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Developing Knowledge-Based Client Relationships:

The Key to Avoiding Commoditization


Ross Dawson
CEO, Advanced Human Technologies Author, Living Networks and Developing Knowledge-Based Client Relationships
AESC December 5, 2007

The weightless economy


10 9 8 7 6 GDP US$tn 5 Weight 4 3 2 1 0
Source: US DoC; Cap Gemini Ernst & Young

2.5 2 1.5 billion 1 tons 0.5 0 1980 1990 2000

Knowledge depreciates!

Weve come a long way...

Finite players play within boundaries; infinite players play with boundaries - James Carse

The future of professional services


The Seven MegaTrends Relationship leadership Knowledge-based relationships Networked value Strategic action

The future of professional services


The Seven MegaTrends Relationship leadership Knowledge-based relationships Networked value Strategic action

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 Seven MegaTrends Relationship leadership Knowledge-based relationships Networked value Strategic action

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

Initiate

Align

Broaden

Partner

The future of professional services


The Seven MegaTrends Relationship leadership Knowledge-based relationships Networked value Strategic action

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 Seven MegaTrends Relationship leadership Knowledge-based relationships Networked value Strategic action

Its a small world...

The network organization

Key junctures for value creation

Capabilities

Opportunities

Professional Firm

Client

Integrating expertise to create unique value

Matching team structure to the client


Relationship Objectives Stage

Relationship team structure


Sales leader with broad internal connections. Small team represents key firm capabilities.

Key actions

Initiate

Access most relevant capabilities to demonstrate unique value to client. Establish clear communication channels to facilitate access to client.

Select sales leader and team with relevant capabilities. Support sales teams access to key firm resources. Define relationship team roles, responsiblities, communication processes. Potential transition from sales leader to relationship leader. 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. Support direct client interaction. Monitor effectiveness. Actively build innovation links across organizations.

Align

Broaden

Clearly defined membership of relationship team, covering scope of firms relevant capabilities. Establish peer relationships between firm and client executives. Bring in new contacts on both Client contact extends beyond core relationship team. Tiered firm and client sides. relationship responsibilities. Establish true organizational Contact redundancy for key relationship. client executives.

Partner

Facilitate joint value creation through open relationship and access.

Core relationship leader team on both sides. Direct communication between specialists on most issues.

Requirements for accessing expertise


 Awareness of capabilities  Understanding of those capabilities  Confidence in those capabilities  Personal trust  Action!

The future of professional services


The Seven MegaTrends Relationship leadership Knowledge-based relationships Networked value Strategic action

Distinctive value

The heart of professional services

Culture
Focus on enhancing client service and client knowledge Effective client relationship team communication Attitude of client partnership Effectively using processes and systems to enhance firm relationship capabilities

Enhancing Client Relationship Capabilities

Skills
Setting and implementing relationship objectives and strategy Leading and participating effectively in relationship teams Customising relationship and communication styles to clients Managing client expectations

Processes
Client relationship team formation selecting the right professionals Relationship team communication and collaboration Developing and monitoring client relationship strategies Ongoing client feedback and its application

Structures
Key account selection and segmentation Selection and allocation of client relationship leaders Cross-selling remuneration and recognition systems Account management and customer relationship management systems

Strategy
Role of client relationship style in firm differentiation Targetted client profiles, client industries, service lines and service delivery Role of online service delivery within firm strategy Long-term strategic directions and shifts in positioning

Thinking about commoditization


Level
Firm Client 3. Outsource Service line 4. Maintain

Strategic choice
1. Eliminate 2. Automate

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 Seven MegaTrends Relationship leadership Knowledge-based relationships Networked value Strategic action

Online resources
Insights and free book chapters and articles at:

www.rossdawsonblog.com
Dawson has pulled off the nighimpossible: 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 Im 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: rossd@ahtgroup.com

Accelerate into the dawn of a new era