Mind the 'Alignment gap'
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1) The document discusses alignment gaps between firm-wide leader expectations and marketing/business development capabilities during the pandemic, based on a survey. 2) The survey found that while traditional marketing/BD services require minor enhancements, larger gaps exist for commercial advisory skills like developing new services and pricing strategies. 3) The largest gaps were for sourcing new client opportunities and direct client approaches, indicating a need for recruiting specialists or consultants in sales and business development. 4) The Managing Partners' Forum chair recommends more frequent communication between marketing/BD directors and firm-wide leaders to ensure resources are aligned with shifting needs in the volatile market.
Mind the 'Alignment gap'
- 1. 12 pm | Winter 2020 research report A n essential part of any profes- sional services marketer’s role is aligning with stakeholder expectations. Understanding these and ensuring the function is meeting business requirements while advising on best practices is critical for the success of BD and marketing teams, and for the businesses they advise. In many firms, BD and marketing directors have historically checked-in on needs and provided recommendations on resourcing and investments primarily during annual planning. The impact of Covid-19 has been to rapidly move markets, creating much uncertainty and regular change. Not surprisingly, require- ments for BD and marketing services have also shifted substantially. In certain situations, this has created a sizeable ‘Alignment Gap’ between what firm-wide leaders want today, and existing capabili- ties in some areas. More frequent reviews of market conditions and how the func- tion fits business need are now required. Our survey says… A survey of firm-wide leaders by the Managing Partners’ Forum shines new light on pandemic-era supply and demand for marketing and BD services in the professions. Thirty-seven such leaders responded to the study in November. They identified numerous areas where limited additional assistance is now needed, and five where supply more significantly lags demand. ‘Traditional’ BD and marketing communications Four key areas were highlighted in the ‘traditional’ BD & MarComms discipline, more time on their hands with home- working and less billable hours, this pres- ents an opportunity for the function to have ‘face time’ and provide advice on best practices. Again, resourcing tweaks may be required, and perhaps external training support may be useful. In summary, survey respondents report that ‘traditional’ BD and MarComms disci- plines require only incremental enhance- ment, which is likely deliverable with redeployment of resources and learning opportunities in many situations. Commercial advice Commercial advisory skills in some firms rest in dedicated Strategy groups. In others, this skill set may sit with M&BD teams. The Alignment Gaps between supply and demand in this discipline (shown in orange on the graph) are greater than for traditional services, implying a lack of resource in many groups. Advice on ‘Developing New Services’ showed a 21% gap, suggesting that numerous firms are simply not receiving sufficient support in this area today. There is likely a need in certain functions for recruitment or use of external consultants to rapidly bring in professionals who can help formulate new commercial opportunities to serve clients. Advice on ‘Pricing’ shows a gap of 14%. Given that many firms are today seeking to win work in challenging and highly competitive markets, this need is perhaps unsurprising. In some teams, such expertise may rest with senior BD staff, but in others, this may be an area where additional resources or training may be required. Finally, a 10% gap has M&BD directors willing to advise leaders to act quickly to resolve specific alignment gaps will give their firms the best chance of winning market share. Mind the ‘Alignment Gap’ Firm-wide leaders’ expectations have shifted during the nine months of the pandemic. Leor Franks believes that regular communication is required to ensure the right resources are in place. (shown in green on the graph). Firstly, ‘CRM’ support around maintaining and updating client data was identified as pretty much in line with current demand, with a narrow Alignment Gap score of 6%. This suggests that CRM teams are performing well, and only a little more assistance in this area is required in today’s environment. The next two typical BD services on ‘Pitches’ and conventional ‘MarComms’ work on events and collat- eral also show a small gap of 6%. Given the recent upturn in market activity levels, this is not unexpected. As many firms had trimmed back on spend and resource earlier in the year, additional work is now needed to catch up. The action required in this area is therefore likely to be some limited fine-tuning of resourcing. Next, ‘Coaching of fee earners’ on BD activity showed an 8% gap. Given that in some firms, front line staff may now have This article originally appeared in PM magazine. For further details go to www.pmforum.co.uk
- 2. pm | Winter 2020 13 research report short term, often reviewing internal func- tions. But experience shows that merely maintaining, let alone expanding, market share in difficult conditions requires investment, rather than cuts, in functions such as M&BD. Data from the survey shows that funding is most urgently needed beyond ‘traditional’ core disci- plines, where resources are seemingly already on hand. Instead, new hires, training or consultants are required by many practices in areas that either directly ‘touch’ clients, or those that provide intelligence on market opportu- nities. Today, the professional services industry press teems with stories of firms reconfiguring fee earners to meet growing demand. Restructuring teams are staffing up, often redeploying professionals from adjacent service lines, eg. transactions, where volumes may be down. Similarly, disputes focussed practices are seeing a sizable uptick in case load as the fall-out from the early months of the pandemic becomes clearer. And overall law firm revenues, for example, which fell substantially in the first phase of the crisis, picked up over the summer period, only to fall back again in the autumn. Having only recently cut costs, firm- wide leaders will understandably pause for thought about hiring senior non-fee earning individuals at a time when revenues are unpredictable, partners are under pressure, and drawings are being restricted. But forward-thinking leaders may be willing to act strategically for the long term and commit to such invest- ments today. In many cases, it will be for M&BD directors to push this point of view. Based on precedents from the dotcom crash and financial crisis, firms able to make focussed spend now are the most likely to not only defend existing market share but potentially win clients from those in retrenchment mode. The challenge in many firms is the understandable need to build consensus and seek buy-in for investment. But today, perhaps bold, decisive action is required to succeed in these difficult times. M&BD directors who are willing to advise firm-wide leaders to act quickly to resolve specific alignment gaps will give their firms the best chance of winning market share now, and in the future. also been identified around ‘Change Agent’ skills. This, in certain environ- ments, sits within HR or Strategy func- tions and is in demand today as practices seek to keep pace with volatile and unpre- dictable market conditions. Firms will likely now want to look to bring in new hires or consultants to remedy these gaps, or at least supplement existing colleagues with training, as current staff may not have the skillset to provide such advice and assistance. Sales support ‘Sales’ is often a controversial term in conventional professional service firms. Leaving the debate on nomenclature aside, firm-wide leaders identified the largest Alignment Gaps in two key areas (shown in red on the graph). Firstly, around ‘Sourcing’ of new client opportu- nities – intelligence gathering and research services to bring potential assignments to the attention of fee earners. Here a sizeable gap of 30% is shown, identifying that many respon- dents are being significantly underserved in this area. And secondly, a 24% gap in ‘Direct Client Approaches’, where BD staff personally enter the market to build relationships and win work. In a period when many fee earners may have less client-facing projects coming in than at other times, provision of such advice and support would typi- cally be well received. The large gaps in these two areas are most likely due to historical planning decisions, in that indi- viduals with research and sales skills are often not on staff in conventional BD and marketing teams. The urgent need for recruitment of specialists, or the use of consultants in this area (there are a number of good quality firms operating in the industry) is particularly clear. What next? In my role as Chair of the Strategy & Marketing Group of the Managing Partners’ Forum, I have had the opportu- nity to discuss such challenges with numerous M &BD directors. Collective experience suggests that insights such as the above, in the worst-case scenario may lead to rather unconstructive partisan ‘finger-pointing’. Is the gap the conse- quence of poor listening and planning on the part of the ‘supply-side’, ie. function directors? Or is it a result of insufficient vision and investment from the ‘demand- side’ of firm-wide leaders? In most situa- tions, the reality may be a combination of the two, amplified by the fast-moving nature of the markets this year. A little more than nine months ago, the majority of BD directors and firm- wide leaders were feeling comfortable amidst strong trading conditions. The sudden shift has, as with past economic crashes, exposed the need for improved communication and greater flexibility and variety of skills. In many firms, annual planning for resources and invest- ments was the norm. Today, Finance functions will no doubt be forecasting revenue and cash balances on a monthly or even weekly basis. M&BD directors should now be checking in with leader- ship with increased regularity to ensure the Alignment Gap is narrowed, and wise counsel is provided as needs flex. In a highly volatile, unpredictable market, countless firm-wide leaders have, however, been looking to cut costs in the Leor Franks is CMO at Augusta, and Chair of the Managing Partners’ Forum Strategy & Marketing Group.