Expertise Marketplace - Professional Service Firm Marketing Blog

Would Market-Based Management Work for PSFs?

Most PSF marketers spend their careers working to move their companies to embrace more nimble marketplace practices.  (Some have wailed to me that their companies are like barges in an ocean of speedboats!)  Indeed, in these consensus-driven micro-societies, new ideas often get watered down to the lowest common denominator in order to be accepted by all the fee-earning professionals. 

In the past, I've been skeptical of management theories that glibly promote new operational constructs as if they were the true panacea for growth.  "These folks obviously aren't thinking of professional service firms," I usually cluck.

But wait a minute.  Could there be merit to the theory called "Market-Based Management?" I saw it referenced on Paul Gladen's Innovation blog, which he picked up from a fascinating Wall Street Journal interview with Charles Koch (registration may be required).  Koch leads "a $60 billion, 80,000-employee empire, which just recently became the largest and most profitable privately held company in America."

You can read the WSJ article (I recommend it), but if you can't, take a look below at just a few of Koch's ideas, which ought to quicken the pulse of any professional services marketer: 

• Free markets and economic liberty should be studied as sciences (including the political aspects of these).  It appears Koch eschews traditional management philosophies and academic preparation.  Instead, he adheres to what he calls "the basic laws of economics."
• "Long-term success entails constantly discovering new ways to create value for customers and building new capabilities to capture new opportunities," he instructs. "In this sense, maintaining a business is, in reality, liquidating a business." Mr. Koch likens the cycle to Schumpeter's "creative destruction" -- where the old and inefficient are ruthlessly swept away by the new." 

• As a way to crystallize the concept above, Koch has trademarked the term "market-based management," which encourages a company's employees to think and act like owner-entrepreneurs, always seeking to provide new value to customers and always seeking to capture new opportunities.  Take a look at the text from this 1996 speech to get a sense of the underpinnings of Market-based Management. 

Most professional services marketers will find some of Koch's points familiar:   vision, integrity, humility, tolerance, responsibility, desire to contribute, and more.   For sure, PSF marketers have a keen understanding of the organized chaos that's involved in "herding cats" to market and sell a firm's services.  Some of us wish we had what Koch espouses:  practitioners who earnestly seek to build profitability, and who continuously put forth their most critical efforts to maximize new marketplace opportunities.  (Some of us have so much of it that we have to rein in the cowboys who go off on tangents and screw up our brand's equity!)

Nevertheless, I can't recall before seeing such a market-focused management construct as this, or one that so succinctly articulates how a business could maximize the opportunities that can be had from a shifting marketplace. 

Could this construct work in your firm?  (Admit it:  wouldn't you just love to have a legion of marketing-focused professionals whose dedication to growing the firm could be harnessed under the principles of Market-based Management? )

But could it work if it were applied without the charisma, energy and savvy of a person like Charles Koch? 

Chief Innovation Officers in professional service firms

The traditional PSF marketer -- even those who grew up within their profession's ranks, and later became one of their firm's marketers -- had nothing to do with innovation.  But there's a new focus on innovation as a discreet function within businesses, and that it can be managed and led.  Hooray to that, I say.  Take a look at a blog post that links to a Business Week article about the dramatic uptick in hiring for CIOs (innovation, that is!).

Even if your firm has not formally addressed innovation, and even if innovation is not formally within your senior marketing job function, shouldn't somebody be calling for this role to be staffed with a professional service firm? 

Goggled over Google marketing

Yikes -- I've lost count of how many senior marketers have told me they need to learn more about "new media" (blogging, podcasting, and using the Internet to build awareness with targeted audiences).  Well I'll say they do!  Even a casual review of the Internet's virtual conversation on Marketing related topics is simply staggering.  But it's more than just volume.  The creativity is breathtaking. 

Currently, I am awestruck by Google's incredible marketing machine.  These guys are already acknowledged as "way out there," but they keep coming up with fantastic offerings like Simply Google (thank you, B.L. Ochman, for telling us about this feature).  And what about Google's DaVinci Code Quest -- a 24-day online puzzle that offers participants a chance to win trips to New York, Paris, London and Rome (thank you Steve Rubel, for telling us about this online adventure).  Check out Google Zeitgeist, which summarizes the leading search patterns globally -- now, there's a market research tool!  Check out Google Gulp, an example of the beginning of a viral marketing program if I ever saw one.  Google Earth, Google News Alerts, gmail and its new just-announced companion, Google calendar.  Wow. 

Okay, tell the truth.  Have we really tried to think outside of the box about how to use the Internet more creatively to build our professional service firm's marketplace leadership?  I can't wait to see what happens when the first professional service firm tries variations of these fantastic marketing techniques.  Why not offer a thrilling online puzzle adventure or a funky viral marketing campaign that just cries out for clients to ask "Where can I find out more?" 

I'm positive that professional service firms can use the Internet to create and extend a client experience that expands the firm's marketplace brand footprint.  What are we waiting for?

Can Loyalty Exist with Innovation?

Fast Company just posted on its blog the following quote from an article written by Susan Lyne, the CEO of Martha Stewart Living Omnimedia: "If people get what they expect from a brand -- and more -- they're going to stick with it." 

This makes sense as it relates to fairly repeatable purchases or rarely-changed products.  But some professional service firms are wondering about the delicate balance between loyalty and innovation.  No two professional services are ever exactly the same, even those delivered by the same individual at the same firm; the client's needs are a continuously evolving target; and needless to say, professional service firms have yet to crack the code on formal innovation.  Lyne's very simple sounding remark succinctly articulates the challenge for professional service firms: growing their clients' loyalty, given a continuous flux of intangibles.   

Has any one heard about a professional firm that has successfully managed the juxtaposition of loyalty and innovation?