Know your client’s business in order to serve it

Understanding your client’s business

One of the best ways to make a strong impression with a new prospect or customer, is to demonstrate that you’ve done all the homework on them that you reasonably can.

Above all, they want to know that you understand their business, and you have good reason to believe you can help them… before the initial approach.

I’ve found a good place to start is to understand their competitive landscape.  There’s a simple but very effective model you can use as a checklist to be sure you’re covering all the bases.

I’m referring to what is known as the “Five Forces Model”.  It was described by Michael Porter in his 1980 book, Competitive Strategy.  It’s a staple for business school strategy courses.

Here’s the model and some starter questions for you to research for the company and executive you’ll be meeting with:

Competitive Rivaries

Which companies compete for the same customers your prospect cares about?

Large companies operate in multiple segments.  Be sure you’re researching competitors in the same segment your prospect works in.

How much market share does your prospect business enjoy? 

Are they gaining ground or losing ground?    Their strategy will be different if they’re a leader, or a new entrant.

Threat of New Entry

What other companies are positioning themselves to compete in this space? 

At one time, IBM was the runaway leader in computers.  But along came DEC, HP, and a host of others.

What is your prospect doing to create “barriers to entry” to make it hard for others to enter? 

Unique technology, strong reputation, global support capability, other ways?

Threat of Substitution

What could be a substitute in the market that winds up competing for the same users? 

The first portable radio was a substitute for a record player.  The record player was a substitute for live concerts…  You get it!  What competitors are finding a new way to serve the same market need?

Buyer Power

How are their biggest customers influencing their product and service strategies? 

When I worked for HP, we spent a lot of time and energy visiting with our largest accounts to understand their emerging needs.  That yielded a better understanding of the market trends of that customer category, which allowed us to get out ahead or our competitors in designing solutions to meet those emerging needs.

Supplier Power

Who supplies critical technology or raw materials to your prospect’s firm?

Oil producing companies andcountries wield considerable power over companies such as refineries, distributors, and automobilecompanies.

Epilogue

Understanding your prospect and asking well informed questions gives you a leg up on your competitors who rely on lame “what keeps you up at night?” questions.

Customers reward the consultants who invest in understandingthem.  You don’t have to be an industry expertto ask a better question.  You just haveto do some basic research and personalize it to the person you will be sitting across from and the segment they serve.

Trust and Credibility: Research on the top five relating skills

Consulting customers more often buy complex solutions from people with trust and credibility.  

The research:

Since August of 2016, Ascendent Leadership and colleagues at Partners International and Discovery Consulting have teamed up to discover what successful consultants consider to be the critical soft skills to generate trust and credibility.  They are asking which of 20 commonly accepted consulting best practices rank as the most important in creating authentic advisory relationships.  (Original blog article introducing the research.)  While the research is continuing, we believe that the interim results are clear and reflect the consulting community.  (Top five have been unchanged since we hit about 30 responses.  The total number of responses is now approaching one hundred.)

Active Listening was the runaway favorite. 

Top Five Skills Driving Trust, Accountability

84 percent of respondents rated Active Listening as Critically Important, the top quartile of importance.  That was over 30 percentage points higher than the runner up, Asking Powerful Questions.

Here are the results for the top five, ranked by the number of total selections in the top quartile, as a percentage of total responses:Ability

It’s all about discovery!

All of the top five could easily fit under the umbrella term “discovery”:

Ability to establish trust and credibility through their focus and presence

Carrying on on a well-informed conversation about the clients’ business and their underlying success factors

Building on the trust/credibility foundation to discover how the consultant’s value can align with the  client’s most compelling opportunities and challenges

Epilogue:

When we invest the time to really understand our client before we interact, and continuously during our relationship, and when we …

Bring our best level of customer focus and presence to every interaction, and when we…

Are confident enough to open up with what makes sense to us, and what doesn’t, …

Then we earn our client’s trust and credibility, and …

Very often, their business.

How Perfect is Perfect Enough?

A business professor assigned a group of MBA students to visit a local custom door factory and observe some of the craftsmen there.

The students arrived at the factory and were assigned to observe an elderly and obviously very seasoned door carver.  They arrived in his work area, equipped with sharp pencils and clip boards.

The door carver paid scant attention to them.  He had already made quite a bit of progress on the door he was working on, and it was already a thing of great beauty. He would carve for a while, stand back and take it all in, and then go to a different part of the door and carve some more.

As he carved, the door became ever more ornate and beautiful.  The MBA students were amazed at his level of concentration and his obvious dedication to his work.

After a number of cycles of silently carving, standing back, assessing, choosing a new spot, and carving some more, one student asked, “How do you know when you’re finished?”

The woodcarver looked up, and said, “When they come to take it away.”

He was depending on someone else to decide  when the product was ready for market. He was deriving his joy from working at the margin and making the door ever more perfect.

“How perfect is perfect enough?”  It seems to me that answering that question  is a critical role that product managers and project managers must play in any complex project. The practitioners, the scientists, the engineers, and the door carvers want to keep carving. Successful projects require someone to make a business judgment.  What criteria define “perfect”?  When must it be done?  How much will people pay for it?  From those questions and judgments, the team creates the definition of when the door is done.

Here are some questions to consider when framing a complex project:

What value are we providing? Is it a door that will keep us warm in the winter, or a door that is a thing of beauty and makes us proud of our home?

Who are we serving?  The market for sturdy and energy efficient doors is significantly different than the market for beautiful doors.

When does the customer need it?  Is it October and getting cold?  Or is it spring and we’re fixing up a home for our daughter and her family to move into?

How perfect is perfect enough?  Am I letting perfectionism push the project completion past the point of diminishing returns and delaying the primary benefit?

Epilogue: 

Most complex enterprises require the right mix of the dreamers and artisans who take joy in the craft of the work and the pragmatists who want to serve a well-defined market with the right product,with just right set of features, at just the right time, and at just the right price.

Sometimes, those talents live inside the same skin.  Most of the time, they do not.