Marketing Accounting Firms: presentation for the HKICPA

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Copy of my presentation to the Hong Kong Institute of Certified Public Accountants on strategy and marketing

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Marketing Accounting Firms: presentation for the HKICPA

  1. 1. Marketing Professional Service Firms<br />Presented by : Robert Sawhney: Managing Director, SRC Associates Ltd<br />Venue: Auditorium, Hong Kong Institute of CPAs<br />Date: 3rd March 2010<br />
  2. 2. 2<br />Disclaimer<br />The materials of this seminar / workshop / conference are intended to provide general information and guidance on the subject concerned. Examples and other materials in this seminar / workshop / conference are only for illustrative purposes and should not be relied upon for technical answers. The Hong Kong Institute of Certified Public Accountants (The Institute), the speaker(s) and the firm(s) that the speaker(s) is representing take no responsibility for any errors or omissions in, or for the loss incurred by individuals or companies due to the use of, the materials of this seminar / workshop / conference. <br />No claims, action or legal proceedings in connection with this seminar/workshop/conference brought by any individuals or companies having reference to the materials on this seminar / workshop / conference will be entertained by the Institute, the speaker(s) and the firm(s) that the speaker(s) is representing. <br />
  3. 3. 3<br />The State of Play<br />GFC<br />Demanding clients<br />Regulation<br />Competition<br />Globalisation<br />Consolidation<br />Social media and Web 2.0<br />Talent retention and management<br />
  4. 4. According to Ron Baker<br />The Firm of the Future<br />4<br />
  5. 5. How PSFs are Different!<br />Product resides in the structural, social, and intellectualcapital of firm – knowledge and learning key<br />Key marketer is the professional who interacts with client<br />Differentiation is harder to achieve – ‘we do better audits’<br />Branding at the individual, practice group, and firm level<br />Marketing and BD coupled together – misunderstanding?<br />Professionals don’t take easily to being ‘managed’, strategy bottom up and involves all or no one (are they interested)?<br />5<br />
  6. 6. And the difficulty of…<br />Fundamental misunderstanding by professionals of what marketing is<br />Growth of 10% per annum, who needs it?<br />Strong resistance by seniors<br />Belief in conflict with professional ethics and association guidelines<br />Combined role of producer/manager<br />Short term orientation and lack of longer term strategic thinking<br />6<br />
  7. 7. Marketing and client value<br />Firstly – what marketing is not:<br />Promotion<br />Clever logo and new brand name<br />Run by the marketing/BD people<br />Something that can be turned on and off according to prevailing conditions<br />In its entirety, something that cannot be measured using ROI<br />7<br />
  8. 8. Cont’d<br />What it is:<br />A business process about creating client value<br />A firm culture that has the most significant impact on firm performance<br />The guiding force for strategy and strategic management <br />The bed rock of firm performance (market orientation) <br />8<br />
  9. 9. Me arguing with someone!<br />http://www.thenewlawyer.com.au/article/firm-marketing-inspires-email-vitriol/493687.aspx#comments<br />9<br />
  10. 10. We are now in the ‘value’ era<br />Clients want their PSF to be more commercially oriented and demonstrate the value they provide (i.e. cost savings, risk mitigation, business improvement)<br />According to HBR (March 2006): value propositions should have a resonating focus with clients that identifies a few key points of difference (with points of parity)<br />10<br />
  11. 11. What Professionals Really Sell<br /><ul><li>According to research conducted at the Centre for Management of Professional Services (Said Business School, Oxford University), a firm's ability to differentiate itself and create a sustainable strategy relies on four factors:
  12. 12. · Expertise - knowledge and experience
  13. 13. · Relationships - clients and other stakeholders
  14. 14. · Reputation - expertise, experience, and engagement
  15. 15. · Service - processes, services, and engagement
  16. 16. According to the authors, a sustainable strategy can be built around these four factors whereby they create a virtuous cycle of innovation, organisation learning and knowledge management, as well as access to new markets. The authors' research demonstrates clearly that for a firm to create differentiation that means something (i.evalue perceptions to client), a firm must spend time on factors aside from technical quality of work.</li></ul>11<br />
  17. 17. What marketing really is: Bed rock of firm performance<br />12<br />
  18. 18. What Does it Mean to be Market Oriented?<br />Marketing is a business philosophy that puts creating and delivering customer value at the heart of all that an organization does<br />It is an organization culture that acquires and disseminates information-cross functionally and across hierarchies, and acts upon that information<br />This sharing and information coordination tolerates no functional silos <br />13<br />
  19. 19. Why firm culture is so important<br />The recent review and findings by the Accounting & Corporate Regulatory Authority of Singapore (Acra) that accounting firms in the region are struggling with audit quality should make firm leaders sit up and take notice. <br />Research has shown that auditors are more likely to accept risky client assignments if they believe it would lead to further work<br />In a paper published in Behavioural Research in Accounting by Jenkins et al (2008), the authors set out a number of areas whereby culture can impact a firm’s governance and the role that seniors within the firm play through their behavior such as mentoring, client interactions, communication, and social influence. They highlight a number of studies and situations whereby firms have engaged in unethical actions (lowered audit quality) due to the cultural conditions of the firm. Primarily, those cultures that value revenue generation over all other activities tend to be at most risk<br />14<br />
  20. 20. What should you strive for? (David Maister)<br />15<br />
  21. 21. Quick Case<br />Harrex Group, NZ (source: J of Accountancy, 2008)<br />Founded in 2007 by Brendan Harrex, first chief value officer at his former firm<br />He says focus on time and cost only creates illusion of managing a PSF<br />What really matters is value creation<br />No more hourly billing, a change of culture<br />16<br />
  22. 22. Cont’d <br />Key Performance Indicators for Harrex:<br />* Ability to think strategically on behalf of clients<br />* Client Communication<br />* Delegation<br />* Turnaround Time<br />* Client Feedback<br />* Effective Listening and Communication Skills<br />* Knowledge Elicitation/Coaching<br />* Risk Taking, Innovation and Creativity<br />* Continuous Learning<br />* Passion, Attitude and Commitment<br />* Team Player<br />17<br />
  23. 23. Thank You!<br />If you want any of the full references for work cited or have any questions, please feel free to contact me:<br />bob@srchk.com, www.srchk.com<br />Blog: www.marketingasia.typepad.com<br />Twitter: http://twitter.com/robertsawhney<br />LinkedIn – Robert Sawhney<br />Our New Book: published by Lexis Nexis in 2009) available from LN in HK and www.amazon.com. <br />18<br />

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