All For One

10 Strategies for Building Trusted Client Partnerships

Andrew Sobel

• Publisher: Wiley
• Year: 2009
• Print ISBN:
  9780470380284
• Edition: 1
• eBook ISBN:
  9780470485347
• Topic: Business
• Subtopic: Business General
• Index: Business

Corporate clients are demanding more value from their external advisors, and consolidating their business around a smaller number of firms. These trends are forcing a variety of service providers—from consulting firms to large banks—to confront a series of difficult challenges:

• How do we create an 'all-for-one, one-for-all' culture in which the whole is greater than the sum-of-the-parts and we succeed in leveraging our global network to deliver value to clients?"
• How do we mobilize the right people, resources, and ideas—across a multitude of organizational and geographic boundaries—into each and every client relationship?"
• How do we evolve from a trusted advisor to a trusted partner and build multi-year, institutional relationships?

All for One answers these questions with an innovative and comprehensive model for developing enduring, institutional client relationships—what Andrew Sobel refers to as Level 6 Trusted Client Partnerships. It offers readers ten specific strategies that are thoroughly supported by case studies, best practices from leading firms, and implementation tools. The individual professional is principally responsible for five of these strategies, while the firm—the institution—must support and drive the other five. When you successfully execute against all ten of these building blocks, you develop long-term, professional-client partnerships that provide great value to the client and high levels of personal satisfaction and profitability for the service provider.

 

PART I

A Road Map for Building Trusted Client Partnerships

1

Reaching Level 6: Trusted Client Partner

This book describes the 10 essential strategies that are required to build long-term, institutional client relationships—what I call trusted client partnerships. These partnerships are broad and deep, and they are characterized by many-to-many relationships at multiple levels. They usually endure for years. They account for a small percentage of most firms’ client relationships, but they contribute a disproportionately large share of their growth, profits, and intellectual capital. They can be hugely beneficial to clients, and often result in greater value, lower risk, and faster execution. You need them in good times, but even more so in tough times. The 10 strategies that I introduce in the coming chapters are largely the result of an extensive study I have conducted of large, institutional client relationships; they also reflect my personal experiences in building senior executive relationships during my 28-year career in management consulting.

What exactly is a trusted client partnership? Let’s define this term by first examining two striking but typical examples.

Citigroup and Royal Dutch Shell

Less than 10 years ago, the idea of having Royal Dutch Shell as a major client was little more than a gleam in the eyes of the top executives of Citigroup’s Global Corporate Bank. Today, Shell is one of Citigroup’s largest worldwide clients. Citigroup has built a network of relationships with dozens of Shell executives around the world and is a major partner in helping Shell to achieve its strategic objectives. The way in which this happened is a practical illustration of the power of the All for One strategies and philosophy set out in this book.

In the beginning, two Citigroup investment bankers had some contacts in Shell’s mergers and acquisitions department. Rather than going it alone, they brought in the then-chairman of Citigroup Europe, Sir Win Bischoff, as a senior advisor to the team. Sir Win did not simply push aggressively to be included in an upcoming transaction, as bankers sometimes do, but rather offered to conduct a complete analysis—at no charge—of Shell’s upstream (refining and distribution) business. Working with a division head who would later become the Shell CEO, the Citigroup team spent three months looking at the future of the business. The ideas that emerged from this work, combined with the trust that developed, eventually earned Citigroup the right to participate in three major Shell deals.

Some top executives were replaced the following year; and it turned out that two of the newcomers had worked for other Citigroup clients. The Citigroup team worked hard to successfully transfer those relationships. The new CEO, however, had no relationship with Citigroup. Sir Win called on his extended network and asked a former finance minister to introduce him to the new CEO and to give Citigroup advice on how to build the relationship. Shortly afterward, Citigroup was one of nine banks invited to bid on a major restructuring assignment. The Citigroup team members invested heavily in preparing their proposal. They even took the unusual approach of interviewing Shell’s auditors and lawyers in an attempt to understand every aspect of the restructuring challenge. Through the quality of their proposal and their intimate knowledge of Shell’s business, they won the mandate. Shell not only picked them for the assignment, but they also insisted on paying them for the planning work because they wanted it to be a fair deal and hoped to secure Citigroup’s full commitment to the program.

The relationship expanded over time, and Citigroup began doing brokerage, trading, and cash management for Shell. It would be one-sided to say that the relationship has always been a bed of roses—in fact, there have been ups and downs, as there invariably are between a major investment bank and a large corporate client. There have been times, for example, when each side had to say no to a request by the other party. Equally, there have been moments when deposits of trust were made—such as when Citigroup helped Shell out by liquidating a particular bond position.

Successful long-term
relationships are based on
a combination of the individual
and the company. In order for
there to be continuity, you really
must have a relationship at the
firm level. This is why having
the right culture is essential. It’s
where teamwork comes in, it’s
about how people are measured
and evaluated, and even about
how information flows—these
things are extremely important.
The individual actually
delivers the relationship, but the
firm backs it up. If the culture
doesn’t support the individual’s
efforts, then it will fail.

—Sir Win Bischoff, Chairman, Citigroup

Citigroup employed a number of All for One strategies in fostering the Shell relationship. Some were explicit —for example, carefully leveraging firm-wide networks, coordinating between product units, putting a senior advisor on the team, and investing heavily to build intimate client knowledge. Others, however, were more hidden in the fabric of the institution, and included things like a sophisticated, multilevel relationship management structure and a performance evaluation system that balances achieving short-term financial goals with commitment to cultural values such as collaboration and client focus.

Booz Allen Hamilton and the U.S. Navy

A second example of an extraordinary trusted client partnership is Booz Allen Hamilton’s relationship with the U.S. Navy. Talk about a “client for life”—the U.S. Navy has used this consulting firm for nearly 70 years, a period of time equal to about three professional lifetimes. In 1940—as the Axis powers tightened their grip on Europe and Asia—the U.S. Navy found itself grossly underequipped, with no permanent headquarters and less than half the ships it needed to conduct the war. The two founders of Booz Allen Hamilton—Ed Booz and Jim Allen—personally took on the assignment to help the Navy expand and modernize. They assisted the Navy to create a more effective management structure and cut red tape, and then worked side by side with Navy personnel to implement a series of recommendations designed to speed up decision making and accelerate manufacturing processes. Good work is always the foundation of a trusted client partnership; and indeed, Secretary of the Navy Frank Knox—who had hired Booz Allen Hamilton—was later quoted by Fortune magazine as saying that in using the firm, he had never spent the government’s money more effectively. Since that initial engagement, Booz Allen Hamilton has worked with the U.S. Navy on a continuous series of projects, helping it confront an array of strategic, operational, and technology issues through the Cold War and beyond. The firm helped the Navy launch the Polaris missile program in the 1950s, and develop shipboard communications and computer technologies in the 1970s. Today, a dedicated group of partners lead Booz Allen Hamilton’s work with the Navy across multiple locations around the world.

Like Citigroup’s Corporate Bank, Booz Allen Hamilton employs a variety of organizational practices, processes, and systems that enable it to develop, grow, and sustain trusted partnerships with its clients. These include an ability to work with and support—rather than disdain—the procurement managers who evaluate new proposals; an authentic talent for aligning with their client’s agenda (“your mission is our mission” is a commonly used phrase at the firm); a set of well-developed best practices for institutionalizing and building many-to-many relationships with the client’s organization; a skilled cadre of project managers (principals) and client service officers (vice presidents) who are empowered to lead major engagements; and rigorous quality control processes.

Booz Allen Hamilton’s relationship with the Navy is the rule for them, not the exception. Over the past decade, the firm’s now $3 billion public sector consulting business has grown at the remarkable pace of 20 percent per year. Its success cannot simply be ascribed to a rapidly growing market for government contracts. In fact, it faces intense—even brutal—competition. For some bids (and over 80 percent of Booz Allen Hamilton’s government work is won through formal, competitive procurement processes) there can be 10 or even 20 large competitors such as Boeing, IBM, Accenture, and other behemoths, who have nonetheless been unable to achieve Booz Allen’s growth rates.

What’s their secret—besides a highly structured approach to building and managing large-scale relationships? One of Booz Allen Hamilton’s senior vice presidents described to me his view of their competitive advantage:

It’s very simple: Collaboration is built into our DNA, and so we always compete as one team. When a large opportunity presents itself, we discuss it as a partner group. We decide together whether or not to commit the resources needed to win the bid. If every head in the room nods, then we go for it. We do whatever it takes, and everyone helps each other out. If I need a particular person who is engaged elsewhere—if they are really critical to help us win and then deliver—my partners will almost always make the sacrifice. The fact is, we are much smaller than almost all of our competitors. But they compete as isolated business units, and we compete as one firm. So even though we are not as large, we do a better job of marshalling the right resources and concentrating them onto the opportunity. We effectively bring to bear the clout of a much larger organization.

Relationships like these are the envy of any large services firm. They don’t happen by accident, however; and they are not the work of a single talented individual. They must be systematically cultivated and grown. As I described in the Introduction, the capacity of a firm to develop these trusted client partnerships rests on an entire system of organizational capabilities. You can become a trusted advisor by developing your own skills and working on your own client relationships, but you need to employ a multiplicity of strategies and a team approach in order to become a trusted partner—it’s not a solo act. The journey is well worth it, however. The rewards, for both service provider and client, are huge.

Underpinnings of Trusted Client Partnerships

To cultivate a relationship of this stature, two key dimensions must be developed: the individual professional’s role, and the firm’s overall relationship. Here’s what has to happen:

• First, the individual professional who is leading the relationship must evolve his role from that of an expert for hire to a trusted client advisor. This is the essential first step.

• Second, the firm’s relationship must develop from a single point of contact and a single service to multiple contacts and a broad range of services.

These two dimensions are shown in Figure 1.1.

FIGURE 1.1 The Client Development Matrix

If you reflect on it, you’ll see that this Client Development Matrix—where each quadrant represents a particular positioning with the client—makes intuitive sense. However, to create a complete progression of professional relationships, we need to consider individuals who are not yet clients—people who have not even entered the matrix. Nonclients include what I call contacts and acquaintances. If we add these into the mix, we end up with six levels of professional relationships. My clients have found it extremely useful to think about these as a progression from one to six.

Level 1: Contact...

Table of contents

• Praise
• Title Page
• Copyright Page
• Dedication
• Introduction
• PART I - A Road Map for Building Trusted Client Partnerships
• PART II - The Five Individual Strategies
• PART III - The Five Institutional Strategies
• PART IV - Frequently Asked Questions and Conclusion
• Index