Professional
service firms need to recognise that you don’t need to compete to grow; what
you need is to work towards creating your own niche.
The niche firm
Those who think they can create a specialist professional service
firm…….……………………..will be the ones who in all probability will.
The niche professional service firm
Today
competitive advantage is defined as the leverage a business has over another.
In simple words, to show being better than the competitor/s. Businesses develop
attributes that differentiate their goods and services through price, quality
and such other features.
Does
one need to really compete in the professional services firm market? Shouldn’t
work be referred to oneself or one’s firm by someone who has been a satisfied
client. This is an age old truth of the professions; yet it is seldom
understood in its purest form.
At the
core of the profession lies knowledge and the abundance of it. And
professionals who excel are normally those who do that ‘one thing’ right. Over
and over and over again. In doing so, they learn so much and improvise
consistently. They reach such a level in their thought process that their final
output is hard to match, or even to come close to, by other professionals. It
is their calling. Their finesse and passion that creates what we call
“expertise”. Once expertise is developed, two things can happen. Professionals
can bask in their glory, develop complacency of what I would say ‘intellectual
arrogance’ and wane over a period of time. Or, for the select minority, they
would rise and rise and reach a level of sublimity that is seldom seen. The
latter is the one who creates new milestones, raises the bar, and develops new
frameworks, new models and new competencies that professionals would follow in
the years ahead.
Those
who succeed in their profession, have done so because they concentrated on
getting that one thing right. And they persevered till they succeeded. And then
moved on to continuously raising the bar, the depth of their advice, the
alternatives that one could explore and charted the unknown. It is they who the
world has recognised and rewarded. They have truly created, what we call, a
‘niche professional service firm’ out of years of demonstrated expertise,
research and perseverance.
Clients don’t need to be sought by a niche firm. Clients will find their
way to expertise, themselves. They will
be referred to the expert. Just like if one needs a knee replacement surgeon,
one would normally ask “do you know who is the best in the business?” Patients
who need these surgeries dread even the thought of something going wrong and
they losing their mobility for life. “Is he good with post-operative care?”;
“How many surgeries has he conducted?”; “What is his success rate?”; “What
happens if something goes wrong – how will he and his team help me?”. These and
others are very natural questions that would come. The expert surgeon will give
a calm, composed and articulated, yet clear, response to each question and
more. The patient and their families return home reassured that they are in
safe hands. The surgery goes smoothly. The post-operative recuperation and
physio goes well. Spot on. The patient is back on his feet. Expertise proven.
What happens next – “He is the best surgeon around…he did so and so..he said so
and so..I highly recommend him..” Haven’t we all heard this at some point in
time about some or the other professional. Does this professional need to worry
about growth? His diary is full, weeks in advance. That is what being a niche
expert does to one’s credibility and reputation.
This
is the point that one needs to reach, if one has to really scale and grow in a
professional service firm. Create your niche. Create a perception..a visible
perception..that you are an expert. And the world is yours. Sounds simple…?
Well, may not be as easy as it sounds.
Let’s
look at how others have done this.
What
are the challenges? What does it take? Does everyone have a shot at becoming an
expert? The answer to all of these question lie in the choices that one makes.
The pattern of rigour and research. The perseverance.
The
road is always so full of challenges. It is always tough.
Can
one find their calling in this narrow space? To start with, a professional
needs to identify his calling. What does he or she excel at? What efforts is he
or she making currently and willing to make to reach the pinnacle?
Let’s look at a few examples
Most
senior tax professionals regularly converge in speaking sessions, conferences,
workshops, seminars, firm level discussion groups, study groups or peer groups
to dissect and analyse any new change or a new law or a path breaking judgment
that impacts the tax practice. It is hard work, at their age, coupled with a
quest for learning new concepts, unlearning old ones at times, and continuous
realignment to the demands of the profession that makes them excel at what they
do. The fire is burning even at the age of 65 or 75 – it is that X factor that
“I want to be the best tax professional around” that keeps them going. They
have made their money in life, they have achieved everything in the profession
that one could possibly achieve, they have earned their stars and kept them
flying high for north of 40-50 years. And done things repeatedly well. They
have become the luminaries of the profession. The key reason – know your niche
and excel at it.
Sachin
Tendulkar, known world over as the Maestro of Cricket, practiced at 5.30 am
even during his last season – in his 24th year of international
cricket. Did the coach tell him to do that – No!! Did the captain ask him to
prove his fitness – No!! Then what was it? Well, it was the innate desire to
give his best – each time, every time. A quest for perfection and excellence.
Nothing less. Not even 0.5% diminution in performance would do for him. It is
this hunger and passion that led him to become what he is – the highest run
scorer in the history of cricket in both forms of the game (tests and one days)
and 100 centuries – a record that is unlikely to be broken for a long long
time. So what was it?
Do we,
as professionals, have it in us to strive for excellence – each time, every
time. Can we burn the morning hours to keep ourselves fit, take care of our
health – physical and mental, create an environment in the firm that attracts
the best people, retains them and rewards them for performance? Excel at client
delivery and client servicing. Follow the principles of practice management to
the core. And, have a strategy of focusing on a niche and building on that
niche. If we can answer a YES to all of these, consistently, we would have created
a niche professional service firm, that one can be proud of. Then, one does not
need to really compete in the true sense. One can focus on excellence, and
clients will come – referred from various sources. All you got to do is deliver
your best; and that will keep on increasing the referrals coming your way.
That
brings us to the following questions commonly asked by practitioners:
– How does a small or medium sized CA firm
create a niche?
– Where does one start?
For a
SME CA firm, here are some ideas and examples that could be used as reference
points:
1. First, SME firms should change their mindset
and believe in themselves and their abilities. Developing a niche may sound
daunting; but in reality, it is not. It needs determination and strong will;
such that the resolve to learn, apply and practice is with the highest level of
motivation. Imagine preparing for the CA final exams – that is the only goal –
and that is to develop expertise in a particular subject. And excel in the
same, continuously – month on month, year on year. Impossible – not at all,
just needs hard work and concentration.
2. Focus. Look at some of our practitioners of
Service Tax who have transitioned into the GST regime like a fish takes to
warmer waters. They have adapted to the new law, spent hours and hours decoding
the developments and updates from the GST council, with new rules coming out
almost on a daily/weekly basis, the client requisitions for conducting GST
impact studies and assisting in the transition process, the technology
challenges and so on. One may argue that they already had a Service Tax
practice; and in that sense, were a niche player. But, even then, GST is a new
law, an amalgam of sales tax/VAT and service tax and central excise; and it
takes perseverance and patience to unlearn and relearn. The fact that they had
a practice helped them to focus on the new law, without worrying about other
service lines. And that’s where CAs will need to strive to transition to. Do not
worry about all service lines. Focus on one and give off your best.
3. For SME firms, with two or more partners, the
easiest thing would be for service areas to be split between partners. Everyone
should not be doing everything. Taxation – Indirect Taxation and Direct
Taxation, Audits – Statutory and Internal, Corporate Advisory – Lead Advisory
and Transaction Advisory, are all knowledge driven practice areas. To expect
one professional to do justice to both Direct and Indirect Taxation is an
outright misalignment. You do not have many all-rounders in any profession;
that’s a small breed. A vast majority are generalists and SMEs would do well to
allow individual partners to pick up one service area and run with it. This
will also create a case for consolidating practices and growing one’s own firms
with merging with like-minded firms. When you have more bandwidth at the
partner level, each partner can pick up an area that he is most wanting to
excel in and then run with it. The partner can then excel at the particular
service area, develop his own team and create a niche for the firm.
4. Consolidation of practices is the name of the
game. The large international and national firms have all grown because they
have partners leading specific practice areas. Clients see the expertise and it
is over and over again demonstrated due to the depth of the partner concerned.
How can a normal CA firm compete with such a value proposition? The only real
answer lies in focusing on that one practice area. Start with making a
determined effort in an area and grow with the expectation that what you are
creating is a niche that will pay rich dividends over time. Get all the books,
practice manuals, databases, expert articles, world literature available on the
subject; make a conscious effort to study and understand the concept, adapt it
to the law in India or whichever jurisdiction you need to apply it; and start
practicing in the right earnest.
There is no one right way to implement these ideas; each firm
will have to adapt itself to the marketplace based on its own philosophy and
strengths. Be market centric, customer focused and consistently develop,
enhance, communicate your niche area of expertise in a demonstrable manner.
In
conclusion, all of these examples drive to that one key principle: one really
does not need to compete with other professionals. Just execute on creating
your own niche. Remember the story of Akbar asking Birbal to shorten a line
without rubbing it out? Birbal simply draws a larger line!
