Successfully reported this slideshow.
We use your LinkedIn profile and activity data to personalize ads and to show you more relevant ads. You can change your ad preferences anytime.

Firm of the Future - Media Edition


Published on

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.

Published in: Business, Education
  • Be the first to comment

Firm of the Future - Media Edition

  1. 1. Firm of the Future Media and Analysts Ed KlessSenior Director, Partner Development and Strategy @edkless
  2. 2. What is a Business Model? How your firm createsvalue for customers, and how you monetize that value.
  3. 3. “Disruptive threats comeinherently not from new technologybut from new Andy Grove, Founder, business Intel models.”
  4. 4. Peter Drucker “The customer never buys a product. By definition thecustomer buys the satisfaction of a want. He buys value.”
  5. 5. Experience CurveUndifferentiated Differentiated Provide knowledge Perform Services Make products Extract Commodities Market Pricing Premium
  6. 6. Professional Service Firm
  7. 7. 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
  8. 8. Four Defenses of Timesheets1) Pricing2) Productivity3) Cost accounting4) Project management
  9. 9. Professional Knowledge Firm Professional Knowledge Firm Capital Pricing onProfit = X Effectiveness X management Purpose
  10. 10. Two Business Models Professional Knowledge Firm Capital Pricing onProfit = X Effectiveness X management Purpose ↑ ↑ ↑ ↑
  11. 11. From Revenue to Profit
  12. 12. The Market Share Myth Richard Miniter
  13. 13. $40,000$35,000$30,000$25,000$20,000$15,000 $10,000 Value $5,000 Price $0 Cost
  14. 14. Baker’s LawBad customers drive out good customers
  15. 15. From Capacity to Capital
  16. 16. Four Forms of Capital• Financial• Intellectual• Structural• Social
  17. 17. Rival Asset Non-Rival Asset
  18. 18. 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
  19. 19. From Efficiencyto Effectiveness
  20. 20. 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
  21. 21. What you canmeasure you can manage. The McKinsey Maxim
  22. 22. “The only way to look into the future is use theories sinceconclusive data is only available about the past.” Clayton Christensen
  23. 23. The Big Three• HSDs• Turn around time• Value Gap
  24. 24. Value Gap
  25. 25. From Cost-plus to Value-led
  26. 26. Warren Buffet“The single most important decision in evaluating a business is pricing power. If you’ve got thepower to raise prices without losing business to acompetitor, you’ve got a very good business. And if you have to have a prayer session beforeraising the price by 10 percent, then you’ve got a terrible business.”
  27. 27. 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
  28. 28. A 1% increase change in, yields12.0% 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
  29. 29. The Smile Curve
  30. 30. Ed’s IT Smile Curve
  31. 31. A Tale of Two Theories The Labor Theory of Value The Subjective Theory of Value
  32. 32. Salaries + Overhead + DNI Expected Hours = Hourly RatePrecise, but precisely wrong
  33. 33. Cost-led PricingService Cost Price Value CustomerCustomer Value Price Cost Service Value-led Pricing
  34. 34. 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)
  35. 35. Five Ts to Offering Options 1) Terms 2) Technology 3) Timing 4) Talent 5) Training
  36. 36. Baron Joseph von Neinbach’s Model WA HF PFCBA
  37. 37. Behavioral Economics
  38. 38. CharlesRevson, Founder, Revlon“When it leaves thefactory, it’s lipstick. Butwhen it crosses the counterin the department store, it’shope.”