Interchangeable or irreplaceable

Four things I keep writing in the margins of my week. They connect, but loosely, the way field notes do.

One: the two piles

In the next two or three years, average firms become obsolete. I say that to my own team and I say it to clients, and I am confident in the direction and less confident in the timing. It might be three years. It might be four. But every service business I can see is sorting into two piles: interchangeable or irreplaceable.

The mechanism is not mysterious. Technology and money make things a commodity. Private equity is rolling into accounting, HR, marketing, and finance the same way it has rolled into every other professional service, and the software is arriving at the same time. Unless you are Big Four or a top-twenty-five firm with real brand equity, the back-office service you sell becomes a commodity within a few years. Competing on that axis is unwinnable by definition, because someone will always be cheaper and faster.

The only way to beat a commodity is to become something completely other than it.

Where the market moves cheaper, faster, and more transactional, you move strategic and higher touch. Pricing follows from that. The price touches the position; it does not set it.

Two: the commodity work is the price of entry

Nobody hires a firm like mine because they want a clean P&L and balance sheet. They want someone who will tell them why the numbers matter. Not a single foundation, board, or nonprofit leader cares how clean the transactions are. They care what clean transactions produce, which is trustworthy data and a clean audit.

The trap in that sentence is that it sounds like permission to be loose on the fundamentals, and it is anything but. You still have to do the commodity work better than anyone, because the commodity work is what earns the right to sell trust, and trust is the actual product. Trust also has an unfair decay curve. Long and hard to build, easy to lose. A client will forgive the first incompetent thing you put in front of them. They will not forgive the second. That is a quality standard, not a slogan, and it is the parent of every response-time rule we have.

The reason most firms have not made this move is uncomfortable to say. Commodity work is easier to sell and easier to measure. The strategic layer requires people who genuinely think strategically, and there are people who think strategically and people who have to mimic what strategic thinking looks like. The difference only shows up under load. You cannot buy it with a credential, either. I have a PhD and I would not bank on it to open a door. Strategic-guide skill comes through reps: laps, seeing the textbook answer meet a real organization and watching what actually happens. Do the work for free if you have to. Get the reps.

Three: high touch is the redemptive part

We use the word “fractional” because the industry does, but I try to rename it every time. Fractional partnership, not fractional staffing. A vendor sells hours. A partner comes alongside and asks, where are we leading? For a faith-driven firm, that posture is where the mission actually shows up. High touch is felt, not measured. It is the sense that a client would never feel transactional with us. And it is the only place the redemption in our work becomes visible, because you cannot see a worldview in a reconciled ledger. You can see it in how someone treats you when the ledger is wrong.

I am honest that we sit in the vendor category structurally. We fight that language relentlessly, and the proof is small: knowing people’s names and their spouses’ names. That is a specification, not sentiment.

Four: the bet I am making with my own firm

This is where I disclose my interest. Everything above is also the strategy of Novum Partners. We are a strategic management firm that happens to run finance and HR, and we are betting the whole company on the irreplaceable pile.

What irreplaceable means to me is specific, and it excludes the cheap version. Not that clients could not work without us. That they would not want to. Stickiness earned through value, never through lock-in. I never want the platform we put clients on to be cumbersome, and I want it to bring so much value that leaving would feel like a loss rather than a hassle. Those are different things, and only one of them is honest.

The other half of the bet is a brand bigger than my name. The difference between a practice and a firm is whether credibility travels with the founder or with the company. There was a point where the brand became bigger than Brad, and that was the point the firm became real.

Will it work? Ask me in three years. My revised prior is that it is the only bet worth making, and that the firms racing to the bottom will get there. I would rather race to the top and be the company everyone wants to work with and everyone wants to work at.