In the second of a series of articles, Ben Kent and Adrian Furner discuss how advisers can better understand the context of their clients’ businesses [Habit 2].
How much do you really know about your clients? In our recent study, Effective Client-Adviser Relationships, 52% of clients cite a lack of understanding of their business by external advisers as the factor which is most likely to derail the client-adviser relationship.
As we discussed in the Summer 2014 edition of pm, understanding the business context in which a client operates is one of seven core habits that commercially-savvy advisers exhibit. Commercial understanding is now a major factor clients consider when they commission work. When looking to instruct advisers for complex work, 40% of clients place an understanding of their business as among their top three selection criteria. The professional firms that have been most successful in this area have managed to turn their more commercial approach into a brand differentiator: “You must constantly educate yourself otherwise
you can’t deliver successful advice.” Mike Strong, Executive Chairman EMEA, CBRE.
So what exactly do clients expect from their advisers? Reading financial statements and annual reports is useful, but no longer sufficient. Clients are demanding much more: 75% say they expect their advisers to know about their organisation’s strategy and business plan, and 67% expect knowledge of industry sectors and trends. As clients raise the bar, professional firms are expected to jump higher and higher to demonstrate commercial understanding.
Three steps to demonstrating better commercial understanding:
1. Research the style and culture of your clients
Each client has their own language, jargon and way of doing business. Communication styles and risk appetite vary between organisations and individuals. Understanding the personal and emotional factors involved in any piece of work will inform how to best position advice to ensure it gains traction. Top tips:
- Map out the key stakeholders for any engagement, and meet with them to discuss their personal views and objectives.
- Keep in touch throughout the duration of an engagement and afterwards. Informal meet ups work well, particularly at the client’s premises.
- Be inquisitive about a client’s strategy. Don’t be afraid to ask for strategy documents that would help contextualise your advice.
2. Share best practice and case studies
Clients want to know from their advisers how other organisations, especially those in the same sector, have undertaken
similar engagements. Sharing insight on what does and doesn’t work, and how pitfalls can be avoided, is a key attribute
of trusted advisers. Top tips:
- Capture the knowledge that you build up from different clients. Write down the key learnings and actively share with junior colleagues.
- Develop a checklist of questions to ask when attending initial meetings with a new clients.
- Prepare relevant case studies to show clients ahead of meetings, and talk to colleagues to gather more examples.
3. Keep one eye firmly rooted on the future
Clients also highly value foresight on trends likely to reshape their sector in the future. CFOs and GCs are time poor and so look to external advisers to offer a view on the issues that might impact their business over the short and long-term. Top tips:
- Read blogs and thought leadership, and attend industry events and networking sessions to keep abreast of sector developments and issues.
- Attend seminars and workshops delivered at client organisations to understand the in-house dynamic.
- Send short, personalised emails to clients drawing their attention to issues you think are relevant to them.
Case studies: fostering business understanding
The talent management strategies of professional firms are at a turning point. Firms now recognise that business understanding
is as important as technical understanding. Sector groups, key account plans, and knowledge managers are a good starting point. However, more innovative firms have taken further steps to build business understanding into their culture:
Simmons & Simmons has created a highly successful mini-MBA for trainees joining the firm that teaches young lawyers essential business skills.
Thomas Eggar, a law firm based in the south of England, sends its lawyers to do a day of work experience at their client’s retail outlets.
The Big Four accountancy firms and large consultancies have high developed knowledge management systems that allow fee-earners to share insight and collaborate across practice areas.