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AESC – December 5, 2007
Developing Knowledge-BasedClient Relationships:The Key to Avoiding Commoditization
Ross DawsonCEO, Advanced Human TechnologiesAuthor, Living Networks andDeveloping Knowledge-Based Client Relationships
The weightless economy
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1980 1990 2000
US$tn
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GDPWeight
Source: US DoC;Cap Gemini Ernst & Young
Knowledge depreciates!
We’ve come a long way...
“Finite players play within boundaries;infinite players play with boundaries”
- James Carse
The future of professional services
The SevenMegaTrends
Relationshipleadership
Knowledge-basedrelationships
Networkedvalue
Strategicaction
The future of professional services
The SevenMegaTrends
Relationshipleadership
Knowledge-basedrelationships
Networkedvalue
Strategicaction
MegaTrends of professional services
• Client sophistication• Governance• Connectivity• Transparency• Modularization• Globalization• Commoditization
Clients get savvy
The rise of accountability
We love instant communication
Flows across boundaries
Information wants to be free
Complete transparency for clients
The power of modularization
Global supply and demand
Services become commoditized
MegaTrends of professional services
• Client sophistication• Governance• Connectivity• Transparency• Modularization• Globalization• Commoditization
The future of professional services
The SevenMegaTrends
Relationshipleadership
Knowledge-basedrelationships
Networkedvalue
Strategicaction
Clients lead their suppliers
A relationship is a process
How do you create continued positive momentum in a relationship?
There is no such thing as a static relationship….
The spectrum of relationship styles
Client leadership
Stages of relationship development
Align Broaden Partner Initiate
The future of professional services
The SevenMegaTrends
Relationshipleadership
Knowledge-basedrelationships
Networkedvalue
Strategicaction
Information and knowledge
Types of services
• Black-box: client receives an outcome, but is left none the wiser: readily commoditized and little scope for client interaction
• Knowledge-based: client and professional collaborate, integrate their specialist knowledge, develop mutual knowledge: far greater value, and drives interaction and a strong relationship
The virtuous circle of knowledge-based relationships
The future of professional services
The SevenMegaTrends
Relationshipleadership
Knowledge-basedrelationships
Networkedvalue
Strategicaction
It’s a small world...
The network organization
Key junctures for value creation
Professional Firm
Client
Capabilities Opportunities
Integrating expertise to create unique value
Matching team structure to the client
RelationshipStage
Objectives Relationship team structure
Key actions
Initiate Access most relevant capabilities to demonstrate unique value to client.
Sales leader with broad internal connections. Small team represents key firm capabilities.
Select sales leader and team with relevant capabilities.
Support sales team’s access to key firm resources.
Align Establish clear communication channels to facilitate access to client.
Clearly defined membership of relationship team, covering scope of firm’s relevant capabilities. Establish peer relationships between firm and client executives.
Define relationship team roles, responsiblities, communication processes.
Potential transition from sales leader to relationship leader.
Broaden Bring in new contacts on both firm and client sides. Establish true organizational relationship.
Client contact extends beyond core relationship team. Tiered relationship responsibilities. Contact redundancy for key client executives.
Monitor and actively support relationship network that links capabilities to client opportunities.
Provide tools (social media etc.) to notify extended team of insights into client.
Partner Facilitate joint value creation through open relationship and access.
Core relationship leader team on both sides. Direct communication between specialists on most issues.
Support direct client interaction. Monitor effectiveness. Actively build innovation links across organizations.
Requirements for accessing expertise
Awareness of capabilities
Understanding of those capabilities
Confidence in those capabilities
Personal trust
Action!
The future of professional services
The SevenMegaTrends
Relationshipleadership
Knowledge-basedrelationships
Networkedvalue
Strategicaction
Distinctive value
The heart of professional services
CultureFocus on enhancing client service and client knowledge Effective client relationship team communicationAttitude of client partnershipEffectively using processes and systems to enhance firm relationship capabilities
SkillsSetting and implementing relationship objectives and strategy Leading and participating effectively in relationship teamsCustomising relationship and communication styles to clientsManaging client expectations
ProcessesClient relationship team formation – selecting the right professionalsRelationship team communication and collaboration Developing and monitoring client relationship strategies Ongoing client feedback and its application
StructuresKey account selection and segmentationSelection and allocation of client relationship leadersCross-selling remuneration and recognition systemsAccount management and customer relationship management systems
StrategyRole of client relationship style in firm differentiationTargetted client profiles, client industries, service lines and service deliveryRole of online service delivery within firm strategyLong-term strategic directions and shifts in positioning
Enhancing
Client
Relationship
Capabilities
Thinking about commoditization
Firm
Service line
Client
Level Strategic choice
1. Eliminate
2. Automate
3. Outsource
4. Maintain
Are you an energizer?
How to be an energizer
• Have and communicate a compelling vision
• Seek and acknowledge quality contributions
• Make and fulfill commitments
• Be a connector!
The future of professional services
The SevenMegaTrends
Relationshipleadership
Knowledge-basedrelationships
Networkedvalue
Strategicaction
Online resources
“Dawson has pulled off the nigh-impossible: improved on what was already a terrific book. Even more than before, this is essential reading for professional service firms.” - David Maister, author, Managing the Professional Service Firm
www.rossdawsonblog.comInsights and free book chapters and articles at:
“I’m not sure that even Ross Dawson realizes how radical – and how likely – his vision of the future is.” - Seth Godin, author, Purple Cows
To contact Ross Dawson: [email protected]
Accelerate into the dawn of a new era