5 Hidden Opportunities to Increase Your Company's Value

By Lee W. Frederiksen, Ph.D.
Hinge

Some of the best opportunities to improve your firm’s value lie hidden in plain view. In our strategy work with federal contracting firms, we see several common problems emerge again and again, weakening profits and robbing firms of meaningful competitive advantage. But these problems, if solved, can become powerful opportunities. They can have strategic significance and improve a firm’s long-term performance and value.

Too often these problems go unrecognized and unaddressed. Even if they know about them, operational managers may argue these issues are unimportant or are already being covered. Don’t fall into this trap.

In our experience, five hidden opportunities surface with particular frequency. Address them and your firm will gain a tangible advantage as you compete for new business and the best employees.

Hidden Opportunity 1: Customers don’t know all that you can do to help them.

Government agencies hire professional service firms to solve specific problems. Once selected, however, firms like yours can get pigeonholed. Chances are, your clients aren’t aware of your full range of capabilities. In many cases, they will look elsewhere for services that you offer, even if they are fully satisfied with your performance.

For example, a well respected and rapidly growing government contractor commissioned interviews with their best clients. They found that over 60% of their government clients felt that they didn’t know all the services the company offered. They were right. When asked to list services they wished the company would offer, almost all of them were already available!

How to capitalize: It’s not your clients’ job to figure out how to use your services. You have to be proactive... and your clients want you to be. A major federal program manager said it best: “We’re focused on the immediate. We want our vendors to anticipate our needs and help solve problems before they become major issues. We don’t want a sales pitch. Just educate us and offer solutions.”

Just don’t expect your project managers to take on the business development role — they are focused on contract performance. Be prepared to dedicate other resources to client development. It’s no secret that many key decisions are often made well before the RFP even goes out. Take the initiative and put your firm in the driver’s seat.

Hidden Opportunity 2: You are confusing your potential customers.

Many contracting firms paint a confusing picture of their capabilities. When they talk about themselves, their descriptions can be intentionally vague and laced with jargon. In their minds, the more general their language, the less likely they are to be perceived as limited. Potential customers, however, are left with little understanding of a firm’s capabilities or experience. They have no compelling reason to hire the firm.

Here’s an example pulled from a prominent government contractor’s website. What do they do? How are they better?

“[Company X] is the innovative professional services firm known for effectively applying strong business and technological expertise as well as process and architectural rigor to promising digital technologies, to solve challenging business problems and enable sustainable advantage.”

How to capitalize: Clarity is golden. If your message is specific and sharply defined, you are far more likely to attract clients that appreciate the things you do best. The more you pare down and focus your message, the more your competitive advantage will shine through. Easy to do? Not at all. But an unfocused and confusing message will cost you business. When you try to be everything to everyone you are nothing to anyone.

Hidden Opportunity 3: Clients tell you what they need. But you aren’t hearing what they want.

Needs and wants can be very different things. In the federal government, clients are often motivated by fears and emotions. If you aren’t sensitive to those motivating factors, you could have trouble delivering a satisfying outcome.

For example, an agency recently needed to upgrade its network infrastructure to better respond to terrorism threats. An IT consultancy with plenty of relevant experience and technical expertise was rejected soon after a conversation with the agency. Why? The agency had been burned recently on another IT project and they were looking for reassurance that this project wouldn’t attract any further negative attention. They didn’t get it. The firm was so focused on the technical need that they completely overlooked the emotional want.

How to capitalize: You are hired to get a specific job done. Fully addressing technical requirements is a given. But if you can identify and address a client’s emotionally-driven agenda then your firm will have a distinct advantage when the award is made.

Hidden Opportunity 4: Some of your most loyal clients don’t want to work with you.

Longevity doesn’t necessarily indicate enthusiasm. In fact, some long-term clients are locked into an unsatisfying relationship. They are unhappy with you and you may not even know it. Contractual obligations, inertia, or the hassle of finding a new vendor keeps these clients around. These relationships often require a lot of maintenance and reap low profits and bad word of mouth.

How to capitalize: Get an outsider to ask the questions, because your unhappy customers are often reluctant to tell you. They may fear making the situation even worse or they simply may dislike confrontation. Once you understand the issues, you can choose to fix them or find a low-pain way to end the relationship. The alternative — simply riding out the contract — can create a lot of red ink and bad blood.

Hidden Opportunity 5: You don’t know what your best people want.

Your top people, those you “wish you could clone,” often have very specific motivations and values. But management rarely understands these individual motivating factors.

For example, many marginal but vocal employees may be focused on money alone. It’s easy to conclude that all employees are similarly motivated. Bad mistake. Often your top performers have very different goals, priorities and wants.

How to capitalize: You must, of course, cover employees’ basic needs, such as competitive salaries, good benefits, and a pleasant work environment. But understanding the intangibles that motivate your best people will allow you to promote the values and benefits that attract the right talent for your firm. Have a neutral, third party interview your best people and find out what keeps them around or why they are considering a change. Expect surprises. Using these insights, refocus your recruiting to attract more personnel gems. In short order, you’ll start winning the talent war.

Building Corporate Value

Some of the best opportunities to improve your business are right under you nose. You may not even be aware of them or may feel that you’ve already got them covered.

Don’t be overconfident. In our research we see these issues very frequently, usually to the surprise of top management. The most successful companies distinguish themselves from their “also ran” peers by looking for and seizing these opportunities. They use them to build a sustainable competitive advantage and a premium valuation.

Dr. Frederiksen, a business psychologist and seasoned entrepreneur, is a principal at Hinge. Hinge is a Reston, Virginia based strategy and branding firm that specializes in helping professional service firms overcome marketplace challenges and reach their full growth potential. He can be reached by email or by phone at 703-391-8870.