There has been an unprecedented amount of M&A activity in the professional services realm. Much of...
Delivery-focused firms are the vast majority of smaller firms, started by smart, talented professionals with a ton of technical experience. These firms share many of the same challenges when it comes to performance. We’ll talk about some challenges of sales-led firms in future posts.
In delivery-focused firms, the technical background of the founders means that the quality of delivery is paramount: artifacts are hand-crafted with extreme care, and whole categories of mistakes are avoided due to the hard-won experience from the founders on down. Let’s look at opportunities for those firms to grow and thrive.
Sales & Marketing
I once worked for a boutique, delivery-focused firm and I won’t sugar-coat it: many delivery-focused firms struggle when it comes to sales and marketing, and they know it quite well and struggle anyway. Here the focus is put too much on ensuring that whatever is sold is carefully constrained to what the founders are certain they can deliver, in order to protect "the brand” the founders have so painstakingly developed.
Giving sales and marketing the opportunity to (with guardrails) allow the service to evolve with market conditions presents an exciting opportunity for all involved. This means both delivery and sales leaders commit to support one another as they build an effective relationship. This will take a lot of time and patience for both groups, and having a sense of accountability to one another is paramount.
Leadership
Small firms tend to rely on the founders to make most of the decisions. This reliance led to early success, but simply cannot scale. Eventually, the founders find themselves working all the time, and the organization stagnates because the founders cannot create enough time to carefully make every decision. Deals cannot close, people cannot be hired, and frustration with the owners turns into turnover as people seek growth opportunities.
Almost every time the solution is the same: founders learn how to delegate decisions and allow so-called “mistakes” by their team to happen, so that the founders can focus on the problems that only they can solve. This means supporting founders as they learn newer, safer ways to give authority to their people. This isn’t a technical skill that can be learned from a class, it's a behavioral skill that is best supported by coaching.
Operations
The founders tend to put delivery first, to the detriment of keeping the firm running well. Necessary functions like HR and finance are commonly regarded as overhead and their impact on the founder's performance are underemphasized. This contributes to distracting the founders from focusing on the business as only they can, keeping them occupied with tasks better left to specialists. In many cases, even delivery personnel are also consumed with performing tasks that could be better handled by dedicated resources.
Solutions
Solutions to these problems are simple and not easy (that’s why so many firms struggle to grow): founders need to focus on the part of the business that’s important to them and delegate the rest to others. Either hire a CEO and give them authority to run the company, or take ownership of the company and leave delivery to trusted leaders. It’s common for founders to wrestle with these issues until one of two things happens: they either sell the firm at a vastly-undervalued price, or they slowly (over years and years) develop the skills themselves.
Any founder will tell you why this isn’t easy: it requires them to let go of the skills that have made them successful and focus on developing skills that are unfamiliar and uncomfortable. A coach with experience in the business can speed the process dramatically, giving founders the tools they need to grow their businesses, their profits, and themselves.
I have experience helping founders make their businesses more profitable, less time-consuming, and better run. I would love the chance to learn about your business and support you on your journey. Contact me or take our professional services maturity assessment to learn more about what can enable greater profits for your business.
