How We Understand The Client Advisory Practice

Our business (there's two of us, Jonathan and I) is built on delivering value to everybody, knowing that a few of you will hire us from time to time when it makes sense. We don't accept any promotional money or ads—just good stuff for decades, now, putting lots of little deposits in the karma bank and making a thoughtful withdrawal at times (like this, hopefully). In this week's note, I'm going to write about one of our services.

Even if you aren't a candidate for it (most readers aren't), there are two reasons why you might still take a look. I believe that:

  • Process matters. Sure, experts ought to be tightly positioned. The world is too complex to have a sufficiently deep understanding of everything, and once you are positioned well, your rate of learning is exponentially faster and you deliver better results more efficiently. Experts don't just deliver expertise, but they deliver it expertly. Maybe there are some things that'll prompt some different thinking for you. (This was what prompted, in part, the writing of Secret Tradecraft.)
  • Productization is a powerful tool. Taken too far, you rob clients of personalization, but tight positioning means you get the chance to see similar scenarios. You aren't applying the same tools each time, but you're bringing the same toolbox, from which you carefully select the right tools each time.

So Jonathan is Practice Lead over the M/A side. He focuses on valuations, buy- and sell-side searches, offer reviews and negotiation, and a three-part "Preparing for Sale" process.

I'm Practice Lead for the Advisory side, which focuses on two things. The three-module New Business Audit  and the six-module Total Business Reset, which I'm going to describe below. (The TBR covers the exact same three modules included in the NBA, but also adds three others and has a longer follow-up period. There's a full comparison at the end.)

How The Conversation Starts

Attribution is a weird thing and the tighter the attribution, the more likely it's pure bullsh1t. Most people list the most recent point of contact they had. For us, it seems to be one of the following:

  • Been a reader (of this weekly insight piece) for decades and something prompted a desire to reach out.
  • Just stumbled on the firm when asking colleagues for a referral or doing a Google search.
  • Been listening to 2Bobs.
  • Heard a presentation at someone's event.
  • Came to one of our events, which are big feeders for our work.

Two-thirds of the queries come via an email (the rest leave a voice message—I find their email and send them a link). "Hey, can we talk?" They schedule a Zoom call and we connect for 30-45 mins. We ask each other a lot of questions and make sure it's a fit. If it's not, I always recommend several other options. About one-third of those calls end up in client relationships. Only one-tenth of those calls require a second one, mainly because I'm very transparent about everything on the website...and there aren't many surprises in how things will unfold.

Who makes a great client?

  • The principal is intimately involved in every step.
  • They have achieved some success but they feel like there's a lot more, but what got them here won't get them there.
  • They want honest feedback. They aren't going to embrace all the recommendations, but they'll give them a fair hearing.
  • They are disciplined and courageous.
  • They are independent (not part of a holding company).

How The Engagement Kicks Off

Once we receive the go ahead, the client receives an e-package, usually within one day, that includes:

  • Explanation of how the process will unfold.
  • A signed NDA confirming that we'll hold everything confidentially like all professionals should.
  • List of materials to gather: financials, employee census, tools, processes, marketing plan, clients, etc. Most of this can be delegated for others to help with. It takes just a few hours.
  • Invoice to pay at the outset.
  • Suggestions on how to announce the engagement to the team.

We ask for the employee census first so that we can issue personality profiles and surveys. There's one version for equity principals and another for everyone else. We'll get financials, next, so that we can begin building out the financial benchmarking, which is where we'll start.

Working Through The Six Modules

These occur in order, except in rare circumstances where we need to talk about staffing earlier. But they build on each other and there's some strong logic underpinning how they work.

We prefer to meet weekly (over Zoom) to keep momentum going, but we're flexible based on schedules for either party.

With each module, there's an extensive handout to review. Each contains some core thoughts, a few things to watch/read, and some questions to answer.

We suggest who should participate but leave that up to the client. They can add or subtract people from the invite. Each session always includes the principal(s), but often includes different people based on the topic.

For the session itself, I also prepare—entirely from scratch—some hyper-personalized thoughts I want to present for consideration. To prepare for each module, I look through the client materials again to be sure that I remember everything correctly.

Here are the six modules and what they cover.

1. Benchmarking

Here we customize a really unique Google doc, pouring the firm's data into multiple sheets. All the data gets calculated on the first page, in nineteen elements across four categories. In addition, there's an algorithm that assigns a proprietary "Firm Health Index" on a scale of 1 to 100.

Each of the elements has a clear title, the expected value, their actual value, and an explanation of how it's calculated.

The client receives this before the session and then I walk through it in detail on the phone, explaining where they are doing exceedingly well and where they could do better. In the latter category, we focus on what levers to pull in what order and how long it might take.

Along with this benchmarking, the principal(s) (only) receive a professional summary analysis of the surveys, anonymized to protect the team whose names are attached to the surveys, for a really insightful look at the firm's culture. It's objective but hopeful and substantive.

We do this module first because it is a business, after all, and performance matters, but also because it provides a good way to measure our progress over time.

Much of this data finds its early roots in "Financial Management of a Marketing Firm."

2. Positioning

Whether the firm's positioning is strong or unsettled, we're going to tear it apart and look at it from every angle, and that's always at the outset (after benchmarking) because everything hinges on it. We won't know what service offerings to build or how to construct a marketing plan or even who to hire until we've nailed this.

The one thing unique about this module is that it's open ended. While we cover the remainder usually in one session, this extends for two, three, four, or whatever. We have to stick with it until we get it right.

We're aiming for a positioning that follows some of the principles described in "The Business of Expertise," as well as the things I've learned since writing that book.

Once we land on what we think will work, we'll keep refining a tagline and suggesting the right changes to their website, concurrently, while we keep working through the other modules.

3. Service Offering Design

This is one of my favorite modules because it's simple but revelatory. We work through three very important concepts: how relationships should start, how they should unfold over the bulk of time, and how they should tail off comfortably (rather than drop with a thud).

The concept here is that expert firms lead the engagement rather than being order takers, and that this should show up in their work. It will also be different for each firm that has a different positioning.

4. Lead Generation

Now that we know who we are reaching, where to find them, and what they care about, we can craft a personalized, simple, executable lead generation plan that will account for the different personalities involved. It needs to be simple and fun or it won't happen, and that's often a challenge, but we have many options to choose from and you can feel people relax once the plan is in place.

My feeling is that it's better to die of overwork than starvation. Also, if you can solve the new business problem, you'll figure everything else out. Even if you have "enough" work, excess opportunity is always the little thing that pushes you over the top because you don't need to capture every bit of opportunity, you can press the envelope, raise prices, etc.

5. Roles | Structure | Staff | Processes

In this module, we'll once again bring out some very interesting and proprietary research across nearly 30,000 team members in this space. We'll discuss:

  • Who should do what.
  • What are the safe role combinations and which ones aren't.
  • What should a principal do...and not do.
  • How much of each role is necessary (there are four types of firms, so this varies).
  • What changes as the firm grows.
  • How do you get the core AM/PM balance exactly right based on the type of firm you are.
  • What types of personalities are a more natural fit for certain roles.
  • What career paths make sense and where does this industry have no idea what they are doing.

It's fun and eye-opening.

6. Future-Proofing

This is a recent addition to the package, and it's been a great chance to wrap the formal part of the engagement. Here we look back at what they wanted to fix, what we did fix, what still needs to be fixed, and what that might look like. We discuss priorities and obstacles.

We also take a stab at seeing how they might land this plane some day and exit, if that's a goal. Since we have a very active M/A practice, it's easy to speak authoritatively to this and (at times) even set some timelines for certain steps.

Finally: Implementation

We don't abandon the client at this point, but instead immediately slide into a three-month implementation period after the sixth session, where we'll:

  • Go deeper where we need to.
  • Address changes that have occurred since we began.
  • Help overcome obstacles they face as they put this into practice.

This occurs over email and Zoom calls.

That's it! I mentioned the New Business Audit, above, and here are the differences:

  • $18k (instead of $25k+).
  • Fewer materials to gather.
  • Modules #2, #3, and #4 only.
  • Shorter implementation (2 months vs. 3).
  • No profiles or surveys.

We do a roughly equal split of the two in a typical year.

Let us know if we can help you with this or something else!

  • Secret Tradecraft of Elite Advisors

    Secret Tradecraft of Elite Advisors

    Covert Techniques For A Remarkable Practice

    Buy Now