A Stable Business was the focus of the last blog. Let’s move on to a “Mature” company, again, in a services business.
Henry and Charles managed a fairly large portfolio management organization. There was over $4 billion in assets under management, and the staff had grown to about 70 people. They prided themselves on the quality of their employees and level of clients they serve. Every year they held a strategic planning session, and were very selective about adding additional individuals to the company. What was their challenge? No two portfolio managers described the business the same way. As a result there was no consistency in the sales process. Henry and Charles needed to stabilize their sales process, and from this expand the practice’s reach into the upscale communities they served.
- Why was there no consistent sales process? Henry and Charles had never defined their market differentiation and made it a consistent story across the organization. The managers that had been with the practice for a long time had core wealthy clients that established their personal practices. They had no need to pursue a larger book other than through the long-term friendships they had with their clients. Newer managers could not look to them for tactics and strategies. This changed by building elevator statements, compelling stories, and a consistent method of conducting the initial interview, based on the best practices of several managers.
- How did the practice grow so large if there was no consistency in the sales process? Henry and Charles lived in a very upscale community surrounded by two other similar suburbs in a major metropolitan area. Their clients tended to be very conservative investors, in a sense, “old money”. Other financial service organizations in these suburbs had not been successful in capturing this audience. Henry and Charles’ fee based approach fit well into the community. The challenge was expanding the practice beyond this market segmentation. The solution? Build a long-term public relation strategy that would expand market awareness into pockets of the major metro that had similar population demographics.
- What was good and what was bad about the strategic planning sessions? Henry and Charles prided themselves on their strategic planning meetings. Unfortunately, the meetings primary focus moved towards growing assets under management and discussions about new technologies the practice was considering adding. What was lacking was a focus on and a vision for all seven disciplines that make up strategic planning: 1. Revenue, 2. Growth (how will growth occur), 3. Profit (how much and what will it be used for?) 4. Technology, 5. Quality Systems (operational workflows, process & procedures), 6. Strategic Marketing, and 7. Corporate Culture. By not defining a long-term vision for all seven elements, the company did not share a consistent picture of who they were and what they were becoming. This slowed down growth, and prevented the “sparkle” that accompanies truly great companies and the relationship they have with clients.
Summary for Mature
- Size, stability, and profits are not guarantees that you have made the company all that it can be. Professional managers that have helped others are an important reality check for all Mature companies.
- Earlier brilliance in your career, or even “being in the right place at the right time” is no guarantee that your current practices represent is appropriate today; remember that the only constant in today’s market is change.
- Sometimes, even the things that you are doing correctly benefit from broader, out-of-the-box thinking. Don’t let pride or vanity keep you from making the business more than it currently is!