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| Turnaround |
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Scan the website of almost any professional services firm, and you'll read about how that practice will help guide clients through the economic doldrums to the promised land of profit and prosperity. It's beginning to feel like we're in an echo chamber.
Savvy marketers will make changes to their marketing themes now--or in the very near future. Even though challenges remain, it's no longer compelling (or even interesting) to repeat how you'll help clients navigate the recession.
Instead, it's time to think about what your clients will need as the economy turns the corner. Clients will need help sorting out the backlog of initiatives that have been on hold, hiring new people, introducing new products, and managing growth, to name a few areas.
Obviously, the economy is still anemic. But plan for a brighter future now. Get into the market with your ideas, and watch how that will differentiate your practice. The market and your existing clients will welcome your forward thinking.
 Speaking of looking forward, next month John Wiley & Sons will publish my new book, Winning the Professional Services Sale: Unconventional Strategies to Reach More Clients, Land Profitable Work, and Maintain Your Sanity.
The central theme of the book is that too much sales advice fails miserably when applied to the complex services sale. In response, Winning the Professional Services Sale offers professional service providers, business development managers, and firm leaders a simple, yet comprehensive, set of strategies to identify, qualify, and close any services sale.
The book is available for pre-order on Amazon.
Enjoy this month's issue.
And send me an email if you have comments.
Mike
McLaughlin
Editor
Management Consulting News is a publication of MindShare
Consulting.
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| MCNews 12 Index of Professional Services |
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In May, the stock markets turned in a third consecutive month of encouraging results.
The major stock indices, including the S+P 500, surged forward, gaining another 4.7 percent in May. Over the past three months, the Index has gained 25 percent, which has some analysts cautiously suggesting that we are seeing signs of an economic recovery.
The MCNews 12 Index also pushed substantially higher in the three months ending in May, posting a 22 percent gain. But in spite of three months of strong performance, the MCNews 12 Index has yet to reach positive territory this year. Eight of the MCNews 12 Index companies are showing healthy returns, while Accenture, Navigant, The Hackett Group, and Watson Wyatt are still trading at prices below 2008 levels.
After reporting earnings and lowering its full year EPS forecast, Watson Wyatt, the global HR and financial management services firm, saw its share price slashed by more than 20 percent. If Watson Wyatt's share price had not taken that hit, the MCNews 12 Index would be showing a year-to-date gain.
In other news, Accenture announced a proposal to shift the company's place of incorporation from Bermuda to Ireland, which would allow the company to enjoy the tax advantages offered by the Irish government.
Finally, four months after revelation of a major fraud at Satyam Computer Services rocked the global services industry, the markets have seemingly declared the scandal over. Satyam's top managers confessed and were jailed, the board was fired, and the giant outsourcing company was sold.
Two partners from the Indian office of PricewaterhouseCoopers, who proclaim their innocence, remain in prison, charged with multiple offenses, including dishonesty, cheating, falsification of accounts, and using forged documents.
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MCNews 12 Index |
YTD
Change |
S+P 500 YTD Change |
| May 2009 |
718 |
-0.98% |
+11.29% |
| Apr 2009 |
722 |
-0.3% |
+6.3% |
| Mar 2008 |
706 |
-2.6% |
-6.7% |
The MCNews 12 Index reflects general investor sentiment about the state of the global professional services industry.
The twelve publicly-traded companies included in the MCNews 12 Index account for roughly $80 billion in combined annual revenue, and serve clients around the world.
Learn more about the MCNews 12 Index 
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| Interview:
Roy Spence and Haley Rushing |
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 "We think purpose will be the key driver of long-term performance over the next twenty years."
Roy Spence and Haley Rushing are coauthors of the bestseller, It's Not What You Sell, It's What You Stand For. Spence is chairman and CEO of GSD&M Idea City, a marketing and advertising company. He and Rushing are also cofounders of the Purpose-Based Institute.
According to Spence and Rushing, high-performing organizations share a strong sense of purpose--the intent to make a difference in the world. We asked Spence and Rushing why purpose is so important to performance, and how organizations can identify, reclaim, or redefine their purpose.
Read
our interview with Spence and Rushing
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| The State of IT Budgets |
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 After slashing IT budgets sharply for months, many US businesses are starting to spend again. Growth in corporate technology spending slowed to 8 percent in 2008, and it is expected to contract in 2009. But some researchers are also beginning to forecast a stabilization in IT spending.
Goldman Sachs Group's equity research department calculates tech spending will decline 9 percent in 2009, but will drop only 1 percent next year. That forecast is hardly reminiscent of the days of double-digit IT spending growth, but it does indicate that IT spending may have bottomed out.
Don't be surprised if clients make significant changes in how they spend new money, especially on IT services. More than ever, look for clients to scrutinize every claim that service providers offer in support of a sale, with a particular emphasis on delivered value.
Even though budgets may be loosening, the competition within organizations for those funds will be keen, as most have backlogs of high-priority projects that were put on hold. Expect clients to have more potential projects than in the past, but be prepared for even more rigorous screening criteria, lengthened sales cycles, and stiff competition.
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| Special Report: Earning Clients' Loyalty |
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So much is written about landing new clients that it's easy to overlook what it takes to keep the clients you already have. And in this market, client retention can make the difference between having a banner year and a mediocre one.
What does it take to build the type of relationships with your clients that keep them coming back to your firm year after year? To find out, RainToday asked me and eight other experts on client loyalty this question:
If you could only give one piece of advice regarding how to develop client loyalty, what would that be?
They gathered our responses in this complimentary, thirty-eight-page special report, The One Piece of Advice You Need to Earn Your Clients' Loyalty.
Grab your copy of the report by visiting RainToday.
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|
Rewiring Management |
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 Using the latest research on how people actually behave, Charles Jacobs has written a lively guide to managing people and organizations. Jacobs is the founder of the Amherst Consulting Group and managing partner of the firm 180 Partners.
In Management Rewired: Why Feedback Doesn't Work and Other Surprising Lessons from the Latest Brain Science, Jacobs says that, if we apply recent knowledge of brain science to managing people, we will reject many of the accepted practices that have defined management for decades.
Jacobs argues that neither positive nor negative reinforcement improve performance. He goes on to say that quantifiable objectives cause workers to fixate on the short term and sacrifice long-term focus, and that many management practices produce the opposite of the intended effect.
To address these realities, Jacobs advises managers to stop directing employees and, instead, engage them with questions. Managers should also stop worrying about the right incentives to motivate good performance and should instead leverage the universal human desire for meaningful work.
Last but not least, managers ought to design organizations so that they channel our innate selfishness rather than attempting to counter it.
The book offers a counterintuitive approach to strategy, leadership, and management that is worth a look. You'll find more about Jacobs and his book here.
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| The Clash of Career and Family |
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It's common for those entering the field of consulting to wonder if it's really possible to have a life outside of work. Professors Claudia Goldin and Lawrence Katz of Harvard University may be zeroing in on an answer. They are trying to understand which careers offer the best chance to balance work and family life.
On almost every aspect of work-life balance, consulting looks pretty dismal. People who take time off, for example, suffer significant penalties--both in terms of money and career opportunities--once they return to full-time work. Part-time consulting jobs are scarce, so when consultants want to start a family, many are forced to choose between working seventy hours a week and leaving a job entirely.
One set of statistics neatly summarizes the findings. After surveying Harvard alumni fifteen years after graduation, Goldin and Katz estimated the average financial penalty for someone who had taken a year and a half off and then returned to work.
In medicine, that person earned 16 percent less than a similar doctor who had not taken time off. For MBAs, a group dominated by finance workers and consultants, it was 41 percent less.
Given how much money many MBAs make, they can probably survive such a pay cut. But the size of the cut suggests that time off pushes these people onto an entirely different career track.
Professional service firm leaders have been grappling with this issue for a long time, and there are no easy solutions. But this research by Goldin and Katz provides some useful data.
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| Coming
Attractions |
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 "Many performance-killing mistakes have been institutionalized into policies and procedures, in training for new managers, and even incorporated into pay, appraisal, and motivational systems."
Next month, we'll talk with Aubrey Daniels, author of OOPS! 13 Management Practices That Waste Time and Money (and what to do instead). We'll ask Daniels how we can help clients avoid these losing management practices, and what they should be doing instead.
Look for the next issue of Management Consulting News on July 7, 2009.
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