Firm of the Future - Media Edition
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I believe a professionals will be more successful and create more value for their customers if they begin to view themselves as professional knowledge firms rather then professional service firms. This presentation for media and industry analysts is an adapted version of the Firm of the Future Symposium that I deliver with the VeraSage Institute's founder, Ron Baker.
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Firm of the Future - Media Edition
- 1. Firm of the Future Media and Analysts Ed Kless Senior Director, Partner Development and Strategy ed.kless@sage.com @edkless
- 3. What is a Business Model? How your firm creates value for customers, and how you monetize that value.
- 4. “Disruptive threats come inherently not from new technology but from new Andy Grove, Founder, business Intel models.”
- 5. Peter Drucker “The customer never buys a product. By definition the customer buys the satisfaction of a want. He buys value.”
- 6. Experience Curve Undifferentiated Differentiated Provide knowledge Perform Services Make products Extract Commodities Market Pricing Premium
- 8. Four Assertions 1) Growth without profit is perilous 2) Nonrival assets have more leverage than rival assets 3) Effectiveness is always and everywhere more important than efficiency 4) Value-led pricing is superior to cost-plus pricing for capturing value
- 9. Four Defenses of Timesheets 1) Pricing 2) Productivity 3) Cost accounting 4) Project management
- 10. Professional Knowledge Firm Professional Knowledge Firm Capital Pricing on Profit = X Effectiveness X management Purpose
- 11. Two Business Models Professional Knowledge Firm Capital Pricing on Profit = X Effectiveness X management Purpose ↑ ↑ ↑ ↑
- 12. From Revenue to Profit
- 13. The Market Share Myth Richard Miniter
- 14. $40,000 $35,000 $30,000 $25,000 $20,000 $15,000 $10,000 Value $5,000 Price $0 Cost
- 16. Baker’s Law Bad customers drive out good customers
- 17. From Capacity to Capital
- 18. Four Forms of Capital • Financial • Intellectual • Structural • Social
- 19. Rival Asset Non-Rival Asset
- 20. How Knowledge Workers are Unique • They own the means of production • Firms need them more than they need firms— balance has shifted • Office is their servant, not their master • Effectiveness is far more important than efficiency • Judgments are more important than measurements • Ultimately, they are volunteers
- 23. The Antithesis of Efficiency • Continuing education • Knowledge management/CKO • Total Quality Service (Ritz-Carlton) • Mentoring and coaching • Networking • Business development • Social media • Pricing on purpose
- 24. What you can measure you can manage. The McKinsey Maxim
- 25. “The only way to look into the future is use theories since conclusive data is only available about the past.” Clayton Christensen
- 26. The Big Three • HSDs • Turn around time • Value Gap
- 27. Value Gap
- 28. From Cost-plus to Value-led
- 29. Warren Buffet “The single most important decision in evaluating a business is pricing power. If you’ve got the power to raise prices without losing business to a competitor, you’ve got a very good business. And if you have to have a prayer session before raising the price by 10 percent, then you’ve got a terrible business.”
- 30. The 5 Cs of Value • Comprehend the key value drivers for customers • Create value for customers • Communicate the value that you create • Convince customers that they must pay for value • Capture value with effective price strategies
- 31. A 1% increase change in, yields 12.0% 11.0% 10.0% 8.0% 7.3% 7.1% 6.0% 4.6% 3.7% 4.0% 2.7% 2.5% 1.5% 2.0% 0.0% - Fixed Costs + Revenue - Variable + Price costs McKinsey AT Kearny
- 32. The Smile Curve
- 33. Ed’s IT Smile Curve
- 34. A Tale of Two Theories The Labor Theory of Value The Subjective Theory of Value
- 35. Salaries + Overhead + DNI Expected Hours = Hourly Rate Precise, but precisely wrong
- 36. Cost-led Pricing Service Cost Price Value Customer Customer Value Price Cost Service Value-led Pricing
- 37. Eight Steps to Pricing on Purpose ① Conversation with customer ② Pricing the customer, not the services ③ Developing and pricing options ④ Present options to customer ⑤ Option selected codified into an FPA ⑥ Proper project management ⑦ Utilize change requests ⑧ Perform after action reviews (AAR)
- 38. Five Ts to Offering Options 1) Terms 2) Technology 3) Timing 4) Talent 5) Training
- 39. Baron Joseph von Neinbach’s Model WA HF PF C B A
- 41. Charles Revson, Founder, Revlon “When it leaves the factory, it’s lipstick. But when it crosses the counter in the department store, it’s hope.”
Editor's Notes
- *Because of the psychology of anchoring, the more you ask for the more you get.*This has been demonstrated in almost 50 years of experiments by behavioral psychologist, many of which are featured in the new book, Priceless.