August 17, 2005
Law Firm Strategies for Pursuing Opportunities
I have four basic strategies for pursuing new opportunities. The pursuit of new opportunities does not occur in a vacuum. You have to consider the environment in which you exist and where business is conducted. Usually someone else is entrenched in the marketplace as an obstacle to the pursuit of your targeted opportunity. You have to outthink them, outrun them and outmaneuver them because your chances of running over them are usually slim to none. The four strategies are:
- Get there first with the most
- Go where they aren’t
- Use a niche strategy
- Create new value
One of my favorite stories is that of Federal Express®. Who would have thought that an unknown startup could wind up as a major competitor to UPS®? No one would have. UPS had the lock on parcel delivery. Consider the road that brought Federal Express to the point where it is today.
First, they created new value—the overnight letter. That is something that did not exist. I don’t think the world was clambering for it. The world did not know it could be done. But when overnight letters made it possible to kick the pace of business up a little more, Federal Express’ new value quickly made it a success.
UPS was in the parcel delivery business not mail delivery. As a result, UPS didn’t even know a new competitor had arrived. They didn’t know because Federal Express had gone “where they were not” and they “got there first with the most." It was also a niche market—a “small” segment of the mail delivery market. The big guys, including the US Post Office, considered it too small to address. Federal Express used all four strategies. Usually, one is enough to get you a place at the table.
Of course, things didn’t stay the same for long. Along came the Internet, eliminating much of the otherwise growing demand for overnight letters, but Federal Express had already gained its place at the table. It was a simple step to begin a migration into UPS territory by transforming the core business of Federal Express to parcel delivery. Federal Express used Management Judo. It took advantage of the weaknesses UPS had developed as the market leader to elbow its way into the UPS market.
As UPS became weaker in its marketplace, it also became wiser and more efficient. Today, it is a better company delivering much better services. Many would say it is now better run than FedEx. Nevertheless, it now shares the market with FedEx®.
· “Getting there first with the most” requires the firm to have a strategy in place to mobilize quickly when opportunities arise. For example, where will your firm be when the next Sarbanes-Oxley law passes Congress? Getting there first means anticipating possible future events and having a basic plan in place to move faster and with more resources than the other guy.
· Going “where they are not” means asking questions like what needs are not being met among our prospects or what prospects are not being targeted at all.
· The niche is fairly well understood. A niche is a small segment of the market that you can usually move in without resistance from competitors. The area isn’t big enough for your competitors to worry about. But it can be an excellent way to get a foothold toward a much bigger share of the pie.
· Creating new value is always the most fun and exciting. It is like being the first software company to invent spreadsheet software or being Edison when he invented the light bulb or Al Gore when he invented the Internet (sic). You create new value. No one loses. Everyone gains. What is exciting is that the time is right for law firms to invent new solutions, new means of delivery, new ways to work, new combinations of people on their team, and even a new scope of services for the law firm.
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Filed under Firm Culture, Management by Tom Collins