Archive for the ‘Advisor Tips’ Category

Depth and Breadth

Monday, July 25th, 2011 by AdvisorCatalyst

I once worked in a distribution business where the customer was the end consumer. Leaders in that business often said, “Depth equals profitability and breadth equals stability.”

By “depth equals profitability,” they meant that more volume delivered to an existing customer directly led to greater profitability. This makes sense, of course. Delivery efficiencies increase and selling costs are lower than when securing new customers.

If the saying had stopped there, however, the business would have been very vulnerable. If you focus entirely on selling more to existing customers, what happens if one of those customers suddenly stops doing business with you? Lack of diversification in revenue stream is a glaring risk for any business – particularly small ones. That is why “breadth equals stability.” Customer attrition will happen, so broadening your customer base is extremely important to improve your ability to survive it.

In short, the long-term health and stability of your business depends on a balance between depth (share of customer) and breadth (share of market).

This principle applies just as well for advisory businesses as anything else.

  • Depth = Profitability: The deeper your relationship with a client (the more you do for them), the more fees you can generate. Referrals are also more likely. Furthermore, greater knowledge of the client makes you more valuable to them, leading to efficiencies in delivery.
  • Breadth = Stability: The more clients you serve at one time, the more stable your revenue stream will be. A certain percentage of your clients will disengage at some point for one reason or another. The larger your client base, the less you will feel the consequences of losing a client.

There is definitely a trade-off between depth and breadth. The more time you invest in a client (depth), the fewer clients you are able to serve (breadth), and vice versa. Over time, you will want to increase both depth and breadth in order to build a vibrant advisory business.


Advisor Power Question: “What’s the Next Action?”

Friday, August 20th, 2010 by AdvisorCatalyst

A CEO recently contacted me to learn more about our strategy execution system. Early in the conversation, I realized that he was actually looking for a system to manage his own time, projects, and work flow. Of course, the disciplines of our strategy execution process are as applicable to individuals as they are to organizations: long-term, quarterly, weekly, and daily priorities. (Read more about setting daily priorities.) Having established that, I recommended this CEO read Getting Things Done by David Allen.

If you’re not familiar with this book, read it. Allen lays out a 5-stage system for managing workflow. I have clients who have used this book to completely change the information storage systems throughout their organizations with great results.

In addition to that system, Allen drills the importance of the phrase, “What’s the next action?” I have found this to be a powerful question for driving clarity in strategic conversations with my clients. Allen writes:

“I am frequently asked to facilitate meetings. I’ve learned the hard way that no matter where we are in the conversation, twenty minutes before the agreed end-time of the discussion I must force the question: “So what’s the next action here?” In my experience, there is usually twenty minutes’ worth of clarifying (and sometimes tough decisions) still required to come up with an answer.”

As you work with clients, ask yourself two questions: (1) Is there a decision to come out of this conversation? and (2) What’s the next action? My own experience confirms that of David Allen; there is at least twenty minutes worth of conversation yet to take place.


The Most Valuable Thing You Can Do Today

Thursday, July 8th, 2010 by Scott Bahr

I can tell you right now how productive I will be today. It all depends on a simple two-minute exercise: setting my daily priorities. If I did it this morning, this is likely to be a good day. If I did not do it, I will probably finish my workday feeling wasteful and unfulfilled.

Grab an index card and write down the most important thing you need to accomplish today. If you don’t think that item will take all day, record a second priority. Fill out the card with everything you can reasonably expect to accomplish (rarely will this list have more than five items). Once the card is filled out, focus completely on #1 until it’s done. Then mark it off and move on to #2. Repeat this process until your card is full or your day is done – whichever comes first. If it’s time to go home and your list is not done, you either wasted time or planned too much. You be the judge. Either way, you’re learning something that you might not have known had you not recorded your expectations for the day.

Recently, I was speaking to a high school class about the importance of this discipline. One student raised his hand and asked, “So what’s on your card today?” The class laughed, but I applauded him for holding me accountable. Then I read him my priorities (one of which was to speak to his class).

If you don’t already set your daily priorities, start now. And I mean now. It will only take you two minutes. Imagine if all of your employees did this. Imagine if you could randomly ask anyone in the hallway, “What do you need to accomplish today?” and he had a ready answer. Think about how quickly you could move as a company. Think about what you could accomplish.

Like I said, do it now.


Join a Network to Succeed Going Solo

Thursday, April 29th, 2010 by AdvisorCatalyst

I’d like to revisit the recent Wall Street Journal article (“How to Succeed in the Age of Going Solo”). It talks about the importance of independent advisors joining a network of people engaged in the same kind of work.

The prospect of being independent is daunting to many. At first, it sounds exciting. After a career of the “daily grind,” the flexibility of working on one’s own seems very enticing. But newly independent workers soon realize that they miss that “daily grind.” They’ve grown so accustomed to the routine of commutes, coworkers, and corporate schedules that their newfound independence presents more of a feeling of “What now?” than “Yippee!” That’s where a network of professional peers serves such a vital purpose. It allows advisors to be independent, but not alone. Furthermore, it gives them a forum in which they can ask questions and share lessons learned.

Over the years, the CEO Advantage advisor peer group has become almost an organization itself in terms of the camaraderie and shared purpose. Our advisors are independent, but they feel a sense of loyalty and friendship toward one another. There’s no question that their association with one another has made them more effective advisors to their own clients.

Whatever you do for a living, if you’re working independently, join a network.


Think Like An Entrepreneur To Succeed Going Solo

Tuesday, April 13th, 2010 by AdvisorCatalyst

A recent Wall Street Journal article (“How to Succeed in the Age of Going Solo”) further confirms an emerging trend that Peter Drucker noted years ago: we are entering the Age of the Advisor. More companies are looking to freelancers in lieu of full-time employees, but the more things change, the more they remain the same. The form of service delivery may be changing, but the essence of what is being offered has not.

All of us are hired for the services we provide and the value we create – whether that comes in the form of full-time employment, part-time work, or project-based consulting. In that sense, we are all entrepreneurs. The most productive workers are those who realize it.

As people lose their jobs in this economy, we see more and more “consultants” who approach their work as a temporary bridge to their next “real” job. This is a mistake. What is a “fake” job anyway? The person who reports to an office each morning to get orders from his supervisor is really not very different from the independent consultant looking for his next project. Both are individuals trading their skills for income. They are entrepreneurs. The more people think that way, the easier any work transition will be.

Business professionals – particularly those who have served in an executive role – possess tremendous ability in areas that can benefit a wide variety of organizations. They need to think more like entrepreneurs when looking for ways to share their expertise. In doing so, they will find that advising can be much more than a temporary step; it can be a very successful career!

Read “11 Steps to Effective Client Delivery” to learn more about how you can thrive in the Age of the Advisor.


Managing Your Own Performance in 2010

Monday, January 11th, 2010 by AdvisorCatalyst

The beginning of a new year prompts us to reflect on the past and plan for the future. When that calendar flips from December to January, we feel as if more than just the year is new; everything is new. “This time,” we say, “I’m going to get it right!” It doesn’t matter what it is. Nothing seems impossible when we have a clean slate in front of us.

I would like to encourage you to take your New Year resolutions beyond the typical. Perhaps you have resolved to eat better or exercise more, to spend more time with your family, or to begin taking lessons on an instrument you’ve always wanted to learn. These are worthy goals, and I wish you the best in whatever you have resolved to do! However, how much thought have you devoted to managing your own performance?

Business organizations know the importance of annual reviews. Most hold an Annual Meeting during which they reflect on the previous year’s successes and failures and set a course for the coming year. Such results and future goals are data driven. Why not do the same for yourself?

What are your strengths? Your weaknesses? Your core values? In what type of environment do you perform best? How do you learn the best? How effective are you at making decisions? Don’t answer these questions based on what you think is true. Look at the record of your own performance and interpret the patterns of your own work. You will be surprised at how much you learn about yourself. I have been doing this for years, and I attest that its value is beyond measure.

So where do you start? Read “Managing Oneself” by Peter Drucker, and you will be able to take it from there. If you would like more pointers on how to conduct an effective personal review, please email me at I would be delighted to discuss it further.


Entrepreneurs: The Process Builders

Friday, December 18th, 2009 by AdvisorCatalyst

After spending a lifetime building a wisdom base, you don’t need to spin that wisdom as something new or revolutionary in order for it to sell. Organizations simply want access to the wisdom – the timeless principles of success that you have learned. The key is to develop a way to deliver that wisdom. You need a process.

In a 2009 interview with Inc. magazine, Jim Collins said:

There has been a big shift away from seeing the essence of entrepreneurship as the creation of a better mousetrap to viewing it as the development of a better process. Did Starbucks have a better mousetrap? Did Home Depot have a better mousetrap? …There are lots of really great mousetraps and very few really great processes. …Isn’t it much more important to create a better process that will produce many mousetraps over time?

Your wisdom already has inherent value, so pour your creative energy into developing a way to deliver it.


The Wisdom-Knowledge Ratio

Thursday, November 12th, 2009 by AdvisorCatalyst

A college graduate is armed with book knowledge and skills, ready to take on the world. For most, it doesn’t take long to realize the limits of that book knowledge. Experience is key in any endeavor, and experience takes time to build. There are no shortcuts.

That’s not to say that book knowledge doesn’t have value. Of course it does. It’s just that book knowledge is pretty much all you bring to the table early in your career. As the years go by, however, your experience contributes a greater and greater portion of your total productive value. Knowledge and skills will always be important, and workers must continually learn, but there will always be more college graduates to hire for book knowledge. As a veteran worker, your value is increasingly found in the wisdom base that you’ve spent years building. You’ve made good decisions and bad decisions, you’ve seen projects succeed and fail, you’ve seen good employees and bad employees… and you’ve developed the instincts to recognize which is which long before they come to fruition.

In other words, your “wisdom-knowledge ratio” increases as you age.

Knowledge is usually interchangeable. Experience usually is not. It’s a unique quality, and thus carries tremendous value. Are you putting your wisdom base to productive use?