The Best Book for Professional Services Firms

When I think of books geared toward professional services firms, only one author comes to mind. His name is David Maister and some of his titles include Managing the Professional Services Firm, The Trusted Advisor, and Strategy and the Fat Smoker (my favorite). The newest title in this genre is now my favorite, and it’s entitled The Boutique: How to Start, Scale, and Sell a Professional Services Firm by Greg Alexander.

Interview Highlights

• The two goals of running a professional services firm (ProServe): to build a great business that can endure for a long time and to sell at some juncture
• What is Capital54?
• One of Greg’s other books is a favorite of Mark’s: Topgrading for Sales
• Either be an elephant or the rabbit hunter, not both
• Pricing mix: retainer-based, performance-based, fixed-based
• The three business models of ProServe firms: Intellect, Wisdom, Method
• Buyers don’t buy firms, they buy teams
• Culture matters more than you think in ProServe firms
• Three distinctive roles in ProServe firms: selling the work, delivering the work, and creating the work (product management and innovation)
• Is the concept of finders, minders, and grinders dead?
• The difference between bookings and pipelines
• Two critical metrics requirements: 9 months of bookings and the 5:1 ratio
• The ideal revenue mix between existing and new business
• What is Collective54 and how does it differ from Capital54?

If We Had More Time

As much as I admire and appreciate the Maister books, Greg’s is more practical and hands-on. My interview with Greg merely scratches the service of the book’s practical advice for ProServe owners and leaders. Here are a few other big ideas I liked about the book:

1. We did not talk about the five competitors every ProServe faces. That list of five items should be the first agenda point for any off-site strategy meeting with members of the senior leadership team.
2. Culture is about how things get done in the ProServe firm. Some of the end-of-chapter questions are excellent on this topic.
3. Price versioning is another topic we did not hit in the interview, but I’d be interested in hearing Ron Baker’s views on this topic (a past guest). I thought Greg nailed it.
4. Get the buy-sell agreement right. Not thinking of selling just yet? It doesn’t matter. Have an attorney look over the agreement now for potholes and landmines. Greg mentions no awards for sweat equity in this part of the book.
5. It seems as though a new book on exits is being released daily. I have at least thirty titles on exits in my Kindle library. And I’m qualified to state that the section on exits is the best I’ve ever read for ProServe firms.
6. We talked about key metrics that buyers will be looking at, but it bears repeating–get the revenue mix rightsized and take note of the months of bookings you have and your projection pipeline (Greg defines and explains the 5:1 project pipeline rule).

Books Mentioned

Greg reads some 300 books annually. Here are some of the books mentioned:

• Think Fast and Slow by Daniel Kahneman
• Any book by Geoffrey Moore including Crossing the Chasm
• Any book by David Maister

Interviews Similar to Our Conversation with Greg Alexander

If you liked this episode, check out our visit with Ron Baker where Mark gets to talk about one of his other favorite books for ProServe firms, The Firm of the Future.