In this article, we highlight some of the issues firms encounter when trying to develop a commercial culture in professional services. How does a firm encourage fee earners to become more responsible for the financial decisions they choose to make?
We also highlight some of the solutions and benefits our business simulation programme has to offer in helping you resolve the issues that will enable you to engender a culture in which each individual understands the full impact of their decisions, right across your firm.
What are the issues?
We only have to look at how many firms have collapsed due to financial mismanagement (and we know many current firms are experiencing some element of financial distress) to understand that it is imperative that firms develop a more ‘commercial’ culture and mindset.
In our experience, the majority of firms provide fantastic, detailed output to their clients and are brilliant at giving advice.
However, senior management realise that being good at giving advice does not mean that this will make the firm financially successful which is why we see such a focus on developing strategy, branding, business development and client service / retention.
Commerciality and financial management are also seen as key drivers and firms understand that by improving efficiency and financial performance, there is a greater chance of driving success. But it is often very difficult to get fee earners to act upon the key messages. Many firms send out emails: ‘please get your billing done asap…’, ‘please review your WIP…’ without much success and we know this can be very frustrating.
We believe that everyone (especially fee earners and in particular, partners) need to understand (and be accountable for managing) their financial model, the pressure points and the impact that their behaviour, actions and decisions have on the top and bottom line and on working capital.
Imagine the impact on a firm of improved…
When taking part in theGrogroup’s business simulation ‘game’ the above are the choices participants have to make in order to create a winning firm.
We focus on the benefits of ‘opening up’ both financial and non-financial KPI’s and helping individuals within firms to understand the impact they can have, through their actions and decisions, on the financial health and results of the firm. This ‘openness’ leads to people at all levels feeling more of a sense of ownership and engagement, as perception changes from ‘the firm’ to ‘our firm’.
During the Business Simulation, people experience running a firm, making the crucial decisions and balancing priorities to help them understand the impact every individual can have on the firm’s financial health.
Benefit to delegates
Encouraging people at all levels to be more financially accountable is crucial to the longer term success of firms and the key to developing a commercial culture in professional services. Taking some simple steps can change thinking and create a more commercial culture.
If you would like to learn how we have helped other firms develop their commercial culture in professional services and improved their profitability please get in touch.