Introduction to the firm of the future

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Introduction to the firm of the future

  1. 1. Introduction to the Firm of the Future Ed Kless @edkless #fotf #laat2014
  2. 2. What is a Business Model? How your firm creates value for and captures value from customers.
  3. 3. “Disruptive threats come inherently not from new technology but from new business models.” Andy Grove, Founder, Intel
  4. 4. Two Business Models Professional Knowledge Firm Profit = Capital management X Effectiveness X Pricing on Purpose ↑ ↑ ↑ ↑
  5. 5. 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 created by PKFs
  6. 6. From Revenue to Profit
  7. 7. $0 $5,000 $10,000 $15,000 $20,000 $25,000 $30,000 $35,000 $40,000 Cost Price Value
  8. 8. From Capacity to Capital
  9. 9. Four Forms of Capital • Financial • Intellectual • Structural • Social
  10. 10. Rival Asset Non-Rival Asset
  11. 11. From Efficiency to Effectiveness
  12. 12. The Antithesis of Efficiency • This conference • All continuing education • Knowledge management • Total quality service • Mentoring and coaching • Networking • Business development • Social media • Pricing on purpose
  13. 13. What you can measure you can manage ––The McKinsey maxim
  14. 14. “The only way to look into the future is use theories since conclusive data is only available about the past.” –-Clayton Christensen, et. al. Seeing What’s Next
  15. 15. From Cost-plus to Value-led
  16. 16. 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 For scope creep, utilize Change Requests ⑧ Perform After Action Reviews (AAR)
  17. 17. “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.” Warren Buffet
  18. 18. A 1% increase change in, yields 0.0% 2.0% 4.0% 6.0% 8.0% 10.0% 12.0% - Fixed Costs + Revenue - Variable costs + Price 2.7% 3.7% 7.3% 11.0% 1.5% 2.5% 4.6% 7.1% McKinsey AT Kearny
  19. 19. A Tale of Two Theories The Labor Theory of Value The Subjective Theory of Value
  20. 20. COST-LED PRICING PRICE-LED COSTING Customer Value Price Cost Service Service Cost Price Value Customer
  21. 21. Seven Ts for creating choices 1) Terms 2) Technology 3) Timing 4) Talent 5) Transference 6) Tailoring 7) Travel
  22. 22. Behavioral Economics
  23. 23. Anchoring
  24. 24. Baron Joseph von Neinbach’s Model WA HF PF C B A
  25. 25. Firm of the Future Symposium Ed Kless @edkless #fotf #laat2014 Ed.Kless@Sage.com NA.Sage.com/leap http://bit.ly/1me9S7j

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