Scissors of death

Presenting at this year’s annual ICAEW Practice conference I was reminded of the phenomenom a partner at one of the Big 4 accounting firms called “the scissors of death”. This was the fact that for many firms, particularly the audit firms, costs were steadily rising whilst clients were increasingly demanding cost savings and fee reduction – the latter often accompanied by demands for more value added to be delivered at the same time.

This development is common in the manufacturing or business to consumer world but has only recently caught up with the professional service world.

There is no simple way to respond to these pressures. Certainly negotiation alone will not hold back the tide. To survive firms will have to improve their internal operations, consider restructuring their services and offers and will have to continue to invest in relationships in order to truly understand what clients want and value. Applying concepts such as the Kano curve (see Chapter 3) will help firms and professionals understand how clients’ views on value received is changing.

Only when the changing needs and perspectives of clients are properly understood can a professional expect to be able to sit down at the table and negotiate a deal that makes sense for both sides in the medium to long term.

Applying the principles of the golden triangle (see the introduction chapter for more information) and focusing on the “Find it” element will serve as a good starting point from which to inform the rest.

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