I've just invented a new verb -- to Ferrazzi. It's one of those verbs that's also a noun, like "summer." The inspiration came from several places.
In today's Wall Street Journal Law Blog, there's a piece about the true savings to firms from associate layoffs. Calculations vary wildly, with one of the most intriguing being Mike O'Horo's estimate that each laid-off associate saves each equity partner around $400. This teeny number, combined with the problems these firms may have in staffing back up when the economy gets back on its feet, are the basis for O'Horo's argument that laying associates off due to the recession is a bad move. He further suggests that this would be unneccesary if equity partners did a better job of marketing.
I think he's half right and half wrong. I think that instead of simply laying them off, the associates should be out there marketing, too. They should be Ferrazzied. Rather than using a meat axe, in making these changes, the firms need to be using a scalpel. The result could well be that they grow in a recession. I've seen it happen.
The term arises from the career of Keith Ferrazzi, author of Never Eat Alone, a well-known book on networking. Early in said career, Ferrazzi was an associate at a big consulting firm, and wasn't doing too well. However, being smarter than the average bear, the firm noticed that Ferrazzi was really good at business development. Here's what happened:
Still, my first annual review was devastating. I received low marks for not doing what I was asked to do with the gusto and focus that was expected of me. But my supervisors, with whom I had already developed relationships and who were aware of all my extracurricular activities, had another idea. Together, we cooked up a job description that previously did not exist at the company.
My mentors gave me a $150,000 expense account to do what I had already been doing: developing business, representing the firm with speaking engagements, and reaching out to the press and business world in ways that would strengthen Deloitte's presence in the marketplace. My supervisors' belief in me paid off. Within a year, the company's brand recognition in the line of business on which I focused (reengineering) moved from bottom of the consulting pack to one of the top in the industry, achieving a growth rate the company had never known (though, of course, it wasn't all my doing).
Why not do the same thing with these associates? If you're planning on laying off twenty of them, only lay off ten. With the remaining ten, who you have identified as having business development talent or inclinations, you basically set up a sales force.
The savings from the layoffs you do go through with will cover the expense of retaining these associates. There are many, many consultants who can train them in business development and coach them in this work (including, of course me -- the very best of the best) as they learn. Then get them out there. Reduce their billable hour expectations, give them some kind of an upside incentive for the business they do bring in, assign them to particular deparments or practice groups, and let them off the chain.
At the very worst, this program will break even. But the benefits are fantastic:
- The firm will have a very motivated, knowledgeable sales force that, at least, will be teeing up opportunities for equity partners to close business.
- When the recession ends, they will have the in-house capability they need to grow.
- Having these people in-house will help a business development culture take root and grow
- And, oh yes, if just one of these people manages to help bring in just one big new client, the entire program will more than pay for itself.
Every business on earth has a sales force, with the exception of professional services firms. With a reasonable amount of training and planning, these firms could leverage the in-house sales potential they've already, basically, bought and paid for. Which is, of course, just what you need to effectively handle a recession. All it takes is some creativity, and some planning.