Tom "Bald Dog" Varjan's PSF (Professional Service Firm) Barking Board

Welcome to my blog. Here we discuss all aspects of running a successful consulting firm. Mainly we’re searching for the answer to the ultimate consulting firm question: How can we deliver more value for higher fees using less of our time, money and effort? If you like this concept, then I invite you to start reading. You may find something valuable.

Wednesday, January 11, 2006

What Farmers and Service Professionals Ought to Have in Common, But Usually Don't

You may find it surprising comparing service professionals to farmers but I believe for demonstrating this specific example it is brilliant. Besides, being a former rabbit farmer myself, I'm biased. I want to talk a little bit about principles versus practices. Or putting it differently learning the trade itself versus learning the tricks of the trade.

In the business world many people are looking for the shortcuts to achieve certain results. Many professional firms want to be market leaders and innovators, but upon presenting a new idea, their first question is, "Where else have you implemented this idea?", "Who else is doing this?" or "Can you prove the validity of this concept to us?"

By definition new and innovative ideas don't have metrics, so they cannot be proved. Metrics are only good for slapping dreams in the face and stabbing visions in the heart. They are useless when we are creating something valuable, something worthwhile. Do you know couples who evaluate each other's "performance" based on the "metrics" of their newborn babies? And in a sense a good professional firm is like a family.

What was Edison's metrics for the light bulb, Bill Gate's metrics for Windows, General Patton's metrics for beating the shit out of the Nazis or Stephenson's metrics for the steam engine? Nothing! These people just dared to boldly go ahead, while others were too busy analysing facts and determining metrics to accurately measure the desperate maintenance of the stinking status quo.

And this is where the problem lies. Many service professionals believe that there is a safe and secure shortcut to become innovative. As a farmer I knew that it would take a full month for the mamma rabbit to deliver the baby rabbits. I couldn't rush the mama rabbit to deliver the babies. I had no guarantee that the baby rabbits would survive and grow up, so I could take them all the way either to the market or the dinner table. I knew one thing: Without regularly "dating" my mama rabbits with George, the daddy rabbit, taking good care of them and then their babies, I would have had nothing to take to the market. And even worse, I would have had nothing to put on the dinner table and would be condemned to eat chicken.

So, I had to invest a lot of work and quite a bit of money on blind faith and believing in my expertise to be able to do the best for these bunnies to grow up in a healthy and happy way. There were no guarantees. Every farmer knows that. Maybe some day farmers – I have already started – will teach at business schools, and then more business people will understand that there are no guarantees besides death and taxes.


The other thing we have to consider is that farmers operate on principles (because that's how nature works), while professional firms try to invent their own artificial principles that often go against the fundamental grains of nature. Here in Canada the papers are full of ads that firms are seeking people with all sorts of fiendish credentials, experiences and qualifications, and they guarantee to pay minimum wage for all this expertise. So, they want a Ferrari for the price of Yugo.

* Yugo used to be a car manufacturer in Yugoslavia hell-bent on making the world's cheapest cars. It failed and went bankrupt a few years ago.

Yet, when I ask service professionals about their practice development activities, most of them say the same: There is no point in investing in it - be it up to date technology, marketing initiative or skill building for associates - because what is the guarantee that it works. It is like a sport team's members say, "What is the point in wasting money on hiring a coach. He can't guarantee results anyway. So, let's save our money."

But what is the underlying message here? Something like this, "We are bunch of hopeless idiots, and that there is no coach in the whole universe who could make something of us."

I can bet my bottom dollars that the more guarantees professional firms are seeking in the process of becoming the best they can be, the more they fall behind with no hope in hell to ever crawl out of the mediocre bunch. In his book, Good to Great, Jim Collins writes about people who have a DNA-level urge to do their best regardless of the circumstances. And they do. The rest are seeking guarantees, investors and other people who are willing to make financial or other sacrifices, so these fools can be successful. I've recently been asked by an HR expert to help her to start her business on a joint venture basis. I asked for a modest monthly retainer and equal revenue split, stipulating that as money starts coming in, she can gradually recoup the initial retainers from my share. I wanted the retainer as a sign of commitment on her part. She flatly denied. She offered no retainer and a maximum 20% revenue sharing. What's the point in taking 100% of the risk for 20% of the reward?
I walked away, and months later she still doesn't have a business. She clearly proved her level of belief in herself and in the potential of her business through her actions. It was basically none.

So, what are you willing to put on the line to demonstrate that you're serious about your firm and you actually believe in what you're doing?

Imagine this situation: Novice farmer goes to the farm shop and asks the owner: "Hey I want to joint venture with you on a lucrative opportunity. I’m a farmer. If you give me all the equipment, seeds, fertiliser and everything I need for farming for free, then I’ll give you 25% of the money I make on the harvest. Believe me, this is a great opportunity."

Then the shop owner asks: "Have you ever done any farming?”

"No" – The "farmer" says, but I have a triple Ph.D. in farming, and I know how to do it. And this will be great opportunity for you.

Then the shop owners says: "So, you expect me to invest my assets and take 100% risk on an venture that is most likely to fail simply because you've never done it before? And in return for my 100% risk and 100% investment I get 25% of the reward? Is this what you mean?"

"Well, yes. If you are as good as you say, you would have the courage to take the risk on me." – Says the "farmer".

"Well, if you are as good as you say, you’d have the courage to take the risk on yourself, punk." – says the shopkeeper.

What kind of farmer are you?

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