reform

Many professionals will argue that their work is undervalued by their clients. For example, a recent article in “In Practice” highlighted the problems that accountants face in differentiating themselves, that project managers face commanding premium rates, that marketing managers endure identifying their added value and that poor old lawyers face as they bounce from caseload feast to famine. The article goes on to blame the lack of ‘visibility’ of the services for the predicament in which the providers find themselves and claims that the issue for accountants is exacerbated because so much of their work is ‘compliance’ driven.

Compared to the sales person that wins the big order, or the production engineer that saves thousands through a design change, it is easy to see how professionals can struggle to make their contribution seem more tangible, but the compliance argument is more difficult to swallow. Although there may be external commercial codes that drive some ‘compliance’ issues, basic professional services are no more or less than basic sales or manufacturing processes. A sales person needs to identify potential clients, communicate with these clients, and hopefully secure business. An accountant needs to identify financial data, organise the data, and hopefully report it in a cogent format.

You can’t really ‘value’ the sales process or the accounting process as such, but you can differentiate between a successful process and a less successful one. In the same way you can’t value the heart or the brain as more important, but you can identify a more efficient heart. So the question professionals should ask themselves is not “how do I value my services?” but “what makes my services more valuable?” or put another way “how can my services add value?”. For the generic professional service provider this question is largely redundant, you simply “do the bookkeeping”. For the more ambitious professional the question becomes much more relevant but it immediately raises the further question of relevant to who?

A sports team would on balance like a player with a more efficient heart, a nuclear facility on balance would like a scientist with a more efficient brain. An FMCG client may value getting management reports within 24 hours of the month end because it helps to optimise working capital requirements while a hotel may require a neat macro that cross correlates marketing spend with occupancy levels. Global service providers can overcome these challenges by employing thousands of practitioners, in many disciplines, that ‘exercise’ accumulated intellectual property for a vast array of clients.

For a smaller professional services business like Reform this ‘all things to all people’ option is not viable. For these businesses specialisation is the key. If hearts is your speciality then find the strongest hearts and don’t try to provide them to nuclear facilities, focus on the sports teams. Sadly this is easier said than done because (1) a nuclear facility will call you with a very lucrative contract , (2) the market for hearts to sports teams is too small to justify, or most likely (3) sports teams don’t know how to differentiate the value of different hearts.

So while the basic processes that professionals provide may be less tangible they are at least understood, and understood to be required. Low value added businesses can be scaled by providing more mundane services reliably and efficiently over the long term – think utilities. But for more aggressive businesses the key is not in the knowledge base or the process of utilising that knowledge base, scalability comes from perceptive ‘exception management’, in large enough specialist markets where clients can be made aware that the services are indeed ‘most valuable’.