The Seven Blind Spots of Boutique Professional Service Firm Founders
In the world of boutique professional service firms, the role of the founder is pivotal. However, even the most astute founders are susceptible to certain blind spots that can hinder their firm’s growth and success. Here, we discuss the seven critical blind spots that founders often overlook, their implications, and how addressing these can lead to a more prosperous future for their firms.
- Filtering: The Distorted Lens
Filtering refers to how founders process information when making decisions. In small service firms, there’s a tendency to distort facts, often unconsciously. This selective absorption of information leads to decisions based on partial data, overlooking crucial aspects that might be critical for the firm’s wellbeing. For example, making a key hiring decision because the recruit has a similar background to yours.
- Relying on Hunches: The Trap of Self-Fulfilling Prophecies
Many founders fill gaps in information with their own assumptions or hunches. While intuition can be a powerful tool, over-reliance on it can lead founders into the trap of self-fulfilling prophecies. These hunches, unchecked by factual data, can steer the firm in a direction based more on belief than reality. For example, investing in launching a new service offering without validating the market will buy it.
- Soothsaying: The Arrogance of Prediction
Soothsaying involves attempting to predict the future with little concrete evidence. This blind spot is particularly dangerous as it can lead founders to commit resources to strategies based on shaky forecasts, often fueled by arrogance rather than practical analysis. For example, hiring more capacity based on a rosy sales forecast.
- Retrospection: The Fictionalized Past
Founders often use selective memory to guide future decisions, converting the actual past into a more palatable, often fictionalized version. This retrospection can lead to repeated mistakes or missed opportunities, as the true lessons from the past are obscured. For example, making yourself feel better about a lost client by telling yourself “They just don’t get it.”
- Categorizing: The Shortcut to Decision Making
In the time-starved world of boutique service firms, founders often resort to categorizing – labeling and judging situations quickly to save time. While this can be efficient, it often leads to poor snap judgments and oversimplifications of complex situations. For example, dismissing a best practice at first glance.
- Emotions: The Clouding of Judgement
Emotions play a significant role in decision-making, but they can also cloud judgment, blocking out logic. Founders, driven by passion, can sometimes let their emotions override rational decision-making, leading to choices that aren’t in the best interest of their firm. For example, carrying a bloated payroll because laying employees off is painful.
- Magnifications: The Extremes of Perception
Magnification involves blowing things out of proportion, making the highs too high and the lows too low. This distortion can lead to overreactions, either overly optimistic or pessimistic, which can destabilize the firm’s strategic direction. For example, when your firm hits a tough patch, and you implement draconian cost cutting because you think the sky is falling.
Conclusion: Overcoming Blind Spots for Success
For boutique professional service firms to grow, scale, and reach a successful exit, they require leadership from a capable founder. A founder suffering from these seven blind spots is not operating at full capacity. Recognizing and addressing these blind spots is essential. Founders who identify with one or more of these pitfalls should invest in personal development efforts to mitigate their effects. This is not just about individual improvement but about ensuring the health and future success of the firm. Remember, overcoming these blind spots is not just a personal victory; it’s a triumph for the entire firm.
A membership in a peer group is an effective way to address these blind spots. And Collective 54 might be the right group for you to join. If you are interested, apply here.