Wednesday Forum - Performance Appraisal

While I did not get a big response from the first Wednesday Forum on delegation - some of-line comments only - I am going to continue the Forum to see if I can build it over time.

Last Friday (October 20) I discussed Designing a Good Performance Appraisal System. The post makes clear my own view that a lot of performance appraisal systems are not very good and may indeed have negative effects.

Is this a fair view? What has been your own experience with such systems? What do you think the major problems are? Have you seen systems that do in fact work well?

Corporatisation in Professional Services - Stocktake of Posts as at 24 October 06

I had been going to write a story on Integrated Legal Holdings Ltd, the first IPO involving a legal practices in this country and perhaps one of the first in the world. Certainly I have not seen the issue discussed on any of the international sites I review. However, before doing so I thought that I should provide a stocktake of posts linked in some way to corporatisation since I will be drawing from this material in discussion.

Previous posts are:

• In only my second post (4 July) I looked briefly at the difference between self-employed professionals and business builders. The first group, the majority by number, focus on return from cash flow. The second focus on building a business looking for a return from the combination of cash flow and business sale. This leads to significant behavioural differences.
• In the following post (also 4 July) Selling your practice: the self employed professional case I suggested that even self-employed professionals should take sale possibilities into account.
• On 8 July I looked at the need for role clarification within partnerships in order to improve management and governance. This included the separation of returns on capital from payments for work. Once this was done, I suggested, the definition of roles and the remuneration to be attached to those roles could then be dealt with using conventional job analysis and remuneration principles.
• On 11 July I introduced the topic of mergers, acquisitions and the abolition of goodwill. I began by looking at the resistances and practical difficulties that would need to be overcome if returns from equity and capital were to be separated. I then suggested that separation of returns from equity and capital was linked to another issue, the increasing trend towards mergers and acquisitions within professional services, a trend associated with changes including demographic change placing pressures on both smaller and mid size practices to get bigger or get out. I then looked at the implications flowing from moves by some firms to abolish goodwill, suggesting that this created its own problems.
• On 14 July I looked at the question of consolidation among accounting firms and especially the way that the WHK Group was using tuck-in acquisitions.
• Then on 31 August in corporatisation in the Australian legal sector I foreshadowed a major series of posts looking at the Australian corporatisation experience across sectors. However, I then explained in on 6 September in corporatisation in the Australian professions - reasons for delay that I had met some practical problems including just how much to explain about the Australian system and that I had therefore put the matter on hold until I worked out the best way of handling it.

Previous Stocktakes

• 23 October 2006. People Management in Professional Services - Consolidated list of Posts as at 23 October 06
• 12 October 2006. Blogs and Blogging - Stocktake of Posts as at 12 October 06
• 24 September 2006. Professional Mudmaps - Cultural Differences Across the Professions: Stocktake of Posts as at 24 September 06

People Management in Professional Services - Consolidated list of Posts as at 23 October 06

The following list of posts dealing with people management in professional services replaces the previous list of 7 September 2006. My aim is to make it a little easier to find previous material.

• 24 July 2006. Introductory post on topic.
• 25 July 2006. Professionals vs managers looks at the differences in training and approach between professionals and managers.
• 26 July 2006. Developing management skills begins our discussion on ways of improving management skills among professionals.
• 27 July 2006. A training primer 1 starts our discussion on overall training issues. A key conclusion was that training could offer significant economic pay-backs if, but only if,the training process focused on and integrated total learning within the firm, including informal learning.
• July 28 2006. A training primer 2 extends the discussion, looking at different categories of training needs, competency based approaches and organisational vs individual needs.
• 3 August 2006. A training primer 3 completes our immediate discussion of overall training issues covering the need for realism, immediate action steps and the integration of appraisal systems and performance measurement.
• 9 August 2006. Getting the horse to the training water responds to a comment about ways of getting people to do training.
• 18 August 2006. Maister on Training looks at the reasons why David Maister will not provide training to certain firms.
• 28 August 2006. Recruitment moves the people management discussion from training to recruitment, the first step in the people chain.
• 31 August 2006. Induction provides an induction check list to help you better integrate new people into the firm.
• 11 September 2006. People Management in Professional Services - Effective Delegation look at ways of improving delegation in professional services firms.
• 11 October 2006. Communications Skills and the Professional discusses communications skills among professionals.
• 14 October 2006. Changing Gender Balances in the Professions - a question for you asks to what extent changing gender balances are affecting firm management.
• 20 October 2006. Designing a Good Performance Appraisal System discusses why so many staff appraisal systems fail and looks at the features of a good system.

Previous Stocktake

• 12 October 2006. Blogs and Blogging - Stocktake of Posts as at 12 October 06
• 24 September 2006. Professional Mudmaps - Cultural Differences Across the Professions: Stocktake of Posts as at 24 September 06
  7 September 2006. People Management in Professional Services - Previous Posts as at 7 September 06 (now replaced and will be deleted from the next list of previous stocktakes)

Designing a Good Performance Appraisal System

Since Chris Marston and I had a brief discussion on performance appraisal systems I have been mulling over the reasons why there are so few good (ie useful and effective) performance appraisal systems. I am sure that you know what I mean if you look at the systems you have experienced (suffered).

I think that the most common failures can be summarised this way:

1. Complexity: Too many systems are just too complicated, try to measure too many things.
2. Centrally imposed and firm focused: This one may sound a bit funny in that performance appraisal systems are almost by definition centrally mandated and intended to improve overall firm performance. It's where we go from there that's important. Good appraisal systems assist individuals to improve personal performance. Otherwise the whole thing becomes just another hurdle that people have to jump through.
3. Linking perfomance appraisal and remuneration. Again, this one may sound a bit funny in that performance is obviously one (but only one) factor in considering remuneration. The problem is that as soon as you establish any form of formal link between performance appraisal sytems and remuneration review, pay immediately comes to dominate.
4. Fear and loathing: Structured appraisal can be a personally frightening process. Many staff fear and even loath the appraisal process. A bad appraisal system itself become an impediment to performance improvement.

Taking these issues into account, I think a good appraisal system:

1. Does not involve pay
2. Focuses on performance improvement
3. Is regular, consistently applied, but kept as simple as possible.
4. Is built into normal management processes and involves a two way appraisal using the previous appraisal as a base
5. Takes varying staff needs into account
6. Is action oriented
7. Has the firm values built into it.
   
   

Wednesday Forum - Delegation Issues

I want to encourage discussion. To this end, I have decided to trial a Wednesday Forum asking readers about their own ideas and experiences. It may well be too early in this blog's history to try this. However, a journey begins with a single step.

When I first joined the Australian Public Service as a new graduate we all used to complain about the way work was allocated. The Director kept the most interesting work and passed the rest onto the class 9. The class 9 selected what he wanted to do and passed the rest onto the class 7. The class 7 then selected, leaving us with the worst stuff. A bit of a parody, but still not far from the truth.

Since then working as a manager and consultant, I have found complaints about delegation to be very common. So I wondered about your views and experiences.

Is delegation in professional services as bad as sometimes presented? What problems have you experienced yourself in the way work is allocated or indeed in trying to allocate work?

Belshaw Blogs - statement of editorial policy

I am carrying this statement on each blog that I am involved with.

There has recently been a fair bit of recent discussion about problems and issues associated with blogging as a publishing activity.

I publish and mainly write four blogs, each serving a different purpose. In doing so, I try to be accurate. However, recently I made some mistakes of fact and interpretation in a story. They were pointed out to me and I have corrected them.

No harm was done int his case. However, it provided an excellent illustration of the need for care. I thought therefore that I should provide a statement of principles governing my approach to all my blogs. Each blogger has their own approach. This is mine.

All my blogs are intended to stimulate interest in and discussion on particular topics. They provide an opportunity for me to place ideas, thoughts, information and research on the public record. I spend a fair bit of time thinking about individual stories and want my readers to value the visit experience. I also believe that blogs are a way of encouraging civilised conversation. To this end:

1. All my blogs contain a mix of fact, analysis, recollection and opinion.
2. I try to check my facts. However, I will make mistakes. Where I do so, I will make corrections to the story and, if necessary, acknowledge the mistake.
3. There will also be mistakes in my analysis. Again, I am happy to recognise and discuss such errors.
4. While I try to be objective, I recognise that my own values and opinions colour my writing. I will try to write in such a way that the reader can properly indentify my views and biases and hence make their own judgments. This holds especially when I am arguing a case.
5. When writing as an analyst, I try to deconstruct the elements in a discussion so that I can properly present issues and approaches. I will try to do so independent of personalities.
6. Since I want to encourage civilised conversation, I will try to treat my visitors with courtesy even where I disagree with them. I reserve the right to delete comments where those comments are nasty or may create legal problems, but I will never delete a comment just because I disagree with it.
7. As part of civilised conversation, I will try to recognise other's ideas, to contribute to relevant discussion on other people's blogs and to answer promptly emails arising from my blogs.

Using Blogs - and other new technology

Photo: Me and dad outside our hotel, Paris December 2004. Clare Belshaw's blog

In an earlier post I spoke of the question posed on the US Learning Circuits blog, should all learning professionals be blogging. The approach adopted - an open question with people responding on their own blogs - generated a large response. Now Dave Lee is trying to encourage a follow up discussion.

Looking at the low response I think that that people are now blogged out so to speak, that the revised question is perhaps too narrowly defined. However, it does give me an opportunity to talk about some of the things I have been mulling over.

Recently I have been trying to get some of my fellow professionals to consider not just blogging, but other new technology approaches to supporting their work. I am not talking about "big" technology here, rather simple approaches that people can use with minimum support. I must say that I have not had great success.

I understand all the reasons for this, but it still frustrates me. I am not in any personal sense a technology leader. I have been working with new technology for many years and remain a technology lagger. So I take something up when I find it useful. But having done so I then become a strong supporter. Hence my frustration.

Given all this, I thought that I might share with you some of the ways that I do use things such as blogging, as well as the things that I have learned.

Use of Blogs to Keep in Touch

I work mainly from home. This is partially a function of the work I do, but also reflects a decision taken several years ago that I wanted the opportunity to enjoy my daughters as they were growing up. I have gained enormously. But the decision also imposed very real costs, one of which has been a degree of isolation. Earlier this year I began to wonder if my knowledge was still up to date, was I falling behind. I now know that this is not the case.

At the time I started really focusing on blogging I had not fully realized the fundamental change that had already taken place in the blogosphere, the fact that a remarkable number of professionals around the world were using blogs for discussion, as a marketing tool, as a way of promoting their ideas. Further, because they posted so frequently, in many cases 3-5 times per week, there was a currency to their comments making it easy to see trends. In addition, the comment facility on blogs allowed for a degree of response and interaction, making knowledge transfer easier while also building contacts.

Perhaps the most important feature of blogging at this level is the way it acts as a huge information screening device. Most bloggers look round their world for things of interest to them and then include links in their posts.

I presently monitor some fifteen key blogs on a daily basis, quickly scanning to look for things of interest. Given average post patterns, this means that I scan up to 12 posts per day, reading some in more detail. The 12 posts will probably contain up to 30 links, of which I will click through on 3-4 and again scan. 30-40 minutes per day keeps me in touch in a way that is simply not possible with either conventional web searches or the print media.

Note that I do not use feeds. I get over 100 emails a day as it is. I prefer to control my own search and review process.

Overall, perhaps it is not surprising that blogs have taken over as a key information resource for so many professionals. Certainly I no longer feel either stale or isolated. I know that my professional competency still stands up on a global basis, and that's not a bad thing to know.

Blogs as a Tool for Dialogue

I find blogs a useful tool for dialogue, establishing new linkages. Let me take two examples to illustrate.

The linkages established through Learning Circuits means that I now have access to experts who know far more about aspects of learning and development than I do. If I have a problem, I can ask. Why is this important? Well, I think that new approaches to learning and development are critical to improved performance in professional services. So I can take the knowledge of others who perhaps know little about professional services but a lot about learning and development and try to make it relevant to the management of a professional services firm.

Then, too, I have been monitoring the efforts of Chris Marston, CEO of Exemplar, to establish a blog focused on the development of Exemplar as a new type of law firm. I first came across Chris through the blogs of Bruce MacEwen and David Maister. I monitored Chris's blog for a few months to get a feel and have just started to comment.

Again, why is this important? Well, I am interested in Chris's experiences as a CEO because it may tell me things that I can use on this blog and in my advice to clients. I think, too, that I may have something that I can contribute to him.

Use of Simple Technologyto support Service Delivery

One of my constant messages on this blog is the need for the professions to learn from each other. Linking this to the core message in this story.

Teachers are one of our most important and least recognised professional groups.

In 2002, Neil Whitfield had to take over an Advanced English class at Sydney Boy's High, one of NSW's selective secondary schools. He got outstanding exam results. One technique that Neil used was a simple web site giving his students access 24/7 to key information. I asked my daughters about this. They thought that it was a marvelous idea.

In 2002 I was running a Front Line Management training course for R&D staff at Aristocrat, the world's largest manufacturer of gaming machines. A web site giving my group 24/7 access would have been a wonderful idea. I did not even think of it.

So my point is that every professional and professional services firm needs to think about how best to use the technology now available.

Changing Gender Balances in the Professions - a question for you

In Australia girls are doing better than boys in the final year school exams and have been doing so for some time This is reflected in the numbers attending university.

In 2004, 54.3 per cent of all Australian university students were female. The female proportion among new students entering university in 2004 was also 54.3 per cent.

I have tried to find aggregate data on the female/male balance in different fields of study but without success at this point. However, based on previous research I did covering certain institutions and fields, my qualitative impressions are:

• In some fields including optometry, dentistry and vet science, the female proportion is now over 80 per cent.
• In other professional fields including medicine, law and accounting, the female proportion is well over 50 per cent and climbing.
• In still other fields such as primary teaching (female) and engineering (male), the traditional gender bias is still there.

Because changing gender balances have implications for individual professions and professional practices (women have to balance child birth and careers), I wondered what the position was in other countries, what practical impact this was having in management terms?

Blogs and Blogging - Stocktake of Posts as at 12 October 06

One of the difficulties of the blog format is that it can make it difficult to easily find past posts on particular topics, even using the blogger search engine. In addition, I as writer can forget what I have said, an increasing problem as the number of posts grow. For that reason I have introduced the practice of providing stocktakes of posts on particular topics. This one deals with blogs and blogging:

• 16 August 2006. Accountancy Blogs lists five blogs relevant to this sector
• 27 August 2006. Dilanchian Launches Blog reports on the launch of a blog by this Sydney law firm
• 14 September 2006. Interlude - Things of Interest reports on things noticed in the on-line world
• 25 September 2006. Blawg Review #76 reports on the Carnival of Law Blogs hosted on David Maister's blog.
• 28 September 2006. Blog Nominations Called For invites nomination of business blogs run by smaller Australian professional services firms or individual professionals for consideration for inclusion as one of the featured blogs on the US small business blog of the day site
• 29 September 2006. Interesting Posts - September 06 reviews a range of blogs and posts
• 2 October 2006. Dennis Howlett & Blogs points to an interesting comment by Dennis on on the use of collaborative tools
• 3 October 2006. Should All Learning Professionals be Blogging - Practical Issues links to a major exercise run by the US Learning Circuits looking at the relationships between learning professionals and blogging.

Previous Stocktake Posts

• 24 September 2006. Professional Mudmaps - Cultural Differences Across the Professions: Stocktake of Posts as at 24 September 06
• 7 September 2006. People Management in Professional Services - Previous Posts as at 7 September 06

Communications Skills and the Professional

This morning I was doing my normal review of blogs relevant to professional services management and in so doing spent some time reading and thinking about a post by Christopher Marston on his Inside the Firm of the Future blog on communications skills and the relationship between those and firm values, policy and procedures.

Chris is CEO of Exemplar Law Partners, a US law firm trying to develop new approaches to the practice and management of law including complete adoption of fixed pricing in place of the hourly billing model. Chris uses the blog to promote Exemplar, while also encouraging discussion on professional and management issues relevant to law.

Chris wanted to encourage discussion and I have posted a comment. This has to go through moderation before it appears, so I won't comment on my comment until it appears. In the meantime, it got me musing on two linked questions:

• Are professionals bad communicators?
• If so, why?

Several years ago when I was CEO of a specialist medical college part of my role was to take complaint calls from the public about our Fellows. I had to be very careful in doing this. I could not say anything that might be construed as interference, I did not wish to worsen situations, I had to be very careful in case my words came back to haunt me later in any inquiry or court case. So my standard approach involved:

• listening very carefully
• encouraging the person to talk for as long as they wanted while not taking sides
• use of gentle and cautious questions to draw out the facts at the person saw them, to find out if they had raised their concerns with the Fellow in question
• regular summarising to ensure that I had properly captured the position as seen by the complainant
• then if necessary at the end giving factual advice on the options open to the person.

In a quite remarkable number of cases I found that the core problem had nothing to do with medical treatment but was simply a communications problem between a busy doctor on one side and a concerned, sometimes frightened, patient on the other, a problem that had festered into a major issue in the patient's mind. In nearly all such cases, talking to me actually defused the problem.

Based on this as well as my experiences as a professional adviser, I would conclude that professionals are in fact bad communicators. Whether they are worse than other groups is a more open question, although I suspect that they are.

If professionals are bad communicators, why so and what can be done about it?

We all think that just because we can talk or write that we can communicate. In fact, I think that personal communications is a skill and, like any skill, must be learned and practiced. Such training may not make the person a good communicator, all sorts of things come into the picture here, but will certainly make them a better communicator than would otherwise have been the case.

I also think that communications skills should be built into vocational education programs for at least all professions requiring individual interaction between the professional and the client or patient.