Thoughts on ways to improve the management of professional services firms

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.


davidmaister said...

Thanks for spreading the word. All further input and advice is eagerly solicited!

Jim Belshaw said...

Thank you, David. I see that you have received still another comment on your original post! The response must be gratifying.

Ellen Weber said...

Jim, you make interesting links to business professionals here and to deeper concepts of change. I was particularly interested in the notion of own experience, and especially by the comments:

"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." What are those differences ... as you see them?

Jim Belshaw said...

Ellen, this is worthy of a full post, but as a short answer.

Professionals are trained to be objective, to analyse problems and provide advice. Where they are involved in doing, say engineers or surgeons, they operate as technical specialists conscious of their professional responsibilities. If the bridge falls down or the operation fails, people may die. Or they may be sued!

Business people generally see things in simpler terms. Their focus is on doing, near enough is good enough, sort it out and move on. They also have a hands dirty approach in areas like sales - get the sale - that makes many professionals very uncomfortable.

If you look at the professionals that have crossed over including a number I worked with in the Australian Treasury (economists and public servants are both professional groups in their own right) such as Tim Besley or Chris Corrigan, they have generally made the jump to bigger organisations where their professional skills can be set in a broader context.

Professionals face much greater challenges in smaller organisations, especially start-ups. A study I read many years ago from MIT looking at the background of succesful entrepreneurs found that a remarkable number came from smaller business family backgounds. There they learned to talk the talk, walk the walk.

Hope that this helps.