Bill Gates on professional firms

During a press interview a few years ago, Bill Gates famously identified Microsoft's key competitors as being 'a kid in a garage' rather than other businesses that most would have seen as the real competition.

And with the benefit of hindsight, he was, of course, absolutely right.  You only have to look at the way in which Facebook, Instagram and all the other spectacular success stories of the social media age to realise just how right Gates actually was.

Now, before you senior citizens of the professional services world hit the delete button at the prospect of reading another piece on social media, let me reassure you that this is nothing about  that taboo subject.  It is about the very survival of your solid, dependable, established, mid-sized firm.

You see, your competition is not about a nearby firm undercutting you on bread and butter work, or launching a new website, or sponsoring some local event.  The competition that you should really fear is the firm (or perhaps even a company) that completely re-engineers the business processes that you believe are sacrosanct, but in reality they are not.

And there are relatively few areas of professional services that cannot be delivered in a different way.  If you are doing anything - yes, anything - in the same way that you were doing it just 5 years ago, you are almost certainly doing it inefficiently and somebody else will be doing it faster, better, cheaper - and more profitably.

Going back to Bill Gates, if he was right about the competition being 'kids in garages' (which he was), why do Microsoft (and most big businesses) commit such huge sums to R & D?  The answer is very simple.  What they are trying to do is to refine and improve their existing products and services, not invent something completely new.  Look at Apple, and you will get the point.

So, if you are a lawyer or an accountant, don't believe that the provision of professional services is exempt from innovation and change.  It certainly is not.  And even if you don't (want to) accept the point, your younger partners and staff are certainly aware of it.  You ignore them at your peril.