Thoughts on ways to improve the management of professional services firms

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.