ASI. Using KPI to Ensure the Marketing Department s Story is Heard at the Management Table. Michael Mabey Stephen Mabey. Applied Strategies, Inc.

Transcription

1 ASI Applied Strategies, Inc. Using KPI to Ensure the Marketing Department s Story is Heard at the Management Table December 1, 2011 Michael Mabey Stephen Mabey Legal Marketing Association 26 Wilewood Drive Falmouth, NS B0P 1L0 Phone:

2 Thanks We just wanted to thank the audience for showing up today as we recognize that in these hectic times everyone has lots on their plates and so to be with us today was a choice and we hope you think a good one! We are going to answer in the remaining time, any questions you might have but welcome you to contact either e of us at the following o addresses with any follow up questions: Mmabey@cmiresearch.com smabey@appliedstrategies.ca Applied Strategies, Inc. 2

3 What s In It For Me? That is the question your firm s management team is asking before inviting gyou to the table. This presentation is about: using KPI as a tool to gain influence in your organization who you enlist in identifying the KPI you will use to gain influence how you go about getting listened to It isn t about the specific value of a particular KPI, although we will talk about some KPI In other words, it is strategic in nature, with tactics for accomplishing your goal Influence at the Management Table Applied Strategies, Inc. 3

4 Agenda SCENE 1 Performance Indicators, Defined 2 Building a Seat at the Table 4 Components 3 Insight Leads To Influence 4 Communication Drives Influence 5 Dashboards Enhance Clarity Applied Strategies, Inc. 4

5 Refresher on Performance Indicators Firms track various performance indicators as measurements of their health and performance. The importance of various performance indicators can and will change over time. Performance indicators have historically focused on the financial and operational aspects of law firms. These performance indicators assist not substitute for common sense and djudgment tin steering your firm through hchange. No one number tells the story but rather must be viewed collectively to get an accurate picture. Applied Strategies, Inc. 5

6 What Converts A Performance Indicator Into A KPI Must be quantifiable Must reflect your firm s goals Must be key to your firm s success Applied Strategies, Inc. 6

7 Resources For more information on KPI and lists of possible KPI to use and so we can stay on track here, (as best Michael can), we direct you to the link below to download a copy of Introductory Guide to Key Performance Indicators. Topics include Marketing, Productivity and Financial Key Performance Indicators as well as such topics as Dashboards and Benchmarking. Applied Strategies, Inc. 7

8 Building a Seat at the Table SCENE 1 Performance Indicators, Defined 2 Building a Seat at the Table 4 Components 3 Insight Leads To Influence 4 Communication Drives Influence 5 Dashboards Enhance Clarity Applied Strategies, Inc. 8

9 Building a Seat at the Table - 4 Components 1. Understand Your Firm s Strategic Direction 2. Match Performance Indicators with Strategy 4. Communicate 3. Gather and Analyze Data 9 Applied Strategies, Inc. 9

10 Building a Seat at the Table - 1: Understand Your Firm s Strategic Direction Develop a 360 degree perspective of your firm s strategic direction Steps Spend time with: Key influencers Strategy architects People who are executing (partners, practice leaders, senior staff) The firm historian the person who knows what didn t work before so you can avoid landmines and address those concerns upfront 10 Applied Strategies, Inc. 10

11 Building a Seat at the Table 2: Match Performance Indicators to Strategy The best indicators will be based on the nature and style of your firm. Steps Cultivate a relationship with the CFO and Accounts Department Understand what various potential KPI are really telling the CFO Test drive the potential KPI with the management age e team Bounce the potential KPI off the key influencers and strategy architects 11 Applied Strategies, Inc. 11

12 Building a Seat at the Table 3: Gather and Analyze Data Collaborate and partner with the Accounts Department Steps Make sure you have the right tools and training to get the proper data in a timely manner Work with the Accounts Department to get timely data Collaboration is critical. You have to have this mindset you will not succeed on your own. Your goal is to make the current people at the table look good by making it easier for them to make good decisions. i 12 Applied Strategies, Inc. 12

13 Building a Seat at the Table 4: Communicate Effective communication gets you listened to Steps Make sure you are not just sending out communications to meet quotas sometimes less is more. Like they teach in animal obedience class first you must get their attention. It is less about your expertise and more about the sensibility of your message. It is less about what you want to say and more about what you can get them to listen and respond to. 13 Applied Strategies, Inc. 13

14 Insight Leads to Influence SCENE 1 Performance Indicators, Defined 2 Building a Seat at the Table 4 Components 3 Insight Leads To Influence 4 Communication Drives Influence 5 Dashboards Enhance Clarity Applied Strategies, Inc. 14

15 Insight Rules Not data, not information Insight Insight vs. Information Insight Leadership Information Management Data Technicians i We are inundated with information and data streams. As the new book, Drinking From The Fire Hose discusses, data is not only not valuable, it is in fact detrimental to success it creates paralysis. But, insight is valuable and is the currency of Trusted Advisors. Applied Strategies, Inc. 15

16 What is Insight? Key Performance Indicators Applied Strategies, Inc. 16

17 Insight Gets You Listened To Insight Influence Applied Strategies, Inc. 17

18 Communication Drives Influence SCENE 1 Performance Indicators, Defined 2 Building a Seat at the Table 4 Components 3 Insight Leads To Influence 4 Communication Drives Influence 5 Dashboards Enhance Clarity Applied Strategies, Inc. 18

19 Communication is Essential for Influence The real source of Insight s influence is in it s communication NOT it s Ownership or Control! What causes people to listen? Insight? Of course, and even better, insight that is their idea! 1. Make your targets look good. It will allow them to listen to you. 2. First, the informal channels, then the formal 3. How do people in your firm communicate, tell stories? Applied Strategies, Inc. 19

20 Presentation is Persuasive Two articles that are worth reading prior to presenting any of the KPIs that you feel advance both the marketing department s and firm s case are: Golden Rules for Presenting Financial Data 2. Change the Way You Persuade Gary A. Williams and Robert B. Miller Harvard Business Review, May 2002 Applied Strategies, Inc. 20

21 Remember This Context is just as important as content because it sets the stage. Applied Strategies, Inc. 21

22 Dashboards Enhance Clarity SCENE 1 Performance Indicators, Defined 2 Building a Seat at the Table 4 Components 3 Insight Leads To Influence 4 Communication Drives Influence 5 Dashboards Enhance Clarity Applied Strategies, Inc. 22

23 Dashboard Dashboards provide an easily accessible summary of the most important insights your firm needs to make decisions. The most important KPI for your firm The next 2 most important KPI Placeholder Placeholder Text Text Text Text 300 Executive Summary Labor practice revenues are up XXX is presenting at the ABA next month We brought in 3 new clients this month Etc. Applied Strategies, Inc. 23

24 Effective Dashboards The three keys to the best dashboards: 1. Focus on what is important 2. Are simple and easy to grasp 3. Understandable by the partners Applied Strategies, Inc. 24

25 Marketing Dashboard Components Four aspects of law firm management that your Marketing Dashboard should reflect: 1. Client Management 2. Revenue 3. Practice Management 4. Client Development Cost Applied Strategies, Inc. 25

26 Marketing Dashboard 1. Client Management Client Retention ratio: clients billed in current t12 mo. versus previous 12 mo. Growth in Top Clients ratio: fees billed to Client Management top 50 clients in current 12 mo. versus 125 previous 12 mo. 100 Client Growth Rate ratio: new clients in 75 current 12 mo. versus total number of active 50 clients KPI Dormant Client Percentage ratio: number of clients not handled a matter for in 2 of the past 3 years to total clients. Number of Matters per Client ratio: number of matters billed to the number of clients billed. 26 Applied Strategies, Inc. 26

27 Marketing Dashboard - 2. Revenue KPI Revenue May June July Aug Sept Oct Nov Average Fee per Client fee revenue for last 12 mo. divided by the number of clients billed. Average Fee per New Client new client fee revenue for last 12 mo. divided by the new clients. Average Fee per Matter fee revenue for last 12 mo. divided by the number of matters billed. Average Fee per New Matter the related fee revenue for the last 12 mo. divided by the number of matters billed for new clients. 27 Applied Strategies, Inc. 27

28 Marketing Dashboard - 3. Practice Management Practice Management KPI Practice Areas per Client average number of individual practice groups billed to clients. Number of Lawyers per Client ratio: individual lawyers generating working fee credits versus number of clients. 0 May June July Aug Sept Oct Nov 28 Applied Strategies, Inc. 28

29 Marketing Dashboard - 4. Client Development Costs Client Development Costs p 1 KPI Marketing Budget Ratio ratio: total marketing spend (including salaries) to total fees billed in last 12 mo. Business Development Ratio ratio: business development spend for last 12 mo. to the total fees billed. Marketing Cost per Client ratio: total marketing spend (including salaries) to the number of clients billed in last 12 mo. Business Development Cost per Client ratio: business development spend to the number of clients billed during last 12 mo. 29 Applied Strategies, Inc. 29

30 Conclusion There is no one right or cookie cutter solution that works for getting a seat at the management table because it is about them not you. The bottom line of this presentation is to provide you with one way that you can get your partners to switch their listening ears on! When you have their listening ears you have influence and are well on the way to Trusted Advisor status the ultimate seat!. Applied Strategies, Inc. 30

31 Questions? SCENE Applied Strategies, Inc. 31