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Having worked to help people build their portfolio executive proposition and to go out and win their first client. I increasingly hear them telling me that they are too busy to find anymore clients. At one level this is a great success story. They have more work than they can cope with. Fantastic!
But at another level, it sets off all sorts of alarm. If you do not continue to grow and develop your client base, then ultimately your business will fail. Let us look at the reasons why you might be too busy to find clients.
Sometimes it is just an excuse. Because finding clients is hard and for you and most portfolio executives, business development is the thing they least enjoy. They will do almost anything to avoid finding clients. It is a bit like when you had homework at school or an essay at university and you spend time organising your notes rather than writing the first paragraph. One expensive diversion is further professional development: going to courses and conferences to enhance you capability. Typically, clients are less impressed by qualifications and more impressed by the interest you take in their problems. If you are an expert on their problems, they will believe you have everything they need to provide a solution.
More time off
Sometimes, it is because they have won a full deck of clients. They have six clients and they are doing two or three days a month for each. They have decided that they enjoy the spare time so much that they are happy to be fee earning just three days a week. But they have also decided to take the remaining eight days or so days per month to do other things that will not build their portfolio. They have chosen to fill this spare, discretionary, time with more non business-related activity rather than continuing to build their professional future. That is fine, if they are happy that their client base is going to diminish over time.
But the most common reason and the one that gives me most concern, is they are too busy because they are spending too much time with a small number of clients doing a large number of days. The temptation is that once you are engaged with a client, there is lots of stuff for you to do, and you do more and more of it. You can quickly find yourself with two, perhaps three, clients but working on average five or six days a month for each. It is squeezing out your business development time.
I have worked with some portfolio executives who end up doing seven days a month for each of those three clients; twenty-one fee earning days a month means you are working flat out; you hardly have enough time to do your book keeping and submit your invoices. Now you have moved away from a role where you primarily ensure that the right things are being done and things are being done right. You are doing a lot of operational execution.
I am not saying, you should never get involved in execution. Sometimes a client has a situation where you just need to roll up your sleeves, get in there and sort it out. The client will be very grateful and it will enhance your credibility. But I am saying there is a big risk that you start to do work that should be done by somebody else. Somebody who has a less senior role and is a lower cost. When you start to become trapped in operational execution you face two substantial risks:
1) You can no longer justify premium rates for the work that you do as you could (and should) be substituted by a cheaper person.
2) You are unable to grow a spread of clients in your portfolio so that you have less income risk. If you have three clients at six days a month, and you lose one client, that is a third of your income, gone! If you have six clients and you are doing two or three days a week for each of them and you lose one client – that is as little as couple of days money.
Now you are at risk of getting into a downward spiral where your fee rates get under pressure because you are doing non-premium non-high value work, and your portfolio is becoming under powered because you are at a higher risk of losing a premium client. I want to give you an example of a lady I started to work with who faced exactly this problem.
She has worked as an independent marketing consultant, has built up some fantastic clients, but she is working incredibly hard. Typically, she is working a six-day week and a lot of the activity for which she bills her clients is actually activity that she is sub-contracting to other people, quite legitimately and by agreement. She is offering her client in effect a blended rate. She is working her socks off for two or three very demanding clients. She has a bit of other work, small episodic stuff assignment. We did an exercise reviewing her hours devoted to fee earning work over the last 12 months. On average she achieved less than £25 pounds an hour for her time. This is for an individual who has thirty years of senior marketing executive experience. She is acting as the marketing director for her key clients. But she is trapped. She has allowed this situation to build up over many years and, because I had only just started working with her, she had some really painful choices to make. Does she put those big clients at risk by changing the terms of engagement? Is she going to be replaced in one of her clients by the marketing manager that they have just hired, who she believes is after her job? Should she just start again?
I will give you another example. This person has been working as a portfolio executive HR director and has a good portfolio of clients. They get involved in recruitment campaigns that can be very demanding. They have always had an ambition to have some associates working with them so that they do more of the premium work. However, by spending too much time doing fee-earning work and very little time on business development, there has never quite been enough work to engage those associates. Recently, they recognised that they needed to start a campaign to find the next client. We are now working on a tightly drawn business development campaign focused on a well defined target segment.
What is interesting is that the focus includes that the client must be local. There is a commitment to make workstyle choices that build the right lifestyle. With confidence to win new work and the confidence of a portfolio of long-term clients, now is the time to accept slightly fewer chargeable days while finding a new client. For this new client a higher day rate will be pitched strengthening the overall portfolio.
If you stay too busy to find new clients, then sooner or later your portfolio executive workstyle will break down. You risk a downward spiral of lower rates and increasing workload. I urge you to stay aware of the weaknesses in your portfolio and actively manage the level of time investment to build the freedom and joy of a rewarding and sustainable future.
Charles McLachlan is the founder of FuturePerfect and on a mission to transform the future of work and business. The Portfolio Executive programme is a new initiative to help executives build a sustainable and impactful second-half-career. Creating an alternative future takes imagination, design, organisation and many other thinking skills. Charles is happy to lend them to you.