The rules that existed for generations have been ripped up. Mike Cullen spoke to the BDLN about the fact that firms and individual professionals must respond appropriately….
“We know more than them. Hire us.”
That’s the ‘sell’ that drove the entire professional services sector for hundreds of years. Clients gravitated to the firms with the biggest IQ power. A firm’s most bankable asset was the information and know-how contained within the brains of its staff and partners. Knowledge was what clients valued above all else and IQ was the fairy dust that turned words into gold.
But a new era has dawned. Today, ‘content knowledge’ is nothing more than your entry ticket to the professional services game because, thanks to the digital revolution and ever-growing connectivity, information is universal: anyone can Google anything. A quick example: not so long ago firms competed over who could print and distribute their budget reports the fastest. These days, anything you could ever need to know about the budget flies through cyberspace before the chancellor has waved his red briefcase.
Today, ‘content knowledge’ is nothing more than your entry ticket to the professional services game
Interestingly though, the implications of this quantum shift receive relatively little attention, despite it fundamentally changing the rules of the game.
A new reality for firms
The bottom line is that content knowledge no longer makes you to stand out.
“Firm X has better content knowledge than firm Y so I will choose firm X.”
That used to be the basic logic used by most clients. No longer. Now clients assume that both firms have suitable know-how and so seek new criteria on which to make their selections. But what are the new differentiators?
A big one is client experience. As technical expertise is now a given, clients select based on how a firm’s people work and behave. That is huge news as it changes the mix of professionals that firms need to thrive. A team of professionals with mind-blowing technical knowledge is no longer nearly enough. Firms must also successfully seek, build and sustain relationships with clients, and that requires a raft of skills more closely linked to emotional intelligence than IQ. Firms are playing catch-up here – some more than others – because historically EQ skills have not been examined or developed. For years firms were able to build fantastically successful businesses on content knowledge alone.
Technical expertise is now a given, clients select based on how a firm’s people work and behave
Another new differentiator is the level of context knowledge that a firm can demonstrate. What does that mean? To demonstrate, let’s quickly dip out of professional services and consider the ridiculously simple question ‘is the water temperature ok or correct?’ Content knowledge might tell you it’s 40 degrees. Great, but what use is that? Forty degrees is too hot to swim in and too cold to make a cup of tea with. So without context knowledge you’re not able to supply any useful insights. Apply the same concept to professional services and it’s clear why firms that are able to display exceptional context knowledge can differentiate effectively. Clients need the insights that come from their niche expertise. This has powered a drive towards sector specialism.
A third new differentiator firms need to understand stems from rapid obsolescence. Thanks to the internet, today’s innovation is tomorrow’s fish and chip paper: ideas and technologies move from rocket science to common knowledge almost instantly. And here’s the rub: firms that are able to think originally and creatively are at a big advantage because they stay ahead of the rapidly advancing curve.
Perhaps the final new way firms can stand out is by showcasing a broader range of skills at all levels. Accountants, tax professionals and lawyers remain at the heart of the proposition but marketing, IT, sales functions and experienced sector specialists are gaining in importance. By bringing in different types of professional – right up to partner level – firms have more chance of standing out in creative new ways.
By bringing in different types of professional – right up to partner level – firms have more chance of standing out
A big change for the individual
All this has big implications for individual professionals.
First and foremost, the skill sets needed to be successful have changed. To thrive in the modern world of professional services, individuals require a high level of relationship and communication skills (EQ), plus strong contextual experience. Functional content knowledge was once the be-all and end-all and is still important, but it’s just the entry point.
So for the individual it’s not just about knowing the rules, it’s about gaining experience and knowledge of the context in which individual client businesses operate. And it’s also about developing the communication and EQ skills that allow you to work effectively with those clients. For example, if you’re advising a founding entrepreneur on the best way to dispose of their business, you need to know both their motivations and the nuances of the business sector. Does the entrepreneur want to cash out and make as much as possible? Or do they want to protect
legacy and brand? And on an EQ level, are they the type of character who responds well to humour? Or do they prefer a business-like approach at all times? Do they prefer you to meet them wearing jeans and T-shirt or a shirt and tie?
The battle for talent
The growing demand for EQ and contextual knowledge has major implications for recruitment and training. Firms now need to search and select people with the right emotional skills.
Firms now need to search and select people with the right emotional skills.
A major professional services firm might recruit 1,000 people a year via its graduate programme. They will get at least 10,000 applicants, all of whom have Firsts or 2.1s from top universities. All have suitable brainpower, so how should they select the 1,000? The selection criteria has to now consider wider experience, inter-personal skills, emotional breadth, the ability to work in teams, and the ability to interact with clients.
Beyond recruitment, firms must nurture and develop their people’s EQ skills. They must also work hard to give recruits the right experiences to their boost contextual knowledge so they are best able to apply their technical knowledge in the right way for clients.
New rules for a new game
It used to be: “We know more than them. Hire us.”
Firms must nurture and develop their people’s EQ skills
That’s gone. Now it’s: “We do it better than them. Hire us.”
As we’ve seen, the implications of this change are large, removing firms’ ability to differentiate on content knowledge alone (IQ) and shifting selling points to new areas (EQ, creativity and contextual knowledge). The knock-on effect for individual professionals is, of course, equally fundamental.
Many firms and individual professionals are aware of these new rules and are responding. The question is, is the response large enough? After such a tectonic shift, there is no room for complacency.
Mike Cullen is the ex-global managing partner for talent at EY. Before that he held the position of global managing partner for markets and over the past 20 years has been a key creator of EY’s global strategy. Today he is visiting professor at London’s Cass Business School and is a member of the Executive Education Faculty at Cambridge University’s Judge Business School. Mike is also a lead advisor to the BDLN.com and its clients.
Written and edited by the BDLN