The single biggest mistake in professional services
Whether you're a lawyer, an accountant, a consultant, or your role falls in the umbrella of 'professional services' of any kind, there's a really simple equation you should make yourself familiar with. By (drastically) simplifying the complexity of the profitability of your firm, we can produce this key commercial calculation:
Opportunities × Results = Revenue
The commercial success of your firm relies, at heart, on its ability to do two things:
Create commercial opportunities
Deliver valuable results
If you're a practicing lawyer, or a CPA, or a consultant, there's really no doubt that you deliver valuable results day-in, day-out. That's your job. Your KPIs closely monitor your ability to deliver results. Your performance reviews are largely based around your contributions in this space.
And (not "but", and) that's usually not enough to get to partner. It's usually not enough to generate the personal income you need to reach individual financial independence by the age of 50. It's usually not enough to grow a thriving firm.
Because, a firm filled with people that that only deliver results will almost always struggle to grow. By definition, valuable results can only be delivered if the opportunity has first been created. My growing years of experience in this space continue to reinforce a fundamental fact about the ecosystem of professional services:
There's an oversupply of people great at delivering valuable results, and a large and growing vacuum of talent able to create commercial opportunity.
Thriving firms have lots of people in their employ who create commercial opportunities, which sets them apart because such people are few and far between in the market more broadly.
In my Real Speaking Returns keynote, I invite members of the audience to estimate what percentage of their time/effort/energy is devoted to each half of the key commercial calculation. For most (often all) contributors below the partner level, this is immensely one-sided. They often respond “0 and 100”, or “1 and 99”.
Meaning, they devote all of their time, effort and energy to delivering results, and basically none to creating opportunities.
In my opinion, allowing this imbalance is the number one mistake made (by both employers and employees) in the professional services space.
Firms need to rethink how they train, support, and measure the performance of staff. Most critically, they need to create time and space to allow their people to invest in creating commercial opportunities. It's harder to measure success on this side of the equation, but that doesn't make it less important.
Individuals need to rethink how they devote their time, effort and energy into their work, in order to produce the best results for themselves personally, and for the firm more generally.
Imagine what your firm might look like if even just 20% of the workforce was upskilled and empowered to spend even just 5-10% of their time and effort in creating commercial opportunities. Imagine what your career might look like if you contributed a meaningful percentage of the commercial opportunities created every year, and how important that would make you and your contribution.
To ignore it is to make the biggest mistake in professional services.