Most successful professional service firms can grow by way of referrals up to a point. Then they hit a plateau.
After serving more than 50 midsize service firms over the last 21 years, I’ve discovered that the mindset of the firm’s leadership is the No. 1 factor that determines whether or not the firm will breakthrough revenue plateaus.
If the firm leaders see themselves as practitioner-in-chief, the most important producer of work product for clients, the firm is not likely to break through the plateau. But if the firm leaders see themselves as entrepreneurs, they’ll greatly increase the odds of breaking through.
If you are the leader of a successful midsize service firm that has plateaued, I’d like to share with you some ideas for changing your mindset and your personal example so you can reignite growth.
Why midsize service firms hit plateaus
When I talk to leaders of midsize service firms that plateau, they often tell me they want to grow, but they don’t give me specifics. They’ll say, “We just want to grow.” Then I’ll ask, “By how much? Is this growth in revenue, profits, clients, geographic expansion or what?” Usually, they’ll pause for a second and answer, “We want all of that.”
But here is what I’ve learned: If you don’t set a specific target in each of these areas, you can’t really build a plan to get there. Why? Because growth requires a plan to go from where you are now — which needs to be fully documented — to where you want to be in the future.
You can hope to grow or plan to grow. But hope is not a plan. The No. 1 reason most midsize service firms don’t grow is because they don’t have a realistic plan for growth. They have ideas and they talk about growth, but they don’t actually execute against a long-term plan year after year.
So here is my advice, in plain and simple terms: If you really want to grow, then build a plan.
Are you a Practitioner or an Entrepreneur?
I want to say, for the record, that I don’t think strategic plans alone are the solution. Many service firms hold strategic planning sessions for the year to come, where they set all sorts of goals and plans. That’s all well and good.
But it won’t work unless you execute the plan day after day with a sustained focus on the goals. This is what I call “the grind,” and it requires primarily a change in mindset and some smaller changes in behaviour.
This is what differentiates entrepreneurs from practitioners. I can know, in just a few minutes of talking to someone, whether their mindset is geared toward being a great producer of work product — a practitioner — or an entrepreneur. How can I know?
I ask them one simple question, “How do you start your day?” Practitioners typically start their day by addressing client emails and open projects. Entrepreneurs start their day by asking themselves, “What’s one thing I need to do today to move this company forward?” Then they prioritize that one thing.
Here is another important question, “How much work product comes from you?” Successful midsize service firms that really grow have subject matter experts at the top who could produce a lot of work product but don’t. Instead, they lead the business by focusing on the top priorities and getting others to do the same.
These leaders know that their primary responsibility is to inspire and coach other people at their firm to produce the vast majority of the work product. This puts their business in a position to scale because they are not a bottleneck to growth by trying to do too much themselves.
What example do you set for your team?
Entrepreneurs set the right example for their team by talking about the right things. So, if you really want to grow, my recommendation is that you begin to talk to your staff about those things that matter to an entrepreneur.
This is how you get subject matter experts to begin to think with you, to think like an entrepreneur. This unleashes your growth potential. How so?
Every day, your staff makes hundreds of little decisions about how to spend their time and energy. Those little decisions add up to big results if they are directed toward outcomes that matter to the business. So I want to ask you:
- Do you talk about EBITDA?
- Can people on your leadership team read a P&L and balance sheet?
- Do you know the status of your pipeline and talk to your people about it
- Do you talk about the one thing that needs to get done right now?
- Can you and everyone on your leadership team articulate your value proposition?
If not, I recommend that you start talking to your people about these things right away. Here is what I’ve seen from midsize service firms that really grow. Their top people can answer all of those questions and with real clarity.
If it walks like a duck and talks like a duck, it’s a duck
If you want to grow, you have to set the right example by walking the walk and talking the talk. Growth starts at the top — with you. If you walk and talk like an entrepreneur, you will inspire other people in your firm to do the same.
The example you set, what you do with your time, what you talk about, what you prioritize — all of these things communicate your mindset. You unleash the growth potential of your firm by adopting an entrepreneurial mindset.
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