How to Think Like a High-Growth Firm
Many firms have the potential to be high-growth superstars. These high performers come from every corner of the professional services universe. Some are large and some small, and they serve a diverse array of clients.
But far too many firms fail to achieve their growth potential. Why?
The knowledge to ignite growth is readily available. In fact, Hinge has published a wealth of books, research studies and executive guides that lay out everything a firm needs to know about building a high-growth — and this bounty is freely available to all. Yet somehow, sustained high growth never happens at most firms.
Often, the problem lies between a management team’s ears. They build their strategic plans upon faulty assumptions and outmoded beliefs.
High-growth teams look at things differently. In this post, we identify five traits of high-growth firms. If your leadership team is lacking any of these traits, you will be hard pressed to take your business to a place where it can deliver consistently high growth and profits.
Belief that you can grow
“We’re too large to grow quickly.” “We’re too small to compete against the big firms.” “Our industry is too competitive.” If there is one thing otherwise intelligent professionals are good at, it’s generating excuses why they can’t grow.
Naturally, if you believe you can’t grow, you will never try. Your firm will grind in low gear forever. Other firms won’t try because they are afraid to fail — if you don’t try, you can’t fail. The logic is flawed, yet it’s still appealing to some.
As with any business goal, success is never certain. But failure is guaranteed if you don’t try.
What you need is a mindshift — a dogged belief that growth is possible and that your team can make it happen. There may be many valid reasons you aren’t growing today. You just need to identify them, then eliminate them one by one.
Courage to be different
It’s very easy — and oddly comforting — to look to your peers for marketing guidance. If “everyone” calls themselves full service or has a blue logo, there must be a good reason. Right?
Wrong. Don’t anchor yourself to your competitors. That’s an anchor that will sink you. Just because everyone is doing it doesn’t mean it’s right. In fact, that’s a sure-fire indicator that you are missing a huge opportunity — one that’s happening in different waters.
The whole point of differentiation is to be, well, different from your competitors. And when that difference provides an important benefit to a segment of potential clients, you’ve got a true competitive advantage.
The roots of this blind spot go back to our evolutionary past. We humans are herd animals. Fitting in feels safe. Being different feels dangerous. But when it comes to marketing and business development it pays to take some risks and stand for something.
Respect for reality
If there is any overriding conclusion to draw from the last 30 years of cognitive and behavioral science, it is that humans are not by nature fully rational creatures. Strong emotions often influence and distort our perceptions even when we think we are being “realistic.”
It’s easy to find people and anecdotal evidence to support our biases and opinions. But we can counterbalance this weakness with research and science.
Using research and provable facts as the basis for making decisions can be immensely powerful. In fact, high-growth firms are much more likely to conduct frequent research on their target clients to uncover opportunities for growth.
So what does your team need to do? Believe in science and embrace research. Separate your assumptions from those things you know to be true. Recognize that anecdotes and opinions are not facts. And remember that snap decisions based on “gut feeling” can be very risky to the health of your firm.
Love of learning
“That’s the way we have always done it” is a very dangerous phrase in today’s fast-changing world. At a time when half of human knowledge becomes outdated every 2.5 years, no professional can avoid new learning.
But how do you approach it? Is learning something your firm embraces or avoids? And do you define learning as mandatory continuing education only, or is it something more?
Firms that love learning about their clients’ industries and the challenges they face are far better equipped to anticipate and address clients’ emerging and needs. And firms that love learning about their technical specialty are positioned to innovate and demonstrate thought leadership. What is your firm’s commitment to learning?
Nishith Desai Associates, an India-based law firm with offices around the globe, decided to make learning an integral part of their firm culture. So they dedicate the first hour of each morning to learning. When they aren’t doing independent study, everyone in the firm participates in live or virtual sessions. For a firm their size, this commitment represents an enormous investment, but it has paid tremendous dividends. They were named Asia’s most innovative law firm by The Financial Times. They have successfully built their world class reputation around their knowledge and creative thinking.
While your firm may not be able to make this level of commitment, that doesn’t mean that you can’t value and support new learning. Knowledge is power. But in an era of rapid change and increasing competition, those who value learning have the greatest power.
Having a clear focus and a well-defined goal are important to motivating and directing growth. This single overriding focus is something we call a “mission mentality.” When people are counting down the days until their retirement or chasing their personal priorities they are not working as a team to achieve a common goal.
Today’s professional services firms are complex organizations. They often have matrix structures and many practice areas with autonomous professionals working on complicated client projects. Add in a rapidly evolving environment and intense competition and you have a recipe for stress and confusion.
When everyone in a firm has a clear understanding of where they are headed and are working together to get there, growth is much easier to achieve. The mission becomes more important than any individual’s priorities.
Firms that have multiple competing goals are at war with themselves. We’ve seen too many firms let conflicting partner-level priorities torpedo growth of the overall firm. Don’t let it happen to yours.
How do you think like a high-growth firm? The five traits I’ve described above are crucial, and a firm has to embrace them at every level of the organization. Of course, that means starting at the top with the leadership team. You may have to work hard to purge the habits and assumptions that are holding you back. But once you get everyone excited and headed in the same direction the obstacles to sustained high performance become easier and easier to overcome.
Here’s Why Bitcoin Won’t Replace Gold So Easily
What a week it was.
First and foremost, I’d like to acknowledge the horrific mass shooting that occurred in Las Vegas, the deadliest in modern American history. On behalf of everyone at U.S. Global Investors, I extend my sincerest and most heartfelt condolences to the victims and their families.
The memory of the shooting was still fresh in people’s minds during last Tuesday’s Hollywood premiere of Blade Runner 2049, which nixed the usual red carpet and other glitz in light of the tragedy. Before the film, producers shared poignant words, saying that in times such as these, the arts are crucial now more than ever.
I had the distinct privilege to attend the premiere. My good friend Frank Giustra, whose production company Thunderbird Entertainment owns a stake in the Blade Runner franchise, was kind enough to invite me along. Despite the somber mood—a pivotal scene in the film even takes place in an irradiated Las Vegas—I thought Blade Runner 2049 was spectacular. Even if you’re not a fan of the original 1982 film, it’s still worth experiencing in theaters. Hans Zimmer and Benjamin Wallfisch’s synth-heavy score is especially haunting.
CNET recently published an interesting piece examining the accuracy of future tech as depicted in the original Blade Runner, from androids to flying cars to off-world travel read the article here.
Still in the Early Innings of Cryptocurrencies
Speaking of the future, I spoke on the topic of the blockchain last week at the Subscriber Investment Summit in Vancouver. My presentation focused on the future of mining—not just of gold and precious metals but also cryptocurrencies.
Believe it or not, there are upwards of 2,100 digital currencies being traded in the world right now, with a combined market cap of nearly $150 billion, according to Coinranking.com.
Obviously not all of these cryptos will survive. We’re still in the early innings. Last month I compared this exciting new digital world to the earliest days of the dotcom era, and just as there were winners and losers then, so too will there be winners and losers today. Although bitcoin and Ethereum appear to be the frontrunners right now, recall that only 20 years ago AOL and Yahoo! were poised to dominate the internet. How times have changed!
It will be interesting to see which coins emerge as the “Amazon” and “Google” of cryptocurrencies.
For now, Ethereum has some huge backers. The Enterprise Ethereum Alliance (EEA), according to its website, seeks to “learn from and build upon the only smart contract supporting blockchain currently running in real-world production—Ethereum.” The EEA includes several big-name financial and tech firms such as Credit Suisse, Intel, Microsoft and JPMorgan Chase, whose own CEO, Jamie Dimon, knocked cryptos a couple of weeks ago.
To learn more about the blockchain and cryptocurrencies, watch this engaging two-minute video.
Will Bitcoin Replace Gold?
Lately I’ve been seeing more and more headlines asking whether cryptos are “killing” gold. Would the gold price be higher today if massive amounts of money weren’t flowing into bitcoin? Both assets, after all, are sometimes favored as safe havens. They’re decentralized and accepted all over the world, 24 hours a day. Transactions are anonymous. Supply is limited.
But I don’t think for a second that cryptocurrencies will ever replace gold, for a number of reasons. For one, cryptos are strictly forms of currency, whereas gold has many other time-tested applications, from jewelry to dentistry to electronics.
Unlike cryptos, gold doesn’t require electricity to trade. This makes it especially useful in situations such as hurricane-ravished Puerto Rico, where 95 percent of people are reportedly still without power. Right now the island’s economy is cash-only. If you have gold jewelry or coins, they can be converted into cash—all without electricity or WiFi.
Finally, gold remains one of the most liquid assets, traded daily in well-established exchanges all around the globe. Every day, some £13.8 billion, or $18 billion, worth of physical gold are traded in London alone, according to the London Bullion Market Association (LBMA). The cryptocurrency market, although expanding rapidly, is not quite there yet.
I will admit, though, that bitcoin is energizing some investors, especially millennials, in ways that gold might have a hard time doing. The proof is all over the internet. You can find a number of TED Talks on bitcoin, cryptocurrencies and the blockchain, but to my knowledge, none is available on gold investing. YouTube is likewise bursting at the seams with videos on cryptos.
Bitcoin is up 350 percent for the year, Ethereum an unbelievable 3,600 percent. Gold, meanwhile, is up around 10 percent. Producers, as measured by the NYSE Arca Gold Miners Index, have gained 11.5 percent in 2017, 23 percent since its 52-week low in December 2016.
Look Past the Negativity to Find the Good News
The news is filled with negative headlines, and sometimes it’s challenging to stay positive. Take Friday’s jobs report. It showed that the U.S. lost 33,000 jobs in September, the first month in seven years that this happened. A weak report was expected because of Hurricane Irma, but no one could have guessed the losses would be this deep.
The jobs report wasn’t all bad news, however. For one, the decline is very likely temporary. Beyond that, a record 4.88 million Americans who were previously sitting out of the labor force found work last month. This helped the unemployment rate fall to 4.2 percent, a 16-year low.
There’s more that supports a stronger U.S. economy. As I shared with you last week, the Manufacturing ISM Purchasing Managers’ Index (PMI) rose to a 13-year high in September, indicating rapid expansion in the manufacturing industry. Factory orders were up during the month. Auto sales were up. Oil has stayed in the relatively low $50-a-barrel range, which is good for transportation and industrials, especially airlines. Small-cap stocks, as measured by the Russell 2000 Index, continue to climb above their 50-day and 200-day moving averages as excitement over tax reform intensifies.
These are among the reasons why I remain bullish.
One final note: Speaking on tax reform, Warren Buffett told CNBC last week that he’s waiting to sell assets until he knows the plan will go through. “I would feel kind of silly if I realized $1 billion worth of gains and paid $350 million in tax on it if I just waited a few months and would have paid $250 million,” he said.
It’s a fair comment, and I imagine other like-minded, forward-thinking investors, buyers and sellers will also wait to make huge transactions if they can help it. Tax reform isn’t a done deal, but I think it has a much better chance of being signed into law than a health care overhaul.
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