Thoughts on ways to improve the management of professional services firms

Friday, December 21, 2007

The Year Ends

This will be my last post for the year, apart from some part completed previous posts that I still have to finish editing and bring on line.

In addition to clearing the post backlog, over the Christmas break I hope to take the time to properly review all the posts I have written since my introductory post on 3 July 2006. Some are ephemeral, but there are also threads that I would like to review to consolidate and extend what I have learned.

To all those who have visited and especially my regular readers, I wish you the best of the season. May 2008 be personally and professionally fulfilling for all of us.

Tuesday, December 11, 2007

Welcome to Visitor 12,000

Welcome to visitor 12,000 from the United States who came to this blog through a google search on sample manager appraisals.

Friday, November 23, 2007

The Australian Prime Minister and Evidence Based Public Policy

This post continues my series on the application of evidence based approaches in professional practice.

The new Australian Prime Minister has been placing great emphasis on the role of evidence in policy development. This is not just a matter of rhetoric.

At a Commonwealth-State officials meeting a week back, Commonwealth officials stated that with the new Government they were in a position to consider new things. However, they also commented on the PM's demand for evidence to support new policy proposals.

This type of demand is not, of course, new. A wide range of approaches have in fact been developed by Governments and researchers to try to improve decision making within the public sector.

Cost-benefit analysis is an early example, becoming popular during the fifties and sixties. This approach attempts to measure the costs and benefits expected from a project expressed in present value terms, allowing judgements to be made as to value.

Program evaluation is a second example. This discipline evolved in the US during the sixties because of the need to assess outcomes from major social programs introduced by the Kennedy and Johnson administrations.

Program budgeting emerged during the same period, coming out of the US Defence Department. This approach attempted to express Government activities in terms of programs with sets of defined, measurable outcomes. Widely accepted, it forms the core of the input-output-outcome approaches so common now in public administration.

While evidence based approaches are common in public administration and in the professions surrounding public administration, it is not clear to me as a sometimes practitioner in the area that they actually work very well. In fact, I would argue that they are now having adverse effects on the efficiency and effectiveness of Government policy and programs.

There are a number of reasons for this.

To begin with, public policy involves more than simply measurable outcomes. Most policies and supporting programs involve a mix of objectives, some of which are not capable of easy quantification.

Then, too, the range of variables involved is wide, the interactions between variables uncertain.

But there is also, I think, insufficient focus on the effectiveness of various professional practices and their supporting tools. Put simply, we do try to measure outcomes from programs, but we do not assess the relative effectiveness of different ways of developing policies and programs. In this sense, public administration is a little like medicine before the development of evidence based medicine.

Tuesday, November 20, 2007

Clients are people too - looking after the client

In my last post I spoke of the need to recognise that clients are people to with their own needs, personalities and places within the organisation.

I now want to extend this analysis, focusing on the needs of clients as people working within organisations.

The management and business related professions as a whole face a problem. Too few of us have actually worked in management roles within organisations, too many of us have spent our whole careers in particular professional slices. Among other things, this can make us insensitive to the practical and political problems faced by our clients.

All organisations have their own structures, processes and cultures. We know this. In fact, many of us advise on ways of changing structures, cultures and processes.

Yet in all this, we can forget that our clients as people have to operate within organisations. To them, the structures, processes and cultures are a daily reality. Their ability to operate in an effective fashion depends critically upon the way that they are perceived within the organisation.

To illustrate by example.

A well recognised individual usually has power and influence extending well beyond their formal position. This makes it easier for them to do things.

Conversely, a poorly regarded individual's power and influence will normally be less than that notionally attached to their position. Their ability to do things is consequently reduced.

As consultants, we generally notice this because it affects our ability to do a job. If our direct client is well regarded, things become easier. Poorly regarded, and we strike delivery obstacles and road blocks.

How does this relate to our role? At one level, these are just things that we have to work around if we can. At a second level, we should never forget that that what we do affects the position of our direct personal client within the organisation.

If we do well, then the position of the individual client will improve. If we stuff up, then their position is likely to be damaged. So over and beyond but still subject to our professional obligations, I think that we have a responsibility to look after our clients. We need to be sensitive to the fact that failure on our part affects not just us, but also the client as a person.

This does not mean breaching professional standards. Rather, the requirement to be sensitive to the needs of and and to look after the client should be seen as one element in those standards.

Friday, November 16, 2007

Clients are people too - Introduction

It is sometimes easy to forget that clients are people too with their own personal needs and drives. This may sound dumb, after all we all know this. But failure to recognise this simple fact is a major cause of failure in consulting assignments.

The client-professional relationship is first and foremost a professional relationship. As professionals, we are hired to do a particular job in the best way that we can. Our formal client is usually an organisation, the person or people we deal with represent the organisation.

In all this, we forget the personal element at our peril.

The people that we deal with have their own personalities that affect the way we interact with them, as well as the way that they interpret our advice. We have to take this into account in the way we phrase things, in the processes that we follow in managing the assignment.

We also need to recognise and understand internal structures and relations within the organisations since these affect both decision processes and the people we deal with directly. While this, too, may seem self-evident, it is remarkable how often a simple question to consultants reveals that they do not in fact know anything about internal decision processes and structures affecting the assignment and the individuals they are dealing with.

This does not usually matter with straight forward assignments, although it may affect chances of getting follow up work since this can depend upon broader and positive exposure within the organisation.

However, it can matter greatly where the assignment links directly or indirectly to sensitive internal strategic or political issues that the consultant is simply unaware of. Here disaster may follow.

Knowledge of internal workings may not prevent this. However, it does increase your chances of at least identifying and managing the problem.

Sunday, November 11, 2007

On saying no to clients 2 - the importance of a discipline of practice

My last post dealt with the problems we all face in saying no to clients at the time we are seeking the assignment. In this post, I want to talk about how to say no to the client during the assignment itself.

This one is really hard. You have worked to get the job. Now, mid-way through delivery, the client may be demanding changes to scope, changes that add to costs. Sometimes the changes may only be small, yet the aggregate effect can be significant.

In fixed price charging, you see your profit margin shrinking. In time based charging, you see the client's bill blowing out.

As a second example, what do you do if it becomes clear that the assignment won't deliver the expected results? When and how do you explain this to the client? What do you do if a better approach emerges, but this requires changes to approach that will cost more?

A final example, one especially relevant to those working in a public policy environment. You have done the work, prepared a draft report. Now the client demands changes to the report. These may be a series of minor drafting changes that do not add to the substance, but simply reflect different drafting styles. But they can also involve requests to alter conclusions and arguments.

Management of these types of problems requires an effective and professional discipline of practice.

To begin with, you need to know job costs. If you are not keeping and/or monitoring your time records, then costs can blow out before you realise.

How often have I heard my independent colleagues suddenly complain towards the end of a job that they are losing money, essentially working for nothing? How often have you heard clients complain about the unexpected size of bills, or seen monthly performance reports suddenly show substantial write-downs?

If you know your costs, then you are in a much better position to manage client client requests. If the job is within budget, then you normally don't have to think about saying no. If the job is running or may run out of budget, you have to information you need to at least discuss the matter with the client.

Good cost records are a subset of a broader issue, the need for an effective and professional project or assignment management approach.

As a professional, you want to do the job in the most cost-effective way, given the specific client requirement. This includes identifying and resolving problems as early as possible. As a general rule, clients hate surprises. Jobs often blow up where a client is faced with a sudden, unexpected, problem.

A good project management approach also includes a process for agreeing variations to the scope of the assignment. I am not talking here so much about formal agreements, but rather a standard approach that ensures that you and the client are aware of and agree on the significance of changes.

This does not have to be complicated. A simple email noting agreed variations or actions is normally sufficient.

The key point to note is that you are the professional. You know or should know what is and has to be done, how much it is likely to cost. The client cannot be expected to know this. So, at least as I see it, you are responsible for alerting the client where a proposed change or action is likely to have significant effects on cost or outcomes.

Friday, November 09, 2007

On saying no to clients

In my recent post Professional Services - the importance of the diagnostic I talked about some of the reasons why consulting assignments failed. There is a linked issue, when to say no to clients.

Several years ago I was walking back from a meeting with a colleague. I took a call on the mobile from a client wanting me to bid on a job. I was polite, but indicated that I might not be able to do it.

After I finished the call, my colleague expressed surprise that I appeared not to want the work. I explained that I had had problems with this particular client before, that in my judgement the assignment was unlikely to be worth the effort involved.

As it happened, the client was insistent and, against my better judgement, I put in an expression of interest. I should not have. The job did not proceed, and I wasted a fair bit of time.

Knowing when to say no and indeed how to say it, is an area that I have wrestled with across the full spectrum from marketing through award to completion. The problem is especially acute in those areas of professional services dominated by project based work, most acute for the smaller independent professional. It is very hard to say no when you really need the work.

Again, there is no magic bullet. Perhaps the most important thing that I have learned is that the process of getting the assignment is not just a marketing exercise, not just persuading the client to give us the work, but also an interview process during which the client has to be assessed.

This assessment should take place at two levels.

At the first level, do you actually want to do this task or even to work with the client full stop? If your antennae are picking up danger signs, then it may be best to exit gracefully.

At the second level, you have to decide how best to work with the client. Here you have to be prepared if necessary to lay down your own ground rules, not just accept those put forward by the client.

Tuesday, November 06, 2007

Work Coach - a useful blog

A search that found this blog on managing up, my post here, led me to the work coach blog.

Subtitled advice from the trenches about jobs, the blog seems to have some rather useful information and advice that would benefit staff, managers and boards.

Saturday, November 03, 2007

Creation and Use of Case Studies

This post continues my practice of tidying up past posts to make the material more accessible.

Most professionals use case studies. However, the practice is especially important in training. For that reason, I ran an earlier short series on the creation and use of case studies. You will find the introductory post here.

Monday, October 29, 2007

Professional services - the importance of the diagnostic

Back in October 2006 in Role of the Diagnostic in Professional Services - medicine vs law I compared the diagnostic approach adopted in both areas. I was reminded of this by a recent case that I saw.

The facts are simple enough. The client decided that it wanted certain things done. The consultant responded to the need as defined by the client. Unfortunately, the client's real need proved to be quite different. The client felt that it had wasted its money and was unhappy with the consultant. The assignment ended in acrimony.

I suppose that I have now completed on my own or managed something over 300 consulting assignments. Inevitably a proportion, perhaps as much as 5 per cent, have gone wrong in some way. When I look at the reasons for this, the most common cause is failure at the diagnostic stage.

I have no magic bullet here. However, there are a couple of things that you can do to minimise the risks.

In scoping jobs, we all talk about what the client wants done. Less often, we talk about why the client wants the job done. Yet this is critical, especially in consulting assignments. If you do not understand how the client intends to use your advice or analysis, then your chances of picking up mistakes in the way scope is defined will be much reduced.

The second thing that you can do is to seek to suss out internal stakeholders and decision points.

One of my worst ever failures on a job - in this case for a Government agency - occurred because I did not identify a key decision maker whose views on the job were different from my immediate client.

It was a strategy assignment. I defined a process to create that strategy. There was also a research or industry analysis component. I focused on this as an input to the strategy process. It turned out that the decision maker in question regarded this as the key component. To his mind, the development of the strategy itself was really a matter for the agency.

This difference in approach did not become clear until half way through the assignment. Then, suddenly, we had to change direction. The results satisfied no-one.

The third thing is to document and clear as you go along. This increases your chances of discovering mis-definition of scope early. It also protects your legal position.

None of this is rocket science. But it may help.

Saturday, October 27, 2007

Welcome Visitor 11,000

Welcome visitor 11,000 who arrived today. It seems a very long time since I started this blog, but it was only July 2006.

Unfortunately I missed your arrival, so cannot identify where you came from or how you got here. Still, my thanks for coming.

Sunday, October 21, 2007

Common Management Problems - issues of communication and trust

In an earlier post, I spoke of the role that communications and trust played in providing a framework that would encourage passion.

Communications, because without this errors occur, fears build up. Trust, because this encourages people to go that extra mile. The two are linked in that poor communication is nearly always associated with reduced trust.

I was reminded of this recently because I saw a simple case where the two factors came into play.

The facts are simple enough. A staff member applied for an internal promotion. The committee decided not to interview her. No one let her know. She found out because she asked another candidate had he heard anything about interviews, only to find out that interviews were being held that afternoon.

The candidate in question was mortified because she had not been told, more so because her colleague immediately realised that she had not been selected for interview.

This type of simple example occurs fairly often. In this case there was no ill intent. The person who should have told her simply got swamped. Yet the damage that was done will be permanent.

My point in all this is that in managing your people you must be straight with them, sensitive to their feelings. This includes passing on bad news. If you are straight and communicate properly, then you will find that your people will not only do better, but will also cut you some slack, forgiving you for mistakes that you are bound to make.

Previous posts in this series are:

November 20 2006: Common Management Problems - the isolation of being boss

November 23 2006: Common Management Problems - the overenthusiastic boss

March 12 2007: Common Management Problems - managing up

March 18, 2007: Common Management Problems - dealing with poor performers

March 27, 2007: Praise from Martin Hoffman for the Common Management Problems SeriesA

April 6, 2007: April 6, 2007: Common Management Problems - dealing with poor performers 2

Thursday, October 18, 2007

Legal blogs in Australia

My thanks to Legal Eagle's Fifteen Minutes of Fame for drawing my attention to an interesting article by Liz Porter in Melbourne's Sunday Age, 14 October 2007.

In a previous story (28 September) I reported on the growth of blogging in the US. I have been watching the same process here.

According to Liz Porter, Australian firm Freehills has embraced the US practice of using blogs to raise its corporate profile, launching two blogs by Australian lawyers in its Singapore office. I have no reason to doubt this, but I think that Freehills may have something to learn since I have been unable to find the blogs.

In addition to professional blogs, Liz notes that some younger lawyers are using blogs as therapy, writing anonymous "secret life of a law firm" web diaries about luxuriously appointed "billable hour" hellholes, where workaholic senior partners drive junior associates through 18-hour working days.

According to Liz, Melbourne's own "Anonymous Lawyer" is Trixie Allan, author of "Lawyertrix — adventures of a (disenchanted) lawyer". Also 28, she is a junior solicitor in a "BCF" — big city firm — who began her blawg as "therapy" during a rough patch at work. She now posts instalments in her work/life story up to three times a week.

I had actually missed this blog, and read it with a degree of amusement. I can understand why some of her readers might find entertainment in try to guess the firm!

Now Liz notes that Trixie's bosses know nothing of her blogging activities. Mm. She also suggests that Trixie's partners may well share the views of law firm Baker & Mackenzie, whose management warned in a 2006 newsletter that "the democratic nature of the blog is a big risk factor for corporate users" and suggested a policy requiring firms to come up with an outline of "who is entitled to blog".

Liz's story also explained to me why the only other local "anonymous lawyer" blawg, Junior Lawyers Union, had stopped posting. Apparently the lawyer in questions had quit his law firm.

I will miss JLU. Like Lawyertrix, it also looked at the quality of working life for young lawyers. Its stories, including its focus on depression, provided the case study material that I used in my depression series.

Liz also quotes "Legal Eagle", the author of the post I mentioned at the start of this story. A Melbourne lawyer and academic, LE's Legal Soapbox is one of my personal favourites.

LE is reported as saying that "Anonymous Lawyer"-style expose blogs will always be rare because blogging is so dangerous for junior associates. Liz also records LE as saying:

"Most of the blawgs I know are written by academics, law students, judges associates or barristers," she says. "If you work in a large law firm, there's not enough time to indulge in blogging. Billable hours mean that you have to account for every six minutes and billing targets mean you spend all your time working. And young solicitors would be too afraid of being found out and sacked. The Melbourne legal community is so small, and everyone knows one another."

In all, Liz has written an interesting and entertaining article well worth reading.

Saturday, October 13, 2007

Hidden Thorns - something all professionals know



This photo from Gordon Smith's LookANDSee photo blog is a close up of a rain-forest leaf from Dorrigo, a very beautiful area to the east of Armidale on Australia's New England Tablelands. As Gordon said in his post, you would not want to grab it!

I am sure that you can think of people who bear a passing resemblance to it.

Sunday, October 07, 2007

Designing a simple performance appraisal system - implementation issues

This, my last post in this short series, briefly discusses the practical issues that can arise in implementing the system I have described.

From experience, three main problems are likely to arise.

First, people have to be given the skills to make them comfortable with the new approach. This is best done by means of an initial workshop in which the system is explained, with staff given the opportunity to experiment through role pays.

As new staff are appointed, they too need to be given access to information about the system. In the case of people who will be required to do appraisals, one way to help them is to get them to sit in on one or two appraisal systems.

Secondly, any new system requires time before it is properly internalised. Too often, management focus shifts to other issues, resulting in lagging effort.

Third, the approach must be kept both focused and as simple as possible. Too many firms start adding things in, complicating the overall process.

Remember, the whole point of this system is performance improvement, but in a way that should aid both manager and staff.

Introductory post.

Thursday, October 04, 2007

Ndarala Group Series on the Economics of Professional Services

Over on the Ndarala Group blog we have begun a series on the economics of professional services. The material is drawn from internal Group material that I prepared. We are publishing it in this form to make it more broadly accessible.

So far we have put up seven posts, with a lot more to go. In some ways the blog form is not really suited to something like this, but it does at least get it out into the public domain. Later will consolidate it and post it to our web site.

If you are interested in the series, you will find the introductory post here.

Monday, October 01, 2007

End Month Review - September 2007

It seems hard to believe that the first post on this blog was on 3 July last year (2006).

In the fourteen months since since I have written 172 posts, an average of just over twelve a month. As I noted in my August review, keeping posts up has been a bit of a struggle recently, but I am slowly getting back into rythym.

Looking at what people searched on over September to bring, them to this blog I found quite a variety. Just a few examples.

A search on Google Australia, web, on corporatisation brought Corporatisation, Corporate Structures and the Law - The Case For in at number 30.

A search on Google Swizterland, "das top management von professional service firms",found the front page of the blog up twice at number 31 and 32.

A search on Google, salaries australia graduate lawyer brought Law, Life Style and Legal Salaries in Australia in at number 2.

A search on Google Israel, managing professionals, brought the front page in at 6.

A search on Google UK, web, professional service firms, brought the front page in at 8.

A search on Google, maslow's hierarchy pyramid, graphics, brought Problems with Performance Pay in at 6. This does in fact include a graphic. I get a steady stream of hits on maslow.

Finally a search on Google, What contributions to the management of professional service firms can a business school graduate provide?, brought the front page in at 1.

Just a small sample, but I always find patterns interesting.

Friday, September 28, 2007

Blogging among US Law Firms

My thanks to Noric Dilanchian (Dilanchian Lawyers & Consultants, Sydney) for drawing my attention to a useful update on the extent of blogging by lawyers at large US law firms: State of the AmLaw 200 Blogosphere, August 2007.

The AMLaw list is a 20 plus year list of the 200 biggest law firms in the US. The list is a little below 200 now because of recent mergers.

The author of the piece runs a blog technology platform, Lexblog. Main conclusions.

Of the firms on the 2006 AMLaw list, 39 firms were blogging.

From those firms, the author found a total of 74 blogs. 56 of these blogs were firm branded (meaning they had the firm's logo prominently displayed on the page). 18 were not branded, indicating that the lawyer was operating their blog independently of or at a distance from their firm. Of the 74 blogs, 33 belonged to LexBlog clients.

As Noric said in his email to me, the variety of legal areas or topics evident in the blog names is remarkable. In his words: I'll call it "variety of the crowds" and note it reflects the expanding universe of law today.

Monday, September 24, 2007

Designing a simple performance appraisal system - sample policy statement

This post in the series sets out a sample boiler plate policy statement designed for immediate use in a professional services environment.

PERFORMANCE APPRAISAL SYSTEM

This paper sets out the approach to performance appraisal.

EMPLOYMENT PHILOSOPHY

Service to the client is central to our work. To this end, the firm undertakes to provide a supportive working environment and to assist the individual staff member to enhance his/her skills. In return, the firm expects individual staff members to be prepared to learn and to seek to improve performance

OBJECTIVES OF PERFORMANCE APPRAISAL

Consistent with the firm’s employment philosophy, the objectives of performance appraisal are to improve individual performance and job satisfaction. To this end, performance appraisal needs to be a structured process during which the individual and firm jointly:

  • assess performance during the previous period against the objectives set for the job, identifying achievements together with any significant shortcomings
  • identify any problems that might be hindering the individual in achieving improved job performance or satisfaction
  • review future objectives
  • agree any actions required to improve performance or job satisfaction.

Under this approach, each performance review provides a base for subsequent performance reviews.

KEY APPRAISAL PRINCIPLES

Effective performance appraisal is based on a number of key principles:

  • improvement focused: performance improvement is central to the process
  • non-disciplinary: performance appraisal is not concerned with discipline or disciplinary approaches
  • fairness: the approach must be seen to be fair by all those involved
  • transparency: the approach needs to be open and well understood. There should be no hidden agendas
  • joint: the appraisal is a cooperative review not just of the individual, but also of the firm and its systems as they affect work
  • needs based: the review has to take into account the needs of both individual and firm
  • realism: the review needs to be based on realistic expectations on both sides
  • non-threatening: a structured review process can be a frightening experience for both the staff member and his/her supervisor. It has been known to make staff physically sick in the period immediately prior to the review. To minimise this, it needs to be carried out in a cooperative non-threatening fashion
  • delivery: both firm and individual must be prepared to deliver on any commitments made during the performance review.

RELATIONSHIP WITH PAY REVIEWS

While there is a relationship, the performance appraisal process should not be confused with pay reviews.

Performance appraisal seeks to improve performance and involves very different issues from those relating to pay. In the majority of cases pay issues should not be dealt with during the performance review. Inclusion of pay reviews within performance reviews nearly always twists the focus away from performance improvement.

FREQUENCY OF APPRAISAL

The first appraisal should be carried out three months after appointment. Thereafter appraisals can be carried out at three or six monthly intervals.

WHO SHOULD DO THE APPRAISAL

Note: this section will need modification depending upon firm structure. Partner reviews involve different issues and are not fully covered here. With senior staff or partners, there are sometimes advantages in using an external facilitator.

The appraisal team depends upon reporting lines.

The partners should carry out appraisal of the CEO/Practice Manager/Office Manager.

A team of two consisting of the direct supervisor plus another nominee (Office Manager, partner, HR person etc) should carry out other staff appraisal.

STRUCTURE OF APPRAISALS

Appraisals at all levels should follow a common format.

Prior to the appraisal, the team should meet to discuss the issues involved and to review previous appraisal.

The review should start with a review of the position itself. Firm operations change continuously. There is not a position in the firm that is exactly the same as it was six months ago. Experience has also demonstrated that even the most experienced manager does not in fact know all the features and nuances of the positions reporting to him/her.

It is therefore very important to establish the changing parameters of the job. What are the key features of the position, where are the main work pressures, how has the job changed, what changes might be expected in the future?

The person being appraised should then be asked to discuss his/her own performance. What do they like/not like about the job? What have they done well, what might be improved? What problems do they face in improving performance? What might be done to improve job satisfaction? Where do they see themselves going next?

Discussion can then turn to a discussion of any performance issues identified by the team that have not already been covered. In this context, while self-awareness varies, most people have some idea of their own performance strengths and weaknesses. It is much easier to deal with performance issues that people have identified themselves. A free flowing discussion will generally allow issues to be identified and dealt with in a non-threatening way.

The last part of the discussion should focus on things that might be done to improve performance. Outcomes here can be quite wide-ranging and might include new training, job redesign, improved supervision and priority changes.

The results of the appraisal should be written up by the chair, cleared with the person being appraised and then signed by all parties. Where the person being appraised disagrees with any aspect of the appraisal, then this should be formally recorded.

The results of the appraisal then provide a benchmark for subsequent appraisals.

A suggested form for recording appraisal results is attached.

PERFORMANCE REVIEW

Name:
Date of Appraisal:
Appraisal Team:
Date of Previous Appraisal:
Summary:

Agreed Actions:

Insert full meeting details here

Endorsed as an accurate record of discussions:


Appraiser Name Appraiser Name
Position Position

___________________ _________________

Appraisee Name
Position

___________________

Previous post. Next post.

Saturday, September 22, 2007

Designing a simple performance appraisal system - introduction

Almost twelve months ago, I set out the principles that I thought were important in the design of a good performance appraisal system.

While I have seen very few really good performance appraisal systems, to my mind the development of a simple, effective, performance appraisal system that increases in value with time is not hard.

In this context, I thought that it might be helpful to at least some readers if I provided a working example of a system that I know can work. I trialled it originally in an organisation while I was CEO and since then have used it in client work.

The key points about it are that it is simple, focuses on performance improvement and is designed to help staff and managers do their ordinary jobs.

To keep things really simple, I am breaking this series into four posts including my original post:

  1. My first post, Designing a Good Performance Appraisal System, sets out basic principles.
  2. This post introduces the series.
  3. The third post, Designing a simple performance appraisal system - sample policy statement, sets out a simple policy statement describing the system and is intended for direct use.
  4. The final post, Designing a simple performance appraisal system - implementation issues, looks at some of the practical problems that can arise in implementing the system.

I would be happy to answer any questions that you might have.

Wednesday, September 19, 2007

Looking Up - regaining a sense of perspective



Photo: Gordon Smith, Looking Up

It has been a little while since I carried a photo on this blog.

This photo from my favourite photo blog reminds me that sometimes we need to take our eyes and focus from our immediate concerns and look up at the world around us.

As a child, I used to lie on the ground to look up at the sky through the trees. It's the same world, but from a very different perspective.

Monday, September 17, 2007

Personal musings - cross-fertilisation within the professions

We all write through a prism set by our experience. I certainly do.

I was reflecting on this recently, reflections triggered by the need to update my CV. Looking back, I can see how my writing has changed over time as my work focus has changed.

This blog has quite a strong focus on the legal profession. Yet I did not complete my first assignment in the legal sector until 2001.

I began my professional career as an Australian Government public servant, working as a professional economist and policy adviser. That was one perspective.

Then I moved to the private sector to develop a practice providing consulting, training and information services with a special focus on the electronics, aerospace and information industries. A second perspective.

After a period as an independent consultant, I spent two years as CEO of a specialist medical college responsible, among other things, for the training of eye care specialists in Australia and New Zealand. A third perspective.

Then I ran a network of independent professional services firms. As part of this, I resumed my role as a strategic consultant with a special focus on the professional services arena. A fourth perspective.

Each area that I have worked in has had its own unique focus. This has affected my own writing and thinking in terms of topic and approach. Yet, looking back, the thing that stands out is the commonalities between areas.

Yes, there are often profound differences. The team and project based focus that you find in some areas is very different from, say, the individuality of practice in law or medicine. Despite this, there are still enormous commonalities.

In theory, this combination of common and different should provide a powerful base for cross-fertilisation. In practice, this is rarely achieved because of the powerful silo effects created by professional divides.

I am still struggling at a professional level to find the best way to overcome this. Sometimes I think that I am making progress, at other times I think that I am as far away from success as ever.

Despite these problems, I still think that the effort is worthwhile.

Saturday, September 15, 2007

It takes more than money to make the world go round

In an earlier post on performance pay I spoke of the distortions that could arise with performance pay systems. I suggested that money itself was not a good motivator, that a focus on money could introduce sometimes unexpected behavioural distortions.

Interesting article by Ross Gittins in the Sydney Morning Herald (10 September 2007) making the same point in a different way.

Ross spoke of the pre-school that had a problem with parents arriving late to pick up their kids, forcing staff to pay late. The school introduced a charge for late parents.

The school thought of it as a fine, a way of encouraging parents to be on time. In fact, the problem got worse because parents thought of it as a fee in return for being late.

As Ross said, introducing a monetary payment changed what had been a moral issue – doing the right thing by day care workers – into a commercial transaction. People no longer felt guilty about arriving late because they were paying for the privilege.

His core conclusion was that where intrinsic motivation is important, introducing monetary rewards can crowd out that intrinsic motivation, making things worse rather than better.

This is a precise statement of one the problems that can arise with performance based pay. Exactly the same problem can arise with performance agreements.

Friday, September 07, 2007

Engineering, globalisation and the obsession with professionalisation

Very interesting post by Cam on Club Troppo, Engineering in Economic Globalisation. I will not repeat the post in detail - I commend it to you - but instead want to pick to one point. Cam wrote:

This final paragraph suggests that American engineers are being over-educated for what the market desires. I believe that is the case in Australian Universities as well. Graduates leave with highly specialised degrees which are over-educated for the labor market. Most engineering degrees could be two years in length and the individual would be just as capable and productive as with a four year degree.

I think that Cam is pointing to a major problem here, and one not limited to engineers. In recent decades we have seen a process of professionalisation in many occupations. Training periods have got longer across the board.

There is nothing wrong with this per se. However, it is now creating problems in terms of supply and expectations.

Longer training periods make professions less responsive to changes in demand, while changing expectations may make people less willing to undertake more mundane tasks that formed the original core of the work. Those tasks still have to be done, so a new para-professional group is born.

A particular problem arises where the process effectively creates a new silo. One side effect can be to lock that group into past knowledge, reducing its capacity to move in new directions.

Tuesday, September 04, 2007

End Month Review - August 2007

Welcome to visitor 10,000 who sneaked in while my attention was elsewhere. But then, that's the way this month has been.

Because of work pressures, July postings were irregular. This was quickly reflected in a decline in blog traffic. So I started August with a determination to do better. However, work pressures again quickly intervened.

To provide discipline, I adopted the practice of reserving posts, starting them on the due date even if I could not finish them at that time. This meant that the posts would finally appear with the right date, even if the real publication date was somewhat later.

This may be somewhat annoying to the reader, but it has imposed a discipline on me. So to that extent it has worked.

While posts over the last two months have addressed a range of issues, the core unifying theme has been ways of improving management. Drawing from my own experience as both manager and consultant, my aim has been to provide simple how to do guidance.

I am not sure that I have been fully successful. It's hard to know how much stuff is used once launched into the ether, but there have been a small number of readers with multiple page views. This suggests some interest.

September is also likely to be a messy month. As I write this, I have three part completed September posts yet to be published. But I do seem to be catching up!

Wednesday, August 29, 2007

Tony Karrer - How long should an e-learning course be?

Useful post by Tony Karrer on elearning Technology on the optimum length of an e-learning course. Tony's key point is that it should be as short as you can make it.

This has certainly been my own experience. Most on-line courses that I have seen within organisations focus on providing information. An example might be an induction course. Too often, the developers include a range of material that they think might be useful.

Bear in mind that the old rule of thumb used to be that a web page should contain at maximum 60 per cent of the material on an equivalent printed page simply because web pages are harder to read than the printed equivalent. So prune, prune, prune.

Tuesday, August 28, 2007

Why law firms don't plan - the law firm entrepreneur

Interesting short post from Tom Collins on the morepartnerincome blog, in part quoting Jerry L Mills.

Based on his experience, Tom notes that he frequently encountered first generation firms, often founded by two or three attorneys who bonded together in their prior firm and who broke away to create their own. Usually one of the three is the clear leader. The role of the team in this case is to keep their entrepreneur leader from getting too many big ideas too often.

In these firms, there can be a real reluctance to commit the firm to a clear mission or purpose because this may impede the freedom, the flexibility of the business and especially that of the entrepreneur.

Here Tom quotes Jerry L Mills from his book The Danger Zone. According to Mills, entrepreneur law firm leader thrive on change. They don't want things formalised, but instead draw from a set of core values that they bring to the organisation. These values give the enterprise its characters and unity the law firm. Mills suggests that memorialising those core values has a better chance of improving and focusing the business than traditional planning steps.

I think that Jerry Mills is almost certainly right, and for a very practical reason.

A core challenge in any new business lies in the creation of common values and a common culture that will unify the entity and drive success. These values form in the early days and are remarkably persistent.

If the new organisation is successful, then it usually but not always follows that the values created have met market acceptance. There is, however, a danger that the entrepreneur in his/her desire to do new things will go in too many directions. In these circumstances, memorialising core values can be an effective way of keeping the entrepreneur on track.

Friday, August 24, 2007

The Problem with Performance Agreements - Limiting staff contribution

In my last post in this series, I talked about ways in which performance agreements limited manager freedom - and responsibility. This post looks briefly at the way in which performance agreements can actually act to limit staff contribution.

The problem can be simply stated. You get what you measure. The more precisely you prescribe, the more you limit activities to those things you prescribe.

Two examples to illustrate my point.

Many professional firms use simple performance metrics focused on yield per hour. They then wonder why their staff are not prepared to become involved in, interested in, other activities such as marketing. Why should they? There is no return from such involvement.

In other types of organisations further removed from direct time based charging, performance agreements often focus on specific activities or projects. You will do x by y. That's fine, but do not expect your staff to do z or k, no matter how important z or k may be.

Talking to staff in this type of organisation, I find it interesting that many actually see performance agreements as a protection. If I do what is in my performance agreement as required, then I cannot be criticised. So negotiation of performance agreements becomes a process of working out the minimum that will satisfy given the particular views at the time of manager and management.

This type of limiting or satisficing behaviour can make it very difficult to really improve performance or to do new things.

This need not happen, but avoiding the problem requires a very particular approach to the development and management of performance agreements, an approach that can be difficult to achieve in most organisations.

In my next post in this series I will look at what is involved in this particular approach.

Introductory post. Previous post. Next post.

Wednesday, August 22, 2007

Chris Marston's 4C's of Value Pricing

Rather a good post by Chris Marston on Inside the Firm of the Future, The 4 C's of Value Pricing: Get it or forget it!

Starting with a quote:

Let me start out by explaining that the Price of work in a Value Price model has NOTHING to do with your time. Say it with me now " The Price of work has NOTHING to do with time." Write it on the board 50 times and say it out loud at least 3 times a day. Value Pricing is about Adding Value to the client and Charging for the value you add. . . . It is ENTIRELY based on Value to the client. Yes, I'm going to have to ask you to repeat that to: It is ENTIRELY based on Value to the client.

Now I know that clients, especially Government clients, make this hard by actually demanding precise, visible, time estimates. They do this even though it reduces value to them. I also know that there are contract worlds in which value pricing does not work.

But all this said, I do commend this post to you as a good introduction to value based pricing.

Monday, August 20, 2007

A View on the Slater & Gordon law firm IPO

Back in May I carried a post linked to the Slater & Gordon IPO setting out why I thought that corporatisation made sense in law. Now I see that Bruce MacEwen (Adam Smith Esq) has carried a rather good interview with Andrew Grech, Slater & Gordon's managing partner.

I will not repeat the details, simply refer you to the post. It is worth a read.

Thursday, August 16, 2007

The Problem with Performance Agreements - Limiting manager freedom

In my first post in this series, I talked about some of the problems associated with performance agreements. I now want to extend the argument, focusing on one issue, the way in which performance agreements inevitably limit the freedom of the manager.

The need for good management has never been greater. Yet I sometimes feel that management as such is becoming a lost art, submerged on one side in the current obsession with leadership, on the other in a plethora of limitations.

Management does involve leadership, but leadership is only one element of the manager's core role, getting the best results from the people and other resources at his or her command. It may sound trite, but the real role of the manager is just that, management.

I feel strongly on this one because over the last two decades I have watched a real decline in management roles and skills across a number of different organisation types in both public and private sectors. This may sound extreme, but in some organisations management in the old sense of the word has actually vanished, replaced by a reliance on systems.

The systems based command and control organisation works in the sense that the organisation still operates, but this comes at a cost in both human and business terms.

By its very nature, management is a bit messy. Needs change, priorities shift, crises arise. Further, any manager worth his or her salt generates new ideas while working. Sometimes, often, these are a little outside current ways of working simply because they are new. A good manager tries to test and introduce new things, in so doing working around and through existing systems.

Performance agreements can be used to stop all this type of nonsense by limiting the manager to the specified and the known. Further, in a world of cascading agreements where the manager's staff are also on agreements, those staff agreements have the useful effect of further limiting the manager's capacity to do new things by also limiting staff activity to the agreed and the known.

The command and control approach can sometimes be remarkably efficient in getting specific defined things done. It is much less effective when it comes to doing things or solving problems that fall outside neat pigeon holes, often hopeless when it comes to something new.

A key difficulty from my perspective with the application of performance agreements in a systems based command and control environment is the way it de-skills managers. Management now centres on the management of performance agreements and the performance agreement process. "Managers" who have grown up in this type of environment often lack the basic skills necessary to manage in a broader environment. Worse, they may not even recognise this lack.

Performance agreements need not be like this. It's just that the standard performance agreement process seems to drive them in this way.

Introductory post. Next

Monday, August 13, 2007

US Market for New Law Graduates

In two recent posts I looked at aspects of current Australian professional salaries.

The first post looked at graduate starting salaries across professions within Australia. The second looked at the results of the latest survey on Australian legal salaries.

A short post in the morepartnerincome blog drew may attention to a US NALP survey on the US market for new law graduates, providing some interesting comparative data.

The overall median starting salary for new US law graduates was $US62,000, well above the Australian equivalent of $A42,000. I must say that the size of the gap came as a surprise.

Compared to the overall median starting salary of $62,000, the law firm private practice median was higher — $95,000, an increase of $10,000 over that for the Class of 2005. Medians for jobs in government and as judicial clerks increased modestly but remained considerably lower, at $48,000 and $46,500, respectively. The median for public interest jobs remained at $40,000. The higher median in private practice notwithstanding, for all full-time salaries reported, salaries of $55,000 or less slightly outnumbered salaries of more than $75,000.

Interestingly, given reports of some starting salaries in top tier firms, just 14 per cent of salaries were either $135,000 or $145,000.

Another perspective on US graduate starting salaries can be obtained by comparing them with average salaries in the Australian top-tier firms for those with five year's experience: $A96,000 in Brisbane, $A110,000 in Perth, $A120,000 in Melbourne and $A125,000 in Sydney. Again the comparison draws out the differences in salary levels between the two countries.

All this raises an interesting challenge for Australian firms, one not unique to law. How, in an increasingly globalised market for professional staff, do you retain your best people when they can earn more elsewhere?

This is not a small issue. According to a 2005 Australian Senate inquiry, there are now more than 750,000 Australians living outside the country, many highly educated.

An Australian Bureau of Statistics study found that the number of long-term and permanent departures of Australian residents had increased considerably over the 20 years to 2005.

In the 12 months to December 2005, there were 158,000 departures by Australian residents for an intended period of 12 months or more. This was more than twice the number of Australian residents who departed in 1985 (69,600).

In 2005, almost two-thirds (64%) of all departures (or 101,000) were to OECD countries. The age profile of Australian residents departing for a period of 12 months or more in 2005 differed from that of the overall Australian population. Most noticeable was the peak in the 25–29 years and the 30–34 years age-groups. One-third (34%) of all departures were of people aged in these groups, yet people aged 25–34 years made up only 14% of the Australian resident population.

This trend has continued since 2005. So far, Australia has had a net brain gain with skilled migration offsetting Australian emigration. However, this is small consolation to individual firms struggling to recruit and retain good people.

Friday, August 10, 2007

Professional Services - why mergers fail

Interesting short post plus comments on David Maister's blog as to the reasons why mergers fail.

From my perspective, a core reason for failure is often lack of clarity about the reasons for the merger in the first place. Even where there is apparent clarity, at least in terms of the reasons being clearly stated, a little digging shows that those involved have not thought the reasons for the merger through.

Just being being clear on the reasons does not ensure success. But without this, success becomes pretty much a matter of luck. And luck is thin on the ground!

Wednesday, August 08, 2007

A Passion for Management - Caring about your people

There was a rather wonderful post by the blond canadian expressing her passion for teaching.

In some ways our teachers are the most important professionals of all for they teach our young. The influence of a good teacher can be measured down the generations.

As a manager, I have always had a passion for my people. This holds whether I like them or not. Mainly I have. But regardless, I have always measured part of my success by how well my people do.

Today I attended some code of conduct and ethics training. It was a useful course because it illustrated various elements and problems about the organisation in which I am presently doing some project work. But when I looked at most of the sample problems - several former staff are in jail for corruption - I felt that I was looking at the outcomes of management problems.

Caring for your people does not mean being soft on them. Any professional organisation must demand standards. But it does mean being close to what they do. And if you do this, you will normally spot emerging problems in advance. Better, you have a chance to help your people achieve their own potential.

This always works to mutual advantage. Staff work better while they are with you. Then. when they leave, they retain a soft spot for you that can work to your advantage in the future.

Sunday, August 05, 2007

Law, Life Style and Legal Salaries in Australia

Marsha Jacobs in the Australian Financial Review (3 August) alerted me to the fact that Mahlab Recruitment had released its Australian annual legal salary survey. The material that follows is drawn from Marsha's article. You can find the full survey here. It is free, but you will need to register.

In an earlier post I referred to a report suggesting that Australian graduate starting salaries had been declining in real terms with a median starting salary for law graduates of $42,000. I also commented that there appeared to be a growing reluctance among professional services firms to employ raw graduates, targeting instead those with some experience. This was beginning to create a chicken and egg problem.

The Mahlab survey found that salary bands rose by nearly 5 per cent nationally over the last year. High performers received salary increases of more than 20 per cent as well as bonuses. This represented the largest increase in seven years.

Average salary increases were highest in Perth (up 9 per cent) because of the mining boom. Then came Sydney (+6.4 per cent), Melbourne (+5.3 per cent), with Brisbane lagging (+4.7 per cent).

Average salaries for corporate lawyers with five years experience ranged from $125,000 in Perth and Brisbane, $128.000 in Melbourne, $150,000 in Sydney.

Average salaries in the top-tier firms for those with five years experience were noticeably lower: $96,000 in Brisbane, $110,000 in Perth, $120,000 in Melbourne and $125,000 in Sydney.

Partner salaries rose by an average of nearly 11 per cent over the last year. Here the range in the average in top-tier firms was $795,000 Brisbane, $805,000 Perth, $1,028,500 Melbourne and $1,084,000 Sydney. However, partners were having to work harder to earn their money.

In this context, the report suggests that you need to have a minimum practice of $2 million to make partner in a top-tier firm, $1.2 to million in a mid-tier firm, $700,000 to $900,000 in a small firm.

Attrition rates among young lawyers continued to be high. Many of those leaving firms were going in-house or overseas where Australian trained lawyers remained in demand. UK was still the number one international destination, although New York was increasing in importance.

Despite record level partner recruitment, the trend among younger lawyers against the partner option continued to increase. The proportion of young lawyers interested in partnerships is now 42 per cent, down almost 14 per cent from the previous year.

Work/life balance was cited as the single most important factor in increasing job satisfaction.

There is a real issue here that I see in my own daughters (ages 17 and 19) and their friends. They are prepared to work hard, certainly they are interested in money, but they are simply not ambitious in career terms in the way that I was. Life is more than work and success.

Tuesday, July 31, 2007

Happy Birthday Blog

It almost escaped my attention, but this blog turned one on 3 July. Since then I have written 160 posts exploring different aspects of the management of the professional services firm looked at in one way or another by 9,500 visitors.

Maintaining the blog has not always been easy. In the last month or so I have struggled to maintain regular posting because of other pressures.

Has it been worthwhile? I think so, although one can never tell just what impact a blog like this has had. Most visitors come to the site via search engines, a second group via links from other blogs. I like to think (hope) that some at least will have got some benefit from the visit.

Now that I have got a reasonable body of work up, I hope over the next twelve months to broaden and deepen the work. That way I work towards my longer term goal of a site that will really be helpful to all those wrestling with management and professional issues within a professional services environment.

Sunday, July 29, 2007

Graduate Starting Salaries in Australia



Graphic: Sydney Morning Herald 25 July 2007

I find it interesting that starting salaries for Australian university graduates have declined in real terms. According to the Graduate Careers Australia's annual survey, university graduates under 25 earned an average $40,800 last year, up just 2 per cent from 2005.

By comparison, Australian Bureau of Statistics figures show that the mean weekly earnings for employees in all jobs increased by 6.8 per cent over roughly the same period. New graduates are now earning less than 80 per cent of average weekly earnings for only the second time since the figures were first collected in 1977.

According to Harriett Alexander in the Sydney Morning Herald , the figures continue a three-decade trend of graduate salaries slipping against average earnings.

The Graduate Careers' report suggests that the trend could represent the effect of more university graduates entering the workforce. I am sure that this is right, although other factors are at play as well.

There seems to be an increasing degree of reluctance among professional services firms to recruit and train raw graduates given that they are increasingly unlikely to stay with the firm. Instead, firms are targeting graduates with a few year's experience who can be productive immediately.

This gives rise to a chicken and egg problem in that the supply of such graduates depends upon firms accepting and training raw graduates.

In this context, I was interested in the very low median starting salary for accountants. I have a young colleague, an accountant, who has been struggling to get a job to gain experience. At the same time, KPMG in Australia is recruiting accountants from Latin America.

Tuesday, July 24, 2007

The Dangers of Team Building

This dislike (of team building exercises) has gone back many years, but I think it was exacerbated by a particular event. Once, longer away now than I care to remember, I was a little articled clerk, full of enthusiasm and naivety. On our first or second week, our group of articled clerks was sent on some kind of “leadership” or “team building” exercise. I don’t know what exactly the point of the exercise was, but the end result was appalling. By the end of the week, we had gone from being a friendly bunch to a group with massive schisms, full of suspicion and dislike. It certainly didn’t build a “team” mentality; in fact the very opposite. Luckily, I was a bit older, and I’d already been working full-time for over a year before then, so I didn’t take the whole thing very seriously. I have always just wanted to do my job well and go home. From Legal Eagle's The Legal Soapbox.

The above quote is drawn from a rather nice post by Legal Eagle on her dislike of team building exercises. It links across to a post by Marcel Proust reporting on the extremely sad case of Dr MacKinnon.

To me, LE's post provides a clear cut example of the dangers that can be involved in so-called team building exercises, an approach that has become popular in recent years.

My experience has been that most team building exercises do not work. They can have a place, but only if carefully constructed and controlled.

Saturday, July 21, 2007

The Problem with Performance Agreements - Introduction

I have just been looking at a set of performance agreements. All very modern, but they reminded me of the problems that I have with so many performance agreements.

The agreements are meant to cover the 2008-2008 financial year. That's fine, but there is no way of actually forecasting just what will happen over that year, nor of the extent to which priorities will change.

The agreements must be related to the formal duties of the positions. That's fine, but most advances actually come from people doing more than their position demands.

In fact, the greatest advances come, as in the skunk works concept (here one and here two), where people actually work around the limitations of formal positions. But you cannot really put this in a performance agreement. The effect is that performance agreements can get certain things done, but can actually stop real development. Unless, of course, those further up in the chain of command already know the best outcome.

The agreement must have defined outcomes, along with agreement as to how those outcomes should be measured. But again outcomes have to be related to immediate roles.

In most organisational environments, results come from combined actions by a number of people. This means that the value of the contribution made by any individual depends in part upon actions by others. This is not a problem where the individual is in control of the team, but does create issues where the individual has little or no control over other critical actions.

Setting an individual performance target that is dependent upon actions by others over which an individual has no control has very obvious dangers. For that reason, many performance agreements are in fact activity rather than results based, I will do x by y, with results measured simply by the achievement of x by y. This may aid command and control, but actually does very little to drive improvement.

Now none of this means that you should not have performance agreements. However, those agreements need to be carefully thought through if they are to deliver the results that you hope for.

Next post

Friday, July 06, 2007

In Praise of Lawyers - We have a democracy, if we can keep it.

Bruce MacEwen (Adam Smith Esq) had a rather interesting meditation marking 4 July. In it he discussed the role of business leaders in public debate. He posed the question why more lawyers did not make a contribution.

As it happened, I had been thinking about the same topic, but from a different perspective.

At a time when western governments are introducing more and more laws in the name of public protection, lawyers have become the main public defence prepared to defend civil liberties.

Too many people fail to realise, I think, that law has always been the main defence between the unfair exercise of coercive state power and the individual. We can see this clearly if we look at English history.

Today lawyers acting as citizens, not just for clients, continue this role to our great collective benefit. Long may it continue.

Wednesday, July 04, 2007

A Passion for Management - To err is human, to forgive divine

I have included this quote from Alexander Pope, English poet & satirist (1688 - 1744) because it captures some of my key messages.

Many years ago I was appointed a sub-monitor at a boy's school. I was a day boy, the school largely boarding, and still run very much on traditional lines. As a sub-monitor I took prep and was responsible for general discipline when on duty. At first, I really struggled.

Looking back, I would have been much better off if my role had been defined in management terms as compared to the school's semi-military discipline approach. At the time I struggled as a sub-monitor, I was already a patrol leader in the scouts and reasonably good at it. There I had a different structure, a better defined role with a focus on the development of my patrol, and a place in decision making.

The hierarchical days of the school are long gone. Today we talk of teams, of mentoring, of individual authority, of empowerment. Experts explain why generation y needs to be managed in different ways from past generations. Yet the reality is, at least as I see it, that management has never been poorer.

Now there is something funny here.

When I look at my daughters - 17 and 19 - and their friends, I see management skills at least as good, better I think, than mine were at the same age. The modern younger generation, at least in Australia, with their tribal focus are well able to create and manage activities of all types. That is what they do. Further, they use computing and communications technology automatically as a tool, a means to an end.

It is the generations immediately above that have the real problem.

Those of my generation had the opportunity to acquire management skills in bits through experience. Those who entered the workforce a little later have had to suffer through process re-engineering, thinned out management, the substitution of systems for people, the obsession with that which can be quantified. Their scope to learn management was severely reduced. And management can really only be learned through doing.

In these circumstances management training becomes a second best alternative, a way of coping with a sometimes impoverished working environment.

I find two major difficulties in providing management training.

Number one is the difficulty that people find in applying the skills I teach in any meaningful way. There is simply not the opportunity to practice. To overcome this, I try to show them ways of applying skills outside conventional management paradigms.

Number two is simply fear. Fear of being let down, fear of being judged, fear of making mistakes. This one is really hard. Here I try to explain that to be human is to err, to forgive define.

As a manager you will make mistakes. So long as you have tried, so long as you learn, then forgive yourself. And forgive those working for you who have tried to apply the same standards.

Monday, June 25, 2007

A Passion for Management - Introduction

Many professionals see management as incidental to their real work, something that they must do, really a distraction.

I do not share this view. While much of my recent professional life has seen me work alone, I actually love management and see it as central to my professional life.

All this got me musing. Why is management so neglected? Yes, we have an increasing range of management courses, but these mainly teach business techniques. Why is the act of managing itself not focused on?

We can see this in the current obsession with leadership. Yes, leadership is important. But of itself it does not deliver sustainable results. Adolf Hitler was a great leader. So was Stalin. But this did not mean that their countries were well managed.

We can see this, too, in the current obsession with performance management. At best, a series of cascading performance agreements can be a useful tool. At worst, it becomes a substitute for management. The agreements are in place, let everybody get on with doing.

Yet experience shows that performance agreements as such are a poor tool for achieving sustained performance improvement. At best, and this is actually unusual, they deliver the results specified in the agreement. Even then, they capture only a small part of the realities of good performance.

Why, then, is management neglected?

In simplest terms, I think that it is because management involves managing people and uncertainties, and many are simply uncomfortable with this. So instead of dealing with people issues and uncertainty, we try to remove the problem, substituting systems instead. And this does not work.

Given all this, in the next few posts I want to share with you my own passion for management, explaining why I think that this is a central human activity. In so doing, I hope to give you a few hints and guides based on my own experience that will help you become better managers.

Saturday, June 23, 2007

The Power of Passion - Skunk Works Case Study

In my last post I spoke of the evolution of the term skunk works. This post looks at a current example of a skunk works in action.

Two key things to remember in considering this example. For a skunk works to work, you must have a champion. You also need to get it outside the normal system.

Statement of the Problem

The organisation in question is a business unit within a larger organisation. It has its own web site, but this has become very out of date.

A key problem here is that the organisation, like many modern organisations, is very thin on administrative resources. While there are 69 staff in all, there are only six support staff who between them have many different responsibilities. No one is directly responsible for the web site.

All staff know that the web site is outdated. When the issue was raised earlier this year, it was referred to a newly established communications committee. This committee, responsible for all communications matters across the business unit and without any administrative support, struggled to address its broad responsibilities in any meaningful way. The web site problem remained.

Finally, the champion pushing for web reform persuaded the unit's business manager to put up a recommendation to the unit's executive committee that a working group chaired by the champion should be formed under the communications committee. This was done.

The Process

The new working group was consciously kept outside existing structures. Nominations were called for from all staff. More than one in ten volunteered, creating a representative group covering different levels and areas. Membership included key support people including the unit's business manager.

The first meeting was a little chaotic while the group found its feet. While longer term objectives were set, the group decided to focus on immediate short term changes using an action planning approach. The aim here was to show staff that change was happening. Various individuals volunteered to undertake review tasks.

At the second meeting a week later - this ran for just thirty minutes with a time keeper in control, reflecting an earlier decision to meet often, but for very short times - two sets of changes were agreed.

The first were essentially machinery changes, corrections and updates that did not affect core content or raise any policy issues. The second were content changes requiring new content to be written. The day following the meeting, the business manager took the outcomes to his regular meeting with the unit's executive director, gaining the required sign-offs.

So after just two week's operation the group had approval for immediate alterations, along with sign-off to continue with content preparation for broader changes.

Note in all this that the really big questions, things such as added functionality to allow better use of the site for business purposes, were put aside. This was done quite deliberately to allow time to build experience and to avoid the type of blockages that had occurred in the past. The group wanted results and wanted them now.

Conclusion

I have given an example that very much represents work in progress.

In just a few weeks, this group achieved more than had been done in the previous twelve months. In doing so, it unleashed ideas and suggestions that had previously been blocked. The problem here will be to find the best way of managing these without overloading the whole process.

I will report back on progress and the lessons learned in a month or so.

Tuesday, June 19, 2007

The Power of Passion Continued - Making Use of Skunk Works

The term skunk works originated in Lockheed Martin and is used in engineering and technical fields to describe a group within an organization given a high degree of autonomy and unhampered by bureaucracy, tasked with working on advanced or secret projects.

The term became popular in management discussions to describe innovative groups in general within organisations, groups that somehow achieved remarkable results. IBM and the development of the PC is an example. Then, as so often happens, fashions changed and the term dropped from favour. I think that's a pity.

Two things - tracking and control - mark modern organisations. Our computer systems allow us to track things in ways not possible before. In turn, management uses this power to try to channel, control and measure activity. The problem with this focus on tracking and control is that there is a fair bit of anecdotal evidence to suggest that many of the biggest break-throughs, things that shape the firm, come from individuals and groups working outside formal structures and systems.

The reasons for this are simple.

By their nature, modern management systems tend to deal with the known, whereas significant change often involves the unknown. This can make it hard to get required formal approvals to do new things that, by their nature, are unproven. Further, the administrative and process loads in our system rich organisations can actually suck the heart out of smaller initiatives. Too much time is spent in reporting and planning, not enough in experimenting and doing.

In these circumstances, people who want to achieve change or who are simply interested in looking at new things have to work around the organisation. They succeed in spite of, not because of, the organisation.

In saying this, I am not saying that we should give away reporting and control to let a thousand flowers bloom, although there is a strong case for simplification. Rather, firms need to find a way to facilitate change and experimentation.

The skunk works concept is one way of doing this because it frees people to get on with a task.

Skunk works can be formal or informal, they can be created by the organisation or by an individual or a group of individuals. In all cases, the distinctive feature is that they stand to some degree outside normal systems.

I will take a case study in my next post to illustrate the point.

Sunday, June 17, 2007

Encouraging Passion

In my last post I spoke of the power of passion. Can a firm create passion? I do not think so, because passion is an individual thing. Most people simply want to do a good job, balancing work with other commitments. However, firms can certainly create an environment that will encourage passion to flower.

Yesterday a colleague and I were going through the results of a number of staff workshops. Like many such workshops, there were sheets of short staff responses. As we looked at them, I was struck by a number of common threads.

The first was the need for improved communication.

Staff felt that they were not given the information they needed to do their jobs properly. They also wanted more information about the organisation itself.

The second linked theme was the need for management improvement.

Whereas management focused on the need for staff to do things to improve staff performance, staff focused on the things that management needed to do to allow them to improve performance. These included clearer instructions, again better information, the need to give staff more authority.

The third theme was trust. Staff felt that management should place greater trust in staff to do things right. Staff also wanted to be able to trust management to protect them, to treat them fairly.

Today we live in a system intense world. We have a tendency to believe that if there is an actual or perceived problem then we need a new system to deal with it. Yet if you look at the three themes above, they are really matters of attitude and skills. Simply changing systems will have little effect.

I should note that this is not a badly managed office. But even in this case there is substantial scope for improvement.

All three themes are central, too, to the creation of passion. If you want to encourage passion, then action to improve management, communication and trust is not a bad place to start.


Friday, June 15, 2007

The Power of Passion

Note to readers: I have had a number of posts at various stages of preparation, but kept getting distracted. I do not want to post them at once, but will do so in batches over the next day or so.

Never underestimate the importance of passion in a working environment.

In recent weeks I have been working with a younger college who demonstrates the power of passion. In rank terms, she has no formal power. In size, she is diminutive, tiny compared to her colleagues. Yet she exercises a powerful influence across the whole office.

Christine is passionate about statistics. She loves collecting them, analysing them, presenting them.

She believes that statistics are there to be used. She looks for new ways of using them.

Recently she prepared as an independent exercise in her own time a compilation of statistics that she thought would be of benefit to the the office. In doing so, she talked about "her baby". Upon completion, she made sure that all sixty nine staff in this office had a copy.

Not content, she ran round the office saying have you looked at my baby yet? People had, because it was Christine and the compilation was also useful.

This passion carries over into other aspects of her working life, including her concern for other staff members and her involvement in staff activities. She is and is seen to be one of the office's most valuable staff members.

People such as Christine need to be valued, encouraged and protected. The word protected may seem an odd one to use, but too many firms actually abuse their enthusiasts through overwork to the longer term detriment of both.

Tuesday, June 12, 2007

Return to Duty

Short post just to say that I will be resuming posting after my short break.

I did not get as many things done as I had hoped during the break, but I did at least get to do some catching up.

Tuesday, June 05, 2007

A Short Break

I have decided to take a short break, probably only a few days, from posts to allow me to recharge and to read and comment on other people's blogs that I am interested in.

While the great majority of visitors come to this blog via search engines with some staying to read a little more (the average is 1.8 pages for every visitor), I greatly value the much smaller number of regular readers, many of them fellow bloggers. This creates a problem in that if I spend all my time writing, I cannot participate properly in civilised conversation and exchange of views.

So I want to get out there to again capture the interest and stimulation that comes from broader debate.

Monday, June 04, 2007

Praise from Legal Eagle

My thanks to Legal Eagle for her praise for my post on Slater & Gordon. I thought that she captured my arguments very well.

Legal Eagle's blog, The Legal Soapbox, is a remarkably good blog mixing the personal and professional. International readers interested in Australian law and life will find her material interesting, while her links provide a valuable entry point into the growing world of Australian legal blogs.

Sunday, June 03, 2007

End Month Post Continued - Visitor Interests

Every so often as part of my end month stocktakes I look back at recent search pattern to see what brought people to this blog. I find it interesting, and it also helps generate new ideas.

The first search I looked at, generational culture in management came in from Google where the visitor found at number five a post I wrote in March on Gender Differences, Generational Differences and Personal Management Styles. This post linked back to some previous writing I had done on the topic.

The next search, economics "professional services firm" also on Google brought up two references to this blog in the top ten. The first reference proved to be the archive for all Deecmber 06 posts. The second brought up all the posts with a training label.

I have in fact written a fair bit in this area over time, but the visitor would not have found most of this material through this search. So that's one area where I can usefully say something more by way of consolidation.

The seach after that on Google Australia was on professional services firm: partner remuneration. This also brought up two references in the first ten, one posts with the strategy label, the second the practice management label. Hopefully this brought the visitor to the arguments I have been mounting about the clear separation of partner roles as one of the foundation blocks for an effective partner remuneration system.

The next search was a Google blog search on professional ethics. This bought up my post on Corporatisation and Professional Ethics triggered by the Slater & Gordon matter. I think that I could usefully say a fair bit more in this area.

Then came a search on Google Australia on how manage bad and good performance. This brought up in the top ten a post of mine from last October, Designing a Good Performance Appraisal System. In fact I have more relevant posts on the topic, so another consolidation post may be worthwhile.

The next search on Google Australia was IT Services Firms - Australia. Another two posts in the top ten, although I think that in this case the searcher would have been disatisfied since I think he had a very specific need in mind.

Then came a search from Google New Zealand, performance appraisals with remuneration, that brought the performance appraisal post already mentioned up as number one.

Another Google seach, wip accounting australia, brought up one of my corporatisation posts as number eleven. Now this would have been a disappointed visitor since that post was not about WIP treatment as such.

The last seach on MSN, managing professional services, brought up this blog on the front page.

In all, the blog scored well in visibility terms in this last set of searches. More importantly, the searches do give me some ideas as to how I might improve the visitor experience in particular content areas.