The Cardinals are considering whether to re-sign Albert Pujols. The deadline is nearing and at this writing I do not know which way that will go. I have heard and read all sorts of arguments why the Cards should and should not sign Mr. Pujols, and none of them have addressed the real issue - economics.
It is NOT about whether he is the best player, his comparisons to a replacement, how many games the Cardinals would or would not win without him or what other comparable players make. It is about whether the Cardinals will make more money off Albert than they spend on him over the contract. The Cardinals are considering the following with and without Mr. Pujols:
Marginal difference in attendance revenue - tickets, food, etc.
Marginal difference in profits from post-season play.
The money to be made as Mr. Pujols breaks Stan Musial's Cardinal records, catches the game's greats in various categories, and finally breaks all-time records.
Ticket sales, media coverage, ad revenues, promotions, merchandise sales, etc, all drive the profitability of Albert Pujols. His productivity is only relevant to the extent it generates those profits.
What does all that add up to, best case scenario, and then what are the probabilities that he will achieve each of those profitable milestones. It is a simple cost-benefit analysis.
Why does this apply to everyone?
Every employer evaluates whether or not the company can make more money than each employee costs the company - a net profit. This also applies to every piece of equipment, facility and other investment the company makes. This is measured in all the ways the company makes or saves money.
Just as it is for Albert Pujols, each of us must evaluate how much our contribution to the bottom line in the company exceeds our cost to the company. The more we bring to the bottom line, the more we will be paid to do that. We create real economic value to the company.
Sure, we can skate by and keep our jobs, but in the end we will be passed by, left behind and eventually let go because we are no longer a profit center within the company.
Albert Pujols is a profit center for the Cardinals. Over the first ten years of his career, the Cardinals have made a killing off Mr. Pujols. They will only sign him if the new Albert Pujols will make them a profit, and so it is for everyone in an economic society.
Let's all learn from this moment and make ourselves stronger in the eyes of those we serve.
Wednesday, February 16, 2011
Wednesday, September 22, 2010
Making Rain - At Least Some
Every professional recognizes that doing a very good job for clients is critical to success. The corner office, however, goes to the partner who brings in the largest fees - the rain makers. It is not every professional's objective to, nor can everyone, get that most cushy of offices, but all can bring in more business. Starting and growing a business is especially valuable to the junior partners and senior associates who are crossing the threshold to partnership, from worker-bee to profit center.
There are those for whom the process comes easy. The Albert Pujols of the business world. For every Albert or A-Rod, there are 20+ pretty darn good ball players who are doing everything they can to get to and stay in the League. Getting to the Show and staying there is a monumental task that requires the marginal ballplayer to become a deep expert in something the Major League team needs.
Nick Stavinoha recognized a few years back that his only hope of getting to the Show was as a utily player. So, he learned to catch so he could be that elusive third string catcher. When he came off the field as a starter for his minor league teams, he went to the end of the bench and asked the manager to call him right before he was about to hit, just as though he was being called upon to pinch hit. He trained to be the best he could possibly be in the areas he where could legitimately contribute at the Major League level. He made it and for the last two years has led the St. Louis Cardinals in pinch hits, has won a game with a pinch homer and even served as an emergency catcher in an extra inning game. Nick is not a natural rain-maker, but he became a true expert in those things every Major League team needs and he made it to the Show.
It is not enough to find your passion. It is not enough to know where you want to go. The skills required to get there are not learned in university. The Albert Pujols can't teach them - to them it is "see the ball hit it hard." I have worked for several years with partners and aspiring partners to help them build and drive their businesses. In the last several, as Director of Thought Leadership and Business Development for the national UHY Advisors FLVS practice, I have developed and refined a system that has helped veteran professionals triple or quadruple their books of business in two to three years, and up-and-comers and even the deeply reluctant to bring in their first opportunities and then build on that.
The process is called 10 Steps to Becoming a Rain Maker. The basics are published in my article in Consulting Magazine and throughout this blog.
http://consultingmag.com/article/ART649090?C=Wx5IyQNG31ojtxlK
Everyone in the organization has the ability to drive some business to the firm, and many who one would never suspect, when given a system to follow, perform beyond expectations.
The key is to find that about which they are deeply passionate, drive them to become an expert in that area, and teach them how to find targets and translate a simple message, and then start solving problems.
There are those for whom the process comes easy. The Albert Pujols of the business world. For every Albert or A-Rod, there are 20+ pretty darn good ball players who are doing everything they can to get to and stay in the League. Getting to the Show and staying there is a monumental task that requires the marginal ballplayer to become a deep expert in something the Major League team needs.
Nick Stavinoha recognized a few years back that his only hope of getting to the Show was as a utily player. So, he learned to catch so he could be that elusive third string catcher. When he came off the field as a starter for his minor league teams, he went to the end of the bench and asked the manager to call him right before he was about to hit, just as though he was being called upon to pinch hit. He trained to be the best he could possibly be in the areas he where could legitimately contribute at the Major League level. He made it and for the last two years has led the St. Louis Cardinals in pinch hits, has won a game with a pinch homer and even served as an emergency catcher in an extra inning game. Nick is not a natural rain-maker, but he became a true expert in those things every Major League team needs and he made it to the Show.
It is not enough to find your passion. It is not enough to know where you want to go. The skills required to get there are not learned in university. The Albert Pujols can't teach them - to them it is "see the ball hit it hard." I have worked for several years with partners and aspiring partners to help them build and drive their businesses. In the last several, as Director of Thought Leadership and Business Development for the national UHY Advisors FLVS practice, I have developed and refined a system that has helped veteran professionals triple or quadruple their books of business in two to three years, and up-and-comers and even the deeply reluctant to bring in their first opportunities and then build on that.
The process is called 10 Steps to Becoming a Rain Maker. The basics are published in my article in Consulting Magazine and throughout this blog.
http://consultingmag.com/article/ART649090?C=Wx5IyQNG31ojtxlK
Everyone in the organization has the ability to drive some business to the firm, and many who one would never suspect, when given a system to follow, perform beyond expectations.
The key is to find that about which they are deeply passionate, drive them to become an expert in that area, and teach them how to find targets and translate a simple message, and then start solving problems.
Tuesday, April 6, 2010
Thought Leadership as Business Development
As providers of professional services, we must strive to prove to our target market that we truly are experts in the areas where they have issues we can resolve. Remember, clients hire experts for their important work. They cannot afford not to. Clients will seek them out and pay them more. Therefore, we have to prove we are experts to a very sophisticated target audience who knows her business significantly better than we ever will.
Writing articles, speaking and teaching others are ways to show that we are experts. They help us become experts, prove we are experts and can ultimately help to drive our businesses. To accomplish this, however, writing and speaking must be thought leading and must be done in a way that creates strong third party validation of us as experts, otherwise our writing and speaking can actually can end up reinforcing to our clients that we are NOT experts.
What is Thought Leadership?
Thought leadership means just what it says. What you will write about is at the forefront of thought and understanding in the area. You must accurately see the future, understand trends and provide high-level, well-supported information that the reader can rely upon to make the basic decision: “Do I need to hire you to help me address this risk or achieve this unique opportunity before my competitors do?”
Thought leadership involves the creation of new models and methods to more clearly address a perplexing area for which no current model is effective. It involves exploring new worlds, emerging markets, changing cultures or governments, and proving you hold the keys to identifying the right pathway to riches there. Thought Leadership pushes the envelope in whatever area you practice within.
Your article ultimately must present information that your sophisticated and experienced prospects and clients will want to read. Information they are seeking and will find if you write about it.
What Thought Leadership is Not:
Many professional service providers see that many of the people they work with currently do not understand the basics of what they do. As a result they tend to write about the basics. They tend to write summaries, overviews or reviews of the processes or of things that have happened in the past. While these might have value, they only show that you are willing to write.
Anyone can sit down and regurgitate the basics or summarize the past. Unless there is a reason to do this, perhaps because new situations have arisen where review of the past is critical to understanding the future, and this is coupled with true thought leading analysis of that future, the author will not be perceived as particularly expert in the area. In fact, these relatively mundane tasks will be attributed to a lower level administrator or young professional – someone decidedly NOT an expert.
This sort of writing will not be publishable in any reputable journal in which experts your target clients rely upon are published. They are appropriate for basic White Papers that should be researched by young professionals in the firm and placed on the firm’s website without author. They are useful for those clients who need to understand the basics so that the project can begin. They are as helpful in business development as your CV and brochure. They will, however, not prove to potential clients that you are an expert capable of handling their most important and most lucrative cases.
Third Party Validation - Experts are Expected to Lead Thought:
A client cannot afford to rely on what you say about yourself. You, after all, have a significant conflict of interest. The client ultimately must make a leap of faith in hiring you and, for lucrative projects, he will need as much certainty as possible before doing so. The most powerful information you can provide are validations by third parties who receive no benefit from doing so.
Clients expect experts to be published in prominent journals, those in which other experts they rely upon are published. Editors of these publications are very picky about who is permitted to publish in their Journal. It is critical to the success of their publication, in a very competitive environment, that their readers perceive the content as extremely valuable and thought leading. Just being published in these journals is a strong third party validation of you as an expert before the article is even read.
Once published, you must send the article to all of your clients and prospects so they know you were published and so they can read what you have written. Use the article in proposals and marketing. In this day and age, clients often expect experts to also have a blog or column where powerful thought leading advice is conveyed. Reading your published and on-line work gives the client a way to gain an understanding of your methodology, processes, areas of expertise as well as your ability to write concisely and convey meaning clearly. Your own well-written blog is ultimately an excellent independent validation of you as an expert.
The client expects to see that you have spoken as an expert at relevant association events, which is a validation of you as an expert both by the organizer of the event and by those who agree to serve on the panel with you. If you have served as a professor, adjunct or otherwise, at a prominent institution, preferably in their graduate program, that shows that at least that institution believes you to be an expert and that you can convey that information to students. Finally, experts rise in stature when they rise to leadership of organizations, especially organizations of other true experts. If your peers elect you to such prominence, you can more easily be considered an expert among experts.
Finally, secure a prominent co-author for all of your articles. Choose someone you want to benefit – an existing client or a prospect. Getting them published helps to make them look like an expert, which is a big feather in their cap. That you helped them achieve that will not be forgotten. Choose a co-author who is a bit more prominent than you. Being associated with the co-author is a third party validation of you as an expert to the co-author – client or prospect himself, to his firm, and to the industry.
Once Published – Exploit:
Place a link to the article on both your website and your co-author’s. Place it on your CV and other marketing materials. Send it, usually a link, to all relevant prospects and clients. Create and deliver webinar, seminars, Continuing Education or other presentations with the co-author. Be creative. When you send the article to all of your clients, you are providing your co-author with a distinct benefit – you are telling the world you think he is an expert. He will appreciate that very much.
Perhaps the most significant benefit of having a prominent co-author is that the co-author will send the article with your name on it as prominent as his to all of HIS clients and prospects, effectively marketing you to them, as an expert, in the process.
Build the relationship with your co-author. After all you are bonded in print together forever! Cultivate her as a “coach.” Look for opportunities you can work on. Present together to clients. Meet her partners. Meet people she knows. Become strong business friends.
Process:
Come up with the idea first. In my experience in nearly 3 years of doing this, trying to develop an idea with the co-author simply never gets off the ground. Partly because you each tend to defer to the other. Also, the client does not really understand your business. You understand hers, because it is your business to do so. Therefore it is incumbent upon you, the expert, to dream up the great idea and invite her to participate.
We have developed a simple “One-Pager” used to craft a concise summary. We complete this, present it to the co-author, edit it as required, and then use that to market the idea to editors of target journals. This avoids writing long articles that the editor does not want to read and which might miss the immediate needs of the editor. Once accepted, the editor will provide the parameters for the article. The length can range from 700 words to 7000 words. The editor often relates other articles that have been or will be published and how the article should be focused to avoid conflict. We use these parameters to craft the article by the deadline set by the editor. Then we keep on the editor to make sure that the article is published within the promised timeframe.
Conclusion:
Driving thought forward helps to establish expertise, prove it to the prospective client, expand relationships and build business opportunities. Doing it properly can make huge differences in how a professional is perceived in the market, and after all, perception is reality.
Writing articles, speaking and teaching others are ways to show that we are experts. They help us become experts, prove we are experts and can ultimately help to drive our businesses. To accomplish this, however, writing and speaking must be thought leading and must be done in a way that creates strong third party validation of us as experts, otherwise our writing and speaking can actually can end up reinforcing to our clients that we are NOT experts.
What is Thought Leadership?
Thought leadership means just what it says. What you will write about is at the forefront of thought and understanding in the area. You must accurately see the future, understand trends and provide high-level, well-supported information that the reader can rely upon to make the basic decision: “Do I need to hire you to help me address this risk or achieve this unique opportunity before my competitors do?”
Thought leadership involves the creation of new models and methods to more clearly address a perplexing area for which no current model is effective. It involves exploring new worlds, emerging markets, changing cultures or governments, and proving you hold the keys to identifying the right pathway to riches there. Thought Leadership pushes the envelope in whatever area you practice within.
Your article ultimately must present information that your sophisticated and experienced prospects and clients will want to read. Information they are seeking and will find if you write about it.
What Thought Leadership is Not:
Many professional service providers see that many of the people they work with currently do not understand the basics of what they do. As a result they tend to write about the basics. They tend to write summaries, overviews or reviews of the processes or of things that have happened in the past. While these might have value, they only show that you are willing to write.
Anyone can sit down and regurgitate the basics or summarize the past. Unless there is a reason to do this, perhaps because new situations have arisen where review of the past is critical to understanding the future, and this is coupled with true thought leading analysis of that future, the author will not be perceived as particularly expert in the area. In fact, these relatively mundane tasks will be attributed to a lower level administrator or young professional – someone decidedly NOT an expert.
This sort of writing will not be publishable in any reputable journal in which experts your target clients rely upon are published. They are appropriate for basic White Papers that should be researched by young professionals in the firm and placed on the firm’s website without author. They are useful for those clients who need to understand the basics so that the project can begin. They are as helpful in business development as your CV and brochure. They will, however, not prove to potential clients that you are an expert capable of handling their most important and most lucrative cases.
Third Party Validation - Experts are Expected to Lead Thought:
A client cannot afford to rely on what you say about yourself. You, after all, have a significant conflict of interest. The client ultimately must make a leap of faith in hiring you and, for lucrative projects, he will need as much certainty as possible before doing so. The most powerful information you can provide are validations by third parties who receive no benefit from doing so.
Clients expect experts to be published in prominent journals, those in which other experts they rely upon are published. Editors of these publications are very picky about who is permitted to publish in their Journal. It is critical to the success of their publication, in a very competitive environment, that their readers perceive the content as extremely valuable and thought leading. Just being published in these journals is a strong third party validation of you as an expert before the article is even read.
Once published, you must send the article to all of your clients and prospects so they know you were published and so they can read what you have written. Use the article in proposals and marketing. In this day and age, clients often expect experts to also have a blog or column where powerful thought leading advice is conveyed. Reading your published and on-line work gives the client a way to gain an understanding of your methodology, processes, areas of expertise as well as your ability to write concisely and convey meaning clearly. Your own well-written blog is ultimately an excellent independent validation of you as an expert.
The client expects to see that you have spoken as an expert at relevant association events, which is a validation of you as an expert both by the organizer of the event and by those who agree to serve on the panel with you. If you have served as a professor, adjunct or otherwise, at a prominent institution, preferably in their graduate program, that shows that at least that institution believes you to be an expert and that you can convey that information to students. Finally, experts rise in stature when they rise to leadership of organizations, especially organizations of other true experts. If your peers elect you to such prominence, you can more easily be considered an expert among experts.
Finally, secure a prominent co-author for all of your articles. Choose someone you want to benefit – an existing client or a prospect. Getting them published helps to make them look like an expert, which is a big feather in their cap. That you helped them achieve that will not be forgotten. Choose a co-author who is a bit more prominent than you. Being associated with the co-author is a third party validation of you as an expert to the co-author – client or prospect himself, to his firm, and to the industry.
Once Published – Exploit:
Place a link to the article on both your website and your co-author’s. Place it on your CV and other marketing materials. Send it, usually a link, to all relevant prospects and clients. Create and deliver webinar, seminars, Continuing Education or other presentations with the co-author. Be creative. When you send the article to all of your clients, you are providing your co-author with a distinct benefit – you are telling the world you think he is an expert. He will appreciate that very much.
Perhaps the most significant benefit of having a prominent co-author is that the co-author will send the article with your name on it as prominent as his to all of HIS clients and prospects, effectively marketing you to them, as an expert, in the process.
Build the relationship with your co-author. After all you are bonded in print together forever! Cultivate her as a “coach.” Look for opportunities you can work on. Present together to clients. Meet her partners. Meet people she knows. Become strong business friends.
Process:
Come up with the idea first. In my experience in nearly 3 years of doing this, trying to develop an idea with the co-author simply never gets off the ground. Partly because you each tend to defer to the other. Also, the client does not really understand your business. You understand hers, because it is your business to do so. Therefore it is incumbent upon you, the expert, to dream up the great idea and invite her to participate.
We have developed a simple “One-Pager” used to craft a concise summary. We complete this, present it to the co-author, edit it as required, and then use that to market the idea to editors of target journals. This avoids writing long articles that the editor does not want to read and which might miss the immediate needs of the editor. Once accepted, the editor will provide the parameters for the article. The length can range from 700 words to 7000 words. The editor often relates other articles that have been or will be published and how the article should be focused to avoid conflict. We use these parameters to craft the article by the deadline set by the editor. Then we keep on the editor to make sure that the article is published within the promised timeframe.
Conclusion:
Driving thought forward helps to establish expertise, prove it to the prospective client, expand relationships and build business opportunities. Doing it properly can make huge differences in how a professional is perceived in the market, and after all, perception is reality.
Thursday, April 1, 2010
Wisdom of the Three Experts and Identifying Your Target Market
Professionals regularly tell me that they hate to “sell.” They need help finding the right people and learning how to talk to them on the phone and in person, and how to close the sale.
I always ask them one thing, “What is it that you do specifically that will help either solve a problem for them or help them achieve an objective or opportunity?”
Inevitably, they have not thought that through.
A professional should never “sell.”
A professional should know clearly what they are truly expert in and explore whether his or her expertise is the solution to an issue the prospect may have, whether removing a risk or an impediment to a great opportunity.
Clients hire experts for their important work.
They cannot afford not to.
Clients will seek them out and pay them more.
You must therefore become an expert.
You will not spend the time to become an expert unless you are truly passionate about what you are doing.
What did the Three Experts Say?
Over the last three weeks we have heard from three true experts in their fields:
Area of Expertise
Jeff Harfenist: International Fraud and FCPA Investigations.
Tom Murphy: Complex Derivatives.
Jim Woods: IP Litigation Damages.
These are their areas of expertise. These are not what they are deeply passionate about.
What is Jeff passionate about?
Solving complex financial puzzles combined with the study of human nature.
International fraud and FCPA investigations are the canvas upon which he is able to work to bring all of his loves together. It took him years to find this, beginning in audit, small litigation cases, then that one fraud case, then another and more complex litigation matters, then the TYCO case and finally the emergence of FCPA. It took him thirty years of searching and probing the edges of everything he did, identifying what he loved most and what was missing, to find the right path.
What is Dr. Tom Murphy passionate about?
Creating complex financial models to quantify disparate variables that impact strategic business decisions.
Derivatives are the canvas upon which Tom works his magic. Only in the context of analyzing complex derivatives can he exercise his passion to the fullest. Again it took years for him to find this was the service that completely satisfied all his passions, and even more time to develop it into a full-scale international expertise.
What is Dr. Jim Woods passionate about?
How things work and how that effects the economics and financials of a business.
He knew early on that he loved to understand how things worked. He knew he liked numbers and financial relationships. It took some time before he realized that while he could apply some of his passions in many areas, only IP Litigation Damages allows him to encompass all of his passions into one endeavor. It was so important to follow his passion to the development of true and deep expertise that he left a lucrative and successful position as leader of an entire practice to pursue it.
The lesson in the stories of each of these successful rain-makers is the same. Your passion is not in the profession you choose, it is in the tasks and concepts you love. Identify those things first and then find and create a profession that allows you to do these things every day. When you find your passion, you will take the time to immerse yourself in it and will become an expert more naturally. Then you can exploit that to your economic advantage.
Identifying and Pursuing Your Target Market.
It is all well and good to be a passionate expert, but you still have to find someone to pay you, and pay you well, to perform those services.
Early in your career, your services will be broad and your target audience still broader. Network with everyone and anyone. Listen to what they do. Try to determine whether you can or want to help them resolve their issues. Get as much work in the door as you can so that you can see if it lights your fire. Your rates will be low. The cases will be relatively simple.
As a young professional you do not have enough knowledge and experience to even know what tasks you love, though you can begin to figure those out and create a clearer picture of your passion. A simple process is to list everything you do, both at work, at home and in your free time, including what you read and watch. Then list the concepts that are important to you. Be honest. Do not put that you like to help people because you feel you should. Include it if you actually like to help people. No one will see this list but you.
Prioritize both lists from those tasks you love to do down to those you hate to do. Do not rank them in terms of anything else, like “I have to do them” or “I should like to do them” or “I make money doing this.” Rank solely on passion for the task. Stop doing the tasks at the bottom of the list. The book Good to Great refers to this as creating a “Stop Doing” List.
Explore every type of project and career you can find to determine whether it is composed largely of those tasks and concepts that are important to you. Try these out, drive to become an expert, see if it completely satisfies your passion. Explore some more. Most important at this stage though, network like crazy and build strong and lasting relationships so that as you grow in your profession, your contacts will increase their positions and become increasingly valuable to you.
As your experience increases, the clarity of your services will increase. As a result you can narrow the description of your ideal client. The more clearly you define your prospect based on your expertise, the easier it becomes to find them and get in front of them. If you serve attorneys, as many of our FLVS professionals do, your targets will tell you what they do and whether they may be able to use your services. Every attorney has a public bio that lists her practice areas.
If your targets are corporations, identify the prospects as tightly as possible and be realistic. Acquire the tools required to find the prospects you need. Hoovers, Capital IQ and other services provide substantial searchable information on corporations, both private and public, though information on private corporations tends to be more sketchy. Join the associations that your target’s join or at least work hard to get involved in them or speak at their conventions. Write truly thought leading article, meaning that they address topics at very high levels that executives you are targeting will seek out and read. Get them published in prominent Journals your targets read. Secure a co-author who your target market will respect – ordinarily one of their own. Once published, send the article to all your clients and prospects.
Use Your Network:
Use your growing network of contacts and the significant number of close relationships you have cultivated to secure introductions, gather information and otherwise gain an advantage over your competition. Building strong friends who trust you, believe in your abilities and who legitimately want you to succeed is a critical part of the success of any rain-maker. They will do this only if you have consistently made them look like heroes in front of the people who are important to them, whether in projects, for their charities or in front of their spouses and families. Connect them to others you know who can help them.
Focus:
Each of the rain-makers focused his business over time and focused on more a more precise ideal prospect. Early on your projects will be smaller, those that a generalist secures. As your level of expertise increases, so will the size of the projects and the fees you can charge for your services. It is only by focusing that you can build the degree of expertise in an area of passion that will provide the level of value that clients pay big money for.
I always ask them one thing, “What is it that you do specifically that will help either solve a problem for them or help them achieve an objective or opportunity?”
Inevitably, they have not thought that through.
A professional should never “sell.”
A professional should know clearly what they are truly expert in and explore whether his or her expertise is the solution to an issue the prospect may have, whether removing a risk or an impediment to a great opportunity.
Clients hire experts for their important work.
They cannot afford not to.
Clients will seek them out and pay them more.
You must therefore become an expert.
You will not spend the time to become an expert unless you are truly passionate about what you are doing.
What did the Three Experts Say?
Over the last three weeks we have heard from three true experts in their fields:
Area of Expertise
Jeff Harfenist: International Fraud and FCPA Investigations.
Tom Murphy: Complex Derivatives.
Jim Woods: IP Litigation Damages.
These are their areas of expertise. These are not what they are deeply passionate about.
What is Jeff passionate about?
Solving complex financial puzzles combined with the study of human nature.
International fraud and FCPA investigations are the canvas upon which he is able to work to bring all of his loves together. It took him years to find this, beginning in audit, small litigation cases, then that one fraud case, then another and more complex litigation matters, then the TYCO case and finally the emergence of FCPA. It took him thirty years of searching and probing the edges of everything he did, identifying what he loved most and what was missing, to find the right path.
What is Dr. Tom Murphy passionate about?
Creating complex financial models to quantify disparate variables that impact strategic business decisions.
Derivatives are the canvas upon which Tom works his magic. Only in the context of analyzing complex derivatives can he exercise his passion to the fullest. Again it took years for him to find this was the service that completely satisfied all his passions, and even more time to develop it into a full-scale international expertise.
What is Dr. Jim Woods passionate about?
How things work and how that effects the economics and financials of a business.
He knew early on that he loved to understand how things worked. He knew he liked numbers and financial relationships. It took some time before he realized that while he could apply some of his passions in many areas, only IP Litigation Damages allows him to encompass all of his passions into one endeavor. It was so important to follow his passion to the development of true and deep expertise that he left a lucrative and successful position as leader of an entire practice to pursue it.
The lesson in the stories of each of these successful rain-makers is the same. Your passion is not in the profession you choose, it is in the tasks and concepts you love. Identify those things first and then find and create a profession that allows you to do these things every day. When you find your passion, you will take the time to immerse yourself in it and will become an expert more naturally. Then you can exploit that to your economic advantage.
Identifying and Pursuing Your Target Market.
It is all well and good to be a passionate expert, but you still have to find someone to pay you, and pay you well, to perform those services.
Early in your career, your services will be broad and your target audience still broader. Network with everyone and anyone. Listen to what they do. Try to determine whether you can or want to help them resolve their issues. Get as much work in the door as you can so that you can see if it lights your fire. Your rates will be low. The cases will be relatively simple.
As a young professional you do not have enough knowledge and experience to even know what tasks you love, though you can begin to figure those out and create a clearer picture of your passion. A simple process is to list everything you do, both at work, at home and in your free time, including what you read and watch. Then list the concepts that are important to you. Be honest. Do not put that you like to help people because you feel you should. Include it if you actually like to help people. No one will see this list but you.
Prioritize both lists from those tasks you love to do down to those you hate to do. Do not rank them in terms of anything else, like “I have to do them” or “I should like to do them” or “I make money doing this.” Rank solely on passion for the task. Stop doing the tasks at the bottom of the list. The book Good to Great refers to this as creating a “Stop Doing” List.
Explore every type of project and career you can find to determine whether it is composed largely of those tasks and concepts that are important to you. Try these out, drive to become an expert, see if it completely satisfies your passion. Explore some more. Most important at this stage though, network like crazy and build strong and lasting relationships so that as you grow in your profession, your contacts will increase their positions and become increasingly valuable to you.
As your experience increases, the clarity of your services will increase. As a result you can narrow the description of your ideal client. The more clearly you define your prospect based on your expertise, the easier it becomes to find them and get in front of them. If you serve attorneys, as many of our FLVS professionals do, your targets will tell you what they do and whether they may be able to use your services. Every attorney has a public bio that lists her practice areas.
If your targets are corporations, identify the prospects as tightly as possible and be realistic. Acquire the tools required to find the prospects you need. Hoovers, Capital IQ and other services provide substantial searchable information on corporations, both private and public, though information on private corporations tends to be more sketchy. Join the associations that your target’s join or at least work hard to get involved in them or speak at their conventions. Write truly thought leading article, meaning that they address topics at very high levels that executives you are targeting will seek out and read. Get them published in prominent Journals your targets read. Secure a co-author who your target market will respect – ordinarily one of their own. Once published, send the article to all your clients and prospects.
Use Your Network:
Use your growing network of contacts and the significant number of close relationships you have cultivated to secure introductions, gather information and otherwise gain an advantage over your competition. Building strong friends who trust you, believe in your abilities and who legitimately want you to succeed is a critical part of the success of any rain-maker. They will do this only if you have consistently made them look like heroes in front of the people who are important to them, whether in projects, for their charities or in front of their spouses and families. Connect them to others you know who can help them.
Focus:
Each of the rain-makers focused his business over time and focused on more a more precise ideal prospect. Early on your projects will be smaller, those that a generalist secures. As your level of expertise increases, so will the size of the projects and the fees you can charge for your services. It is only by focusing that you can build the degree of expertise in an area of passion that will provide the level of value that clients pay big money for.
Tuesday, March 30, 2010
Interview with Dr. James Woods - Focusing Your Business
Introduction:
Dr. James Woods joined UHY Advisors FLVS last summer and is a Managing Director in the IP Litigation group based in Houston. Jim has earned his Ph.D. in Finance from the Mays Business School at Texas A&M University, and his MBA, Finance and Banking and BSBA from the University of Missouri. He has also been an Adjunct Professor at the University of Houston-Victoria. He is a Certified Licensing Professional. Prior to joining UHY, Jim was the Practice Leader of the Economic Advisory Services practice group (the FLVS equivalent) for the Houston office of Grant Thornton.
Over the past fifteen years, Jim has had a broad general practice, assisting clients with fraud investigations, valuation projects, intellectual asset management, and litigation matters. He is concentrating he practice now on intellectual property matters.
About what are you deeply passionate?
I am passionate about understanding how things work. I am one of those people that like those strange cable television shows like “How Things Work” because they explain how all sorts of common everyday items are manufactured. As a financial economist, I am also interested in how people work, how they make decisions. These interests translate well to IP litigation since it is often about analyzing in detail how things work and then applying economic theories to determine their value.
How did you come to that realization?
Finding my passion was a long journey. When I finished my PhD in finance, I graduated into one of the worst markets for new Ph.D.s. In prior years, there were usually approximately 100 new Ph.D.s applying for 120 to 150 job openings. The market always cleared and most people got to choose which position they would accept. However, when I graduated there were over 200 Ph.D.s applying for fewer than 100 jobs. Getting a job became competitive and the chances of landing your desired position decreased dramatically. This situation forced me to consider options beyond an academic career. Through fortuity and perhaps a bit on purpose, I happened to run into a professional at Price Waterhouse. After we spoke for awhile and he listened to what I was interested in, he suggested that I look into the Dispute Analysis and Corporate Recovery Practice “DACR” at PW.
I did a hard analysis of my future. If I accepted an academic position, it was unlikely that I could be a consultant, but if I accepted the consulting position and it did not work out, it was likely that I could land an academic position if the market improved. Also, quite frankly, the consulting work seemed more appealing. So I decided to accept the DACR opportunity at Price Waterhouse with the possibility of going back into academics if this did not work out.
At the time I thought I wanted to go into the bankruptcy practice because it was hot at the time and seemed like a good match for my background. I soon realized I did not like that practice area at all. I did not like to develop the financial scenarios that then dictated that I had to fire people I was working with and had gotten to know.
One day while in the Houston office, I was walking past an office where a partner and a couple of associates were talking about a case. The case involved how pagers worked. As it turns out, I knew something about this and had the gumption to stick my head into the office. I mentioned that I knew a little about how pagers work. They invited me in and the next thing I knew I was talking to a Motorola engineer in charge of pager design and development about how pagers conserve battery power. And just like that I was involved in IP. My personal passion for how things work and my pursuit of understanding in that area, along with my willingness to stick my head in that door, opened me up to what I found was a place for my personal passion to be exploited in my professional life.
I worked on several IP matters, but did many non-IP engagements. Ultimately, I was recruited to join Grant Thornton to be the practice leader of the EAS practice, which is basically the same as FLVS here. I tried to personally find IP cases to work on, but as practice leader I was involved in and at least oversaw all sorts of other cases – FCPA, Fraud, and Commercial Litigation of all kinds. I found that I really was not very passionate about being responsible for all of these different types of matters. To me, they all came with a lot of baggage, administrative requirements and effort. They were outside my personal expertise and so I had to do a lot of research to catch up, largely in areas in which I was not terribly interested.
The opportunity to concentrate on IP and work with a team dedicated to litigation support was a strong appeal and had a great deal of influence in my decision to join UHY. Even though I am concentrating my efforts on IP matters, I will still accept litigation cases if they come along, but I am focusing all of my marketing efforts on IP cases.
Why IP cases?
I grew up in a time when computer technology was just reaching the public and over time, this technology has bled into everything. I have always been interested in technology and this interest allowed me to understand the history and the process of growth from early computers to current more complex systems we use today.
IP was the connection point between my personal passion, figuring out how things work, and my professional passions for analyzing and presenting the financial and economic value of things.
To reach the top of that profession you have to become a true expert in that area. What have you done to make yourself a true expert in the area of IP Litigation damages analysis?
I read. I read a lot. I read everything that has to do with IP. For example there has been a big push in the Congress to reform IP laws. Even though this reform is only partially related to IP damages, I have followed the entire reform process. To be a true expert, you have to have a real depth of understanding of both IP law and the application of lost profits, reasonable royalty, economics and valuation theories related to intellectual property. I work hard to develop a strong understanding of the financial and legal issues related to IP and am willing to dig into everything I can find on these topics.
You were leading the entire EAS group at Grant Thornton. Why would you leave that position to join UHY?
This was truly a very difficult decision. My post-doctoral decisions were similar. What are my options? Where is Grant Thornton going? What is my future here? What is most interesting to me?
I could have stayed at Grant Thornton. While I was there we tripled in size. The firm liked me and supported me, but as the practice and the firm evolved I realized I would never have been able to focus on what I really wanted to do.
As GT grew, the number of conflicts increased. Grant Thornton management decided they were no longer interested in the $150,000 litigation case. They wanted to push the practice toward the big, multimillion dollar investigations and away from commercial litigation. Commercial litigation created conflicts and issues for all of the other areas of the practice, including audit and tax. They instead pushed for a full-suite approach to corporations, including compliance and international investigations. That meant that there could be no litigation opposing either a current client or any client they might consider going after in the future.
Once I came to the understanding that I could remain practice leader and not do what I loved to do, or find an opportunity where I could go back to doing the work I loved, IP damages litigation, the decision was much easier.
Do clients hire firms or professionals?
In litigation, they hire the professional because they are looking for an expert to help with their case. They want someone who knows what he is doing, but also someone they can work with. Having the support of an organization is important, but when it comes to IP litigation, they hire passionate experts.
So now you are here and working to focus your practice in the area of IP Litigation Damages. How are you going about doing that?
It has been rather easy. With Ron Vollmar and Wayne Hoeberlein, both already recognized IP litigation damages experts with UHY Advisors, there is a strong emphasis in the area and a lot of passion in the practice group. All of the cases I have been hired on as an expert for at FLVS, but one, have been IP litigation cases. It is good to know that if cases outside my area of expertise come in I have very strong group of professionals I can refer the work to. That is an advantage of being with a firm that is focused on driving expertise like UHY Advisors FLVS.
When you meet with attorneys, how does that meeting usually go?
There are different types of people; some are all business and want to talk about the case at hand and nothing else and others want to become “friends” first. You have to roll with the conversation and be willing to carry the discussion whichever way the potential clients needs it to go. Most important, make sure that you “connect” with the person.
UHY Advisors has a strong Business Development team and they are great for setting up introductions and meetings. That is certainly a huge help, but networking, meeting people and securing opportunities is ultimately up to me and every professional and I take that seriously. I attend the HIPLA, LES and other organizational luncheons where attorneys I need to meet will be. I am not uncomfortable asking one person to introduce me to other people and I work hard to reciprocate. Again, the key is to establish and develop strong relationships. Be genuinely interested what people have to say. Asking them about their services and what they are looking for. Take a genuine interest in other people and figure out how you can help them.
Advice on Building a Practice.
This is a tremendous time to access knowledge. My daughter is 10. She was watching Seinfeld and asked if Julia Louis Dreyfuss was still alive. My wife and I were taken aback until we looked at the scene. No cell phones. Telephones on wires. Pay phones. No computers at all, much less lap tops. The technology is so dramatically different in just the last 15 years. It must have looked to her like something from the Dark Ages.
We, as professionals, need to adapt quickly. We have to take advantage of new technologies and access to information. At any moment you can read the most powerful experts in the world in your field of interest in just seconds. Just be curious and read everything you can find in the area of your passion.
How important is the past?
In most high tech areas, knowledge of the past is not that important. Things change too quickly.
But in the law, history can be important. If you are interested in an area of the law, you really should go back and look at the development of the law to uncover the underlying assumptions and the issues that arose over time to gain an understanding as to how the caselaw has evolved and why it is as it is today. Ron Vollmar and I recently published an article that required us to go back into the 1800s to trace the evolution of the Entire Market Value Theory. We uncovered some interesting aspects of its origin and the twists that occurred in the caselaw and legislation that led to the current interpretation. We were able to apply that to some recent cases and explain that maybe the justices were trying to return to previous definitions of the Entire Market Value Rule rather than develop new definitions. Incidentally, this article was published as the feature in two very prominent IP journals, IP Litigator and The Licensing Journal. It really helps to understand why the law is the way it is today and you can only do that by reading about the past.
Find your passion, which involves the tasks and concepts you love. Then find that vocation in which you can do those things. Finally, make the hard choices to focus your practice on what you love to do most. Because you love the work, you will become an expert, and that combined with passion and a genuine interest in helping people, leads to opportunities to do what you love.
Dr. James Woods joined UHY Advisors FLVS last summer and is a Managing Director in the IP Litigation group based in Houston. Jim has earned his Ph.D. in Finance from the Mays Business School at Texas A&M University, and his MBA, Finance and Banking and BSBA from the University of Missouri. He has also been an Adjunct Professor at the University of Houston-Victoria. He is a Certified Licensing Professional. Prior to joining UHY, Jim was the Practice Leader of the Economic Advisory Services practice group (the FLVS equivalent) for the Houston office of Grant Thornton.
Over the past fifteen years, Jim has had a broad general practice, assisting clients with fraud investigations, valuation projects, intellectual asset management, and litigation matters. He is concentrating he practice now on intellectual property matters.
About what are you deeply passionate?
I am passionate about understanding how things work. I am one of those people that like those strange cable television shows like “How Things Work” because they explain how all sorts of common everyday items are manufactured. As a financial economist, I am also interested in how people work, how they make decisions. These interests translate well to IP litigation since it is often about analyzing in detail how things work and then applying economic theories to determine their value.
How did you come to that realization?
Finding my passion was a long journey. When I finished my PhD in finance, I graduated into one of the worst markets for new Ph.D.s. In prior years, there were usually approximately 100 new Ph.D.s applying for 120 to 150 job openings. The market always cleared and most people got to choose which position they would accept. However, when I graduated there were over 200 Ph.D.s applying for fewer than 100 jobs. Getting a job became competitive and the chances of landing your desired position decreased dramatically. This situation forced me to consider options beyond an academic career. Through fortuity and perhaps a bit on purpose, I happened to run into a professional at Price Waterhouse. After we spoke for awhile and he listened to what I was interested in, he suggested that I look into the Dispute Analysis and Corporate Recovery Practice “DACR” at PW.
I did a hard analysis of my future. If I accepted an academic position, it was unlikely that I could be a consultant, but if I accepted the consulting position and it did not work out, it was likely that I could land an academic position if the market improved. Also, quite frankly, the consulting work seemed more appealing. So I decided to accept the DACR opportunity at Price Waterhouse with the possibility of going back into academics if this did not work out.
At the time I thought I wanted to go into the bankruptcy practice because it was hot at the time and seemed like a good match for my background. I soon realized I did not like that practice area at all. I did not like to develop the financial scenarios that then dictated that I had to fire people I was working with and had gotten to know.
One day while in the Houston office, I was walking past an office where a partner and a couple of associates were talking about a case. The case involved how pagers worked. As it turns out, I knew something about this and had the gumption to stick my head into the office. I mentioned that I knew a little about how pagers work. They invited me in and the next thing I knew I was talking to a Motorola engineer in charge of pager design and development about how pagers conserve battery power. And just like that I was involved in IP. My personal passion for how things work and my pursuit of understanding in that area, along with my willingness to stick my head in that door, opened me up to what I found was a place for my personal passion to be exploited in my professional life.
I worked on several IP matters, but did many non-IP engagements. Ultimately, I was recruited to join Grant Thornton to be the practice leader of the EAS practice, which is basically the same as FLVS here. I tried to personally find IP cases to work on, but as practice leader I was involved in and at least oversaw all sorts of other cases – FCPA, Fraud, and Commercial Litigation of all kinds. I found that I really was not very passionate about being responsible for all of these different types of matters. To me, they all came with a lot of baggage, administrative requirements and effort. They were outside my personal expertise and so I had to do a lot of research to catch up, largely in areas in which I was not terribly interested.
The opportunity to concentrate on IP and work with a team dedicated to litigation support was a strong appeal and had a great deal of influence in my decision to join UHY. Even though I am concentrating my efforts on IP matters, I will still accept litigation cases if they come along, but I am focusing all of my marketing efforts on IP cases.
Why IP cases?
I grew up in a time when computer technology was just reaching the public and over time, this technology has bled into everything. I have always been interested in technology and this interest allowed me to understand the history and the process of growth from early computers to current more complex systems we use today.
IP was the connection point between my personal passion, figuring out how things work, and my professional passions for analyzing and presenting the financial and economic value of things.
To reach the top of that profession you have to become a true expert in that area. What have you done to make yourself a true expert in the area of IP Litigation damages analysis?
I read. I read a lot. I read everything that has to do with IP. For example there has been a big push in the Congress to reform IP laws. Even though this reform is only partially related to IP damages, I have followed the entire reform process. To be a true expert, you have to have a real depth of understanding of both IP law and the application of lost profits, reasonable royalty, economics and valuation theories related to intellectual property. I work hard to develop a strong understanding of the financial and legal issues related to IP and am willing to dig into everything I can find on these topics.
You were leading the entire EAS group at Grant Thornton. Why would you leave that position to join UHY?
This was truly a very difficult decision. My post-doctoral decisions were similar. What are my options? Where is Grant Thornton going? What is my future here? What is most interesting to me?
I could have stayed at Grant Thornton. While I was there we tripled in size. The firm liked me and supported me, but as the practice and the firm evolved I realized I would never have been able to focus on what I really wanted to do.
As GT grew, the number of conflicts increased. Grant Thornton management decided they were no longer interested in the $150,000 litigation case. They wanted to push the practice toward the big, multimillion dollar investigations and away from commercial litigation. Commercial litigation created conflicts and issues for all of the other areas of the practice, including audit and tax. They instead pushed for a full-suite approach to corporations, including compliance and international investigations. That meant that there could be no litigation opposing either a current client or any client they might consider going after in the future.
Once I came to the understanding that I could remain practice leader and not do what I loved to do, or find an opportunity where I could go back to doing the work I loved, IP damages litigation, the decision was much easier.
Do clients hire firms or professionals?
In litigation, they hire the professional because they are looking for an expert to help with their case. They want someone who knows what he is doing, but also someone they can work with. Having the support of an organization is important, but when it comes to IP litigation, they hire passionate experts.
So now you are here and working to focus your practice in the area of IP Litigation Damages. How are you going about doing that?
It has been rather easy. With Ron Vollmar and Wayne Hoeberlein, both already recognized IP litigation damages experts with UHY Advisors, there is a strong emphasis in the area and a lot of passion in the practice group. All of the cases I have been hired on as an expert for at FLVS, but one, have been IP litigation cases. It is good to know that if cases outside my area of expertise come in I have very strong group of professionals I can refer the work to. That is an advantage of being with a firm that is focused on driving expertise like UHY Advisors FLVS.
When you meet with attorneys, how does that meeting usually go?
There are different types of people; some are all business and want to talk about the case at hand and nothing else and others want to become “friends” first. You have to roll with the conversation and be willing to carry the discussion whichever way the potential clients needs it to go. Most important, make sure that you “connect” with the person.
UHY Advisors has a strong Business Development team and they are great for setting up introductions and meetings. That is certainly a huge help, but networking, meeting people and securing opportunities is ultimately up to me and every professional and I take that seriously. I attend the HIPLA, LES and other organizational luncheons where attorneys I need to meet will be. I am not uncomfortable asking one person to introduce me to other people and I work hard to reciprocate. Again, the key is to establish and develop strong relationships. Be genuinely interested what people have to say. Asking them about their services and what they are looking for. Take a genuine interest in other people and figure out how you can help them.
Advice on Building a Practice.
This is a tremendous time to access knowledge. My daughter is 10. She was watching Seinfeld and asked if Julia Louis Dreyfuss was still alive. My wife and I were taken aback until we looked at the scene. No cell phones. Telephones on wires. Pay phones. No computers at all, much less lap tops. The technology is so dramatically different in just the last 15 years. It must have looked to her like something from the Dark Ages.
We, as professionals, need to adapt quickly. We have to take advantage of new technologies and access to information. At any moment you can read the most powerful experts in the world in your field of interest in just seconds. Just be curious and read everything you can find in the area of your passion.
How important is the past?
In most high tech areas, knowledge of the past is not that important. Things change too quickly.
But in the law, history can be important. If you are interested in an area of the law, you really should go back and look at the development of the law to uncover the underlying assumptions and the issues that arose over time to gain an understanding as to how the caselaw has evolved and why it is as it is today. Ron Vollmar and I recently published an article that required us to go back into the 1800s to trace the evolution of the Entire Market Value Theory. We uncovered some interesting aspects of its origin and the twists that occurred in the caselaw and legislation that led to the current interpretation. We were able to apply that to some recent cases and explain that maybe the justices were trying to return to previous definitions of the Entire Market Value Rule rather than develop new definitions. Incidentally, this article was published as the feature in two very prominent IP journals, IP Litigator and The Licensing Journal. It really helps to understand why the law is the way it is today and you can only do that by reading about the past.
Find your passion, which involves the tasks and concepts you love. Then find that vocation in which you can do those things. Finally, make the hard choices to focus your practice on what you love to do most. Because you love the work, you will become an expert, and that combined with passion and a genuine interest in helping people, leads to opportunities to do what you love.
Monday, March 22, 2010
Following Your Passion to Become a World Class Expert - An Interview with Derivatives Expert Dr. Thomas Murphy
Being passionate about what you do is only part of the process of becoming a true rain maker. Once one finds their passion, he or she must become a true expert in that area. Tom Murphy is a Principal in the UHY Advisors FLVS New York office. He is a world renowned expert on derivatives. He holds a degree in chemical engineering, an MBA in accounting, a PhD in Finance, and a Juris Doctorate. He has spoken around the world on derivatives over the years in London, Amsterdam, Paris, Geneva, Copenhagen, and Hong Kong. But that is not what makes him an expert, nor is it how he got there.
Dr. Murphy, tell us how your career began.
I began my career as a chemical engineer with E. I. DuPont de Nemours, and my initial assignment was at a polymer products plant where I ran experiments to improve yield and quality. I really enjoyed both the technical aspects of the work and the interaction with the manufacturing division. As I worked hard at each assignment with DuPont, I was promoted through a series of positions in engineering, manufacturing, marketing, and research. This gave me a broad view of how businesses work. I became very interested in the capital investment process and finance. To get to the next level at DuPont, I needed an MBA degree, so I returned to graduate school where I majored in accounting. I discovered that accounting had many of the same concepts that I learned in engineering. I was also very intrigued with quantitative finance, especially option theory and its application to real assets and management decisions. My dissertation was inspired by Lenos Trigeorgis, who earned his doctorate at Harvard as I was starting my PhD program. This was an interdisciplinary area of finance where the “light bulb” came on for me, and I pursued my passion with a dual doctoral degree program: PhD in Finance; and JD in Law at Syracuse University.
After I secured my PhD I moved to Houston and worked for a large energy industrial gas company and began to analyze and understand the vast application of derivative theory in business decisions and in setting strategy. I decided I wanted to learn more, but rather than taking more classes, I decided to teach and do research. I became a professor of finance at Kansas State University. I used this time to become an even stronger expert on derivatives and the depth of their application. Teaching students about derivatives, how to recognize them, and how to use them to make complex decisions was a way to focus my knowledge and learn to convey it to those not completely immersed in the topic.
I helped some start-ups get going from the university and realized I needed to get back into the “real world.” I joined the Deloite & Touche Energy practice in Houston, working with clients to help them analyze the many derivatives involved in that business. Quite a few of these companies were dependant on Enron and when that failed, due largely to very poor use of and control over derivatives, many of them failed as well. I joined Ernst & Young’s Valuation practice where I applied option models to complex securities and structures. I then received the unique opportunity to join my mentor Lenos Trigeorgis in the Real Options Group where I met Michael Brennan, Myron Scholes, Robert Pindyck, Mark Rubinstein, Alexander Triantis, Tom Copeland, Vladimir Antikarov, and Valery Kholodnyi which was very exciting, then to Charles Rivers Associates and finally to UHY Advisors to run the Derivatives group here.
As briefly as possible, when we say you are an expert in derivatives, what do we mean? What is a “derivative” and what do you do with them?
In the simplest of terms, a derivative is anything that derives its value from something else, or a bundle of other things. Derivatives include options, futures, financial structures, equity, contracts having flexible terms and conditions, or tangible assets like oil refineries, electrical power generation, twin fuel boilers, etc. As inputs and outputs face risk and uncertainty, these assets have flexibility to switch. Occasionally, of course, extreme events such as 9/11 occur and even these have to be factored into derivatives.
Flexibility is the key to derivatives. Derivatives affect the valuation and optimal strategy of everything we do in virtually any industry, from the obvious such as the finance and insurance industries to the less obvious such as IP, energy, construction, industrial processes, markets and the like. I identify the derivatives, create models to quantify as many variables as possible, and then help clients understand how to work with them to create forward-looking strategies based on high quality information.
You have a passion in the area of derivatives. How did that happen?
I can identify a lot with what Jeffrey Harfenist said last week. Finding your passion is something that happens with both a bit of happenstance and from the dogged pursuit of those things about which we are extremely interested. As we explore, we become more exposed to the intricacies and opportunities within an area of interest, and eventually we may find that area that lights that light, and the rest is history.
That happened to me as I was trying to figure out what I would write my PhD dissertation on. I was searching through abstracts of other dissertations and ran across Lenos Trigeorgis’ abstract on real options. After I read this, I literally ran to my professor and exclaimed that this was the area I wanted to work in. My professor was stunned and perhaps a bit disappointed. He cut me off and suggested that I was crazy. “Real options?” he asked. “Why would you want to do this?” I told him that as an engineer I could see how this worked in real life situations. The concept tied all of my experiences together, from being an engineer with DuPont, through accounting, intellectual property, and the law. My dissertation was on the intellectual property portfolios and R&D projects in the pharmaceutical industry. This was when I found my true love of complex financial modeling and derivatives.
After that “Ah-hah” moment, how did you then go about becoming a World Class expert in derivatives?
First let me say that I appreciate you referring to me as a world class expert in derivatives, and I suppose I am, but it is critical to remain humble because one is never truly the Best in the World at anything and as soon as you believe you are, someone will pass you by like you are standing still.
I absolutely love complex financial models. Experts are those, like me, who are never satisfied with what they know and are focused on an area they love deeply and others need. I never give up. I pursue the field with dedication. The deeper I got into it the more I found it to be fascinating and ever-changing.
I obviously pursued my dreams through education and academia. I read extensively, purchasing and studying at least three hard texts on various relevant issues a month. I found those recognized as the best and listened to them at conferences. I have written on the concepts. I have developed first impression models of areas never before addressed. I speak whenever I can and have presented around the world from Hong Kong to London to Miami. My doctorate, my professorship, my presence as a speaker and writer, and I suppose my gumption, has allowed me to meet Nobel Prize winners and the creators of some of the tools used by experts. I took what I learned and applied it to a client’s problem and then extended beyond that. In consulting I was allowed to take all the best from academia and apply it and build upon it in real life projects. This is more than what a professor gets to see.
To me an “expert” is one who has found something about which he or she is deeply passionate and then relentlessly pursues its study and application. Under that definition, I am an expert.
Many experts are merely academics. What are your thoughts on business development? How did you build your business and grow it?
Business development and growing a practice is the essence of what I do. At DuPont I was exposed to exciting real life projects. When I moved into academia I loved the extended study of theory, but I truly missed the complex problems of the real world. It is only through working with clients in their complicated problems that I find new ways to use quantitative modeling.
When did you land your first client?
I was in graduate school when “SWORD” securities were developed. The Pharmaceutical company, Centocor, had several parts of their R&D portfolio that they knew would take years to go from Phase 1 research through Phase 3 testing and then through the rigors of FDA approval and ultimately the true test of commercial viability. Modeling that process was fascinating.
As I was finishing my Ph.D., the energy industry began to be de-regulated. This opened up huge area for analysis. As energy companies began to compete with each other, prices fluctuated based on myriad variables. I became quite involved in the derivatives in the energy industry. If derivatives are used in the right way, they can help companies make wise decisions about strategies that shape the company’s future. As a result, I tend to have clients for a very long period of time.
Complex models are a common theme throughout my career.
Most people are not passionate about derivatives. How would you advise young professionals on finding THEIR unique passions?
As a professor, students would talk to me about career decisions. I would tell them to think about all the things that they have done and which ones they enjoyed the most. A lot of leading edge work happens at the boundaries of disciplines. Passions are not based upon what’s popular at the moment, but rather on fundamental skills and abilities that can be applied to solve a variety of problems. In my case this is has spanned energy, financials, commodities, risk, and strategy.
Do not think in terms of a mono-line career. Instead relentlessly pursue what you love. Explore the edges. Follow divergent paths until you find, through a combination of intent and fortuity, that path you are passionate about.
Bottom line: find those things you love to do; and identify those things that you are naturally very good at. These combinations will lead you to the right path. Push it to its limits and explore all the edges.
The world changes. The things that stay the same are our ability to do what we do best, to answer certain types of questions, and analyze things in a certain way. Learn those skills you love and can be great at and apply them to every new scenario.
Be relentless in pursuit of your passion. You will discover the way to make money doing what you love most in the world and can be best in the world at. Practice, practice, and practice some more. Read, explore, try, do. Keep working at it. When you can feel it, go for it.
Dr. Murphy, tell us how your career began.
I began my career as a chemical engineer with E. I. DuPont de Nemours, and my initial assignment was at a polymer products plant where I ran experiments to improve yield and quality. I really enjoyed both the technical aspects of the work and the interaction with the manufacturing division. As I worked hard at each assignment with DuPont, I was promoted through a series of positions in engineering, manufacturing, marketing, and research. This gave me a broad view of how businesses work. I became very interested in the capital investment process and finance. To get to the next level at DuPont, I needed an MBA degree, so I returned to graduate school where I majored in accounting. I discovered that accounting had many of the same concepts that I learned in engineering. I was also very intrigued with quantitative finance, especially option theory and its application to real assets and management decisions. My dissertation was inspired by Lenos Trigeorgis, who earned his doctorate at Harvard as I was starting my PhD program. This was an interdisciplinary area of finance where the “light bulb” came on for me, and I pursued my passion with a dual doctoral degree program: PhD in Finance; and JD in Law at Syracuse University.
After I secured my PhD I moved to Houston and worked for a large energy industrial gas company and began to analyze and understand the vast application of derivative theory in business decisions and in setting strategy. I decided I wanted to learn more, but rather than taking more classes, I decided to teach and do research. I became a professor of finance at Kansas State University. I used this time to become an even stronger expert on derivatives and the depth of their application. Teaching students about derivatives, how to recognize them, and how to use them to make complex decisions was a way to focus my knowledge and learn to convey it to those not completely immersed in the topic.
I helped some start-ups get going from the university and realized I needed to get back into the “real world.” I joined the Deloite & Touche Energy practice in Houston, working with clients to help them analyze the many derivatives involved in that business. Quite a few of these companies were dependant on Enron and when that failed, due largely to very poor use of and control over derivatives, many of them failed as well. I joined Ernst & Young’s Valuation practice where I applied option models to complex securities and structures. I then received the unique opportunity to join my mentor Lenos Trigeorgis in the Real Options Group where I met Michael Brennan, Myron Scholes, Robert Pindyck, Mark Rubinstein, Alexander Triantis, Tom Copeland, Vladimir Antikarov, and Valery Kholodnyi which was very exciting, then to Charles Rivers Associates and finally to UHY Advisors to run the Derivatives group here.
As briefly as possible, when we say you are an expert in derivatives, what do we mean? What is a “derivative” and what do you do with them?
In the simplest of terms, a derivative is anything that derives its value from something else, or a bundle of other things. Derivatives include options, futures, financial structures, equity, contracts having flexible terms and conditions, or tangible assets like oil refineries, electrical power generation, twin fuel boilers, etc. As inputs and outputs face risk and uncertainty, these assets have flexibility to switch. Occasionally, of course, extreme events such as 9/11 occur and even these have to be factored into derivatives.
Flexibility is the key to derivatives. Derivatives affect the valuation and optimal strategy of everything we do in virtually any industry, from the obvious such as the finance and insurance industries to the less obvious such as IP, energy, construction, industrial processes, markets and the like. I identify the derivatives, create models to quantify as many variables as possible, and then help clients understand how to work with them to create forward-looking strategies based on high quality information.
You have a passion in the area of derivatives. How did that happen?
I can identify a lot with what Jeffrey Harfenist said last week. Finding your passion is something that happens with both a bit of happenstance and from the dogged pursuit of those things about which we are extremely interested. As we explore, we become more exposed to the intricacies and opportunities within an area of interest, and eventually we may find that area that lights that light, and the rest is history.
That happened to me as I was trying to figure out what I would write my PhD dissertation on. I was searching through abstracts of other dissertations and ran across Lenos Trigeorgis’ abstract on real options. After I read this, I literally ran to my professor and exclaimed that this was the area I wanted to work in. My professor was stunned and perhaps a bit disappointed. He cut me off and suggested that I was crazy. “Real options?” he asked. “Why would you want to do this?” I told him that as an engineer I could see how this worked in real life situations. The concept tied all of my experiences together, from being an engineer with DuPont, through accounting, intellectual property, and the law. My dissertation was on the intellectual property portfolios and R&D projects in the pharmaceutical industry. This was when I found my true love of complex financial modeling and derivatives.
After that “Ah-hah” moment, how did you then go about becoming a World Class expert in derivatives?
First let me say that I appreciate you referring to me as a world class expert in derivatives, and I suppose I am, but it is critical to remain humble because one is never truly the Best in the World at anything and as soon as you believe you are, someone will pass you by like you are standing still.
I absolutely love complex financial models. Experts are those, like me, who are never satisfied with what they know and are focused on an area they love deeply and others need. I never give up. I pursue the field with dedication. The deeper I got into it the more I found it to be fascinating and ever-changing.
I obviously pursued my dreams through education and academia. I read extensively, purchasing and studying at least three hard texts on various relevant issues a month. I found those recognized as the best and listened to them at conferences. I have written on the concepts. I have developed first impression models of areas never before addressed. I speak whenever I can and have presented around the world from Hong Kong to London to Miami. My doctorate, my professorship, my presence as a speaker and writer, and I suppose my gumption, has allowed me to meet Nobel Prize winners and the creators of some of the tools used by experts. I took what I learned and applied it to a client’s problem and then extended beyond that. In consulting I was allowed to take all the best from academia and apply it and build upon it in real life projects. This is more than what a professor gets to see.
To me an “expert” is one who has found something about which he or she is deeply passionate and then relentlessly pursues its study and application. Under that definition, I am an expert.
Many experts are merely academics. What are your thoughts on business development? How did you build your business and grow it?
Business development and growing a practice is the essence of what I do. At DuPont I was exposed to exciting real life projects. When I moved into academia I loved the extended study of theory, but I truly missed the complex problems of the real world. It is only through working with clients in their complicated problems that I find new ways to use quantitative modeling.
When did you land your first client?
I was in graduate school when “SWORD” securities were developed. The Pharmaceutical company, Centocor, had several parts of their R&D portfolio that they knew would take years to go from Phase 1 research through Phase 3 testing and then through the rigors of FDA approval and ultimately the true test of commercial viability. Modeling that process was fascinating.
As I was finishing my Ph.D., the energy industry began to be de-regulated. This opened up huge area for analysis. As energy companies began to compete with each other, prices fluctuated based on myriad variables. I became quite involved in the derivatives in the energy industry. If derivatives are used in the right way, they can help companies make wise decisions about strategies that shape the company’s future. As a result, I tend to have clients for a very long period of time.
Complex models are a common theme throughout my career.
Most people are not passionate about derivatives. How would you advise young professionals on finding THEIR unique passions?
As a professor, students would talk to me about career decisions. I would tell them to think about all the things that they have done and which ones they enjoyed the most. A lot of leading edge work happens at the boundaries of disciplines. Passions are not based upon what’s popular at the moment, but rather on fundamental skills and abilities that can be applied to solve a variety of problems. In my case this is has spanned energy, financials, commodities, risk, and strategy.
Do not think in terms of a mono-line career. Instead relentlessly pursue what you love. Explore the edges. Follow divergent paths until you find, through a combination of intent and fortuity, that path you are passionate about.
Bottom line: find those things you love to do; and identify those things that you are naturally very good at. These combinations will lead you to the right path. Push it to its limits and explore all the edges.
The world changes. The things that stay the same are our ability to do what we do best, to answer certain types of questions, and analyze things in a certain way. Learn those skills you love and can be great at and apply them to every new scenario.
Be relentless in pursuit of your passion. You will discover the way to make money doing what you love most in the world and can be best in the world at. Practice, practice, and practice some more. Read, explore, try, do. Keep working at it. When you can feel it, go for it.
Friday, March 12, 2010
First Tip of the Week: Minimums to Becoming a Partner in a Professional Services Firm
No guarantees, but to become an equity partner in a professional services firm, in my opinion, one needs to shoot for and accomplish ALL three of the following:
1. Strong Network: Have a strong network of contacts and relationships with literally Hundreds of people, out of which you have 10 – 20 champions:
a. with whom you have deep integrity;
b. who have integrity and some influence within their firms or industries; and
c. most important, who care about your success, at least as much as you have proven to them that you care deeply about their success (the “Golden Rule” adjusted slightly).
2. Expertise: You are a true expert in your field.
a. Learn, read, and listen to the best religiously; and
b. Write and speak as often as you can to anyone who will listen; and
c. perform flawlessly with phenomenal customer service.
3. Bring in Business: Show that you can bring in at least $1,000,000 per year in business, whether you do all the work or not.
a. Your relationships are as they seem above because you generate business from them.
b. Your expertise is developed to the extent that clients seek you out and you are hired for bigger cases that pay more.
c. You can lead an engagement successfully.
d. You have a dedicated team who will perform for you.
As Sam Walton said, every “overnight success” is “twenty years in the making.”
Start now in earnest.
Network, network, network with anyone and everyone – focusing as you grow.
Go out of your way to help other people.
It ALL starts with number 1 above.
You cannot get to 3 without both 1 and 2 handled.
If you do not get to 3, you will not become a partner.
1. Strong Network: Have a strong network of contacts and relationships with literally Hundreds of people, out of which you have 10 – 20 champions:
a. with whom you have deep integrity;
b. who have integrity and some influence within their firms or industries; and
c. most important, who care about your success, at least as much as you have proven to them that you care deeply about their success (the “Golden Rule” adjusted slightly).
2. Expertise: You are a true expert in your field.
a. Learn, read, and listen to the best religiously; and
b. Write and speak as often as you can to anyone who will listen; and
c. perform flawlessly with phenomenal customer service.
3. Bring in Business: Show that you can bring in at least $1,000,000 per year in business, whether you do all the work or not.
a. Your relationships are as they seem above because you generate business from them.
b. Your expertise is developed to the extent that clients seek you out and you are hired for bigger cases that pay more.
c. You can lead an engagement successfully.
d. You have a dedicated team who will perform for you.
As Sam Walton said, every “overnight success” is “twenty years in the making.”
Start now in earnest.
Network, network, network with anyone and everyone – focusing as you grow.
Go out of your way to help other people.
It ALL starts with number 1 above.
You cannot get to 3 without both 1 and 2 handled.
If you do not get to 3, you will not become a partner.
Subscribe to:
Posts (Atom)
