Thoughts on ways to improve the management of professional services firms

Friday, September 29, 2006

Interesting Posts - September 06

Photo: Gordon Smith, Saint Mary’s Peak at Wilpena, South Australia

It takes a little while to write major posts. In the meantime I thought that I would report on some of the interesting posts I have seen recently in my travels.

In doing so I am not covering those listed by David Maister in his recent Blawg Review #76 because they are best reviewed through David's summary.

Cross Cultural Issues

Nava Shalev has a good piece on her Global Relocation Portal, Dancing in a global world: How to build effective cross cultural partnerships, on cross-cultural issues. Those reading this blog or Personal Reflections, my personal blog, will know that this is one of my interests.

Importantly, some of the worst cross-cultural errors occur between apparently similar cultures both nationally (say the US and Australia) and within the professions (lawyers vs consultants) because differences are obscured by apparent familiarity. Mind you, mix in techno speak with, say, legalese, and all similarities are lost in semantic confusion!

Web Issues

One of my enduring interests is the way in which the web continues to affect service development, marketing and service delivery across the professions.

Web 2.0 has been of interest because I like what I see as the core concept, a shift from an environment in which the provider dictates what can be done to one in which the customer has more control. Like all new concepts it has spawned a whole series of sub-variants, in turn sparking a reaction from those who wish to argue that there is in fact nothing new about web 2.0.

This argument was well covered in a post on Dennis McDonald's blog Web 2.0 Doublethink is Alive and Well.

Dennis also had an interesting post on why Introducing Collaboration Technologies to the Enterprise is a Challenge . cazh 1 had a related post on The Law of Large Numbers - or, why Enterprise Wikis are Fundamentally Challenged. Both deal with the practical issues associated with the real application of new collaborative tools.

I must say that this has also been my experience. You would think that they would be a magnificent help in trying to coordinate a geographically and professionally distributed network like Ndarala. Set up a wiki on a topic and let the flowers bloom. The reality is that in the absence of coercion, something that is hardly possible in a network, busy professional will only particpate where they can see an immediate gain relative to the time involved.

Now here David Lee on eelearning has been trying something a little new. He has established a wiki as part of his blog, with the first one focused on web 2.0 applications. But what he has also done is to link it to some other tools. Now here he has done something very useful for those like me who are interested but do not claim great technical knowhow by providing a very useful applications summary. Go here to see what I mean.

Other Management Issues

Dennis Howlett has a short but interesting post on benchmarking, although I did wince at his description of consultants. After all, I am one! Dennis is not a supporter and makes some good points. I was a supporter. It can still be very useful in technical or process areas where the aim is to improve existing performance, but I have becoming increasingly critical of the approach because of the way it locks organisations into other people's past practices.

Something of a counter if partial view was presented by Tom Collins in morepartnerincome, the Juris blog in a discussion on the power of legal surveys. I think that it's all a question of balance.

In Adam Smith Esq Bruce had an interesting post, Does IT matter?, a post that links back to earlier web discussion. The hard part with technology issues, at least as I see it, is to drill down to the underlying management need. Just as lawyers provide legal answers, so technologists provid technology answers.

Not by Bread Alone

Life is not meant to be all work.

In Look and See, Gordon Smith continues his journey through outback Australia. The photos are wonderful, each accompanied with a short caption. The journey began on 29 August with an initial photo of Quilpie in Queensland - "Beyond Quilpie… there be dragons, red dirt, heat, dust and haze". Since then Gordon has posted a photo a day as he works his way down through the channel country through Birdsville into South Australia. He can now be found in the Flinders Ranges of South Australia.

For those from overseas as well as some of those in Australia's cities, Ochre Archives presents a sometimes irregular but always interesting view of the world centred on Phillip Diprose's property, Ochre Arch, at Grenfell in NSW.

Finally, Neil has a interesting story on New Lines from a Floating Life on the Australian artist David Humphreys, interesting in general but also because I find that David lives just three blocks from me. Those who would like to find out more about David can do so from his web site.

Correction: In the first version of this post I misread Neil's post and wrongly ascribed the devonshire street tunnel blog to David. I would have picked the error up had I checked the profile properly. Thanks, Neil, now corrected.

Thursday, September 28, 2006

Blog Nominations Called For

The Ndarala Group in conjunction with Regional Living Australa and Brian Brown's Pajama Market: small business blog of the day would like to invite you to nominate business blogs run by smaller Australian professional services firms or individual professionals for consideration for inclusion as one of the featured blogs on Brian's site. The key requirement is that the blog be a business blog.

I have spoken of Brian's blog before. It has developed into a leading source of information about and examples of small business blogging.

Just to set a context for our invitation.

On 23 July Dave Lee reported in his e e learning blog on the opportunity he had had to join some of top media and content names in San Francisco for a conference on the future of media that was held concurrently with a similar gathering in Sydney, Australia. I wrote about it at the time in a post on my personal blog, Informal Learning - the end of courseware?.

In his post, Dave included a chart comparing US and Australian involvement in content creation on the web. There were some important inter-country differences.

Eight per cent of Americans had a blog as compared to 4 per cent of Australians, 14 per cent of Americans had added material to their own web site as compared to 10 per cent of Australians.

These statistics threw light on something that had puzzled us, the huge apparent gap between the US and Australia when it came to the use of blogs for business purposes within professional services. Yes, the US economy is twenty or so times the size of the Australian economy, but the gap was far bigger than that. Now the stats suggest that US blog intensity is twice that of Australia, thus doubling the gap.

We believe that business blogging is a valuable tool, especially for smaller firms. The trawls I have done across US sites show great use of blogging by independent consultants in particular as a way of keeping in touch with a broader marketplace.

Our hope is that we can use this call for nominations to identify and promote individual business blogs within Australian professional services, thus providing demonstration models to encourage broader usage.

Nominations can be submitted by inserting the blog name in the comments section or by emailing me on ndarala(at)optusnet(dot)com(dot)au.

Monday, September 25, 2006

Blawg Review #76

David Maister has just hosted Blawg Review #76. Blawg Review - The Carnival of Law Bloggers - is the blog carnival for everyone interested in law. A blog carnival is a traveling post about a topic or theme.

Because David was hosting this Review, it focuses primarily on the themes of work and professional life, firm management, marketing, strategy and careers rather than legal topics per se.

I won't repeat the material in David's review because I think that this is best done by visiting the post itself.

As broad comment, I found the review very useful because it introduced me to a number of blogs about the practice and management of law that I had not seen. I have now done a preliminary review and can see a number worthy of further report as useful information sources on the management of professional services firms in general, law firms in particular.

Not unexpectedly, the blogs are mainly US: sixteen US vs two each for the UK and Australia. The US is a much bigger market, while the proportion of the US population with blogs is approximately twice that of Australia.

I was pleased to see that David picked up the Kiwi fruit branding article on the Dilanchian blog. As indicated previously, Dilanchian is one of the few Australian law firms that I know of with a blog. If anybody does know of Australian blogs either coming from Australian professional services firms or dealing in any way with the management of professional services firms please let me know.

Digging down in one article, I cannot remember which one and for that I apologise, I was pleased to see a reference to Brian Brown's Pajama Market: small business blog of the day. This blog is on my must read list because of its daily coverage - one each day - of specific small business blogs.

Finally, David listed one short post from this blog comparing diagnostic approaches in medicine and law. Obviously he could not help noticing the similarities between the name of this blog and one of his books, "what a catchy name!" was his comment.

The blog name does indeed come from David's book, but the connection is indirect.

Ndarala, the professional network I manage, was set up in April 1996 to help the independent management related professional practice achieve business and professional objectives through cooperative action while retaining full business and professional independence.

Today we have 38 member practices including law together with a wide variety of training and management related consulting activities. So we are one of those rare organisations that actually spans professional services.

Because we both operate in and consult to the professional services sector, a couple of years ago we set up a professional services special interest group. We also started creating a supporting section on our web site. We called this Managing the Professional Services Firm because it acurately described the territory we were coveing.

In selecting the name, I was no doubt influenced by David's book since I had been quoting his writings for a number of years. We carried the name across when we created the blog ealier this year.

Sunday, September 24, 2006

Professional Mudmaps - Cultural Differences Across the Professions: Stocktake of Posts as at 24 September 06

This post lists previous posts that have dealt in some way with cultural differences across and within the professions. There have actually been a fair number, so I thought that a consolidation might be of assistance.

Previous Stocktakes

Friday, September 22, 2006

Role of the Diagnostic in Professional Practice - medicine vs law

Triggered by some comments from Prem Chandavarkar, my last post discussed the development of a discipline of practice. Here I defined one knowledge domain as the application of the profession in practice by individual professionals. Doctor/patient, lawyer/client etc. Essentially, how do we do what we do.

I thought that I would extend this discussion by taking one element in this application, the initial diagnosis, briefly comparing the processes adopted in medicine and law.

The Medical Case

Effective diagnosis is central to the practice of medicine. For that reason it also forms a key element in the training of doctors. Here I am not talking about the grand drama as presented in the US TV program House where the team stumbles from one possibility to another in face of complex and puzzling diagnostic problems, rather the more mundane day to day application of diagnosis in practice.

I saw the importance placed upon the diagnostic during my two year period as CEO of the Royal Australian (now Australian and New Zealand) College of Ophthalmologists, the peak body responsible for the training of future eye care specialists in Australia and New Zealand.

At the time the Victorian Government had decided to grant certain prescribing rights to optometrists. The College's position was that optometrists lacked the diagnostic skills necessary to prescribe those drugs safely. There were some turf elements in this position among at least some ophthalmologists, but overall it reflected a very strong belief in the need for effective diagnosis to ensure protection of patient interests.

Given that the Government was going to grant the rights, the College argued that this should be made conditional upon optometrists undergoing additional training. The College was then asked to advise on just what additional minimum training should be mandated and why.

The word minimum is important. The College could not simply put forward a shopping list whose effect would be to derail the process. So we needed a structured process to both define what was required and explain why. Importantly, the requirements had to be defined with sufficient clarity to allow universities responsible for training optometrists to incorporate them into future optometric training.

We adopted a competency based approach. These approaches are common in education and training in Australia, New Zealand or Europe, less so in the US. In simple terms, they involve defining what minimum level of competence is required to do something effectively, defining how this competence is to be measured, then specifying the necessary knowledge, skills and judgment required to achieve that degree of competence.

I provided more information on these approaches in one of my earlier posts on people management in professional services.

Application of these approaches to a specialist medical area was then new and required our specialists to stand back and look at what they did and why. One outcome was defined competencies relating to the diagnostic process.

Comparison with Law

Now compare medicine and law.

When the patient comes to see the doctor, the doctor goes though a structured process checking medical history, finding out any symptoms from the patient, carrying out any necessary tests, developing a diagnosis and then defining treatment. If necessary, the doctor will refer the patient on for specialist advice.

The equivalent process in law is far less structured.

Putting it in medical terms, the patient comes to the doctor with symptoms (I want a contract), the doctor then finds out what treatment the patient thinks is required (what do you want to go into your contract), then prescribes and makes the necessary drugs (the contract) drawing from the in-house pharmacy (templates, precedents).

Perhaps not surprisingly, both misdiagnosis and wrong prescription are not unusual. The problem may in fact not be a legal one at all. If a legal problem, the real requirement may be different from that specified by the client. In both cases, the final legal outcome is likely to be unsatisfactory and may even be disastrous.

Linking all this back to my starting point, the knowledge domain I defined as the application of the profession in practice by individual professionals. Doctor/patient, lawyer/client etc. Essentially, how do we do what we do.

My point about the medicine versus law comparison is that I think that all professions can benefit from re-examination of the way they apply their profession in practice. I also think that all professions can benefit from examination of the way other professions undertake similar tasks.

Thursday, September 21, 2006

Towards a Discipline of Practice

I see that the discussion on David Maister's questions on his personal strategy is now up to 54 posts!

As part of the discussion Prem Chandavarkar made a rather nice distinction. He wrote:

I believe the problem lies in the fact that we lack a disciplinary definition of practice. Most of us enter a profession through a formal training in the discipline. The training tends to focus on enabling us to acquire a strong conceptual understanding of the profession as a discipline - its core realm of knowlege, its value to the world, its methodologies. Success, within this academic context, is defined in terms of the intellectual contribution one can make towards the extension of the boundaries of the discipline - and this builds a strong sense of self worth and personal fulfillment because it constructs higher realms of reality.

But when we talk about forms of practice (such as the structure and strategy of firms) we are unable to talk about it in disciplinary terms, and we shift outside the discipline toward a language of management. It appears that practice is seen as a method rather than a philosophy.

Extending Prem's analysis, I think that there are in fact three overlapping knowledge domains:

  1. The profession itself, whether it be engineering, medicine, law or training. Most professional education and training focuses on this as Prem notes.
  2. The application of the profession in practice by individual professionals. Doctor/patient, lawyer/client etc. Essentially, how do we do what we do.
  3. The management of the overall practice. Essentially, how do we manage what we do.

Knowledge domain one is largely unique to each profession, although all professions can learn from others in regard to the way people are taught, knowledge structured.

Knowledge domains two and especially three cross professions. Each profession has unique features that influence approach, but they are still common knowledge domains.

Looking briefly at two and three.

On the surface, the application of each profession in practice may not seem connected. What do, say, law and medicine have in common? At least this:

  1. Common techniques can be used to analyse the processes followed by professionals in their work.
  2. A least some of the elements in those processes are common. For example, both lawyers and doctors have to begin each engagement (matter in the case of the lawyer, consultation in the case of the doctor) with a diagnostic. Comparison of the different application of common process elements between professions can yield fruitful insights.

The commonalities between management of practices across professions are better understood. However, there is in fact a gap here.

If you look at the literature you will find a range of general advice and principles drawn from management. You will also find a volume of nitty gritty material classified under the general head of practice management. This is often encapsulated in specific practice management courses and qualifications.

The gap as I see it between the two, and I think that this holds even though David Maister among others has written on the topic, is the gap that Prem points to, the absence of a fully articulated philosophy of practice that takes into account the unique features of professional practice.

Saturday, September 16, 2006

Maister on Maister - "Help me with my strategy, please"

Postscript: I normally try to post every couple of days. Because this post has created some interest, I am leaving it as the front post for a longer period.

In my last post I mentioned that even David Maister asks himself and others the same type of questions that I ask myself, posing the question in his latest post "Help me with my strategy, please."

David's question to his blog audience generated a large response, with 33 comments so far. Anybody who has been involved with blogging will know that that's a big response. I found the discussion interesting and thought therefore that I might report on it, drawing out some of the broader issues. It's a long discussion - almost 15 pages when I printed it out - with some quite long and very thoughtful individual responses, so I am not going to cover it all.

Further, in considering both David's comments and the responses, please remember that this is a blog conversation, a chance for him to pose question and get some ideas in return, not a highly structured and carefully thought out approach. Given his guru status, David is actually quite brave to follow this approach since he risks being misunderstood.

In this context, a quote from him in response to one comment: "In case I left any confusion, I'm not bored or depressed. Quite the opposite in fact - I've never had more career opportunities and choices (nor more fun.) That's why I'm trying to think the options through."

Setting the Scene

David starts by outlining some of his strategic choices and challenges.

He has an established reputation in consulting with, speaking to and writing about businesses around the world in the professional sector (law, accounting, investment banking, executive search, IT services, real estate, consulting etc). However, he has noticed a few trends in his business:

  1. Since he began there has been significant growth in writing about and consulting to professional services businesses. On the other hand, interest in his work has spread to new industries. So David is tempted to write about business in general, but is concerned about loss of specialist reputation.
  2. He has two quite different audiences. The bigger group, this includes many of those who read the blog, are younger or those outside the power structure (smaller firms, solo consultants like him) and who enjoy his focus on staying true to dreams and ambitions. The second group, top officers in top firms, have more direct business concerns. Here he aims to challenge them.
  3. David's choices are not really driven by economics, but by the desire to make a contribution and to receive the personal returns (not just money) that come from this. However, the economics of the two areas are different. If David wants to serve the first audience and make money at it, it will probably mean selling ebooks, CDs and videos. To serve the second audience means generating and emphasizing new thoughts in new articles, deriving an income from high-level face-to-face consulting. So far he has been able to do both, but he does not know whether this will continue to be a good model (or even viable) moving forward.

Given this background, David poses three questions:

  1. Should he continue to try and be a professional business specialist or write about general business issues?
  2. What could he do to best serve the first audience of other consultants, staff people, younger people and small firms? If he wanted to, what would be the best way to monetize his services to that audience?
  3. If he want to keep serving the second, top officer audience, how might he carry on being challenging and provocative without being one more person pointing out whats wrong with the established structure? Is it possible to pull off the high-wire act of being both a provocateur and a wise counselor? Should he continue to try that?

The Discussion

I think that the best way of summarising the discussion while linking it some of of my own thinking is lies in the adoption of a thematic approach.

Professional Services

I agree with David that there has been a proliferation of writing on professional services since he began and that he has in fact played a major role in this. I can see this in the number of times I have quoted him. However, when I drop below this I see real problems and needs.

I know the Australian scene best. When I look on ground, I can see a significant increase in the number of consultants advising within the general professional services business field. However, this growth appears to be pretty much all sector specific. So we have consultants specialising in helping law firms, accounting firms, engineering firms, IT services etc.

The reason for this lies in the substantial cultural divides across professional services. I have been exploringoring these on this blog using the concept of professional mudmaps as a discussion peg. I would love to see David focus to some degree on these differences and on linked topics such as multidisciplinary work, moving away from, at least as I see it, a sometimes implicit focus on partnerships and time based charging.

I also see real advantages in the idea of David making his work available to a broader business audience, generalising some of his lessons. I don't think that there is a real conflict here in regard to his position within professional services, or at least none that can't be managed. In fact, I think that David's work in and advice on professional services may even benefit in that the new perspectives created by looking more broadly will flow back into his thinking on professional services.

David's Two Audiences

One of the most interesting things about the discussion was the way it drew out very clearly that David is indeed talking to two audiences, although the composition of the first audience - that linked especially to the blog - appears to be a little different from from the way that David defined it initially.

David defined the first audience as made up of relatively younger people, or those outside the power structure (staff people, other consultants, small firms and solo operators like me.) This group tends to enjoy my emphasis on core principles and staying true to dreams and ambitions. He contrasted this with the second group, the leaders of professional services businesses.

As a broad statement, David's description of his first audience appears absolutely correct. He has established a quite remarkable degree of involvement with his blog audience, they do indeed value his comments and his emphasis on staying true to dreams and ambitions. The one qualification, and its really an extension rather than a qualification, is that the blog audience already appears to reach well outside professional services as such, reaching people who would otherwise never have seen his writings.

All this raised a couple of issues in my mind, linking back to David's opening questions.

Audience One vs Audience Two

David defined his track record in terms of consulting with, speaking to and writing about professional businesses. I have put businesses in bold because this is a critical issue.

In only my second post on this blog, I referred to the difference in focus between the self employed professional (part of audience one) and business builder (audience two), suggesting that this lead to quite profound behavioural differences. This is in fact another example of differences in professional mudmaps.

These differences mean that the self employed professional is simply not interested in many of the topics relevant to the professional services business. The same holds true to greater or lesser extent for the other components of audience one. I say greater or lesser extent because at least some of audience one such as those employed in professional services businesses are (or should) be interested in business issues. So there actually is a potential conflict in interests, one that David presently appears to bridge in two ways:

  1. The blog includes a range of material relevant to business building.
  2. David uses the blog as a device for keeping in touch with a younger audience that he might not otherwise reach simply because those he deals with on a face to face basis, the business leaders, are often pretty remote from their staff.

However, if David is to build audience one as a new focus, especially business focus, then the conflict may become more intense. How might he resolve this?

A story from my own experience that may be instructive here.

When I first launched this blog earlier this year with the aim of getting some of the ideas and experiences of I and my colleagues to a broader audience, I asked a couple of friends to look at it. Both were partners in major law firms and I thought that they would be interested in the business and management issues covered. They were not. They saw these issues as falling to the domain of the managing partner.

This was a real frustration. People management in a lot of professional services firms is quite simply awful. Further, too many of my consulting colleagues focus on ways of improving profit through "better" time utilisation, adding to problems. I wanted to change this by getting a message to a wider audience, hence my frustration re my friends' responses.

Through his audience one, David is already reaching a wider audience that I can only dream of. He has bridged the relevance gap.

Intuitively, if I were David I would create a greater separation between the blog itself and the main web site. I do not mean separating the two, simply making the difference in focus a little clearer.

At present, the main web site is structured into two sections, my materials and about me. The my materials section covers the blog, articles, podcasts, video, audio and books. The about me covers services. Then there is a topic section broken into strategy, managing, client relations, careers and general.

Other than the word blog, the blog is not separately indentified on the main site. If you do click on the blog and go through, the tone changes. The blog's title - Passion, People and Principles - says it all. This is David Maister in conversation.

I would keep the professional services business focus on the main site. But I would also separately identify the blog as a discrete entity with a different focus. Again intuitively, I would maintain a strong people focus so that the blog continues to reach out to the individual professional. The site then has two streams focused on the two audiences, separate but linked. This would then allow David to link more things explicitly to the blog itself.

I think that whatever is done should maintain the David Maister conversational focus. This blog works because it is David Maister. This bears upon the next issue, generating a return from the blog.

Generating a Return

Those responding to David made a number of suggestions on possible returns including material sales and conferences.

This issue of added return from effort is presently of great interest to some of my own colleagues for two reasons:

  1. They want to break or at least reduce the nexus between time based charging and income, creating an income stream independent of their own immediate time inputs.
  2. They have invested a lot of effort in content creation and would like to get a direct return for this to justify the effort. In simple terms, and this problem applies to all independents, so long as the only return from content creation including new services comes from sale of individual time, then the economic return is going to be severely limited.

Looking at David's question and the responses in light of my own experience, I would make three comments:

  1. In general, most commercialisation attempts fail because independent professionals, and indeed most professionals, simply don't think like business people. They may be very effective as business consultants, but the mindset required to actually establish and grow a business is very different. Here David himself has defined his own position as that of solo operator.
  2. Blogging, even business blogs, involves very particular issues in that an overtly sales focus can quickly put people off. So care is required.
  3. There is a clear potential conflict, one that was identified during the discussion, between the guru role deriving return from consulting (this role is maximised by the provision of a range of free material) and material sales.

I have no doubt that David's market position provides the potential base for extended e-publishing and e-training activities. This need not involve the appointment of additional consultants. Last year a consulting/training operation in NSW that had been built and run by one professional on his own was sold for several million dollars. At the same time, this needs to be done very carefully to overcome the type of problems described above.

Reconciling Business and Passion

This brings me to my final point, the need to find a fit between the business model adopted and the drivers that motivate David.

Working with my own Ndarala colleagues, the biggest mistakes I have made have all occurred where I tried to push them outside the frames set by their own experience and enthusiasms. No matter what the potential may be, these efforts have always failed.

In the end, David Maister's biggest asset is David Maister. It will be David's own enthusiams that will and should determine his next steps. And that really links to the purpose of the blog entry.

David is doing what he has always argued that all professional services firms should do, seeking advice from customers. But he is also using the process in a personal sense to test and get feedback on his evolving thinking.

I will watch developments with interest.

Thursday, September 14, 2006

Interlude - Things of Interest

A short diversion from my professional mudmaps posts to point to some of the interesting things I have noticed in my screening of the electronic world linked to professional services.

I mentioned in an earlier post that Dilanchian Lawyers & Consultants (Sydney) had launched a new blog, Lightbulb, focused on commercialisation. The site is content rich and therefore of interest to all those with an interest in intellectual property, innovation and commercialisation. However, it is also of interest to all those interested in the use of the web as a marketing device, an area where Noric has very considerable expertise.

One of the common beliefs in professional services - another example in fact of an element in many professional's mental mudmaps - is that professional services is first and foremost a people business and that, consequently, clients will not buy services on-line. Web sites are therefore seen as a device to support other marketing, rather than a client attraction tool in their own right.

Noric's site is therefore interesting, because both the old and now the new site have in fact directly attracted new clients. So the site is worth a browse.

Interesting post on Bruce MacEwen's Adam Smith Esq on the merger between between US law firms Orrick and Dewey Ballantine, interesting because it draws out in a simple way some of the issues involved in a major merger of partner based firms. I looked in a preliminary way at some of the issues in my earlier post on Professional services : mergers, acquisitions and goodwill.

Another interesting post on the Juris sponsored morepartnerincome blog reporting the results of their latest survey of US law firms. To quote: "The disparity in per-partner income between the top performing 25 percent of firms and the rest of the pack is eye-opening. Partners in the top 25 percent earn twice the income of the next quartile and more than seven times the per-partner income of the lowest 25 percent. " As I remember the Australian Bureau of Statistics figures, I do not have them in front of me, the position in Australia is somewhat similar for both accounting and law sectors.

I am pleased to see that even David Maister asks himself and others the same type of questions that I ask myself, posing the question in his latest post "Help me with my strategy, please."

In my first post on this blog on 3 July I said: This blog has been created to encourage debate about and to provide information relevant too the management of all professional services firms. With time, I hope that it will develop into a valuable resource.

Two months and 36 posts later I and my Ndarala colleagues are starting to get a feel for some of the challenges involved. This is a business blog. We want to encourage debate and provide information, to share our experiences. But we also want to encourage people to use the services we can offer. In my own case, for example, assisting firms at both the strategic and business improvement levels.

A core challenge lies in making the blog interesting and useful to a diverse audience.

How do we get individual professionals to read the blog when so many see management as someone else's responsibility? How do we balance the need to keep the blog interesting and readable for a general audience and yet provide the depth on particular topics that people really need if our material is to help them solve specific problems? How do we overcome the silo divides between professional sectors so that people can see linkages and draw lessons?

I do not pretend that we yet have answers to these questions. For the present we are simply trying to build content on particular topics such as the series on people management, while also adding in shorter more current posts.

With time, we hope that we will attract both browsers (regular visitors who are interested in seeing what we have to say and perhaps contributing their own thoughts) and those who want to use the site to follow up particular topics as required.

Wednesday, September 13, 2006

Professional Mudmaps - Project Based vs Relationship Based

In my last post I used the term professional mudmaps as short hand to describe the personal mental models every professional uses to interpret and make sense of a complex external world. I suggested that these mudmaps were incredibly powerful and, once created, very slow to change. I suggested that these mudmaps varied across the professions creating sometimes subtle differences in culture, attitude and approach.

I have previously given one example of differences in mudmaps in my discussion on managers vs professionals.

Now to extend my argument I will take an interesting discussion on David Maister's blog on marketing in a one-off industry as a trigger point. Tim Burrows from GHD in Australia posed this question: "Across the spectrum of industries, there is a wide variety of client needs, ranging from repetitive and regular advice through to one-off projects. In the latter case, some of these clients you may never serve again. How do you market yourself if you are in a one-off industry? "

The discussion that followed contained some interesting ideas. However, I was also interested in the fact that the discussion seemed to me to slide over one of the key dividers within professional services, a divider that profoundly affects professional mudmaps. That divider is the difference between project based and relationship based approaches.

Some years ago I was involved in the establishment of a new consulting business. The business grew from a zero start to $A750,000 in annual fees within eighteen months. We were badly hit by the onset of recession in 1990, but then clawed our way back to annual fees of $A1,000,000 within twelve months. At that point we hit another fee decline, one that took me a little while to understand.

The business was established to provide an integrated suite of consulting, information and training services to a particular broadly based industry sector. We wanted to be able to supply a range of services to individual clients so that our offerings changed as their needs changed. So we invested in relationships, taking a longer term view of paybacks. That was our professional mudmap.

When I looked at the reasons for the decline, I finally came to realise that we had unknowingly moved from a relationship to a project based approach. The differences between the two are quite profound.

Project based approaches are common in certain sectors where jobs come in discrete lumpish units, often obtained through tender. They are also common among independent consultants offering a discrete slice of services - specialist training or HR services, for example. A key feature in both cases is that you meet a client need, but then have to find a new client. Yes, there can be repeat business, but this can involve long lags because it depends upon the client developing a similar need. So project based approaches fit Tim's one-off class.

In project based approaches there is a clear division between delivery and marketing. Delivery focuses on getting the job out the door to get cash in. Marketing focuses on getting new clients. The incentive to invest in a relationship with an existing client has to be tempered by the likelihood of getting work from that client.

In relationship based approaches, the focus is on getting new work from the existing client. This means that delivery and marketing are integrated since new needs are frequently identified during the delivery process, while the client's willingness to continue to use the consultant depends upon client satisfaction with the delivery process. The incentive to invest in the relationship is much higher because repeat work is expected.

Linking this back to the example I started from.

Because of the commercial pressures on the company, my own focus had shifted from relationship building to job completion to generate cash. As a consequence, my people's focus had also shifted from relationships to project based approaches. So our professional mudmaps had changed.

When I looked at the outcomes, the work mix had shifted from 80 per cent repeat business, 20 per cent new business to 20 per cent repeat business, 80 per cent new business. The marketing chains (the way one job leads to another) that we had depended on for so much of our work had largely vanished.

Tuesday, September 12, 2006

Professional Mudmaps

Back in July I put up a post looking briefly at financial metrics in professional services. I concluded:"Even in a single professional field like law, there are considerable variations between customer types and fields of law in areas like pricing, the pattern of WIP creation, write ups, write offs and billings. These need to be understood and accommodated."

I followed this with two posts (one, two) looking at pricing, positioning and service areas.

In the first post I concluded: "The most common problem is simply failure to recognise the differences, leading to the application of firm wide policies and procedures that do not properly take variations into account. This can be a particular problem where firms are moving into new fields of practice. " The second post illustrated the problem with a short case study.

I now want to extend the analysis using the concept of professional mudmaps as a peg.

The term mudmaps dates back to the days when travellers meeting in the Australian bush would squat on the ground and draw maps in the dirt with a twig to show features of the way ahead. I have always liked the term and am using it here as a short hand to describe the personal mental models every professional uses to interpet and make sense of a complex external world. These mudmaps are incredibly powerful and, once created, very slow to change.

I first focused on this issue while taking a personal break to do some post graduate work in history at the University of New England. I was writing a political biography at the time and was trying to understand shifts in views over time towards the structure and potential of the New England region. I was especially trying to understand why New England seemed in some way to have shrunk in people's minds.

I concluded that the missing link was changes in travel time and the way this affected views of the world around. At the start of my study period there were no cars, train or ship was the fastest form of travel, most journeys were by horse or on foot. The surrounding world was vast and familiar. By the end travel was by car and plane. Valleys that had taken a day to travel along were now crossed in a hour by car, minutes by plane. The world had both shrunk and in some ways become less familiar. This simple shift in perceptions - an unseen change in mudmaps - affected attitudes across a range of dimensions.

Now link this back to professional services. Working across professional service sectors as I do, I am constantly surprised at the sometimes subtle differences between and sometimes within sectors in culture, attitude and approach. This applies down to differences in meaning attached to the same words. Whenever I try to do something that goes too far outside or conflicts with the core mudmaps holding in that area it is likely to fail.

Do we then give away the idea of professional services as a sector, looking instead just at the constituent parts? I don't think so because there are common issues and problems, while the very differences themselves can generate new ideas and approaches.

The challenge is to delineate the mudmaps holding in different areas with sufficient clarity to allow for sensible comparison and discussion.

Monday, September 11, 2006

People Management in Professional Services - Effective Delegation

The inability of partners and senior staff to delegate properly is a common complaint among junior staff in many professional services firms.

Fear of Delegation

Many professionals simply do not like delegating. They fear loss of control and standards. Most have had very little management training, so do not really know how to do it. Many will argue that the client wants them. So how do they get the client to accept someone else? When they do delegate, they over control, giving nominal responsibility without authority.

In response, I try to hammer the message that effective delegation offers very real benefits to client and firm. One of my favourite quotes here comes from David Maister's True Professionalism:

"There should be no tolerance for underdelegation. If a portion of a professional's work can be done with quality by a more junior person under proper supervision, there should be a requirement for that professional to ensure that the work is always assigned to the lowest level capable of producing quality work under supervision."

This approach generates fairly common reactions from many professionals. Specfically, I can do things faster myself. The client won't pay for supervision time. How do I record that time and charge it to the client?

In response, I generally point, among other things, to the significant difference in charge rates between senior and junior staff. So even if a junior took longer and had to be supervised, the client could gain.

There is a simple test here. If the total time value involved in the job ( junior plus senior supervision and planning and any reworking) is less than the value of the time that the senior would have charged on his/her own, then the client has gained and full time should be charged. If the time cost involved is more, then the extra estimated time fees should be not charged but treated as training and development time.


Some professionals who do delegate go to the opposite extreme, overdelegation. That is, they either give the staff member work that goes beyond that which the staff member can be expected to do and/or fail to provide proper supervision and support.

The message that I try to get across here is that effective delegation requires planning and thought. Here-in lies the rub that often explains both under and over delegation.

Because this planning and thought generally falls into the important but not urgent class, the busy professional finds it hard to find or justify the time involved. So it doesn't get done, leading to later problems. The difficulty can be made more accute where the time codings used do not properly recognise nor reward supervision or training and development time.

Steps in effective delegation

The time code problem can be dealt with via alterations to the time recording system. The delegation planning processᅠcan be eased by following a few simple steps:

  • Study your people: Effective delegation requires relating work to capabilities. Here three things are important: knowledge (what the staff member knows), skills (what the staff member can do) and attitude/judgement (this covers attitudes to work, personality and core intelligence). My practical suggestion here is to take a sheet of paper, put down the three headings and then jot down assessments under the three headings. This need not take a lot of time. The objective should be toᅠprovide a simple benchmark that can then be refined through experience.
  • Analyse your job: A suprising number of professionals do not think about what they do beyond the immediate professional issue being dealt with. By analysing the overall pattern of work and then relating it to the capabilities of the individual staff member, it is usually possible to identify fields of work that might be delegated.
  • Define the task: A pre-condition for effective delegation. In most cases, this need not take a lot of time. All that is required is to take a sheet of paper and jot down some thoughts: just what have we to do and why (essentially what the client wants); when must it be done by; information sources (precedents etc); any problems to be overcome; what might the staff member do on the job (whole, part). Many experienced professionals assume that things are self-evident. But you have to make them explicit if you are to delegate.
  • Check task against person: Having defined the overall task, you can then check just what you want done against the person. Can he/she do the job in whole, in part? What special support/training might be required?
  • Define responsibility/accountability: just what are the specific outcomes do you expect from the person, in what form and when?
  • Give clear instructions: Steps one through five above should allow you to explain precisely what you want done. In explaining, check that the person does understand.
  • Follow up: Sounds dumb, but a lot of problems arise because the person delegating does not build any follow up into the process. It is always a good idea to work out just when to check progress, sort out any problems that might have arisen. Recognise that the junior staff member may not recognise that they have a problem, or may be afraid to mention it.
  • Finally, accept mistakes, praise success.

Staff Responsibility

Delegation is a two way street. That is, the staff member also has responsibilities under the delegation process. It is suprising just how often staff do not understand this, so it is generally a good idea to make your expectations clear. Specifically, you expect the staff member to:

  • Tell you up front if they do not understand the task, tell you of any difficulties they see in the task, tell you if they feel that they cannot do it.
  • As the task proceeds, identify any problems and advise you should they need help.
  • Progressively report back on progress.

Development, Information, Realism and Keeping Things Simple

Delegation forms an integral element in effective staff development by pushing out the envelope of just what the person can do. This is best done consciously.

A few simple guidelines:

  • If you have followed the steps above, you know where the person stands now. So then work out where you thing that they might be by, say, end year. A comparison of the two then tells you what you think they need to gain in terms of both knowledge and skills over the year.
  • Then work out roughly how they might get there. Much of this may come from delegation/on-the-job training, but some may require specific training external to the practice.
  • Do not overload the person with too much information initially. Keep things simple. People learn by doing, so give them information in blocks relating to immediate tasks. I often think in terms of bricks and walls. There is certain foundation of knowledge/skills, then you need to add bricks progressively to build the wall.
  • Review progress every few months. By then, progress and problems should be clear.

Other Issues

Turning to a few final issues.

On marketing, people's marketing capacities vary. In part, this is a matter of attitude, personality and capability. Some people are just not very good at it. However, my view is that all professionals should be expected to play some role in marketing, with the exact role depending upon the person's knowledge, skills and capabilities.

In terms of knowledge required for marketing, you have to give the staff member sufficient understanding of the firm so that they can explain it to others. They also need to understand your basic marketing strategy. They need knowledge about key customers. Finally, they need some knowledge about marketing processes themselves. If you cannot explain these things to staff, then the firm has the problem, not the staff members.

In terms of skills, these come only from doing.

Part of the doing is simply doing a good job for clients since referrals remain the best source of work for most practices. A second part of the doing is conscious involvement in your existing marketing activities. This includes sitting in at client meetings, helping prepare newsletters etc. A third part comes from a conscious effort to help them build their own contact network.

One of the key issues in my experience, and one that links with the contact network point, is to get the staff member to focus externally rather than internally. This internal focus happens in even the smallest firm, but gets worse as the firm grows. So there needs to be conscious action to overcome this. Suggestions:

  • Send the staffer as firm representative to specific conferences/meetings. Expect him/her to report back on lessons, possibilities.
  • Send the staffer on site visits. In my experience, clients are usually happy to cooperate because they know that this will help you give them better support. Again, he/she should report back in a structured way.
  • Give the staffer access to professional activities outside the practiceᅠso that they gain exposure to other professionals.

In my experience, one of the problems that arises in many firms when it comes to marketing or people development is the time focus on charge. If you only measure and assess billable hours, then marketing will be neglected.

One way of overcoming this is through the concept of effective time. Effective time can be defined as charge plus marketing and business development plus any other activities considered to be of priority at that time. It is up to the practice to decide which elements to include and how much weight to give them. Performance targets can then be based on effective time as defined rather than simply billable hours as such. This approach also makes it easier to extend the time measurement system to all classes of staff.

One thing to watch with effective time, and the same thing applies in general to all specific allocations of firm time, is to avoid micro-management via overspecification of time allocations to specific activity categories. If you do this, you will reduce flexibility and increase staff resistance.

Thursday, September 07, 2006

People Management in Professional Services - Previous Posts as at 7 September 06

I have been thinking about ways of making this blog more useful to me as well as you. Yes, the search facility can be helpful in finding posts on particular topics. But this can be a cumbersome process on a big blog. It can also be difficult to see how things fit together, to follow chains through even with the inclusion of cross-links.

Taking all this into account, I have decided that the best way of handling all this is to provide regular lists of previous posts on particular matters, starting with the series of posts directed at improving people management in professional services. The initial list follows:
  • 24 July 2006. Introductory post on topic.
  • 25 July 2006. Professionals vs managers looks at the differences in training and approach between professionals and managers.
  • 26 July 2006. Developing management skills begins our discussion on ways of improving management skills among professionals.
  • 27 July 2006. A training primer 1 starts our discussion on overall training issues. A key conclusion was that training could offer significant economic pay-backs if, but only if,the training process focused on and integrated total learning within the firm, including informal learning.
  • July 28 2006. A training primer 2 extends the discussion, looking at different categories of training needs, competency based approaches and organisational vs individual needs.
  • 3 August 2006. A training primer 3 completes our immediate discussion of overall training issues covering the need for realism, immediate action steps and the integration of appraisal systems and performance measurement.
  • 9 August 2006. Getting the horse to the training water responds to a comment about ways of getting people to do training.
  • 18 August 2006. Maister on Training looks at the reasons why David Maister will not provide training to certain firms.
  • 28 August 2006. Recruitment moves the people management discussion from training to recruitment, the first step in the people chain.
  • 31 August 2006. Induction provides an induction check list to help you better integrate new people into the firm.

Wednesday, September 06, 2006

Corporatisation in the Australian Professions - Reasons for Delay

I proposed in my last post on 31 August to look in the next few blog entries at the corporatisation experience across a number of professions and the challenge it poses for all professions and professionals. Then silence.

I have been collecting material. However, I ran into two problems in deciding how to present it:
  1. Common themes and pressures meant duplication in material on different sectors. How best to handle?
  2. While many of the challenges faced by professions reflect world wide trends, the form taken in Australia reflects this country's constitution and political system. So when I started to write material using terms such as National Competition Policy I realised that these were likely to be simply incomprehensible to my international readers. While this blog does have an Australian focus, I do want it to be broadly relevant.

I am still thinking all this through. I will return to my foreshadowed theme once I have worked out the best approach.