may be used as well as historical and service line financial analysis. I mentioned several examples but drew attention to the time that can be involved – one firm took six years to get the average client revenue amongst its top 250 clients from £75K to £370K.
B is for Behaviours
Identifying, encouraging and propagating the right behaviours that exist within your practice was felt to be a good way to avoid the “top down” approach of trying to impose a system from the marketing, business development or client service team. The importance of focusing on the seniors – who sometimes pay lip service to such initiatives – was mentioned as being important to set good role models that younger professionals will follow.
I talked about my experience at a large property practice where we had “sitting down with Bob” sessions to get a senior partner with exemplary relationship management practices to share his knowledge, insights and approaches in the context of specific, real scenarios. The difference between strategic and day-to-day operational relationship behaviours was discussed. Mentoring, buddy systems and action groups were noted as ways to help fee-earners work together and motivate each other. The use of pilot projects, training and one-to-one coaching were considered as ways to provide a safe environment for senior partners experimenting with “risky” (to them) behaviours and for youngsters to break down the process into bite sized pieces. Mirror and match programmes for major clients helped include younger members of the team in the relationship management process.
C is for Carrots and Compensation
Most agreed that the present reward systems – whether the annual appraisal and pay increase systems or the partnership promotion track – often worked against the relationship management culture although property practices were felt to have more flexible systems to encourage the right behaviours. The need to avoid purely negative communications about relationship management (i.e. where it goes wrong) was balanced with the need to see regular, positive communications about where relationship management is working effectively. Systems for recording blue and green time (short term billable hours, long term business development hours), bonus systems on internal referrals, league tables for client satisfaction scores improvement, reduced fee targets for relationship partners and time/agenda allocation for relationship management at all meetings were also touched on.
D is for Development programmes
Firms need to be explicit about what is expected of its fee-earners and this needs to be articulated in best practice guides and training programmes – and tailored to the different levels of experience and seniority amongst fee-earners and with special support for those with specific relationship responsibilities. Sometimes there was confusion about how selling and account management training fitted into programmes that taught client care, service delivery and relationship management skills. The use of service storybooks, relationship legends, reverse client seminars and structured, focused workshops were explored. The need for marketing/business development to work closely with human resource and training teams was stressed.
E is for Establishing systems
To truly embed relationship management into a firm’s culture requires systems to be established that measure both the effort invested and the results. Capturing, managing and sharing the information to support such systems can be a challenge as can the processes to prompt, remind and chase further action. Without established systems, there is a danger that relationship management becomes “this month’s initiative” and quickly loses momentum.
Monthly reports that show progress against relationship goals should be as important as the monthly financial pack. Some firms have used the balanced scorecard approach to ensure that client measures are considered with the same importance as financial, process and people measures. The fact that larger firms, particularly the accountants, employ highly paid account and relationship management staff to work alongside fee-earners shows how far some will go to embed the right relationship behaviours.
