The cover of the latest Harvard Business Review was emblazoned with the statement ‘What really keeps CEOs awake at night’ in a bright and shocking pink.
The issue was dominated by the HBR’s list of the top 100 best-performing CEOs in the world and an interview with a selection of these top business leaders based around their major worries.
Unsurprisingly key concerns include company culture, managing change and volatility, planning for the longer-term in the face of tremendous short-term pressures, innovation and becoming more purpose-driven as scale and globalisation means traditional management and reporting lines are becoming ineffective.
Whilst discussing these revelations with theGrogroup team, we came up with the brilliant idea (we do have them, occasionally!) to run our own survey of Senior and Managing Partners of Professional Services firms.
However, we quickly realised that we actually have this research already available because we regularly ask the same question to Managing Partners who attend the ICAEWs Managing Partners programme. In fact, their responses have formed the basis of our soon to be published first book ‘The Firm Principles’ (More news on the launch will follow).
So what issues do keep Managing Partners awake at night?
Managing Partners know this is essential, but for a variety of reasons clarity around the strategic objectives of the firm are rarely well understood and embedded in the day to day activities of individuals and teams. In a sector where business combinations are more the norm than the exception then strategy needs to be regularly revisited, validated and communicated within the firm. It must be consistent and constant.
“We need a strong bench…” is something we often hear from Senior Partners. But what does this actually mean?
In sport, an effective team requires those on the ‘bench’ to be game changers. They need to warm up quickly, be adaptable and ready to hit the ground running.
So surely this means ‘future’ partners and HoDs need to have been exposed to leadership challenges along their career journeys. A top down, formal succession plan will help to cover all the bases and ensure adequate resource to drive the strategy. And those ‘game changers’ need to be identified as early as possible. If they are demonstrating high performance in the behaviours and skills that are business critical in driving success, and showing potential in the way they adapt to challenges, then create clear plans to nurture them.
Successful change requires commitment across the board. Most importantly it requires the senior team to act as role models, leading from the front and demonstrating a united front.
Managing Partners have been honest enough to tell us that this is extremely difficult. Successful delivery against business objectives may require new approaches, initial loss of control and a sense of exposure.
Naturally some partners may not want to feel any ‘pain’ and it doesn’t take many ‘blockers’ to create a critical mass which either ‘anchors’ the firm or even pushes it backwards.
Working with a wide range of professional services firms, we see a lot of strategy documents and business plans. Whilst targets and KPI’s can be very different the vast majority of firms have the same ultimate aim – growth in fee income.
Creating a robust business development and marketing strategy which enables all fee earners (and even non fee earners) to understand how they can contribute to developing new sales from existing and new sales from new business is essential.
Getting across that looking for opportunities to provide exceptional client advice and service is essentially the same guise as ‘up-selling’ can be difficult, but is vital.
Providing the knowledge, skills, tools and incentives then serve as enablers to drive activity.
There seems to be a ‘tipping-point’ (somewhere around 35 people) where firms seem to break into a collection of sub teams, usually defined by practice area. They may not realise it, but they stop collaborating, stop sharing challenges, ideas, solutions, successes and failures.
This means that client service suffers because the firm isn’t ‘joined up’ in offering the client more options to help solve their challenges, and the firm suffers because their people can be disengaged, learn less about their client’s business needs and miss revenue opportunities.
The best way to ensure fee-earners understand the total value proposition is to get people talking about clients and business. To bring client (and prospect) issues and challenges to the table and ensure cross service line groups create collaborative client action plans.
Service line updates need to form part of every fee earners CPD plan. And do practice areas really all need to sit together? Maybe a simple re-shuffle could produce great results. We have seen great examples of cross-team collaboration by doing just this.
Many Managing Partners feel that convoluted and complicated appraisal systems, underpinned by extensive competency frameworks are just not producing effective results.
Appraisal and performance meetings are not always honest and open and are based on inaccurate metrics and data. Maybe somewhere along the way some have lost sight of what needs to be achieved – an absolute focus on maximising performance (and performance is the value of employees’ contributions to the firm over time).
This requires a simple system of setting regular and clear expectations, targets and standards of performance that are aligned with the business objectives and values. Ensuring regular feedback to continually improve performance. Linking training, development, experiences and career planning to this process. And having simple, consistent systems to manage both under and over performance.
We are sure that the above list includes few surprises. And we know that many firms regularly and heavily invest in partner away days, conferences, leadership, management and business development programmes and other people management activities to address these challenges. And yet these issues still seem to be keeping Managing Partners tossing and turning at night.
theGrogroup is a specialist consultancy that helps Professional Services Firms win in a competitive marketplace. Our bespoke solutions are designed to align people with an effective strategy. This ensures key areas such as business development, client advisory, commerciality, leadership and practice succession effectively support business goals in an environment where people are empowered to drive results and create a winning firm.