We are designed in a way that acceptance of the changes in the reality takes some time (the amount of time varies from individual to individual). The legal firm partners are no exceptions: thus, accepting the new economical reality happens with a delay, in some cases takes a month, for some half a year. … the two questions like: who is to blame and what to do about it?
Who is to blame?
- The lack of scenario planning skills (budget – is only a part of this process) and a missing habit to regularly analyse financial figures (partners don’t luck numbers!). they are playing a bad trick with all legal market players regardless of their size and shape.
- Management (here: decision making and profit distribution) according to cash-in method, unfortunately only increase the gap between economic reality.
The bigger the difference between existing reality and our perception of reality, the greater is the panic that is caused in the process of awareness! The high degree of uncertainty in the future only increases the panic.
What to do?
Sooner or later, the signals about the change in the reality are received and accepted by everyone, even those who were irresponsible.
Therefore, I strongly advice to pay attention to those changes that are happening in your business starting September, i.e. for the last three months. Special attention is to be paid to the changes in:
- The state of account receivable;
- Incoming flow (income);
- Overall final partnership profit as well as per partner;
- Client inflow;
- «Average check» from a client.
Also, you may spot the changes in :
- The quantity and quality of accounts write-off, requested discounts ;
- Schemes of “pre-sale” preparation of services and sales expenses;
- Client requirements and the means of service delivery,
and also а putting on hold /rejecting the projects and changes in other behavioural categories in the current projects.
- If you subconsciously substituted the word “change” by the word “decline” in the items 1 to 5 from the above list, this post is for you;
- If the word “change” is associated with “growth” then read this post twice;
- If you have seen a lot of new and difficult to understand concepts (regardless of perspective being decline or growth) the changes that are occurring at the moment are taken with a difficulty.
For those who wanted to see such words as “sanctions” or “rapid fall of the local currency” in the list of factors, sorry, you will be disappointed. For these are only the new elements of reality, but not the factors determining the reality. The determining factors for the sustainable growth of business and its development are completely different:
- ability to identify and regularly follow new opportunities for yourself and your business in the new economic situation;
- readiness to exit “comfort zones” in order to implement the changes required by potential changes;
- presence of the emotional resource to implement the changes (panic, stress, the discussions “we’ve lost everything” and endless following up of the Central Bank rate contribute to wasting the resource).
Lets go through all of the tree factors…
How is it possible to identify the opportunity?
I would rather say that at the first place, you have to hear it. You can hear it from your clients. Instead of being angry with them that they have started to pay less and longer, and asking “when does it end” , you can learn from your client and know how can you be helpful from providing “moral support” to “offering new service/product”.
As my experience shows (based on Ukrainian case, which entered a turbulence phase 6-9 month earlier than the Russian one), the clients have already went through the “freeze” stage and are close to going out of it. The production related business is prone to be more reactive to change than the service market, the changes in numbers are visible faster and they are more obvious.
You – convenient, comfortable, checked and double checked consultant – will become even more trustworthy from the client point of view, if they see a counter move and readiness to join them in facing new challenges and search of solutions. If the reflection of being the one hurt the most will prevail, the client will look for a more client-oriented consultant.
Moreover, “client-oriented” is to change to “client-centred”. The secret is not in being able to sell the product to the new clients by a lower price (just for the sake of selling it). The successful strategy would be to sell the existing clients just what they needed most of all!
On practice it concerns the following issues: How long it was since you communicated with the old client? What did you talk about? What were the conclusions drawn? What was the meeting follow-up? What was actually done after the meeting? How did it influence the relationship with the client?
What actions have been taken to develop your client base? – a maniac draw to buy training in sales which have appeared during the last month or so is becoming epic already.
Every marketing manager will tell you that picking up on existing clients is 10 times easier (faster, cheaper) then selling the product to the new ones. I don’t know exactly what is the marketing theory behind it, but from the point of view of psychology it is the fact that the social distance between existing clients is far more shorter! Building a new contact and minimising social distance with the new clients takes time and money (with no guarantee to succeed) which are both the resources that are scars at this time.
Therefore, before you rush in to the networking dinner, which most probably goes on under the slogan “the game is up”, better revise the list of your clients, make an appointment to those who you have not met during the last 3 to 6 month. Talk to the client – not with the goal to make a sale (although, it would be great if you succeeded!), aiming to understand what are the current concerns and demonstrate its eagerness to give a shoulder to lean on.
Why to exist a comfort zone?
You, of course, may stay there J . Although there is a price for everything – if you want to preserve your way of life – you pay for it! Lost opportunities, cut expenses e.g moving ito less prestigeous office, laid off personnel, decrease in income, subsidizing own business etc – you are the one to decide…
But if mentioned above measures are not the choice of yours, you have to take measures that might seem completely new to you: the changes in the price policy, a longer time of developing client relationship or creating a new service/product, changes in remuneration policies of personnel, etc.
I came across the great phrase of one western entrepreneur (I think it was a women fashion eye ware production): “Listen to your clients, listen till it hurts…”.
It will be impossible to keep status-quo in the period of changes – this law, is very similar with the energy conservation law in physics – if something goes out, something will come in or energy is not going anywhere and is not coming from somewhere.
If you really hear your clients, the result would get you personalized road map for exiting a comfort zone.
Where to get resources (especially emotional) to implement the needed changes?
Many partners are loosing the site of a very obvious fact: the clients come to the consultants to solve their own issues. The fact that, as a result, the consultants are satisfying their own needs (in money, in recognition etc) does not have anything to do with the client. Solving your own issues by transferring them onto the client is not included in the effective program of the relationship “client-consultant” and is very unethical and unsafe.
Thus, keeping a mission in solving the problems of a client – is an essential element of a sustainable and successful business. An old saying comes in mind: “A man loves a healthy wife and a brother loves a rich sister!»
Some advices on how to save and multiply your physical and emotional resource:
- leave out the access information and no-quality communication (not needed emotions) – 90% of whatever is streaming into your ears, does not help to make key decisions, but it distracts and brings up emotions. Does it help to follow the currency rate every 20 minutes if you are not a head of the Central Bank or an exchange market broker? Moving away from television in order to log-in into Facebook is the same as quitting smoking in order to start drinking. On a contrary, to spend some time analysing billing, to organize partner meetings – is a productive thing to do! Communicating with friends from other spheres of business activity (not lawyers) and learning from their experience in approaching current tasks will definitely lead to new ideas for your own business.
- Share responsibility with your employees – they are also interested in getting their share of a pie, which means that they are can be helpful in collecting interesting facts and observations from their current interactions with clients and colleagues, new pieces of information and new ideas (in business development, in sustaining client relations, in being effective in operational activity).
- One important component of business vitalization in frames of high uncertainty periods is (gradual and thorough) constructing of a new reality, e.i, getting an answer to the question: “how do the occurring changes influence me personally and what actions to I need to take in order to respond to these changes?” Now, it is a question #1 in your agenda for the period of next 12-18 months. As for your employees also!
- Focus on your current tasks as much as you can, live in “here and now”. On one hand it will help to increase the quality of your product or service, on the other hand it will allow you to hear and understand client needs in the mode of “hear and now”, and thirdly it will help you to save your resources (both material and emotional) for solving issues related to upcoming challenges and utilizing the new opportunities.
- Pay attention to personal effectiveness which decreases during the period of changes. Take a course in time-management or emotional effectiveness, scenario planning or financial literacy (I will write about a training in sales later).
- Stress brings up all chronic and somatic manifestations in the bodies. “A healthy body carries healthy spirit!” Do sports, balance your diet and sleep.
- Notice and celebrate success! Big and loud victory is composed of small everyday victories over yourself and over circumstances.
I don’t believe in the market being difficult or easy, I believe in the change of the context in the market and an opportunity to see a value in it. So, I strongly suggest you to the same! 🙂