Richard Kleiner is managing partner at Gerald Edelman. He joined the firm in 1978 and became partner aged 27, and managing partner, for the first time, aged 36. Passionate about business, he took up a private equity role for a stable of investors and their portfolio of tech businesses while continuing to work for Gerald Edelman. “It gave me experience of getting under the skin of fast-growing businesses,” he says.
Richard gained further corporate experience – and resilience – when the dotcom bubble burst: “I was parachuted into a public tech investment company called Internet Incubator to see what could be salvaged.” From the ashes, Avanti Capital was eventually born, with Richard co-leading the management team. “The whole experience joined up my accounting skills with my interest in business. It allowed me to fully understand the dynamics of any particular business and what really makes it tick.”
How does your corporate experience inform your current role at Gerald Edelman?
I’ve tried to ‘corporatise’ the whole communication environment within the firm. Although I’m not into labels I am effectively the CEO and as far as I’m concerned the labels of managing partner and senior partner roles are largely redundant.
Why is that?
Because it means all 16 divisions (both service and admin) report straight to me. I put together a monthly CEO report, which should be read by all partners; otherwise they just don’t know what’s going on.
I don’t believe in wasting time so I created a ‘SPORT’ report to be completed each month on a single sheet of A4. The ‘S’ stands for Successes; ‘P’ is Priorities – short-term; ‘O’ is Opportunities; ‘R’ and ‘T’ are Risks and Threats. The divisional heads be they partners or managers insert bullet points in each box to give an overview of their division.
It provides focus but more importantly it gets the team thinking about their own departments. And, if the truth be known, managers are often better at completing the SPORT report than partners.
Many accountants tend to get stuck in ruttish behaviour and often tend to make assumptions about client behaviour without testing the particular issue. That means they find it difficult to step back, get in the helicopter and see the landscape. That’s frustrating for me because sometimes I see the dynamic and wonder why we aren’t all responding to it.
One partner said to me recently, which you may say is flattering but is actually a sad indictment: “Because you do it so well, we don’t need to.” I told him he’d missed the point and that strategic management had to be a team effort!
And you think the younger generation is better at responding to new dynamics?
Yes, but they can only be empowered to the limits of their experience.
What you are saying echoes a recent BDLN interview with Richard King, ex-managing partner of EY. He asked: are you a partner or a leader?
I completely agree. As a leader, I consider my role to be the principal “driver” of the business.
And it’s important you’re seen as the CEO, not the managing partner?
Labels are labels. It’s about what you do and how you do it, not your title.
I’m trying to get people to think in a business way rather than a vocational way. We’re here to grow. We’re running a professional services business.
Networking is crucial, particularly in professional services. It’s also a relentless activity. If you don’t wear your networking hat every day, you’re not going to succeed. At every meeting, even with existing clients, you must focus on networking. The objective is for your contact to go away from that meeting thinking: “Wow! That was great – I’ve been challenged and made to really think.”
By giving that impression you’re leveraging into their network. It may not be that day, it might not be for three months, but at some point that meeting is going to come up in conversation – with friends, colleagues, business associates, lawyers, who knows? When it does your personal brand gets enhanced.
You can’t correlate that to a new piece of business, which is why networking is relentless. You don’t know where the new business is going to come from.
Where has your hunger for business development come from? Has it always been there?
I think so. If you like talking about business, which I have always done, you should thrive on networking discussions. But you’ve got to become widely read. If you don’t read the Sunday Times Business Section and others, you’re dead in the water. Same if you don’t sign up to good subscription services that give you a snapshot of what the markets are doing and the political and macro-economic issues of the day. This is what your clients want you for. They want your views on the major issues that could affect their business.
For young professionals who want to develop their business but don’t feel they are natural networkers, what would you advise?
Start slowly and don’t have any expectations. When I started running again in my mid-40s – I was a sprinter at school so long distance was an anathema to me – my trainer (Mary) told me to run with no expectation. Jog for 15 minutes as slowly as you like, then for 17 minutes. Build it up progressively but stay focused, Mary told me.
There doesn’t have to be a goal. If I’d started thinking I had to run a marathon next year I’d probably have given up.
Building on my running analogy, my view is that if you want it, start doing the things you need to do but don’t give yourself any unrealistic visions, goals or time limits. Just do it. And when you do it, try to feel the positive benefits and enjoy it. Then you’ll do it more and the rest will take care of itself.
Marathon training or business development, the principles are the same. I’ve run eight marathons now, by the way.
In addition to Avanti, you sit on the boards of several companies. How has that allowed you to develop your commercial instincts?
It’s given me an appreciation of the relative dynamics of business, and, not surprisingly, many issues and protocols are the same. The product or service might be different, the sector might be different, but the business principles are the same – whether you’re setting up a professional services firm or opening a restaurant. Is your sales and marketing right? Is your finance right? Is your HR policy right? All those matter for any business.
The aim of being in business is to build it to sell, even if, when it’s ready for sale, you choose not to. So making sure the business strives to be in a position to be sold is essential. That drives behaviour, strategic process and forward thinking.
I once read in a book that “it’s amazing how many people aim for nothing and hit it every time”.
What do you think a smaller firm like GE offers over and above a Big Four firm?
A partner-led ethic and approach. Anything with a sub-£50k fee may initially give a client access to a good quality partner at a top-ten firm, but eventually that will stop. You’ll get one meeting a year with a partner but the rest of the time you’ll get a manager. That might be fine – you may not need a partner.
The really big firms must go through many layers of internal control processes because they have a brand to protect – and actually very few accountancy firms have an international brand… probably six. Understandably perhaps, big firms are manic about brand and completely driven by fear of reputational risk. The issue is that the cost of their internal protocols are often reflected in the fee to the client.
SMEs do not need a Big Four name on their audit report. Certain entrepreneurs think they have made it when they use a Big Four firm but actually that’s just not correct.
And by the way, building a publicly recognisable professional services brand takes many millions. As I once said to one of my partners, you could throw, say £3m at it and it would be a mere drop in the ocean.
But you can build a personal brand. That requires you to relentlessly wow everyone you meet. Or at least try to. One good way to do that is to challenge your clients regularly, but many people – particularly accountants – are scared to do that.
Traditionally, accountants are a little bit in awe of clients. But clients want to be challenged. Don’t be in awe of them. Clients will throw out ideas and you have to tell them what will and won’t work.
Richard Kleiner was talking to BDLN founder John Maffioli.