Firms often label themselves as “…a Leading (fill in the blank) firm.” I suspect they believe that saying as much will speak the result into being. Unfortunately, as most of us already know, being an industry leader requires much more than saying you are one.
When I was CMO at Genworth Financial Investment Services, a former GE company, we defined market leadership in simple terms: generating growth and profitability that exceeded the industry average. In other words, we would grow faster than the competition and do it more cost-effectively.
We lived by the mantra:
Growth Rate X Profit = Higher Share Value
Many firms confuse an industry growth rate with their firm’s real growth rate and overall performance. They lose sight of the fact that a rising tide raises all boats. Growing at 20% can seem impressive until you learn that the industry is growing at 30%.
Desiring industry leadership is a great starting place, but it is only that– a starting place. A clear competitive advantage, a prudent business strategy, and a high-performance culture are recognizable prerequisites for market leadership. In my experience, a firm’s confidence level is an equally important indicator of its ability to pursue, achieve and sustain market leadership.
You may not be leading right now, but here are 14 signs that your firm has the confidence to become a leader.
1. You don’t feel personally rejected when top talent leaves your firm.
Insecure firms get up in arms when talent voluntarily leaves. It is akin to being personally rejected by a love interest. A departing employee can be subjected to any of the following: being escorted out of the building, having intellectual property commandeered, being reminded of a punitive non-compete clause in his/her employment contract, having personal effects shipped home, having computer access immediately shut off, having his oral history/reputation rewritten, etc. Confident firms appreciate personal ambition and the long arc of professional careers. As a result, they implement positive exit practices for talent, build strong alumni networks, and do not needlessly make enemies. They know that today she is an employee, but tomorrow she is a senior-level buyer.
2. You walk away from deals.
Confident firms know themselves well. They are aware of their strengths, clear about the ideal client for whom those strengths add prized value, and pursue well-defined, long-term business goals. They focus. Lesser firms chase anything that has a dollar sign attached to it. Chasing deals wastes time, reduces economies of scale, adds costs, and erodes brands.
3. You are a “one-firm” firm.
There is one ownership structure and one culture across geographies. Leading firms have clear value systems that are violated at your own risk. The same behaviors get you hired, promoted or fired in any office, a line of business, or role. Madrid is no different than Chicago or Beijing. Partners and staff, new hires, veterans, big lines of business and small are all treated the same. You are part of a firm, not a clique.
READ: 6 Beliefs of Hazardous Firm Cultures
4. You don’t waste time developing and promoting an employer brand.
Like religion, recruiting is about attraction, not promotion. High performers want to work with high performers. Ambitious people want challenging work, growth opportunities, supportive peers and managers, and to be appreciated for their work. A firm either has those qualities or it does not. Insecure firms waste time and money promoting HR platitudes, creating collateral with diversity-laden stock photography, and publicizing a narrative disconnected from employee reality. In the end, these promotion efforts damage the firm’s reputation and retard recruiting efforts more because they deliver incongruent experiences. Recruits know who the leading firms are and the leading firms know their position.
5. Your culture encourages risk-taking and it rewards learning.
The best firms understand the relationship between risk and reward. Contrary to popular belief, prudence does not mean avoiding risks or acting overly cautious. Just the opposite. Prudent decision-makers act boldly because they KNOW and UNDERSTAND the risks, and they manage them intelligently. Most importantly, prudent decision-makers don’t punish failure or waste opportunities to learn for fear they will “fail.” Failure is only feedback.
LISTEN: Evaluating Growth Opportunities
6. You share good and bad client references.
Mature buyers know that project circumstances can go askew. Potential clients want to know how a firm deals with problems. When engagements go south, do you blame, cut and run, nickel and dime the client or do you dig deep and work toward mutually beneficial solutions? Leading firms are confident enough to share good and bad references. Sharing bad references gives top firms opportunities to explain what they have learned from the “breakdowns” and how they have strengthened their approaches to enhance performance or to mitigate future problems. In other words, they make it right.
READ: Why Top Firms Share Good, Bad & Ugly References
7. You aren’t obsessed with what your competitors are doing.
Confident firms lead (i.e. set the example for others to follow). They spend a disproportionate amount of time understanding and solving issues/needs aligned with the firm’s core value proposition. They don’t lose client focus or suffer inertia waiting for competitors to move. They are knowledgeable of competition, but never preoccupied with it.
READ: What Can You Learn From Following Clients Home?
8. Your talent comes from your farm team, not from industry trades.
The best firms create and sustain their own talent pool for two reasons. Developing talent demonstrates a firm’s intellectual, managerial and business prowess—a leader producing more leaders. Second, leading firms understand the impact culture plays in delivering high performance. Hiring external leaders who have neither grown up in the firm contributed to its past success nor added to its history makes it difficult, if not impossible, to preserve cultural integrity. A leader who has lived in a firm, from newly hired college graduate to a senior leader, possesses a unique perspective and emotional understanding of a firm’s history. Outside leadership simply cannot replicate this historical perspective nor appreciate its significance.
READ: Are Your Industry Experts Competent?
9. Your performance measures consist of more than revenue targets and utilization.
Confident firms invest heavily in intellectual capital, leadership development, innovation, and social responsibility to build endurance and strength like a professional athlete. Insecure firms think solely in terms of short-term revenue goals and annual bonuses. Firms focused on these production“checkboxes,” are not reinvesting at the appropriate level to achieve leadership. Instead, they are dieting.
10. Your culture is a development crucible.
It is overstated, but it illustrates the point, that the best firms operate like the Navy Seals. Getting into the firm is hard and staying in it is even harder. Client assignments, special projects, training, and promotions are designed to burn off the individual impurities that are inconsistent with the top performers wanted in your firm. If your culture is not up-or-out, it lacks self-awareness, focus, discipline, confidence and simply perpetuates its mediocrity.
READ: Are Your Firm’s Values Any Different Than the Local Dry Cleaner?
11. You have a differentiated POV and the IP to demonstrate it.
Does your firm express a strong, informed point-of-view on your industry and its clients’ most important issues or does it echo the market’s cacophony of conventional wisdom? Top firms dig deeply into industry issues, examine the issues through unique lenses, and articulate singular, and often courageous, perspectives on how to solve them. More importantly, leading firms have the methodologies, models, and processes to deliver said value across the firm. Insecure firms regurgitate industry buzz, have a solitary pocket of thinking that easily evaporates or simply declares its thinking extraordinary. Make no mistake: the market determines its thought leaders—not a firm’s marketing department.
READ: How to Prepare Your Firm for a Digitized World
12. You do not suffer from brand envy.
Roses do not wish to be orchids. Horses do not wish to be camels—and Wolverines do not wish to be Buckeyes. Leading firms know themselves well—their strengths and weaknesses. They accept who they are and the unique value they offer to their clients. You will never hear a leading firm define itself by using another firm as a contrast (i.e. “We are like Deloitte, but we’re not as expensive” or “We are like McKinsey, but we specialize in the middle-market”). Leading firms know themselves and feel great about it.
READ: Is Your Firm Suffering From Brand Envy? Mistake No. 4
13. You command a premium for the value you deliver.
If you lead, you set the price. You do not apologize and you do not discount. You walk away.
14. You see every human interaction and decision as meaningful in fulfilling the mission of your firm.
Leading firms think long term. Leading firms build a legacy. Leading firms are stewarded, not managed. As Arthur Andersen told his partners, “Your job is to leave the firm better than you found it for the next generation of partners.” Insecure firms are filled with people who receive a paycheck.
READ: Pope Francis’ Message for Leaders of Professional Services Firms
Take away
A leader’s goal is not to be a leader. His goal is to create value. Her goal is to help others succeed. His goal is to create a legacy.
As a result, prudent leaders lead with meaning and magnanimity. Market leadership, like happiness, success, and fulfillment, is the RESULT of living for something bigger than yourself, not achieving the object of the pursuit itself.
To rephrase Mahatma Gandhi,
Confidence “occurs when what you think, what you say, and what you do are in harmony.”
Be prudent.
Jeff McKay
Founder & CEO
Jeff’s teams and strategies have helped the world’s top professional services firms achieve industry-leading growth rates, optimize marketing investment and maximize brand value. He was the SVP of Marketing at Genworth Financial, the Global Marketing Leader at Hewitt Associates, and held senior roles at Towers Perrin and Andersen.
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