After reading Strategy and the Fat Smoker, I made a research in our company to find out the types of people who work with me. It was very positive because I found out that we have:

• 75% of employees with long term and team motivation
• 15% - wolf pack
• 5% - individualist
• 5% - spider

It was funny that after this research two managers-individualists left the service at once and other employees were very happy about it.

I have one question to you: how can we determine the type of person if he can’t clearly answer the questions about his motivation, for example:

1.       He wants to be motivated 50% by team result and 50% by individual result

2.       He wants to invest time to have long term result but don’t want to lose money in short term period

***

I'd suggest taking him out to dinner and pointing out that he cannot get what he wants in life if he doesn't make choices! If he continues to go back and forward, I'd point out that he won't be comfortable with with the rerst of the team, and they won't be comfortable with him. It might be time to move on.

What do the rest of you think? Would you be more "accomodating"? Does everyone have to be oriented the same way?

He and his firm, Edge International, have just launched, in concert with Managing Partner Magazine, a service through which new law firm managing partners will have access to advice through a newly formed Leadership Advisory Board (the "LAB.")

Disclosure point two: the following description is adapted from their press release.

The LAB will be comprised of experienced and knowledgeable managing partners, and will offer new law firm leaders a forum in which to pose questions about issues of greatest importance to them and to receive from the LAB advice and guidance based on its members' many years' experience as law firm leaders.

The LAB is the brain child of both Patrick and Baker & Daniels' Chair Emeritus Brian Burke. Burke says, "While teaching a Managing Partner Magazine-sponsored program that Patrick and I conduct for new managing partners, it became evident that these leaders of law firms have very limited resources from which to draw guidance. While their firms might belong to a network of law firms or they might get together with other managing partners in their local markets, it can be awkward for managing partners to ask questions in such settings about the more sensitive strategic, interpersonal, or operational issues that they find themselves confronting."

Any managing partner can now seek advice (anonymously, if preferred) by logging on to the Managing Partner Magazine web site. Once there, managing partners may pose questions, challenges, or issues. McKenna and Burke will circulate the inquiry to all members of the LAB, asking for individual guidance, views, and examples; gather and synthesize the group's feedback; and draft a cogent response to the individual presenting the inquiry.

Explained one of the LAB members, “I believe that there is a dearth of good advice and mentoring available to new managing partners.  It is staggering to think that corporate CEO's and other C-level people in the corporate world train their entire careers in order to be prepared when it is their turns to take the helm, but law firms put people at the helm of an enterprise whose revenue numbers have two commas in them with little or no formal training and almost no mentoring.”

For further information contact Patrick McKenna at  (780) 428-1052 / (800) 921-3343

"Many people may remember the “meme” that went around the blogosphere about a year ago, something called Five Things You Didn’t Know About Me. The idea was simple: reveal 5 pieces of information that people might not know about you and then contact other people to contribute. A bit like a chain letter. But much more fun in terms of time wastage.

"Well, there is a new meme zipping around the Net: open the nearest book to page 123, go down to the 5th sentence and type up the 3 following sentences. Then, pass the message along to other people you want to invite to contribute to the game."

I don't want to obligate others, but it sounded fun so here goes:

(From EPIC CHANGE: How to Lead Change in the Global Age, by Timothy R. Clark, which was sent to me by his publicist to review)

"In almost every case, change must be handed off for implementation. Unless there is broad-based action by many people, change won't take place. Change usually affects far more people than those who identify it as a need"

***

An interesting experiment. You can also imagine providing this quote as an examination question, followed by the instruction: "Discuss"

*** 

Anyone else want to join in either on their own blog, or in the comments here? Closest book to you, page 123, start at 5th sentence, and type the following three sentences.

"Our company will start improving our consultancy using the input of your book True Professionalism. I have carefully read the book (as have all my colleagues) and I have found a situation in my work that to me seems paradoxical.

"In achieving happiness and fulfillment in work, you encourage the professional to start and change himself first, take initiative, show enthusiasm. It is not advisable to wait for the company itself to change: that will never happen. It is also not advisable to 'blame' the management: that turns the professional into a victim of his surroundings (which a real professional would never allow to happen).

"The paradox is: professional and company/management are, in my view, interdependent. They fulfill each others needs and in a way facilitate each others existence. What is the role of the management in a professional organization, specifically when it comes to encouraging and stimulating the professionals?

"Actively seeking a positive attitude towards work and client is obviously the main responsibility of the professional himself. How can the management of a company pick up on that positivity, that initiative? If the initiative of the professional is not met and answered by the management, the incentive to try and improve oneself, to walk that extra mile for the greater good of the company, will simply be non-existent. The professional will most likely leave and try to find that reciprocal relation elsewhere. In short: how does one manage a professional?

"Any light you could shed on that interesting subject would be greatly welcomed! Could you for example perhaps point me in the direction of literature I could read on that subject?"

***

The role of management in my view is to:

(a) Provide a clear purpose for the organization, so that the individual can decide whether that purpose is one they can believe in and contribute to.

(b) Help the individual find his or her passion, providing alternatives, encouragement, support during rough times

(c) Provide clear and honest feedback

(d) Enforce common standards so that the individual is part of a community of like-minded people of whom the individual can be proud.

Does anyone else have different answers?  

***

My premise is that the traditional system is not only antiquated, it is the cause of many of the problems and issues facing large law firms today.

I am referring to (a) the whole process of law school recruiting, (b) the "class" system for associates, (c) the "up or out" progression to partner and (d) the concept of being a partner inclusive of lockstep compensation.

(a) Law school recruiting / summer program:

This is very expensive from both an attorney time and a financial perspective. Typically the first year class is larger than needed due to a high number of departures over the first three years.

Classes 1 to 3 are, from an actually working perspective, an unknown commodity and are being trained. They typically start by earning $160,000 plus bonus. Many are looking to only pay off their law school loans or aren’t even committed to practicing law and often treat this period as a career determining step which accounts for the high turnover. Considering all the firm investment in these attorneys they aren’t usually profitable to the firm till the third year by which time many have already left. In addition, a growing number of clients are refusing to pay for these associates as their billing rates far outstrip the level and often the quality of work they perform.

Proposed solution: First, maintain a pool of staff attorneys and document analysts to perform the low level routine (years 1-3) type work. Made up of part-timers, those wanting a home/life balance (1,800 hour requirement with bonuses paid for hours in excess) and those from second and third tier law schools but with previous work experience. Hired laterally with no pretense for marked advancement thus there being reduced expectations. Provides a well paying prestigious job for attorneys otherwise not able to work at large major firms likely resulting in dramatically reduced turnover than currently exists with law school recruits. Treated as paralegals are treated, quasi administrative/quasi professional staff. Paid less than 1 to 3 year associates and bill out at less as well which makes clients happy.

Also, hire laterally attorneys with 3 years experience with excellent backgrounds and slot them into “levels” 1 through 5. Let someone else recruit and train them! Once an attorney has 3 years of experience they are a much more stable and valuable asset. We will pay greater than market as well as guarantee partnership. Therefore, we will target only “A” quality attorneys. We will also be able to command top dollar for these attorneys since they are all top rated and will be more stable since they are being paid more than market and guaranteed partnership. This appeals to clients knowing that they will likely be dealing with the same attorneys and not incurring transition costs associated with having to bring in new attorneys on their deals in mid stream when others leave.

(b) The “class” system. Even though people mature and progress at different rates, under the traditional system people advance strictly based on the passage of time. Poor performers are asked to leave but decent and average performers advance at the same pace as the excellent performers. This causes an inequity in the allocation of work, both the type and amount, which ultimately leads to disgruntled attorneys further adding to turnover.

Proposed solution: Progression from level to level is earned based on performance as evaluated on a semi-annual basis. The intention is that each attorney will “graduate” from level 5 in a 5 to 7 period when joining at level 1. Unlike the current “class” system, attorneys will progress from levels 1 through 5 based on performance, not merely the passage of time. A minimum of 3 years experience is required for level 1. The purpose of promotion to the next level is the continued growth and development of the attorney with increased training, responsibility and client contact. Since partnership upon “graduation” from level 5 is guaranteed, this level ascension is viewed as more than just annual salary and rate increases but as partner building. Since we’ll be starting with “A” quality associates with at least 3 years experience, the success rate should be quite high.

( c) Up or out.

For the vast majority who don’t make partner for one reason or another after 8 or 10 years, they are typically either asked to leave or invariably leave on their own if given the inauspicious title of “special counsel”. This then results in the firm’s loss of investment for after training and mentoring all those years these people take their human capital elsewhere. Sometimes to a competitor.

Proposed solution. Upon “graduation” from level 5, partnership would be guaranteed. This will lead to low leverage which has worked quite well at a firm such as Wachtell with leverage of just 2.51 in 2006 as per the American Lawyer and was the model in the 60s, 70s and 80s when leverage at large New York firms averaged less than 2 to 1 as per the National Law Journal.

Clearly over time partnership ranks will expand at a rate either equal or possibly in excess of our level based associate ranks. However, this is viewed as a benefit and will enhance retention and overall performance. The theory is that most partners will perform at a high level given their background and mentoring. In addition, since there will be a large pool of staff attorneys not eligible for partnership the makeup of our attorneys will be the opposite of a bell curve with large numbers of staff attorneys performing the first through third year type work, relatively few level based associates and a large partner group.

(d) Partner comp.

In the traditional model, the lucky few who make partner are then compensated on a lockstep or modified lockstep basis. Almost certainly every year a handful of new partners are made. This results in the firm’s need to exponentially grow to maintain the same leverage. In addition, by simply converting associates to partners, there is a dilution of the profits per partner (barring an increase in business and/or rates.) Here again there is client backlash against the ever rising billing rates forcing more law firms to grant discounts and write-offs. Finally, lockstep or modified lockstep is becoming more difficult to maintain at most firms with rainmaker partners either wanting a greater share of profits at their current firms or willing to go to the highest bidder.

Proposed solution. Two-tiered partnership compensated based on a meritocracy. Since we are starting with “A” quality associates and providing partner building training and mentoring, the idea is that the vast number of those attaining partnership will be worthy. In addition, since we will be a two tiered partnership compensated based on merit, all partners will be compensated in proportion to their firm contribution.

***

OK, folks. What’s your reaction to my questioner’s analysis and proposed solutions?

I’m generally not a fan, because paying a commission:

1. Fails to distinguish between revenue and profit. It can reward bringing in work that the organization loses money on (or at least makes less money than other alternative uses of its scarce resources.)
2. Fails to distinguish between on-strategy and off-strategy work. The organization ends up with an “if it moves, shoot it” mentality.
3. Over-rewards the person who makes the final sale (the transaction), and under-rewards activities (for example, seminars, articles, speeches) that “court” the audience and lead them into conversations that result in sales. Consequently, it encourages an impatience that may backfire in building business.
4. Encourages salespeople to think of their own rewards (the commission) rather than truly helping the client, and hence creates an uncaring market image that may backfire.
5. By overstressing individual commissions, can prevent the cooperative teamwork necessary to execute a full coordinated marketing program. Instead, the sales efforts are no more than the (weakened) sum of a lot of individual efforts, none of which has the impact to make a big difference.

In spite of these concerns, sales commissions are still common in a lot of professional businesses. In some, such as real estate brokerage or headhunting, it’s at the core of how individuals are paid (X% of all revenue generated to the individual, the remainder to the firm.)

And, as firms (in, say, law and accounting) try to get their junior professionals involved in generating business, I see them experimenting with paying those juniors a percentage of what they generate.

What do you think about all this? Are sales commission systems good in a professional business context? If not, why are they  common?

Criteria for a good compensation system:

1. It encourages individual initiative
2. It encourages working for the good of the whole
3. It helps people improve, not just rewards them when they do
4. The decision process is seen as based on all the real facts (i.e. thorough)
5. Inputs to the process are received from multiple constituencies (group and project leaders, clients, subordinates, peers.)
6. The decision process is perceived as fair
7. The criteria for differential rewards are well understood at the beginning of the year
8. At the end of the process, people know why they got what they got
9. At the end of the process, people know what to do (and how to do it) next year to get higher rewards
10. It encourages people to work for the long-term, not just latest year
11. It provides an incentive (encourages people) to stay
12. It can reward a variety of contributions necessary for the health of the firm
13. There is an appropriate return to those who built the business
14. There's a chance, over time, to achieve the highest levels (i.e. no permanent second-class)
15. It does not lock-in high rewards for past contributions that are not sustained
16. The system discourages "cruising" (those on a high reward no longer being energetic)
17. Timing of rewards does not put firm's cash position at risk
18. The system does not allow or encourage "gaming" (such as hoarding credit)
19. Individual superstars can obtain a premium reward

Which of these items do you think are most critical? Least? What have I left out?

Here are some of their chapter headings and subheadings:

Getting to Know Your Protégé
            Spend time
Identify and communicate strengths and weaknesses
            Allow fears and emotions to be discussed
Expect Excellence
            Set high expectations and communicate clearly
            Model what you expect of others
            Demonstrate confidence
Affirm, Encourage and Support
            Show that you value them
            Instill confidence
            Kindly shed light on unrealistic expectations
Provide Sponsorship
             Discern their dream
            Help them with first steps
            Use your status to get them opportunities
            Get them to function on your behalf occasionally
Teach and Coach
            Clear Instruction on expectations, roles and functions
            Story-telling and metaphors
            Help people understand organizational politics
Offer Counsel in Difficult Times
            Provide insight, not necessarily answers
Listen, reflect feelings clarify alternatives
            Validate feelings
Protect When Necessary
            Recognize that protégé will occasionally suffer personal or political problems
            Use protection sparingly
Stimulate growth with Challenging assignments
Nurture Creativity
            Encourage innovative thought
            Safe haven to experiment
            Model innovation
Provide Correction – Even when painful
            Confront negative performance or behavior
            Help with ideas – don’t just criticize
Narrate Growth and development
            Discuss milestones openly
Self-Disclose when appropriate
Accept Increasing Friendship and Mutuality
Model work/Life Balance
Display Dependability

****

What’s your experience been with best practice in mentoring? Have you experienced organizations where it works well? What is the secret to effectiveness at this?

Lindsey acknowledges immediately that this is a tall order.

I don’t know if Lindsey’s opinion is (a) correct or (b) translates into the business world, but it’s an interesting hypothesis about the contrast between an “aggressive, competitive” style when dealing with the external world, and a “nurturing, collaborative” style that many (including me) would advocate inside the firm.

I have a suspicion that “switching” mindsets is difficult for many people, if not most of us. Those who are aggressive externally may have a bias towards creating internally competitive organizations, and those who tend toward the “nurturing, collaborative” style may fail to evoke the ambition and dynamism on the external marketplace needed for commercial success.

We could create a categorization scheme of four types (of people or organizations):

• Externally aggressive, internally nurturing and collaborative
• Externally aggressive, internally aggressive
• Externally nurturing and collaborative,  internally aggressive
• Externally nurturing and collaborative, internally nurturing

Which would you bet on to succeed? Which do you think is actually most common?

Here are some of the rules I would offer to help make them more productive.

1. Do not call meetings when some other form of information sharing is possible. 
2. Since most people can read ten times faster than a presenter can speak, send material ahead.
3. Meetings need to have concrete goals (a purpose for what must be accomplished), not just an agenda.
4. Select speciifc start and stop times and stick to them
5. Restrict attendance to only those who must be there
6. Appoint a reporter at the beginning of the meeting, charged with recording the discussion, writing it up, and circulating the meeting notes within 24 hours

***

Those are just some of the rules I would offer. what meeting rules would you propose?

Over the weekend, I heard from Adam Simon, Managing Director of Business Optimisation Services at PRG-Schultz Europe. He wrote:

Many thanks for your words of inspiration at last Friday's seminar.  Before going into business 25 years ago I spent some time as a Benedictine monk and have often tried to draw on that experience in my business life. 

As you were leaving, I asked if you had read the rule of St Benedict and you said no.  I think you will love parts of it, especially two chapters that I draw your attention to for a starter: Chapter 2 what type of man the Abbot should be.  I do not think that in all management writing, pace Drucker, Peters and all the gurus, there is a better description of what a good manager should be.  Chapter 28, Of Those Who Having Often Been Corrected Do Not Amend, which follows your principle that people have to be pulling in the same direction or leave. Whilst many of the specifics in the rule have no relevance, the spirit is totally modern with its understanding of human frailty and the difficulties of living with others.

Here is a link to a translation of the rule into English (slightly old fashioned language, better modern translations do exist but I could not find them on the web).

CHAPTER II

What Kind of Man the Abbot Ought to Be

The Abbot who is worthy to be over a monastery ought always to be mindful of what he is called, and make his works square with his name of

Superior

. For he is believed to hold the place of Christ in the monastery, when he is called by his name, according to the saying of the Apostle: "You have received the spirit of adoption of sons, whereby we cry Abba (Father)" (Rom 8:15). Therefore, the Abbot should never teach, prescribe, or command (which God forbid) anything contrary to the laws of the Lord; but his commands and teaching should be instilled like a leaven of divine justice into the minds of his disciples.

Let the Abbot always bear in mind that he must give an account in the dread judgment of God of both his own teaching and of the obedience of his disciples. And let the Abbot know that whatever lack of profit the master of the house shall find in the sheep, will be laid to the blame of the shepherd. On the other hand he will be blameless, if he gave all a shepherd's care to his restless and unruly flock, and took all pains to correct their corrupt manners; so that their shepherd, acquitted at the Lord's judgment seat, may say to the Lord with the Prophet: "I have not hid Thy justice within my heart. I have declared Thy truth and Thy salvation" (Ps 39[40]:11). "But they contemning have despised me" (Is 1:2; Ezek 20:27). Then at length eternal death will be the crushing doom of the rebellious sheep under his charge.

When, therefore, anyone taketh the name of Abbot he should govern his disciples by a twofold teaching; namely, he should show them all that is good and holy by his deeds more than by his words; explain the commandments of God to intelligent disciples by words, but show the divine precepts to the dull and simple by his works. And let him show by his actions, that whatever he teacheth his disciples as being contrary to the law of God must not be done, "lest perhaps when he hath preached to others, he himself should become a castaway" (1 Cor 9:27), and he himself committing sin, God one day say to him: "Why dost thou declare My justices, and take My covenant in thy mouth? But thou hast hated discipline, and hast cast My words behind thee" (Ps 49[50]:16-17). And: "Thou who sawest the mote in thy brother's eye, hast not seen the beam in thine own" (Mt 7:3).

Let him make no distinction of persons in the monastery. Let him not love one more than another, unless it be one whom he findeth more exemplary in good works and obedience. Let not a free-born be preferred to a freedman, unless there be some other reasonable cause. But if from a just reason the Abbot deemeth it proper to make such a distinction, he may do so in regard to the rank of anyone whomsoever; otherwise let everyone keep his own place; for whether bond or free, we are all one in Christ (cf Gal 3:28; Eph 6:8), and we all bear an equal burden of servitude under one Lord, "for there is no respect of persons with God" (Rom 2:11). We are distinguished with Him in this respect alone, if we are found to excel others in good works and in humility. Therefore, let him have equal charity for all, and impose a uniform discipline for all according to merit.

For in his teaching the Abbot should always observe that principle of the Apostle in which he saith: "Reprove, entreat, rebuke" (2 Tm 4:2), that is, mingling gentleness with severity, as the occasion may call for, let him show the severity of the master and the loving affection of a father. He must sternly rebuke the undisciplined and restless; but he must exhort the obedient, meek, and patient to advance in virtue. But we charge him to rebuke and punish the negligent and haughty. Let him not shut his eyes to the sins of evil-doers; but on their first appearance let him do his utmost to cut them out from the root at once, mindful of the fate of Heli, the priest of Silo (cf 1 Sam 2:11-4:18). The well-disposed and those of good understanding, let him correct at the first and second admonition only with words; but let him chastise the wicked and the hard of heart, and the proud and disobedient at the very first offense with stripes and other bodily punishments, knowing that it is written: "The fool is not corrected with words" (Prov 29:19). And again: "Strike thy son with the rod, and thou shalt deliver his soul from death" (Prov 23:14).

The Abbot ought always to remember what he is and what he is called, and to know that to whom much hath been entrusted, from him much will be required; and let him understand what a difficult and arduous task he assumeth in governing souls and accommodating himself to a variety of characters. Let him so adjust and adapt himself to everyone — to one gentleness of speech, to another by reproofs, and to still another by entreaties, to each one according to his bent and understanding — that he not only suffer no loss in his flock, but may rejoice in the increase of a worthy fold.

Above all things, that the Abbot may not neglect or undervalue the welfare of the souls entrusted to him, let him not have too great a concern about fleeting, earthly, perishable things; but let him always consider that he hath undertaken the government of souls, of which he must give an account. And that he may not perhaps complain of the want of earthly means, let him remember what is written: "Seek ye first the

kingdom

of

God

and His justice, and all these things shall be added unto you" (Mt 6:33). And again: "There is no want to them that fear Him" (Ps 33[34]:10). And let him know that he who undertaketh the government of souls must prepare himself to give an account for them; and whatever the number of brethren he hath under his charge, let him be sure that on judgment day he will, without doubt, have to give an account to the Lord for all these souls, in addition to that of his own. And thus, whilst he is in constant fear of the Shepherd's future examination about the sheep entrusted to him, and is watchful of his account for others, he is made solicitous also on his own account; and whilst by his admonitions he had administered correction to others, he is freed from his own failings.

CHAPTER XXVIII

Of Those Who Having Often Been Corrected Do Not Amend

If a brother hath often been corrected and hath even been excommunicated for a fault and doth not amend, let a more severe correction be applied to him, namely, proceed against him with corporal punishment.

But if even then he doth not reform, or puffed up with pride, should perhaps, which God forbid, even defend his actions, then let the Abbot act like a prudent physician. After he hath applied soothing lotions, ointments of admonitions, medicaments of the Holy Scriptures, and if, as a last resource, he hath employed the caustic of excommunication and the blows of the lash, and seeth that even then his pains are of no avail, let him apply for that brother also what is more potent than all these measures: his own prayer and that of the brethren, that the Lord who is all-powerful may work a cure in that brother.

But if he is not healed even in this way, then finally let the Abbot dismiss him from the community, as the Apostle saith: "Put away the evil one from among you" (1 Cor 5:13); and again: "If the faithless depart, let him depart" (1 Cor 7:15); lest one diseased sheep infect the whole flock.

One common element is the claim that senior people are evaluated on how well they develop their mentees. I wonder how real this is, and how much is just paying lip-service. I’m sure it’s on the list, but I don’t know how much weight is actually given to it. After all, senior people have lots of other things they are evaluated on.

Do any of you have experience being effectively mentored inside your firm? What were the key elements that made the mentoring program work well in your organization?

However, it's not a trivial issue to ask whether and how a firm goes about ensuring that its employees in fact meet high standards of technical expertise, especially in a world where companies tend to signal that revenue generation is a more pressing (if not more important) topic.

Who is best positioned in a professional organization to judge an employee's technical quality? I assume that it might be that person's supervisor, but there could be some built-in conflicts: what if the supervisor is under economic pressure to meet group goals and hence compromise (a little) degrees of technical excellence?

I'm curious about your experience as to how your firm or company goes about ensuring technical excellence. Is it some combination of:

1. Training
2. On-the-job supervision
3. Peer Review Processes at the Job Level
4. Annual Performance Appraisals
5. Reward schemes

Or something else?

As a consultant, it's easier initially to work with a true believer, but the implementation success may be higher if a skeptic is appointed.

Does anyone have experience with this? if you were a company manager, who would you appoint to lead the charge on new strategic change intiatives?

It’s a complex question. Let’s start below the level of the organization and ask whether the principles of managing professionals (not the organization, but the people) differs between for-profit and not for profit.

I suspect that while the principles are the same (manage people through the opportunity for meaningful, challenging work) the actual practices are very different. The monetary dimension in the for-profit sector is both a blessing and a curse.

The blessing is that the availability of money allows generous rewards to be used to attract, motivate and retain talent. The curse is that financial rewards come to be used exclusively as the means to attract, motivate and retain talent.

In the for-profit sector, managers can “get away” with being poor managers, using money to cover up the absence of hands-on managerial skill. In the not-for-profit sector, the need for people management skills is unavoidable.

That’s only one dimension of the not-for-profit difference, but before carrying on with my analysis, let me get yours.

What do the rest of you think? What has your experience been?

As always, I was making what I thought were obvious points - that the best means to get productivity and quality from those you manage is to help them find the meaning, the purpose, the excitement in what they have to do. 

The reactions were amazingly cynical. "Have you ever worked in a professional service firm?" asked one young man. 

A young woman asked, "But how do you motivate people to do the unexciting tasks that have to get done?" (I told her that she was unlikely to get much commitment, productivity and quality by dlegating with an air of "We all know this is boring, but someone's got to do it, so I chose you!")

Obviously, these young people had not (yet) been managed in a style that elicited their enthusiasms. Even though their firm (like all others) had grand statements about its commitment to developing its people, they had already learned (or so they thought) that the world did not really work that way.

I said that I hoped they would not just pass on to the next generation the poor way they had been managed, but I didn't leave the room with much hope.

Sad, sad, sad.

When the firm gets a contract to train managers of a company X, the firm assigns a trainer (who is, most commonly, an independent contractor) to the company.  If the company likes the results of the training, they would most likely invite the same training firm again and again, most commonly asking for the same trainer.  Over time, the relationship between the trainer and the client company flourishes to the degree that the company starts offering training assignments directly to the trainer, without even notifying the firm. 

How can the training company protect itself from such an unfortunate turn of events?  I realize that there are some "half-baked" solutions like, for instance, try not to send the same trainers to the same company, but there should be something else.

***

There are two dimensions along which this can be examined. There is a triangle formed by the individual consultant (or trainer), the client and the consulting (or training) firm. The question makes clear the strength of the link between the individual and the client. But what strengthens the link between (a) the client and the firm and (b) the individual and the firm?

In both cases, we are asking how the firm “adds value” above and beyond the talents of the individual service provider. Some possibilities:

1. On-going enhancement of the consulting / training product or service
2. Access for both the individual consultant and the client to proprietary tools owned by the firm
3. Access for both the individual consultant and the client to research conducted by the firm
4. Access for both the individual consultant and the client firm to regular “solons”, discussion groups, seminars and other learning opportunities, so that there is Value in belonging to the network.

Does anyone else have other ideas?

The National MBA Human Capital Case Competition will be held in Nashville, Tenn. on Oct. 19-20. The teams will be judged by a panel of industry executives, including leaders from General Electric and Deloitte, who are sponsoring the competition. The teams will have the chance to win more than $30,000 in cash prizes.

Strayer (a 2007 grad of the Owen school) said “Some of the biggest obstacles companies of any size will face have to do with their employees. It's imperative that business school students make employee-related issues as important as other avenues of business. That’s why Owen is taking the lead to elevate the study of human capital to be on the same level with marketing, finance and operations."

For more information on the National MBA Human Capital Case Competition, log onto www.humancapitalcasecompetition.com.

I’m sure other business schools will take issue with the assertion that Vanderbilt is “taking the lead” here. Any current or recent B-school grads have anything interesting to report about the extent to which the “study of human capital” (horrible phrase) is being integrated into the curriculum and treated “at the same level with marketing, finance and operations”?

His 15 chapter headings are:

1. Adopt a Serving Attitude
2. Teach
3. Provide Honest and Timely Feedback
4. Share Information
5. Listen
6. Treat People Like Human Beings
7. Set Goals, Plan and Execute
8. Learn
9. Do the Right Thing
10. Embrace the Uncomfortable
11. Clean Up Your Own House First
12. Persist
13. Do what You Say You’ll Do
14. Always Follow Up
15. Plan your Week

That’s a pretty good summary checklist for any manager!

Which of these would everyone say tends to be done best? Which are usually least well done?

Stated that way, it’s a pretty tough message, and I sometimes struggle to find a way to soften it while maintaining the point.

For example, in my seminars, it’s almost always the case that people ask how to make their practice groups more effective.

As a starting point, I feel it’s necessary to go through the (simple, familiar) points that (a) the key is the group manager’s time and skills and (b) that it is economic and effective to allow – even require - group leaders to take the time to manage the people in their groups, and not just expect them to carry a full personal “sell and deliver” load, and then manage their group on top of that.

Yes, I know these are old points, but that’s the message – “eat less, exercise more” is the answer to losing weight, and everything else is commentary.

But that frequently doesn’t satisfy my audiences and clients.

“But what do we do if our culture and systems don’t reward people for managing, and pays them on their personal production?”

OR “What do we do if none of our partners wants to take on the role of being a manager, each preferring to build his or her own book of business rather than taking the time to helping other people succeed?”

In essence, I say (with as supportive and comforting tone as I am capable of) “Well, if you don’t want to do what works, then just don’t expect to get the benefits. Your choice!”

Not surprisingly, people are often frustrated with this “tough love” answer. All of us want the “magic pill.”

So, here’s the challenge: What do you do if the problem posed by your client is presented with excessively binding constraints?

It is remarkably common to hear clients ask “We don’t want to change how we do things, that’s our culture, but tell us how we can get more of what we want!”

Can anyone shed some light on the best way to help when people pose things this way?

The very first case study zeroes in on a controversial management decision made by Procter & Gamble CEO A.G. Lafley, who skipped over 78 general managers with more seniority in making a key staff appointment without even consulting the rest of his management team. Lafley says “there was almost a revolt” over his decision. The case study includes an analysis by Noel Tichy, the leadership maven and University of Michigan professor.

It’s worth checking out!

The lessons weren't new: turnover costs a lot; people quit because they don't feel well treated by those immediately above them; people seek opportunities to learn and grow; you should analyze who's leaving and why.

The fact that this wisdom is not new doesn't detract from its truth, but it does bring us back to the challenge of why organizations don't act on it. If we know there's a shortage of talent, why haven't we changed as much as we know we should in adapting to that marketplace reality?

In my consulting work, this is a common topic. A few themes tend to emerge:

a)  It's still true that professional organizations are trying to attract, motivate and retain those they recruit through "add-on" programs like HR, flex-time, paying people more, etc. These are all good ideas, but none of them get to the core of actually improving how people are managed day to day by senior people.

b) Senior people feel they are still subject to the same measures and systems as before (ie a focus on revenues and client service) and good people management, in spite of what firms say to them, is still a weak thrid priority.

c) What is more, senior people continue to avoid and even resent the need to "manage" more. They weren't mentored, coached or supervised well on THEIR way up the ladder, and they haven't really internalized the need to treat the next generation differently.

d) There is a widespread misunderstanding that good management means being "soft." In fact, holding on to the best and the brightest is NOT about making the firm less demanding: it is about making sure that the organization provides fast-track learning opportunties and (as Ms. Hymowitz pointed out) opportunities for people to take on lots of extra responsibility early. That DOESN'T challenge the business model of the firm (as some senior people fear) but it DOES challenge the security of the senior people. It means they must be willing to delegate more, and keep moving on to new things themselves, so that they are not the bottleneck to achievement.

I find that discussing point (d) is difficult, but is the key to bringing about real changes of behavior in managing people.

As is normal, people come up to me at the breaks and say, "I believe this, and I'm willing to invest for the longer term, but it's my bosses who don't get this. The entire culture and environment is built on getting ever demanding short-term results!"

They then go on to ask two questions:

a) How can I convince my bosses to take the longer term view; and

b) How should I operate if I can't?

I'm not entirely happy with my current answer:

There's no way to change your boss except to deliver great results - preferably by managing superbly, thereby winning permission to keep doing it your way.

In a bad environment, you get two choices as a manager: pass on the pressures coming down upon you (thereby being a participant - no matter how unwilling - in sustaining a climate of "it's a;; about the short term") or, somehow, you try to protect your team from the pressures upon you. You pass some of it on, but not unfiltered.

The second choice involves managing with an air of "We've got to produce short-term results, but let's do it OUR way - with standards, mutual respect and mutual support. We can create our own culture for our own group, can't we?"

What do you think? Is there a better way to (realistically) avoid being a particpant in a short-term culture?

CAN you influence your boss(es) to change?

CAN you protect your team from the S*** coming down from on high?

Most insistent on the issue has been Tom Peters. he basically said "You can disagree with me on many issues but not this one: I'm right and you're wrong." (To see Tom's arguments, go to his website www.tompeters.com and download his slides. He's very generous in making them freely available.)

Over dinner, I heard practicing businesspeople (and those in local governement) increasingly willing to comment on the ability and desirability of hiring females as opposed to males.  According to what I was told, young males are less loyal and committed, harder to handle and are more demanding as employees.

Is it me, or are people increasingly willing to make generalizations about male / female differences? Isn't this dangerous territory? Or is it just reflecting statistical realities? Do you feel comfortable listening to (or participating in) discussions about why women are better/ different than men?

I don't. I'll listen and try to learn, but it feels like the opportunties for bias and gross exaggeration are boundless.

Among the interesting things he had to say was a description of how Westpac enforces its values. For each person, from the CEO on down to the lowest front-line person, each individual is evaluated according to two dimensions - what they accomplished (their outcomes) and HOW they accomplished them (their behaviors.) The behaviors evaluated include "doing the right thing", integrity, apolitical behavior, thinking of the best interests of the bank rather than just the individual's own operating unit, etc. According to David Morgan, the system which feeds directly into a person's remuneration, is a key mechanism for ensuring that the values are lived.

I've heard that GE also has a similar system.

Has anyone out there experienced such sytems (ie lived within an organization which uses this approach)? How effective is it in ensuring compliance wit organizational values?

 *** 

I work for a firm of about 20 people (15 consultants.) We all work independently, the consultants rarely meeting up - if we do, it's for training sake.  We are sole practitioners at the client site, coaching and leading client teams.  Our projects get little or no oversight, as long as the client is happy and we are getting results. We do have "standard methodology", a standard project roadmap, some standard analysis tools, and some standard training presentations and exercises that we use, or at least they are available to us.

Compliance to the standard methodology is low.  The tools are typically used, but there is huge variation in the exact project sequencing/schedule and the training presentations.  Many of us in the group were hired in from different companies and we have different backgrounds and we all bring something different to the table. 

Most of us personalize and adapt the training material based on what and how we like to teach.  I think some of the training material is either incomplete, inappropriate, or unprofessional.  So, I spend time customizing the slides, sharing some of them with co-workers in an informal way, but, again, nobody is really watching to see HOW I do my consulting work, just to see if I'm delivering results (which I do).

Recently, we had a very frustrating week-long offsite meeting as a team.  There was a lot of contention and confusion about this idea of standard methodology, namely who defines it? How much standardization is enough?

A team of four people volunteered to look at the issue of standard methodology — but those of us who didn't volunteer (or weren't chosen) didn't realize how much power this group would have.  Instead of looking at ALL of the variation and the ways some basic training presentations were crafted and delivered, they picked one version and made edits to it, basically ignoring the input that the rest of us would have given. 

In our consulting, we preach that standardized work can't be dictated to people — yet, we're doing the same thing within our group.  Can we ever get 15 diverse people to perfectly 100% agree on what material should be presented and in what order?  There are too many diverging opinions (and too much history of not being perfectly standardized) for us to all just suddenly get on board.

We're getting very inconsistent and schizophrenic "direction" from our leadership.  On the one hand, they'll say "the standard is the bare minimum of content, you can add to it" and then later saying "you must all do the work exactly the same way."  Is it enough to have a standard framework that we can all customize to our personal tastes and client needs?  Or, do we have to be "consultant-bots" who follow a perfectly scripted program, for the sake of consistency?

I fully believe "nobody likes to be told what to do" and that it applies equally well to assembly workers, nurses, and consultants.  If I am told to perfectly standardize on what I consider to be sub-par material, I'll most likely look for a new firm (or start my own).  I understand the need to deliver a consistent experience to our clients, but how standard is standard enough from their standpoint?  I can handle standardizing to the level of "here's what you must accomplish in a 16-week project and here's what you should be doing each week, if all goes well."  But dictating every single slide seems like overkill, like standardization for the sake of standardization.  If we're all getting good results with slightly different methods, isn't that ok?

What are your thoughts?  Is this a common problem in a consulting firm?

 *** 

My first instinct is to share the view that no-one like to be dictated to on HOW to do things. In general, as you suggest, the key is to have very solid accountabiity for outcome effectiveness, and then let people do it their own way "on the day."

But let's think about this. Under what circumstances might you argue the opposite? If you're not involved and can look at it in a detached way, then you could observe that standardizing the process is exactly what businesses have done for centuries to capture efficiency and get things done with lower cost workers. Does MacDonalds let each outlet decide how to do things? Should they? What about a steel mill?

Now, I'm not arguing that fits your situation.  I merely observe that I know consulting operations whose entire business model is built around getting lower paid people to deliver very effective standard methodologies. You and I might not want to work there, but it's not inherently a dumb idea.

The source of all these reflections is an email I just received from a young professional describing how his firm operates. My question is: why hasn’t this egregiously bad management been driven out competitively? How do firms like this stay in business?

Here’s the story as it was relayed to me in my correspondent’s email:

***

Over the last few weeks situations at my workplace have sent me down and interesting journey of thought. Specifically, I have noticed how distorted our perception can be in the accounting industry.

There was a particular engagement in my sector which was new to us this year. We had one staff member with less than a year experience, one supervisor who has been at our firm for less than 6 months, and a principal who has been with our firm for 3 years but has extensive public accounting and private industry experience. As the engagement went on it became very clear that work was not progressing at a satisfactory rate but nothing was adjusted to compensate for it.

Finally, last week, the young staff member stressed once again that he did not believe they would be able to finish the work on time. At this point the sugar hit the fan! The principal came down very hard on the staff and supervisor and stated she was "disappointed" in their inability to get the job done. For the rest of the week, the principal and another manager from our department stepped in and worked close to 20 hour days to complete the project. I should also mention that both the staff and supervisor had put in 60 hour weeks over the last 2 months attempting to meet the deadline.

I first became upset when the principal threw the staff member under the bus and failed to take any responsibility for the engagement herself. But what bothers me even more is that from the outside, the principal (and the additional manager who stepped in to help out) looks like she saved the day when in reality the engagement "failed" due to poor management throughout. Part of me realizes that my youth may cause me to overlook many aspects of the situation but I also know that this has solidified in my mind the up-hill battle that many individuals in my generation will have in public accounting.

Unfortunately, this industry will continue to reward those who sacrifice their time, their family and their lives over those who find ways to manage effectively, and become more efficient. The end result is that current senior management will label my generation as lazy and arrogant (both are partially true). If you tell me that I can achieve success, as my superiors have, by working 3,000 hours a year I would see it as a failure. If I have to work as much as someone else did 20 years ago to accomplish the same results have we really progressed at all?  

I always thought that a fun experiment would be to tell someone that they only had 45 hours this week to accomplish their work. I bet we would all be surprised by the efficiencies and innovation that would come out of it. The fact that this profession will permit, and even worse, reward those who work such ridiculous hours exposes a fundamental flaw in the collective thinking of the industry. After all, we are not teaching our young staff to find better, more effective ways to do anything. But rather, we are simply showing them how to put their career before their family and personal life. We do not encourage that people take risks, try something new, or go out on a limb. We take the easy, safe route...we just work more. In the process we are rewarding many who are poor managers, poor developers and are stagnant in their own development.  

Thank you for your time, I look forward to hearing your thoughts.

***

I’d like to hear everyone else’s thoughts: How do firms that manage this way survive? Is it simple that EVERYONE is equally bad, so there’s no penalty?

Yesterday, Joseph Dunphy reacted by saying: “On behalf of many, I suspect, I'd just like to say WHAT? Did I really just read that? Unbelievable. That's just terrible.”

I understand Joseph’s initial reaction, but I don’t think Penelope was advocating anything – she was just sharing her real-world experience that appearance matters a great deal more than we like to admit openly.

For example, last week I was conducting a workshop for a global corporation that had concentrated a number of its in-house services into one “shared services” unit. One service line in particular received much higher client satisfaction ratings than the others. We discussed why, and focused on the traditional client service topics.

During one of the coffee breaks, one of the participants came up to me and said, “The real reason that unit does so well is that it explicitly sets out to hire attractive young women. No-one likes to admit it, but that makes a huge difference.” (The unit was in a South American country, if that makes a difference to your reaction to the story.)

Of course it does. I know of more than one top-flight professional firm that takes appearance into account in its hiring of both males and females and gives its young people lessons in how to dress well and how to behave with sophistication.  

Should appearance, youth and manners matter? Maybe not, but they do – a lot. To pretend they do not is just unrealistic.

Yet in many countries this is called discrimination and is legally barred.

All of this raises some interesting questions:

Should more firms continue to include physical appearnace in their hiring, even to the point of preferring some ages and genders?

Are we naive to believe they are not already doing that?

Are discrimination laws fighting a losing battle against human nature?

Should I get back on the treadmill and worry more about my clothing in order to enhance my career prospects?

For you lawyers out there (and those who consult to them) there is a new resource released today: BlawgWorld 2007—a collection of 77 thought-provoking essays from 77 of the most influential law-related blogs ("blawgs").

Handpicked by each respective blogger (including yours truly), these essays provide a window into their blawgs, making it easy to figure out which ones merit your ongoing attention. 

You can download the 300 page document here.

You can quickly find essays of interest in BlawgWorld 2007 by using an interactive table of contents. From any page, click on the Blawgs navigation tab. From there, two more clicks will take you to any essay.

I work for a government department that has just re-organised into 30 unwieldy 30 directorates (on the recommendation of a famous consulting firm.)

I have been asked to develop an operating model that might help senior management plan for the deployment of the professional human resource at their disposal.

Our working assumption is that we have something to learn from the PSF model (as set out broadly in your book “Managing the Professional Service Firm”) but our project is veering towards a model based on time recording (a sort of “billable time” analogue) relating individuals’ efforts to one or other of the broad strategic objectives that our management board has designated as a priority.

I’d be interested to know whether you believe the material in your book is, in principle, adaptable for a government department where the drivers are in many ways very different. Actual profitability is not one, for example, but cost effectiveness and customer experience certainly are.

Other differences are that we have a much more static career structure where promotion and performance pay are often less important than pride, respect and “public service” as individual motivators.

Nor do we really have the types of leaders that seem to be the prerequisite for the working of your model. By and large they are not inspirational or dynamic strategic leaders, but are, more often than not, managers because they happen to have been in the department a while or have reached a certain level of seniority.

Hence, I’m sceptical about the notion that we can solve our problem of improving our effectiveness by developing another administrative layer of resource management. (I’ve tried unsuccessfully quoting chunks to them of your chapter on how managers really add value.)

****

David replies: I have always had difficulty with the notion that there is such a thing as one unique “PSF model,” if that is taken to mean one clear set of policies, practices, processes, structures and attitudes.

Yes, I did try to offer some generalizations and insights that I hoped (and have proven to be) broadly applicable, but there is no one recipe that fits all situations.

I think the closest parallel I’ve seen to the government situation is the running of in-house service departments inside large for-profit corporations. They face similar issues that there is a more limited career path, they are often not profit-driven, and their mission is often less clear. If I were you, looking for comparable situations, I’d look at companies that have in-house legal departments, real estate or property departments, shared-service accounting departments, etc.

Using the for-profit model will, I think, be completely misleading. Even in the for-profit sector, some of the underlying assumptions that the traditional model was built on (and are described in my book) are proving to be untrue in the modern world.

Take, for example, a topic of promotion opportunities. In the traditional model I described, it was assumed that the vast majority of people hired at junior levels would want to become “partners”, and would be willing to work very hard toward that as a primary goal.  As a counterpart, it was assumed that the organization wanted a high percentage to become partners, because what the organization provided to its market was the fully rounded, fully developed professional.

You point out that this is not necessarily the case in government: not everyone has the dynamism to want to move up, and top management doesn’t necessarily want them to.

Here’s my point: that’s actually the direction that many private practice firms are going in: Firms are promoting a smaller and smaller percentage of people to partners, because they can show more “profits per partner” by keeping partner numbers small. For these and many other cultural reasons, fewer and fewer younger people feel that it is worthwhile or sensible to compete in the “tournament” to become partner.

I would agree with two other points you make. The solution is absolutely not about structures (reorganizing) or systems (time-keeping.) You get better efficiency, quality, morale and everything else by having managers in place who now how to manage. Without them, the rest is truly irrelevant.  

Here’s Menkes’ key findings (or assertions, according to taste):

Managerial work can be broken down into three subjects: accomplishing tasks, working with other people, and self-evaluation. Within each of these categories there are identifiable cognitive skills that determine how well an executive performs, such as:

• TASKS — the abilities to properly define a problem, identify the highest-priority issues, and assess both what is known and what needs to be known in order to render a sound decision.
• OTHERS — the abilities to recognize underlying agendas, understand multiple perspectives, and anticipate likely emotional reactions.
• SELF — the abilities to identify one's own mistakes, encourage and seek out constructive criticism, and adjust one's own behavior.

Though these cognitive skills play a profound role in determining a manager's success, they are not what most employers focus on when recruiting or promoting executives. Instead, nearly everyone fixates on personality type, style, or other irrelevant characteristics.

The book is filled with quotes from famous, successful people, and is not shy about stating firm conclusions. For example: “Not one study has shown emotional intelligence to be a meaningful predictor of job performance beyond what has long been explained by other measures.”

Menkes and his other consulting firm (MenkesStark) claim to have a proprietary approach to measuring what they call Executive Intelligence. I don't buy everything he has to say, but it's probably worth your $14.95 and the plane-ride time it will take to examine it. 

"I work for a consulting company (50 people) and have been in the business 10 years. Recently our partners rolled out a list of "guiding principles" for the company. You talk a lot about setting minimum standards of behavior and strict adherence to group values. So I tried to create a way whereby we could measure if we were living by these principles.

I suggested to the partners that we create a checklist whereby the employees can rate the partners on how well we think they are living up to the standards. This received a lukewarm response - "We’ll think about it".

For reference, here are our "guiding principles" (by the way, it seems almost impossible for any one human to meet them all):

Trust

We believe that trust is fundamental to success in our business, which means we must be transparent, reliable, accepting and congruent. We must do what we’ve said we’ll do, we must be clear in our expectations and opinions, be accepting of mistakes and limitations of others, and “walk our talk”. We must also be sincere, hear and acknowledge others, be candid and straight, and demonstrate integrity and clarity with boundaries.

Accountability

We believe that individuals are the source of who they are, how they feel, behave and perform. We can choose to be a player and not  a victim, and can lead with head and heart. We recognize that we can choose to be inspiring, self-motivated and determined. We take on accountabilities out of creative cause, not for praise or credit, or out of burden, blame or guilt.

Perspective

We seek out perspective because we don’t believe in “right” answers, just better interventions. This requires us to be thoughtful, self aware, humble and low ego. But we are not afraid to have a point of view on what we believe can work better.

Performance

We judge performance by what is achieved, but in the meantime we assume positive intent. We believe in courage and energy, look for the positive and are future focused. We recognise that performance is situational and some achievements need to be judged over longer time periods.  We set high standards, welcome challenge and are honest and transparent about our own performance.

Learning

We are aware of our interactions with the world and the opportunity to learn from our successes and failures. We are comfortable with ambiguity and use an enabling leadership style that allows people to experiment and learn. We don’t take ourselves too seriously. We believe upsets are setups for learning.

Externally Open

We are externally curious and understand the value of seeing and acting beyond ourselves.  We value the thoughts and suggestions of others and invite them into all our conversations. We actively encourage collaboration and interdependency.

Human

We believe in people. We are supportive, and show empathy and compassion to see the potential in everyone.  We understand the importance of meaning at a personal level, and how active appreciation can counteract fear. We believe we engage with the whole of a person, not just their work persona and are sensitive to cultural diversity. We encourage health and life balance.  We believe businesses should do good when they’re doing great.

David, what do you think about such things? If we create these great aspirations but don't hold people accountable what good are they? (Ironically, you’ll note that one of the guiding principles is "accountability.")

***

The questioner has answered his or her own questions, right? If it’s humanly impossible to live up to the standards, what do the partners mean to convey when they pronounce them? What is achieved by stating your commitments to the unachievable? And if you’re not willing to be evaluated on what you say you stand for, what do people think you mean?

Note that I don’t think it “immoral” to enunciate principles you’re not prepared to be accountable for – I just think you’re fooling yourself as to the beneficial impact of preaching them. My experience says it’s even worse than neutral: you train people to see that you cannot be depended upon to act according to what you advocate, and they end up either trusting you less or just ignoring what you preach.

****

What do the rest of you think? Does all this mean that firms shouldn’t even try to enunciate their principles? Should they survey everyone each year and publish the results? Internally? Externally? How many firms – good or bad, successful or unsuccessful, actually do that?

As someone who has tried to get my own business books noticed, I feel sympathetic. So, I’ll try to let my readers know what’s crossing my desk.  I won’t always be timely: sometimes it takes a while for reading a book to rise to the top of my to-do pile.

One that I was recently sent is how: Why HOW we do anything means everything in business (and in Life) by Dov Seidman

It’s already doing well (Number 389 among all books on Amazon.)

It’s got some great stories, but like many modern readers, I want to get straight to the punch-line. Seidman helps with this by providing end-of-chapter tabular or graphical summaries, enabling you to skip through the book and get it’s main messages.

One table I liked was this:

 
The Problem With Rules (As opposed to Values or Principles)

1. Rules are External: made by others
2. We are Ambivalent About  Rules (we like breaking them)
3. Rules are reactive to Past events
4. Rules are both over- and underinclusive (they are proxies, not precise)
5. Proliferation of rules is a tax on the system
6. Rules are typically prohibitions
7. Rules require enforcement
8. Rules speak to boundaries and floors, but create ceilings
9. The only way to honor rules is to obey them exactly
10. Too many rules breeds overreliance

As the subtitle suggests, it’s about why people decisions matter so much, why they are so hard and how you can master them.  I’m not sure one book alone will make any of us more skilled at people decisions, but this one is a good introduction to and summary of some of the latest research in the area, as well as the author’s own extensive experience. It will make you think, and you'll enjoy the personal stories. Araoz comments:  

“Nothing is more important for your career success than making great people decisions. Just think about it: once you become a manager, everything you do will depend on the people you’ve chosen: your results, your performance, your chances of being promoted, your risks…In short, your career success.”

“However, we rarely get any type of effective education for these crucial skills! Making great people decisions is a craft, and a discipline. It can be learned, and it should be learned.”

What have YOU learned about the craft, skill and discipline of making better people decisions. How did you learn it?  

In this video clip, we're going to explore another example of how you go about investing in a relationship in order to get involved in more of the transactions in business that your client has, otherwise known as cross-selling or expanding a relationship. We will explore the tactics that work with a particular emphasizes on how you invest in the relationship.

"We run a small-ish (just under 30 employees) but rapidly growing high-end engineering/manufacturing. company. In truth, we're more a service firm than a manufacturer per se, in that we provide an enormous amount of guidance/advice and consulting services to our clients, in addition to the systems and other hardware that we produce and sell. We enjoy an excellent, almost cult-like reputation in the global marketplace for our products and depth of knowledge in this area.

"We're doing our utmost to build a world class company, much along the lines of Jim Collins' "Good to Great" and with key precepts from your work as well. We've read your exceptional book, "Managing the Professional Services Firm", have internalized many of the insights and ideas in it, and have found it enormously helpful vis-a-vis our perspectives on running & growing the business. Truly a tour de force!

"The crux of this message is to ask for your recommendations, if any, in regard to an intelligent commission or bonus arrangement that we can implement for our sales/advisory staff. We currently have our 3 main sales guys on salary as we've wanted to compensate them as generously as we can but don't want them feeling like they have to either punch a clock or as though their income is going to rise or fall on a given transaction.

"Essentially we want them to work with our customers and each other in a fashion that engenders a healthy cooperative environment in the sales office and rewards them both individually and as a group for attaining departmental goals. Each one holds his own admirably on all levels, and as the company grows we want their income to grow commensurately with sales revenues. 

"They also do a pretty fantastic job in general within our office operations and so our objective is to structure an arrangement that provides meaningful incentives to them as individuals and as a group without fostering an overly competitive tone. Also oftentimes in this business it takes a collective effort on the part of all of them to thoroughly assess a prospective client's needs, and performance objectives, and then to define the optimal means for achieving those objectives. What we do definitely requires a team of passionate and dedicated individuals.

"I have seen instances within other companies where management's idea of a commission set-up ended up pitting the members of the sales team against one another, sometimes with pretty disastrous results. And customers could immediately sense the overly aggressive and protective attitudes on the part of the sales people (as in "hey, he's MY customer! And that should have been MY sale!!!) We don't want anything to divide our team, we only want to implement a program that will reward them for working with one another and enable them to succeed together. We also want to keep things pretty simple and straightforward for everyone, management included!

***

Thanks for the kind words. I think you can guess my main response, which is that while, like the questioner, I believe in (generous) rewards, it is my experience that any explicit commission system which builds in incentives for particular things will lead people to ignore anything which is NOT included in the system. So, especially since you are of a small scale, I'd keep it personal and human and judgmental (non-formulaic) as long as possible.

That means, working with each person regularly to discuss objectives, challenges, and needs, and also holding regular team sales meetings to solve common problems and learn from each other. The only incentive your people should need is the absolute confidence that you’ll play straight with them and be fair – if they truly contribute in ways that produce results, you’ll reward them.

And here’s the key, obvious point: if they don’t trust you to treat them fairly, no incentive scheme is going to work. So, keep doing what you’re doing.

(I did a podcast about this, called “You Cannot Manage Through Pay Schemes.”)

*****

Does anybody else out there have a different point of view? For example, if this logic is correct, why do we see so many sales commission schemes out there? Are there good ones to consider?

If you have passion, an understanding of how people work but no fixed principles, then I think you are dangerous. You’ll seduce a lot of people to your side, but you’ll end up fooling them or betraying them. You’ll be an exploiter.

If you have passion and principles, but no understanding of how people work, you’ll also draw a lot of people to your side, but it will all come to naught. Without an understanding of people, you’ll never build an organization nor get clients and customers to trust you. You’ll be a firebrand.

 
If you have principles and an understanding of people, but no passion, you’ll be righteous but ineffective.

Life, careers and business require all three.

****

Discuss, with reasons. Do not write on both sides of the paper at once (grin.)

In the following video we will make the case that, if the employees of an organization are to raise their performance, then logically what is required is that the managers must first be better at performing their role and that, in order to make this happen, the managers must be prepared to be accountable for their performance. In the video, you'll see one idea put forward about how managerial accountability for performing the managerial role could be installed inside an organization.

1. Pursuing Purpose with Passion

2. Practicing Solid Values

3. Leading with the Heart

4. Establishing Connected Relationships

5. Demonstrating Self-Discipline

George is the former CEO of Medtronic and is now a professor at the Harvard Business School, as well as a board memeber of such firms as Goldman Sachs, Target and Novartis.

The TRUE NORTH book contains the stories of 125 prominent individuals judged by George to be authentic leaders. It makes for fascinating and inspirational reading.

George obviously intends us to believe that we can learn from these stories, but I walked away believing that, even though there were commonalities among the people profiled, each achieved what s/he did because of who they WERE. As Gorge stresses, these people were formed and forged through their early life experiences.

Which makes me worry and wonder? Can we ordinary folk really learn from these examples? Can the dimensions isted above (which are really personaliity characteristics and deeply-formed attitudes) really be affected by books, speeches, training programs, consultants?

Is leadership development an oxymoron?

It was written by Peter Friedes, the former CEO of Hewitt Associates, the HR consulting firm.

Pete’s basic insight is that, to be effective in managing others, we must know both how to be “requiring” of people (that’s the first R) – make sure that they deliver on and live up to the tasks they take on. A manager must also, however, do this in a way that “Relates” (the second R) to each individual.

These two dimensions can define nine kinds of managers:

The first four are the extremes:

The Abdicator: low requiring, low relating

The Demander: high requiring, low relating

The Pleaser: low requiring, high relating

The Overwhelmer: high requiring, high relating

Then there are four which are less problematical, but still less than perfect:

The Supervisor: About right requiring, but low relating

The Friend: About right relating, but low requiring

The Encroacher: About right requiring, but high relating

The Energizer: About right relating, but high requiring

The best, in Pete’s view, is someone who is about right in both requiring and relating: The 2R Manager.

Which are you? Which is your boss?

In this clip we dig into the parallels between being an effective manager in the workplace and being an effective change agent within your family. How do you learn how to deal with different family members and bring about harmony and joint action in a family situation? And where does that match what you have to do at work?

In business, performance appraisal or even out and out criticism supplants skillful use of language and careful presentation of issues and solutions. We will examine a story of exemplary language skills and note the various applications in business life.

In this video, we’re going to explore the proposition that helping another human being to improve, to fulfill their potential is, in fact, a general process with general lessons which we can draw upon both from within business life and from our experience outside being either a sports coach or helping out children grow. Somewhat humorously, I call the description; how do you train a pigeon?

A crucial difference in our style in dealing with the world is whether we deal with other people as "us," part of the same relationship. Or whether or not we're always thinking of them as "them," people who are on the other side, people from whom we want things. They are adversaries. The following clip tries to illustrate that distinction.

(Sometimes the question is posed as how leadership of professionals differs from leadership in general.)

As time goes by, I’m increasingly coming to the belief that the differences are minor, if they exist at all. This is mostly because it’s a good idea to treat EVERYBODY as a professional.

This doesn’t always go over well. I was being considered to do some educational sessions for managers in a (super-successful) investment bank and was asked how what I would present would reflect the special nature of their people – highly intelligent, already successful, already energetic and motivated, etc.

I really stuck my foot in my mouth when I said that the key to managing ANYONE, even a secretary, was to treat them with respect, deal with them as individuals, assume that (until proven otherwise) they were intelligent and interested in excitedly pursuing a cause or vision of excellence that they could believe in, help them find the individual, personal challenge that would match their interests and passions, etc., etc.,

Apparently, I gave great offense, because the individual I was talking to replied: “What do you mean, it’s not different from managing a secretary? Our people are SPECIAL!!”

Now, I’m not so naïve as to realize that I could have phrased it better. (I often get into trouble for being blunt and refusing to play into people’s underlying assumptions. I’m a less diplomatic trusted advisor than I’d like to be.)

However, if you ignore my language skills and get to the underlying issue, there’s an important debate there. Just because someone’s a “professional” does that mean that they need to be managed in different ways, with different skills?

I’m not asking the moral question here, but the pragmatic, practical one. If you were put in charge of managing a group of “partners” (i.e. senior VPs, shareholders) would your approach to managing be different than it would be if you were in charge of a group of admin staff?

Phrase it another way:  If you were going to put on a course on how to be a good manager, would you cover different material if you were training managers of senior professionals or managers of admin staff?

Everyone agrees that professional groups need to be led by a player coach or a producer manager. But the balance between those roles is not always agreed even with in firms or within the group themselves. In most firms the emphasis is on the player or the producer role meaning that the main job that's taken seriously is to serve the clients and get out and get revenues. The coaching or the managing is very often neglected. I think this is a very bad economic choice for most firms, as you will see in the following discussion.

If you have more than those you compare yourself to, then you will be a happy person. If you have less, you will be unhappy.

This matches what I tend to see. CEOs with obscene paypackets are unhappy until they have matched what is considered "normal" among other CEOs. Lawyers from modest beginnings, making more than a million dollars a year or more, can get depressed and resentful because they are not earning what investment bankers earn.

The issue is not just about money, but many forms of the world's rewards and recognitions. Academics and other authors can be (and are) jealous the (non-monetary) respect and recognition that is accorded to their (perceived) competitors' work. Socially, in their personal lives, people are always playing the game of "keeping up with the Jones':" being content with what they've got, until their neighbor has more.

All of this points out something rather interesting for managing oneself and others. If happiness comes from "how well you are doing compared to others," then it matters a lot WHICH others you compare yourself to. And that can be very arbitrary.

On any given day, we can be amazed at the good fortune we have been showered with, compared to specific others who, perhaps, did not have our advantages. There will usually be solid reasons to celebrate our relative successes, triumphs, accomplishments, recognition.

On the other hand, for most people and most companies, there will ALWAYS be someone who, in some way, has done "better," deservedly or undeservedly, and the focus can become a dispirited one of regret and disappointment , that we are not doing as well as THEM. 

Sometimes, you don't care what others have got. Or to be more precise, certain people just aren't your reference group: you don't compare yourself to them. Others you care about a lot.

The questions that all this raises in my mind are these:

(a) How are the reference groups you compare yourself with determined?

(b) As individuals (self-management) or as companies (managing others) can we learn to control or manage who we choose as our reference group?

(c) How do you keep comparisons to a reference group "healthy" and avoid obsessive, unproductive comparisons?

In this video we are going to dig deep into the issue of excitement. Of how you ensure that in fact people bring to their work passion and excitement and enthusiasm. And the question is going to be not only about yourself but also the people around you.

In the following video clip, I try to make the case that being an effective manager is not about knowledge, and is not even about skills, but that the crucial element in becoming an effective manager is entering into the role with the right set of attitudes. I also try to make the case that not all of us, in fact, can qualify on those attitudes.

Audio Timeline
00:39 – Introduction
01:04 – Management: A passion for other people’s success
02:30 – It’s not about being “right”, it’s about people
05:32 - Conclusion

You can download Not Qualified to Manage or sign up to receive new Maister Moments videos automatically with iTunes or other video players. (Click here for step-by-step instructions on how to subscribe.) My seminars are always available for download at no cost.

(Actually, he co-hosts other blogs as well, but let’s not go there because I’m intimidated enough already!)

On the HBS site, he announces that “The War For Talent Is Back” (did it go away?) and offers five lessons for discussion:

1. Superstars are overrated.
2. Great systems are more important than great people.
3. Create smaller rather than larger pay differences between “star” employees and everyone else.
4. The law of crappy people (great people will hire other great people, but mediocre people will hire even worse people because they are threatened by competent people) is probably a myth.
5. The no asshole rule helps.

Here are some of my lessons / propositions for winning the war for talent:

1. In hiring, never let the pursuit of volume get in the way of maintaining the highest possible standards.
2. People want the opportunity to learn and grow: you must actively work to provide a variety of stretching, challenging experiences.
3. Standards of people supervision and management are as important as standards of product or service quality: they should be monitored and enforced in the same way.
4. Firms that try to win by hiring pre-existing, already-formed talent will never do as well as firms that are skilled in building talented people.
5. Talent is over-rated: character and energy count for more.

***

What are some of your lessons for winning the war for talent?

In this video we're going to explore how management, in a society of professionals, can really be made to work. The clip opens with an example of fabulous management, fabulous coaching, that was done to me early in my career, and contrasts with the sorts of management that we often see, inside professional firms.

But here's an interesting question: what about people and firms that, quite consciously, make a choice that they don't want to pursue "Olympic Gold." They want to do good work, serve their clients well, while making a decent living.

Do business authors and consultants have anything to offer such people? Is there business advice out there for those without profit-maximizing, glory-seeking objectives?

If not, is most business literature profoundly misleading, because it assumes objectives that many real people do not have?

Many individuals and firms attempt this, attempting to get the benefits of access to professionals in other locations (cities or countries) or in disciplines other than their own.

These networks exist in many professions, mostly to refer business to each other (or at least that’s where I see them working best.) Occasionally, members of the network try to join up to pitch for business jointly, thereby (if they are successful) winning work they would not have qualified to bid for alone. This does happen, but much less often.

In some case, the benefit is not in revenue increases, but comes from belonging to a group that shares best practices. This can be the biggest benefit if you have mechanisms to facilitate the sharing.

My observation is that it’s very hard to make these networks work very well. The are not disasters, and if the memebership fees are low enough, they can be “clubs” worth joining, but the potential is often unrealized.

Does anyone have views on the best ways to ensure that these networks really do benefit their members? If you are a member, what’s the best way to take advantage of any network you belong to?

This problem comes up again and again. In last week’s blogpost about How Not to Manage People, Mark D. observed: “My experience tells me that all things being equal most people want to or are at least willing to embrace your teachings but all things are not equal.  As soon as your teachings conflict with short term financial gain, people begin to throw out the teachings which they view as costing them money.  I know I am skeptical and somewhat jaded but there is no stomach for anything that risks immediate profits.”

As I tried to point out, this is not about just MY teachings, but is a much broader point. As I argued in Strategy and the Fat Smoker, it is part of the human condition that we can know what to do, why we should do it, and even how to do things for which we fervently desire the benefits. None of that actually predicts that we actually are going to do what we absolutely know is good for us.

Note that it’s not about a lack of incentives: live longer is a pretty good incentive!

I continue to be professionally frustrated by all of this. If we can’t help people start doing what even they say would be best for them, how can we be really helpful?

So here’s my question: how DO you help people actually get on the program for what is their best interests? The question is relevant if you are a manager trying to coach your subordinates, or if you a consultant or other trusted advisor trying to get a client on the path that is best for him or her.

So what actually works to get people to take the long-term view with their work, their business and their lives?

Rational discourse (logic) doesn’t seem to work consistently well, and providing statistically reliable data doesn’t seem to be persuasive (so much for the Surgeon General’s reports!)

In descending order of effectiveness, here’s my experience in what gets someone (us as well – don’t make this all about THEM) to change from acting in a short-term way to doing what they (already) know is best for them in the long-term:   

• Talk up or create the “glamour” of the future state (“Think of how fabulous it’s going to be when you’re there!)
• Make it a moral principal (Isn’t it consistent with our/your values to act this way?)
• Get us/them to commit themselves to more public disclosure on actions, to keep them/us on track (embarrassment rather than guilt.)

What experiences do the rest of you have? Have you helped a short-term actor become a long-term actor? What REALLY helped / worked to bring about this transition? What gets people on "the diet?"

The whitepaper is based on the findings of a survey of CPAs with four to seven years of experience, asking them what they wanted most and asked them to rate how well their firms were meeting these needs.

The results are the same old sad story. Fewer than one-half of firms received a very good rating on their ability to deliver on the attributes most important to up-and-coming professionals.

Amazingly, only 39% of the respondenst rated their firms as very good in providing "comprehensive resources to get the job done."

How about that for convincing your staff about your commitmtent to quality and giving them a good work experience!!

Interestingly, the three most important atrributes of firm culture in the eyes of the respondents were:

Ethical leadership in the firm (only 55% of firms were rated very good!)

Work / Life Balance – Family friendly Policies (38% of firms rated very good)

High quality feedback, supervision and performance management (13% of firms rated very good!)

What ARE these firms thinking of? What IS going on out there?

I'm close to giving up in disgust. why bother writing and taling about sensible management if these results reflect the real world?

The article points out that many of the desired characteristics that firms say they want in a CEO or Managing Partner are inherently contradictory: for example, firms often say they want someone who is both decisive and consultative. It’s tough to be both.

Some other trade-offs include choosing someone who:

• Focuses on working inside firm versus focuses on a high profile with clients and marketplace
• Is good with numbers versus good with people
• Leads in accordance with a strong personal ideology of his or her own, versus is the kind of person who tolerates different views, values and approaches

In the article, I describe a simple approach to debating “forced choices” between a large number of these “paired virtues", as a way of getting firms to clarify what they really want in a leader.

What contradictory or conflicting things do you see people include when they enumerate the desirable characteristics of a leader?

This is not a new debate, in the law or in industry generally. The weaknesses of  PEP are largely the same as the weaknesses of return on shareholders’ equity measures. As Messrs Beringer and MacEwan point out, many games can be played with both the numerator and denominator of PEP, but it’s not exactly news that companies can and do play games with both reported profits and invested equity, in order to bolster earnings per share numbers.

Welcome, leaders of professional firms, to the wonderful world and revered tradition of managed earnings and media games!

The problem with PEP is not that it's a bad financial measure. ALL measures, especially financial ones, can be gamed. As a lot of people have pointed out over the last two decades, the problem arises when financial measures are not used as part of a "balanced scorecard." It's always been true that a firm needs to serve three constituencies to flourish: clients, people and owners.

Industry makes the same mistake that Mr. Beringer cautions us against: focusing on financials to please Wall Street, hoping that no-one will notice that (initially) degrees of client satisfaction and employee morale are allowed to slip. He’s absolutely right to propose the broader use of client and employee satisfaction measures.

One of the things that may cause this to actually happen would be if someone REALLY developed and put up on the web a "JD Powers-like" evaluation system which basically  said: “evaluate your law firm and your lawyer here,” allowing ready access for furue clients and people to check out prospective firms (and individual practices) they might consider working with.

There are beginnings of this out there: Vault.com tries to rate the employee experience, and Chambers (in the UK) has print and on-line versions reporting firm’s and people’s reputations. But it could get a LOT more explicit, and high profile. I suspect there's a great business available for anyone who wanted to develop that "Rate your law firm" web site.

Of course, I'd be nervous about a "rate your consultant" website, but that's coming too, of course! Someday soon, we're ALL going to be held accountable to a balanced scorecard, whether we like it or not.

That seems simple enough, but too few firms understand (and implement) the logical consequence: that you must say “no” to clients who treat you or your people badly. Not only must you not employ jerks (as Bob Sutton keeps reminding in his new book), but you must also not accept them as clients.

Richard Ennis, the co-founder and Chairman of the Board of Ennis Knupp Associates (a 100-person consulting firm which provides advice to pension funds and other major investors on how to invest their assets) reports that the key to his organization’s success is that they have been very selective as to which clients they will take on. (They pursue only about 50 percent of the requests to propose that they receive.)

“Let’s face it” he says. “Some clients are nasty. And you can’t expect to hold on to good people, at junior or senior levels, if you bring in work where they are not going to be treated properly.”

Oh, if only more CEOs and managing partners understood that simple principle. 

Does your boss? 

When you’re the boss, do you always live by that principle?

Once a year is, of course, too infrequent. Saying I’ll accomplish something in the next twelve months is like setting New Years’ Resolutions – the pressure for accountability is too little at the beginning of the year, and too intense at the end. Examining whether I did what I promised only after 12 months of effort is unlikely to ensure that I stay on the diligent execution path.

On the other hand, meeting with me and reviewing plans and activities once every month is micromanaging and doesn’t allow for unforeseen circumstances. I can’t ABSOLUTELY promise I’ll get something done in the next 30 days. Who knows what existing client demands will change, what new client opportunities will arise, what staff emergencies and ill-health will affect output? Or (to be honest) how the ups and downs of personal intensity will flow – as my clients keep telling me, you can’t be a dynamo, learning new skills, every month.

But three months is ideal. It’s long enough to work around the world’s unpredictabilities both at work and in people’s personal lives. It’s a long enough leash to make me feel that I have a lot of autonomy in allocating my time, while still keeping me accountable in a period of time that won’t let me go off the rails.

On the other hand, to make it work, the three month-review system mustn’t slip. It must be scheduled, planned for, actionable commitments made and the review actually held. If you want to treat me like a true professional, hold really thorough reviews with strict accountability for action promises made every 3 months – and get off my back in the intervening time period.

Ban monthly budgets!

Abolish annual performance appraisals.

Manage to a 3-month cycle!

(By the way, this rule works on client relationships , too.)

***

Agree, disagree?

There's a better way. Hold meetings where you pose a subject and ask for everyone’s input. Then build from there. People will get involved, they won’t feel threatened and they’ll come away understanding the subject. Even if there is not total agreement, there will be a greater consensus and willingness to try. Because, they always know there will be a point where they can challenge point/issue, etc if they feel the consensus point is not working. 

This form of meeting also works to building loyalty—everyone feels they have played a part in the development of a solution. When they feel that what they are doing is their idea—they take pride and ownership in it and are more apt to work harder and be more dedicated to making it work.

Of course, if you’re the boss (or an outside speaker) and see yourself an “expert” in the field, it can take great self-discipline to do it this way! YOu always want to present YOUR latest and greatest idea. Tempting, but ineffective, usually.

I was reminded of this insight as I reflected on my experience as a juror. The more I thought about it, the more I realized that I had been put into a strange situation for me. For the 5 days of the trial, I was forced to be an OBSERVER, not a participant.

Until the time came to deliberate on the verdict, I could not ask questions, I could not intervene, I could not discuss things. I was forced to be a WATCHER as well as a listener. 

It taught me a lot. I earn my living through words, but I am increasingly coming to believe that we don’t best reveal ourselves (or judge others) through words, but through other means.

I’ve never been trained to “observe”, I’ve never read a book on it, and I don’t have a natural proclivity for it. My wife can be with people at a party or family gathering and tell you things about what they are feeling that were never said out loud. She just “notices.”

Try this exercise: Just watch people in a meeting and see if you can answer these questions about them:

• How self-confident is this person?
• How would you describe their level of optimism or pessimism?
• What emotional needs do they have?
• What type of role would they function best in?
• Is this someone you would trust?
• Would other people want to work with this person?

Even if you’ve never been trained in psychology and never read a book on body language, I’ll bet you’ll get very close to the truth.

Which raises a series of interesting questions:

1. How good a watcher are you?
2. What makes someone a good observer?
3. Can YOU figure someone out by observing them?
4. What do YOU look for?

We are in the midst of generating year- end reviews for our associate (ie non-partner) lawyers. We have moved away from a standardized report and have been coaching all year. The report we will give them will merely be a re-cap of all the coaching sessions for the year. We will of course be addressing monetary rewards and we are in a heated debate about one issue. Should we address the billing amounts of each lawyer at this review? Should one be congratulated over the others for doing more individual billable hours? Isn’t there a risk that we will set up an unhealthy competition and seem to encourage less teamwork?

I have a few responses:

1. If you have been coaching all year, why do you need a year-end review?
2. If there is a need for something year-end, shouldn’t it be less of a “review” and focus almost entirely on looking ahead as to what each person can and should be doing to enhance their career? What’s the point of looking back?
3. In a law firm, aren’t the number of billable hours determined by what the partners assign to the juniors? If so, what do high personal billable hours reflect? Popularity among the partners? A more dependable person? Someone too dumb to hide out when they are already busy? I’d discuss the personal billable hours and try to understand them, but I would stay away from using them as a performance metric.

One person is saying to another: “Hey, isn’t that Jim pulling out of the parking lot? He only worked ten hours today?” The other person responds: “We have a client demo tomorrow and he’s only working a half day? I’d fire his ass.”

It’s meant as a joke, but there’s an incredibly important and serious lesson here.

For decades I have been involved in conducting upwards evaluations of managers by their subordinates. Consistently, over time, geography, profession or industry, and size of firm, the one aspect of managerial performance that is consistently rated as done most poorly is “tackling underperformance promptly.”

Subordinates, it seems, are rarely satisfied with how well their superiors do this. What’s fascinating is that the result is subject to interpretation. Is it that managers, everywhere, always, are relatively poor at this compared to other aspects of managerial performance?

Or is it that, no-matter how well they do it, this issue is particularly annoying to co-workers.

Naturally, I think the answer is a little of both.

Many of us, as managers, find confrontation emotionally difficult, so don’t want to tackle issues until we “have to.”  If a subordinate is only “average” not yet “failing,” why bother making a fuss?

The reason is the effect that one person’s underperformance has on the motivation, morale and energy of those around them. If management can’t (or won’t) enforce the standards and help underperformers achieve competence, then why should the rest of us try for excellence? It’s hard to feel like part of an energizing, exciting team if there are passengers (or what are seen to be passengers.)

This is not about management being rapacious and trying to get the most out of everybody, but the simple recognition that a team cannot form if group norms are not clear and adhered to, and it’s a manager's job to ensure that that happens.

Your views? How well would you rate your manager at “tackling and dealing with underperformance in your group?” Do you have any theories about why it’s often done so poorly?

• Those you lead will never have a longer-term horizon than you do
• Those you lead will never operate to higher standards than you do
• Those you lead will never be more optimistic than you are
• Those you lead will never live the vision if you don't

Your article, "The One-Firm Firm" addresses my current situation. I own a salon and spa in Texas. I acquired the business 18 months ago and have faced resistance to new strategies almost from day one.

As you may know, most stylist / technicians wield power by threatening to leave and take clients with them. They are the rainmakers. Therefore, most salons are what you call “warlords” shops.

I fear I do not have much time in order to implement an employee development program. Attracting other rainmakers is difficult even though we offer full "back office" support. We provide assistants, front desk, bookkeeping, etc. They do not even sweep the hair clippings as we have a housekeeper on staff. With all of the above services, the stylists still want full commission (55%). Industry analysts show that salons cannot be profitable with payroll / commissions over 45 - 50%.

Clients are very loyal to stylists and very vocal in giving their opinions, likes and dislikes. I need to terminate one of the rainmakers for insubordination, but it will hurt cashflow so much that I would have to close.

The staffing model of the salon since the early 70's has been to have a hair-stylist up front servicing clients at full commission. Support people were hired to work in the back, shampooing and applying color and perms, washing towels, sweeping hair, cleaning the bathrooms, etc. for hourly min wage + tips. In most salons, these tasks would be a part of the job.

The irony is that the stylist received full commission but do not have do all the work and resist contributing to the overhead cost of the assistants. They know it, the clients know it too. Until 6 yrs ago none of the stylists made a great deal of money. As others retired, they took on the clients of the retirees. Now they are making money, but have no loyalty to me.

The Company at one point was a $2.8 mil dollar business and could easily afford the overhead costs. Today, I can't. With overhead payroll and commission, total payroll is 67% of revenues. We are in a high profile strip center and rent is $8400/mth for 3600 sf. We do $800,000 yr, but there too much going out the door.

Raising prices on the existing client base would be greatly help. However, the stylist will most likely resist as they did before. That battle started the riff leading to 2 employees leaving. We retained 100% of the clients, so we have a feather in our decision making management cap. All dissenters were proved wrong.

Stylists who are afraid that they will lose clients by raising prices do not understand supply and demand or their value to the market. They only want to work harder for the lower prices. And they do this because of the assistants that perform the time-consuming tasks that they do not pay a whole lot for.

This fear becomes arrogance if the stylist has sufficient clientele to support them going independent. They will then have to accept losing clients or work more hours because they are working all alone without assistants. If they pay an assistant they are in my boat and will not make the money they want.

Among the solutions I have considered are to budget and implement regular advertising and measure results to improve, implement aggressive recruiting and training program. With a regular flow of new clients and home grown employees, I, as the owner could always have foundation and build a firm, not just a collection of independent warlords. By the time the existing stylists begin to resist policy and process changes, I will have more stability and can manage the any insubordination or non-collaboration head on.

What advice do you have for "NexLevel?"

While Goldsmith warns against self-diagnosis, I found the list incredibly helpful (even though I am not and never will be a CEO.) The practical, real world advice he provides for conquering these bad habits is immensely useful. Here’s his list of bad habits:

1. The need to win each time
2. The overwhelming desire to add our two cents to every discussion
3. The need to pass judgment on others
4. Needless sarcasm and cutting comments
5. Starting with “no”, “But”, “However”
6. Need to show how smart we are
7. Speaking when angry
8. Negativity: the need to share negative thoughts even when not asked
9. Withholding Information
10. Failing to Give Proper recognition
11. Claiming credit we don’t deserve
12. Making excuses
13. Clinging to the past
14. Playing favorites
15. Refusing to express regret
16. Not listening
17. Failing to express gratitude
18. Punishing the messenger
19. Passing the buck
20. An excessive need to be “me”: exalting our faults as virtues simply because they’re who we are

Read the book. You’ll learn a lot about yourself, and how to improve (slowly.)

As a way to get our discussion going on this blog, let me ask all of you two questions about your bosses (not about you, but your bosses.)

(a)   

Which of Goldsmith’s 20 bad habits would you say is the most damaging?

(b)  

Which do you think are the most common?

Commonly listed non-financial currencies would be these:

1. Approval (Well Done)
2. Gratitude (Thank you)
3. Autonomy (Extra degrees of freedom to operate that others in the group do not have)
4. Recognition (in front of others)
5. Visibility (to others inside and outside the office)
6. Contacts (to key people)
7. Access to Information (Becoming more of an Insider)
8. Access to additional resources
9. Rapid response (by manager, even faster than to rest of the team)
10. Task support (more resources)
11. Titles (Official and Unofficial)
12. Special roles or assignments
13. Extra Challenges
14. Access to Participation / Involvement in hi-status tasks
15. Personal Interest / Support

Is it possible to say which of these are the best to use? Are some of them dangerous? What categories do you see?

David:

I have been mulling the life & work of the late, great James Brown and given your love of pop music, I thought I'd share this with you.

JB's gift was as much collaborative as it was individual - he took musicians such as Maceo Parker and Bootsy Collins and then created environments where they did their best work. He was tough - he was legendary for fining musicians for insufficiently shiny shoes and bum notes. And most of his collaborators ended up leaving him eventually.

He was definitely a great leader. Was he a great manager? I dunno, but here are some things I learnt from JB:

• Give people the opportunity to shine. Everyone is his band gets an opportunity to showcase their particular talents. And results can be something like Funky Drummer or Superbad.

• Work with what you got. When JB remade his band (usually after the previous one had stormed out or been fired), he had to work with the talents of his musicians. Not every bass player is Bootsy Collins. But that doesn't mean that the bass can't be a compelling part of the track.

• High standards are not popular but very important.

• Less is more. Cold Sweat has virtually no chord changes but is mesmerising.

• How the parts fit together is key. Funk works not just because you have great individual musicians but because the basic elements (polyrhythmic drumming, synchopated bass lines, horn stabs) play off each other in a rhythmically compelling way.

I don't live up to these lessons but I think there will be a picture of JB next to my laptop for a few weeks.

There are also some negative lessons from the life of JB (beating up your wife, smoking PCP, alienating your most talented colleagues) but I don't want to dwell on those now.

Seasons greeting, Matt Moore

As a follow up, here’s an end-of-year email that Jay received from one of his people:

Subject: We Succeed When We All Succeed

Dear Jay,

There are few leaders that have the many qualities that you have. You guide, support, listen, mentor, advise, educate and best of all lead by example (and these are only a few of your great qualities.) You find the good in everyone you come into contact with. You bring out the good in everyone.

It is because of you that I want to work harder, work better and not only achieve, but also exceed my personal and professional goals. You have allowed me to open new chapters in my career and to further my knowledge. Sure we are working hard, and although at times it can be stressful, you still make it a fun place to work. Nobody could ask for a better job; nobody could ask for a better President. I certainly can’t. I am proud to work with you in a dynamic Advertising Agency.

Thank you for the many opportunities; the many, many chats; your continued support and teaching me to become a stronger person. Neither our colleagues nor I would be where we are at today, without you at the helm.

We have worked together for four great years now. I look forward to working with you for many more.

I hope that you get some R&R and enjoy the spirit of the season with your family during the Christmas break. I wish you and your family a very Merry Christmas and best wishes for 2007 and beyond.

Sincerely,

(name withheld)

PS - We are closed Monday thru Friday next week. I am begging you to take this time to NOT WORK. But if you do work, you are always welcome to call me at anytime if you need anything. I'll be there!!

Isn’t that fabulous?

Jay was kind enough to say that I had made a real difference in his life and now he is affecting others. As he says, it clearly demonstrates that if you practice what you preach you can make a difference in the lives of others.

Members of the organization have an obligation to:

Act with integrity and high ethical standards at all times

Serve client first, firm second, themselves last

Continuous self-improvement (no cruising)

Preserve reputation of the firm

Reach out for additional responsibility

Take the initiative

Help others (that report to them) succeed

Be a team player

Work hard

Treat all people as valuable members of the "team".

Treat all professionals with trust and respect.

Cooperate with everyone within and between departments.

Delegate work to the appropriate level.

Members have rights to:

Stretching assignments

Be kept informed of what’s going on in the organization

Be treated with respect

Know the criteria by which they will be assessed

A good understanding of the overall goals and objectives of our firm.

Freedom to make the necessary decisions to do their work properly.

Be kept informed about the things THEY need to know to do their job properly.

Input on issues that affect their work.

The resources necessary to provide high quality client service.

Understand how their compensation is determined.

Work that makes good use of their knowledge and ability.

Work that has variety, interest and challenge

Encouragement and opportunity to learn new skills

A clear understanding of their responsibilities.

Useful performance feedback throughout the year.

High quality of on-the-job training.

**

What would YOU add or delete for an ideal professional business?

In the past year, I have been trying to get a great deal done. I have been working not only on continuous improvement for my own website (and my consulting work) but also helping with a thousand decisions needed for my wife’s new website.

New ideas and new initiatives have been launched weekly, sometimes daily — and that’s been the problem. A great deal of effort has been put in to things that were started and never finished. It’s not that they were bad ideas — it’s that the priorities always seemed to be changing. I lived with it because I thought it was evidence of innovation and creativity.

Now I’m not so sure. I (and the people who work for me) have wasted a lot of time stopping and starting.

When I heard Craig Weatherup (former CEO of The Pepsi Bottling Company ) speak he was asked what he thought his strengths were as a CEO. He said that one of his strengths was that he was always good at having a “filter” for actions, decisions and topics. He would lay out a strategy, and from that develop a strong decision screen that clearly identified which issues should be passed through the screen and brought to his attention, and which should be refused.

If, for example, his Board wanted him to look at something that was “off the screen,” he would say “I’m not going to change my priorities just for this topic. If you want me to go back to the beginning and redesign my entire screen, I will, but I’m not going to make constant readjustments.”

Another way he said it was that he felt that one of his strengths was that we was slow to say “Yes” and quick to say “No.”

Every two weeks, he would look ahead at the appointments on his calendar and eliminate non-essential, non-strategic activities.

There’s a term for all this that some other people, especially those in software design: the point comes in every project when you must “freeze the design.”

I now understand the power of that, and the wastefulness that results from constantly shifting priorities and work tasks. Weatherup’s rules are invaluable: Be ready to make changes only if it’s truly worth going back and redesigning the entire strategy of what you’re up to. Have a slow yes and a fast no. Brutally eliminate off-strategy activities.

Now, if only I had the personality and discipline to do all that!

What do you think? Is it better to go for focus and constancy of purpose, or be open and flexible to new ideas as they emerge? Is it possible to have the best of both worlds?

In my experience, there's too little reflection and examination on the consequences of those points, and too much glib advice (including by me) that you "should" get interested in people.

I think that misses the whole point about not being able to fake it. People array along a continuous spectrum of how genuinely interested they are in other people, and how comfortable they are in relating to other people on an intimate one-to-one ("drop the mask, be human") basis.  Given different underlying characters and personality tyupes, maybe we need to stop pretending that everyone CAN become 'interested in other people.' If you really can't fake it, then what use is the advice that you should "get interested?"

Very frequently when I am doing a seminar or consulting about effective management, people look at the list of what effective managers do and they say things like "That's not too hard - why doesn't everyone do that?" And the answer is that it's not too hard if you are genuinely interested in other people. But it is my experience that, in real life, only a minority really are. That's not a moral failing, or a lack of skills - it's about relatively fixed personality traits, in my view.

For example, some people have high social needs - they revel in being part of a lively, active circle. Others, just aren't wired that way. They'd prefer to cuddle up with a good book rather than go to the bar or the pub with the 'gang.'  Some people REALLY enjoy listening to the details of other people's lives. Others, meaning no disrespect, just don't want or need to know.

So, here's the point for discussion. If you can't fake a sincere interest in people, what's the point of advising people to do it? Should we shut down all the management training programs or restrict them only for people who first pass an attitude test?

The group he was presenting to had just spent much of a day debating whether a leader needed to have “charisma” so it was almost a shock for many in the audience to meet this low-key, self-deprecating “down-home” man. He may now own and live in (just as a summer home, mind you) a 110-room mansion formerly owned by the Rockefeller family, but he still comes across primarily as the humble (and loyal) graduate from the regional college (Arizona State) that he also is. 

Among his messages was the importance of actually, really, sincerely, “don’t even try to fake it” caring about people. Again and again, he stressed the view that you can only be an effective leader if you view it as a privilege to serve in that role.

Describing various times when he had to lead Pepsi, his employees, his Board, the bottlers, and others through times of change, he said he was only able to bring everyone with him because they trusted him.  When asked why he thought people trusted him, he said that he had worked very diligently for all his life to connect with people as individuals, not just people in a role. Just as one small (or not so small) example, he made it his business to talk with fork-lift truck drivers whenever he visited the company’s bottling plants which he did regularly.

People trusted me, he said, because they knew me. They knew I cared about them. You can’t fake that, he said. That’s what gave me the power to lead.

WOW!

Leaving aside for the moment whether or not this is a good decision (though see my co-author Charles Green’s interesting insight on this, entitled Pfizer, Doctors, Sales and Trust), there was a challenging aspect pointed out to me in an email by Nick Saban. He wrote:

A good friend of my family works as a sales rep for Pfizer. She told us that on or around December 18th, the company will notify its entire US sales force if they are or are not being terminated VIA EMAIL. I am not interested in condemning Pfizer, per se, and I realize my information may not totally be accurate. However, this begs two questions, really.

First, are we to a point in our society that face-to-face delivery of bad news is so uncomfortable that is it being replaced by email (and probably text messages soon)? I suppose this is akin to the old pink slip, but termination notices by email, phone, or anything less than face-to-face are just completely dehumanizing to me.

Second, from a practical standpoint, how does a company notify a 10,000 person strong national sales force regarding who will stay and who will go? Email certainly makes this easy, cost-effective, and works out bugs in timing. But are there other methods that could possibly be as effective, yet be more respectful towards the people being cut?

Great questions, Nick, and eternal ones. By complete coincidence, I was killing time over the weekend watching some old English TV shows that I have on DVD (a 1991 episode of “Drop the Dead Donkey” to be exact) and the entire plot of this sitcom (!) was about a group of fellow-workers waiting to find out which of them were going to be fired as part of a cost-cutting program. (Great topic for a comedy, right?)

Different time, different country, different context –- same issue.

So, let’s accept Nick’s challenge. Let’s not debate whether large-scale layoffs are a good idea, fair, or anything else. Let’s address his question. If you know you’re going to have to lay off a large number of people, what’s the best way to do it? Short and sweet or slow and thoughtful? An email blast all at once or have everyone talk to their manager (which would take quite a bit of time)?

I actually think I can make a case for the virtues of the email approach. I once wrote that all business decisions contain a finite amount of pain, and you get to choose – either a lot of pain for a few people in a short period of time, or a little bit of pain for a larger group of people over a longer period of time. Guess which (in general) I would recommend? You got it – if you HAVE to choose, I think it’s better to get things over and done with as soon as possible. And if that means it has to be relatively impersonal, then that’s what it’s got to be.

The choices aren’t perfect. Of course we would all want to be more human and respectful. But leaving everyone in doubt as to whether they’re in or out isn’t very respectful, and it could take forever to arrange one-on-one’s for 10,000 people (or even just the 2,000 who are going to get the chop.) It’s the scale that causes the problem.

That’s one view. Anyone else want to offer a perspective on this tough managerial topic? If you have no choice but to layoff 2,000 people, is there a better way to do it?

After nearly two decades as the pre-eminent business and management journalist (and co-author of former GE-CEO Jack Welch’s book Straight from the Gut), Byrne made the transition to becoming the editor, first, of the magazine Fast Company, and then the print edition of BusinessWeek, overseeing 180 people.

His vantage point is unique, and as he observes, managing a knowledge-based enterprise like a magazine is only a little different (if at all) from managing a professional service business.

I found his remarks fascinating and I hope you will too.

You can download my John Byrne interview or sign up to receive new Business Masterclass seminars automatically with iTunes or other podcast players. (Click here for step-by-step instructions on how to subscribe.) My seminars are always available for download at no cost.

“What’s the best way to structure a compensation system for partners in a small startup firm? I have recently launched my own consulting practice with another partner. We also have a third minority owner (1%) and we expect to hire between 3-5 associates this year. We might even bring in a third partner if things go well. Should it be simply a division of retained earnings by ownership share? A formula that builds in factors such as total sales, revenue managed, etc? Obviously, fairness and trust among the partners is critical.”

It would seem from previous comments on this blog during the year that some of you might have been through this, or are in the business of advising start-ups . (I am not.)

But here are some of my thoughts to get your juices flowing:

(i) I always like “look ahead” systems, not “look back” systems. In other words, let’s discuss how we are going to allocate next year’s profits. Once we’ve agreed on that, and each have our shares, we can move together during the year aligned in our interests, focusing on making the whole enterprise successful. If that proves to be a little unbalanced, then we’ll tackle it at year end when we plan the division for the year after that. However, if we have a system whereby you’re always looking back - trying to allocate funds based on performance that has already taken place - you’ll always be fighting over differing interpretations of history.

(ii) Stay away from formulas based on origination or anything else. In a start-up there are just too many things that need to get done to allocate incomes on a few measures.

(iii) Recognize that, even in a tiny partnership, it’s possible to invent a system that has different categories of splitting available cash. For example, you could begin by saying “tranche” number one of any end-of-year cash is to be split by ownership shares, while tranche number two is to be split on some other “performance” basis. The weighting between these two might vary over time. Initially, to encourage a focus on overall success, you could say “Let’s allocate 80% to reward for ownership – which gets everyone focusing on the firmwide result – allocating only, say, 20% to be divided to the basis of performance. As the years go by and you add more people, you will then have choice as to the weighting between the reward for ownership and the reward for performance.

(iv) In general, I like systems where everybody shares in the overall performance (relatively fixed shares, adjusted only infrequently), but that can only be sustained if your ‘system’ is good at addressing performance issues, so that you tackle performance problems by talking to each other during the year, not trying to invent crazy formulae. So, how well can you and your partners talk with each other? Are you the type of people who are comfortable addressing issues during the year and commenting if you thi k the burdens are not being equally shared? If so, you won’t need the comp system to do it for you.

(v) What you REALLY have to ask yourself is: do I want to be partners with this person? With these people? Am I prepared to trust that we can work it out? IF yes, then any scheme will get you through the first couple of years, and you can re-examine it later. If the answer is no, then no comp scheme will cover up that lack of trust.

OK everybody else – jump in. What advice do YOU have to give about structuring partnership compensation in a start-up?

The picture above is Bryan Schwartz, Managing Partner of Levenfeld and Pearlstein, a law firm in Chicago. Let me use his own words to describe how he ran a recent partner’s retreat.

“I did a Shakespeare theme where I showed some clips from Henry V (1989) starring Kenneth Branagh , an adaptation from something I had learned from the Young Presidents Organization that I belong to. The clips made the messages powerful. The partners had to play the role of the king and determine how they would behave under the circumstances. This lead into the themes below.

“We discussed the issue of managing friendships in business and whether we would deal with those of our friends who were not living up to our firm's standards for quality and service. Would we hang the thief who stole from the French? We decided that we would maintain our friendship but be firm about adherence to our standards and that one did not conflict with the other.

“We talked about how Henry V walked around and talked to his people to get a sense of how they were feeling the night before the big battle at Agincourt.

“We talked about being optimistic and being of the right mind when we observed Henry's speech concerning St. Crispin's Day. We talked about compensation and our subjective plan. You set that up beautifully. We spent 10 minutes on that - a miracle for a law firm. I believe people are realizing that in the absence of subjectivity, which we currently employ, we become a mercenary firm, which we do not desire to emulate.

“We really embraced the fact that we had choices to make. Thequestion about how much of our work fell into the category of "God, we love this"! really hit home with many and we all discussed this at dinner on Saturday night. We discussed the power of change at the dinner on Saturday and weaved it in on Sunday. We viewed the battle scene at Agincourt, where the smaller English forces were highly focused and fought the battle on their terms against the arrogant but larger and better equipped French. We talked about the distinctive weapons that were created and the use of strategy to win that battle. I made the analogy of big firm vs.. small firm and focus.

“We incorporated the scene where Henry is trying to woo Princess Katherine even though he could grab her by the hair and say do what I tell you to do because I am the king. We made that analogy to our associates and also our clients. We focused winning the hearts and minds of people we deal with, not just telling them what to do and avoiding intimacy. I think intimacy is the right word by the way.

“We went through various tensions that exist in the firm and spoke about those tensions out loud. We had a great deal of honest and worthwhile discussion.

"It was probably our best retreat.”

Has anyone else been using Shakespeare or other authors to form the basis for real, substantive discussions at business meetings?

This is, of course, the conclusion I had also reached anecdotally and reported in my recent article “It’s Not How Good You are, But How Much You Want It.”

However, as Colvin also concludes, there is a large mystery that remains. Why do some people always push themselves to work at getting ever better, while others settle for competence or moderate improvement? What makes ‘driven’ people driven? If the key to individual (and organizatonal) nnexcellence is a greater determination to get somewhere (and that seems to be the emerging scientific conclusion) then can such attitudes be bred in others or must they be 'found?'

James McNerney, CEO of Boeing, answers that question by saying “I do know that there’s a restlessness in some people…I don’t know if it comes from the toilet training, if your parents do expect a lot of you and you’re always trying to grow and meet their expectations… Another (component) is that success and achievement can feed on themselves. .. “

Next question: Does it come down to the inner motivation that people have, or can a manager bring it out in other people? Can a manager turn an “uninspired,” “not-driven” person into an inspired, driven one? McNerney says: “expect a lot, inspire people, ask them to take the values that are important at home or at church and bring them to work”

For anyone with a career or interested in business these are important questions. Do you get inspired, driven people by hirinrg well those who bring it all with them (for whatever psychological reasons) or can a good manager create repeated passion, energy dedication?

I’m torn between the two points of view. It does seem as if the amount of “internal fire” that people have at work (or outside it) is a built-in characteristic. It may be there for admirable reasons (ambition, the desire to excel) or less admirable reasons (paranoid insecurity) but it’s an observable phenomenon that some people have it and others don’t.

But I’m also reluctant to give up the notion that managers can’t make a difference. As I said in the (audio podcast) interview that I did with BUSINESS WEEK, maybe managers can’t create the fire, but they sure as heck an suppress it if they don’t perform the managerial role well.

So, over to you? Why do YOU think some people are continually motivated to improve and keep trying while others are not? And can a manager influence that or is it inherent in individuals?

In the November 6 issue of The Wall Street Journal (page B1) there was an article by Erin White and Gregory Zuckerman entitled The Private Equity CEO, which explored how life for a CEO changed when a company went from being publicly-held to being owned by private equity investors.

What caught my attention was this excerpt:

“Mr. Bilborough (the CEO of privately-held Generation Brands) says one of his biggest challenges is motivating employees amid uncertainty. Most companies controlled by private equity are sold within three to seven years. Senior executives receive equity, which can be lucrative. But middle managers and lower-level staffers typically don’t get stock. ‘You’re trying to lead an organization where everybody knows we’re going to be sold, said Mr. Bilborough. ‘It just hangs over them like a cloud as a constant distraction for people.’”

Exactly!

When management and employees have very different vested interests and incentives, employees really begin to question whether everyone’s on the same side. They begin to ask “Is management doing this because it’s good for the company, or because it’s good for them?” People begin to wonder: “Are we in this together or not?”

By the way, before you get too far in reading this, don’t think I’m only talking about “THEM” – the top people in large companies. These tensions apply to all of us, even if we manage only a small project team – or even if we don’t manage anybody, but just have to collaborate with others on a project or across departments.

People will always be asking:

a) What time-frame are you using for your decisions; and

b) Are we in this together or not?

We are all tempted by (and seek) immediate gratification, and doing things that pay-off in the short term. Underinvesting in our future is something we all due as individuals and human beings, not just as organizations. And we’ve all probably done something, sometime, where we were seen as looking out for ourselves rather than the team.

The timeframe issue is crucial, because it’s hard to get your team to accomplish things that take time if they think that you, their manager, is acting with a shorter –term horizon.

This is not a matter of morality (like some Animal Farm chant of “long-term good, short-term bad”). It’s OK to be either at different times, but you need to be honest and self-aware about which game you’re playing. Managers need to learn that they rarely fool anyone else about their timeframe, and it’s dangerous to try and fool yourself!

So, putting all this together, there could be four outcomes of how people view you:

1. You’re in it for yourself and want a quick payback for your efforts.
2. You’ll ‘play ball’ as a team player as long as the team is working, but will bail out if it stops working for you.
3. You’re in it for the longer term, but you’re still primarily focused on yourself.
4. You’re both a team player and in it for the long haul.

Which way do your people see you?

Note that these questions don’t necessarily have to have permanent answers. People will come to a judgement about which game you are playing THIS TIME.

In my latest article called “Accountability: Effective Managers Go First” I argued that the best managers work hard to remove the distance between themselves and those they manage. By this phrase, I don’t mean you have to get “buddy, buddy” with those you manage, but, if you DO want them to pull out all the stops on behalf of you team, then those being managed need to feel that the manager is part of the team, not separate from it. Managers and managed need to be “on the same side.” All too often they are not.

If the people you are trying to manage think you’re not on their side, or are only trying to meet short-term goals, you’ll have a lot less ability to influence them. You’ll be able to manage them because they (temporarily) want to keep their job, but its unlikely they are going to put their hearts and minds into your team’s activities. You’ll get today’s sausages made and shipped, but you won’t be going anywhere new as an organization.

So, those are my thoughts. Your reactions, please?

“About ten years ago, while still a manager for Washington State, I took a week's class from a person considered, at the time, maybe the most talented and accomplished person in Washington State governement, Dick Thomas. He'd been Chief of Staff for the Governor, house majority leader, president of Evergreen State College, etc., and a very cool guy to boot.

When I took that class, he said two things over and over until I, for one, wanted to kill him—-figuratively, of course. Long after the class ended I finally began to understand the wisdom of these two simple thoughts:

1. Policy is what happens.
2. Peoples' feelings about the process largely determine their feelings about the outcome of the process.”

If only more managers understood those two lessons!

Policy isn't goals, visions, missions, values, principles, etc. It's what happens around here. Manage that!

Don't just manage the goals, mange the process. Simple!

The podcast (and the book chapter it was taken from), suggests that professionalism is when people:

• Take pride in their work, and show a personal commitment to quality;
• Reach out for responsibility;
• Anticipate, and don’t wait to be told what to do -they show initiative;
• Do whatever it takes to get the job done;
• Get involved and don’t just stick to their assigned role;
• Are always looking for ways to make things easier for those they serve;
• Are eager to learn as much as they can about the business of those they serve;
• Really listen to the needs of those they serve;
• Learn to understand and think like those they serve so they can represent them when they are not there;
• Are team players;
• Can be trusted with confidences;
• Are honest, trustworthy and loyal; and
• Are open to constructive critiques on how to improve.

Julie MacDonald O'Leary, who began as my secretary and who was my business manager for seventeen years commented (in the book, TRUE PROFESSIONALISM):

Professional is not a label you give yourself - it's a description you hope others will apply to you. You do the best you can as a matter of self-respect. Having self-respect is the key to earning respect and trust from others. If you want to be trusted and respected you have to earn it. These behaviors lead to job fulfillment. The question should really be, "Why wouldn’t someone want to do this?" If someone takes a job, or starts a career worrying about what’s in it for them, looking to do just enough to get by, or being purely self-serving in their performance—they will go nowhere. Even if they manage to excel through the ranks as good technicians—they will not be happy in what they are doing. The work will be boring, aggravating, tiresome and a drag.

When asked what brought out the professionalism in others, Julie observed:

• Remember to show appreciation to the one who has taken that extra step or surprised you with an exceptional performance. This will breed more enthusiasm and more good work.
• Don't be afraid to give people ever more responsible assignments - trust them - and if it doesn't come out perfect, let them try again after you've given them some pointers. Everyone likes a challenge.
• Get people involved. Share reports, conversations, information about competitors and, clients, etc., so that everyone can see the big picture and how they fit into it.
• Constructive critiques are one of the most powerful learning tools available to the employee. Take the time to help people learn - not as a matter of performance appraisal, nor an issue of compensation, but simply as a sincere desire to help them improve.
• Don't promote teamwork and then only recognize the captain. Make sure recognition is given to everyone in some way - it doesn't have to be money - it can be as simple as saying "Well done. Take a friend to lunch - it's on me."
• Work hard to make people feel part of what's going on.

What’s your view? What would you add to the characteristics of what a “real professional” does, and what do you think is the best way to create and elicit these attitudes and behaviors in others?

Back in July, I wrote a blog post about Jay Bertram, president of the Toronto office of TBWA, the global advertising agency, who asked all his people to evaluate him as a manager and announced to all his staff that if he did not improve in their ratings - by 20 percent within one year—he would resign!

I have now written a full article explaining the case for doing precisely that. It has been published by ChangeThis and is called "Accountability: Effective Managers Go First."

It makes the case why effective managers must run a process that:

• Clarifies their role
• Gives them feedback
• Demonstrates the crucial principle of commitment to continuous improvement and
• Reduces the emotional distance between "us" and "them"

By the way, if you don't know it, ChangeThis is a unique online magazine, inspired by Seth Godin and run by 800-CEO-READ, with an editorial board dedicated to what they call "thoughtful, rational, constructive arguments about important issues." Their contributor list includes Tom Peters, Guy Kawaski, and Malcolm Gladwell. Earlier this year they also published my article "Strategy and the Fat Smoker."

Back to our topic: I’ve asked this before on this blog, but I have no apology for asking again: Do any of you have examples of managers who led by force of personal example and willingness to go first? Managers who have been prepared to be personally accountable for their role?

Denmark and organizing conferences for me. (Thanks, Stefan, keep up the good work!)

On Stefan’s November 2 blog post, he summarises the results of our discussions on innovation. They included:

• Most firms (and individuals) have lots of innovative ideas – that’s not the shortage. Rather, the problem is lack of follow-through in diverting the time away from current production to get the innovative projects done. At the individual and organizational level, we just forgive ourselves for not investing in our future – especially if the reason we are able to give is that we “made more sausages” (ie increased current production.)

• To get more innovation going in a professional environment, you need to pull, not push. The truth is that people do things for themselves, not for the glory of the company. So, you need to find out what innovative experiments people would want to pursue for their own reasons, and figure out which ones would benefit the company most if they worked out.

• Messy, self-selected teams or networks are better at driving change and innovation than teams hand-picked by top management. Stefan points out that, in many organizations, there is a tendency to keep teams going forever. He says you need to dissolve teams of all kinds when a mission is accomplished and then form new teams or networks for new missions.

• Innovation wins through its portfolio of experiments, not by being super-geniuses at spotting in advance the one that is going to work. So, you need to stimulate a large number of experiments.

• Start out with small innovation projects that have a chance to pay off early – small scale, quick payback projects. Get the early wins. They will help build the confidence, change the culture and over time create a larger and longer-lasting impact.

Stefan reports on more lessons than these, and I’d recommend looking at other posts on his blog if innovation is your interest.

And it should be. One of the first lessons I was taught at business school was: “Most innovations fail, but companies that don’t innovate die.” The same is true for individual careers.

What have you tried in the past three months that gave you a shot at building your capabilities? What plans do you have for the next three months to try something radically different?

I really want to know. Let’s share here. What experiments are you trying? I’m not asking you to betray confidences and give away your secrets – just help others in this community, as individuals or in firms, get better at innovating.

What’s working to stimulate innovation where you work?

It identified a strategy common to leading firms across a broad array of professions - creating instituitonal loyalty and team focus.

The firms named in that article were McKinsey, Goldman Sachs, Arthur Andersen, Hewitt Associates, and Latham & Watkins — still today pre-eminent and fabulously successful firms. (Assuming you accept Accenture as the legacy successor to Arthur Andersen, that is.)

Today, I have added to my website a new article “The One-Firm Firm Revisited” coauthored with Jack Walker, former managing partner of Latham & Watkins. ("The One-Firm Firm Revisited" can also be downloaded in pdf form.)

We examine what has happened to these one-firm firms in the past 21 years — what they have preserved, what they have abandoned and what they have modified.

The one-firm firm approach is similar in many ways to the U. S. Marine Corps (in which Jack Walker served). Both are designed to achieve the highest levels of internal collaboration and mutual commitment in pursuing ambitious goals. Loyalty in one-firm firms, and in the Marines, is based primarily on a strong culture and clear principles rather thanon the personal relations or stature of individual members. The key relationship is that of the individual member to the organization, in the form of a set of reciprocal, value-based expectations.

This, in turn, informs and supports relationships among members — who often do not know each other personally. Everyone knows the values they must live by and the code of behavior they must follow. Everyone is commonly and intensively trained in these values and protocols. Everyone also knows that if an individual is in trouble, the group will expend every effort to help him or her.

Marines have a special bond and a shared pride, built on shared values and a shared striving for excellence with integrity. Critical to the success of the organization is respect for both the past and the future. Every marine grasps the concept of stewardship — the organization, its reputation, and its very effectiveness have been inherited from previous generations and are held in trust for future generations.

A contrasting, and more common, approach to running a professional service firm is the “star-based” or “warlord” approach, which succeeds by emphasizing internal competition, individual entrepreneurialism, distinct profit centers, decentralized decision-making and the strength that comes from stimulating many diverse initiatives driven by relatively autonomous operators. The rainmakers of the firm are the warlords, and their followers, the mercenaries, are doing it for the money.

Which would you bet on to win? In which environment would you want to work?

I interned with an accounting firm that paid everyone (except for partners) by the hour. Under this system employees made a lot of money during tax season. People seemed to work much longer hours than at another firm I had worked in which paid straight salaries. It really did not seem they had so much more to do, but time-and-half wages were a huge opportunity cost of going home. “Time-in-seat” seemed to be a motivation which could only lead to a lack of efficiency.

I don’t blame the firm on this one—a lack of efficiency seems to be a fundamental problem with billable hour work in general because more hours translate to more pay. I can’t blame the employees either—why not use this incentive structure to their advantage? The partners encouraged people to work as much as they wanted.

At school, we studied a manufacturing company (Lincoln Electric) which pays its workers a piece rate. Lincoln requires a quality standard for each piece (no pay if the standard isn't met and the employee has to fix things up on his/her own time). Teamwork is factored into a score that determines bonuses at the end of the year (and importantly, employees are held to the teamwork and other requirements). With year-end bonuses having the potential of 100% of the whole year’s wages, the employees take these rules seriously.

Obviously, you can’t really pay piece rate for a tax return (and I’m not even sure you would want to). Paying by the hour must inevitably put dollars ahead of excellence (at least slightly. Paying a salary currently seems like a best bet.

How should employees be compensated?

The Lincoln Electric case study is very famous in business schools, but I’m not aware of any professional firm that uses piece-rate wages for its employees. Does anyone else out there know of an example?

As a lot of people have discussed, paying people by the hour builds in lots of discincentives and poor behavior. Nevertheless, many firms do this, even if it is only in the aggregate form of paying bonuses annually for those juniors with the most billable hours.

I think this is a terrible system because junior employees don’t really get to control their own workload. It’s a partner who decides whether or not give a piece of work to junior person A or B. So getting more billable hours may just be a matter of being chosen more often. (Although you could argue that such a system serves as a quality screen – only the good juniors will be sought out by the partners who allocate work, so they will end up busier.)

There have been some firms that create a “free market” for work allocation – to get assigned to a job, juniors can offer to work for a discount off their salary, and partners can pay a premium over normal salary rated. That way, partners only sought out either the :best” for their jobs” or the cheapest internal resources for the basic work. I know firms (elite firms) where this lasted a long time.

In spite of its creativity, I’m against such models. All quantitative incentive schemes backfire (we’re dealing with smart people here!) Ultimately, I think you have to do what Alfie Kohn said “Pay people well (a salary) and work like mad to get them to forget about the money.” If you want them to work to higher quality, more collaboratively, with higher productivity, then you must MANAGE them to accomplish this. You can’t just design a scorecard and then say “go!”

One thing in the Linoln Electric system is worth contemplating. A significant annual bonus for everyone based on company results and teamwork makes a LOT of sense to me.

Anyone else got different views?

Before going into consultancy I was a teacher. In a school in a relatively tough area, the stress was phenomenal. I had nowhere to go with my stress and was just told not to complain. I got more and more depressed and eventually left teaching. When I went into consultancy I noticed that managers who "listened" had more effective staff. People, like sponges, can absorb only so much stress. Find a way to squeeze your stress sponge, and also allow other people to share their concerns and problems. It helps to get rid of some of the pressure, thus enabling you (or them) to cope with more.

Regular readers of this blog know that one of my central themes is that we must learn about how people function wherever we can, and then apply those lessons in each of the contexts in which we operate.

We have stress in our personal lives. Conflicting demands for what has to be done – NOW! –and we try to accommodate our loved ones. But, as at work, pressure can build. Between husband and wife, parents and children and other family members, any way you can find to give the other person the opportunity to say what’s on their mind helps to overcome pressures, misunderstandings.

My sister’s lesson is that it helps most if you can solve the source of the stress, it helps a little if you say “sorry” – but it’s still worth giving people a chance to vent if you can’t change things. Talking about it helps under almost all circumstances, and enables people to carry on even if the source of stress cannot be immediately removed.

I’m curious – in your workplace, what opportunities are there for people to let off steam, vent and vocalize their frustrations, or, as Frances would say, “squeeze the stress sponge.” What have you seen that works? What creative approaches have you seen?

He has a new (200-page) book coming out in February called “The No Asshole Rule: Building a Civilized Workplace and Surviving One that Isn’t”.

Many of you may be aware of his themes, because Bob has a terrific blog and has been talking about the topics of his new book in a number of posts.

As you would expect from Bob, it’s a terrific book – a true ‘must read.’

The theme is clear from the title, but the chapter that really got me was “How to Stop Your ‘Inner Jerk’ From Getting Out.” In other words, how to stop being an asshole yourself.

Bob notes that we all act as assholes sometimes. “Most of us, even the most ‘naturally” kind and mentally healthy, can turn caustic and cruel under the wrong conditions,” he writes. He also points out that “once you unleash disdain, anger and contempt or someone unleashes it on you, it spreads like wildfire. …If you join a group filled with jerks, odds are you will catch their disease.”

Bob covers a lot of territory in his book. What assholes do, and why you know so many. Why every workplace needs the “no asshole” rule. How to keep the rule alive. Tips for surviving nasty people and workplaces. And, to be fair, the virtues of assholes.

Without a doubt, this book will make you think. I’m just sorry you’ll have to wait until February to get it.

In the interim, let me try to start a dialogue based on Bob’s ideas.

I don’t think I’ve ever been the type of asshole who transgresses Bob’s two tests ( first, making other people feel humiliated, de-energized and belittled and second, aiming venom at people who are less powerful than me.)

But there are other ways of being the primary asshole in the room without going that far.

Not in Bob’s sense of the truly nasty person, but nevertheless saying or doing inappropriate things. Bob’s book says that past performance is a good predictor of future performance and one of the good ways to avoid being an asshole in the future is to figure out when and why you have been one in the past.

So, under what circumstances have you found (past tense, of corse) that you yourself ended up being the asshole?

Here’s the beginnings of my list:

I have been the asshole when:

1. I got overexcited and overenthused on a topic (I lose my sense of proportion , just keep trying to make my point and don’t let people finish their sentences)
2. I got tired
3. Three things went wrong in a row. Two I can handle, but make it three and I lose it.
4. I was asked to do more than one thing at a time. I’m not a multitasker, and I get shirty when people interrupt my concentration.
5. I got criticized too directly (I reacted badly)
6. I felt like I’m not being treated with respect
7. I was trying too hard to ‘show off.’

Anyone else wanna play this game?

Under what circumstances do you become the asshole?

It's the slide I prepared over 20 years ago to give speeches about what was happening in professional businesses.

Isn't it astounding how much is still the same?

MAJOR STRUCTURAL TRENDS IN THE PROFESSIONS

Client Marketplace

• Short service/product life cycles - constant need to innovate
• More client demand for specific industry expertise
• More "packaged" service products
• Global marketplace
• Fee pressure on "mature" services
• Merger activity-client base
• Continued demand for high specialization
• Increasing client demand for counseling work (more "front room" / "advisory")
• Fuzzing of boundaries between professions
• More complex client organizations
• Client use of microcomputer technology
• Merger activity-professional firms
• Client skepticism about value of services

People marketplace

• Rising competition for junior staff
• Competition for staff from other professions/industries (change in perceived "glamour")
• More hiring of senior (lateral hire) staff
• Computer technology changing work tasks (and hence leverage ratios and organizational structure)
• Rising proportion of women in profession
• Cultural shift in work-ethic among juniors
• Greater diversity of skill backgrounds in staff
• Greater mobility of skilled staff
• Increasing ability of paraprofessionals to perform junior professional tasks

Some consequences

• Rising diversification of services inside firms need to manage different businesses differently
• Internal coordination of specialists required
• More investment in technology, r&d, mktg.
• Rising fixed costs in the practice
• Rising internal training needs
• More internal formal structuring
• Greater need for market intelligence on client needs
• Effect of changing environment on senior professionals
• Effects of rising firm size on culture, communications

By presenting all this, I don't mean to pretend that I was especially prescient. My whole point is that anyone at that time would have readily agreed that these were the major trends.

But who would have predicted that we'd still be talking about many (most?) of them 20 years later.

Here's the question for all of you out there:  

What does it MEAN that the list of trends 20 years ago is still so current?

Does it mean that we've learned or solved nothing?

Does it mean that there really are no new business issues?

Does it mean I stopped paying attention 20 years ago?

It can happen with a client, a boss, a subordinate, a peer, a romantic partner, a friend or a family member.

Of course, you acknowledge that you were guilty, too, but you feel that your sins are less because:

(a) you were RIGHT

(b) you had a good reason for what YOU did

(c) the other person was unfair

(d) they started it

(e) you’re going to be the one who has the final word, come hell or high water

Now what?

The temptation is always to dwell on the hurtful things the other person said, or the ways they let you down. The temptation is to burn your bridges, or engage in extensive discussions to prove you were in the right.

Bad idea. The thing that set the other person off may not have been the thing they’re complaining about. Often, it’s not. Frequently, resentments accumulate and the final topic that causes the explosion is, more often than not, only the excuse for the bad temper, not the real cause.

One of the hardest things in the world is to stand aside from all this, and ask “Do I want to end the relationship right now, or try to restore it over time?” It’s hard to ask ‘What’s in my best interests here?’ It’s hard, but necessary, to put aside – at least temporarily- the issue of who was right and who was wrong.

One of the most elusive – and valuable – talents, is the ability to mend broken fences. Some people are terrific at it, others don’t have the personality for it. But my rule is that I don’t believe in half-relationships. We’re either in this fully together or I don’t want to play.

That doesn’t mean that I don’t realize that sometimes the relationship is on probation. When trying to mend fences, note that you will need to discuss whatever set you both off, but not right when it happened. The more you try to “explain” your side, the more self-justifying (and annoying) you will become. Remember the goal is to heal, not to have the argument yet one more time.

Just move on together. Weeks, months or years from now you can discuss who did what to whom, but until time has performed its magic, you’ll get nowhere trying to heal hurt feelings with logic. Just acknowledge that the underlying mutual respect is there – the commitment to make it work – and get back to work.

Relationships are more important than blame.

What are YOUR tips for getting through these terrible times?

(Thanks to Bill Peper for drawing it to my attention) 

"When the outcome of a meeting is to have another meeting, it has been a lousy meeting."

— Herbert Hoover

Let’s say you attend, on average, two meetings per workday. That would be about 500 meetings a year, or, if aggregated over a forty-year career, 20,000 meetings — a thought that could make anyone want to reach for the black capsule of death and hope for something better on the next plane of existence. 

What got me thinking about meetings was sitting in one so tedious that I had time to do ridiculous calculations, such as the number of meetings in a career. And I also had time to recall that handful of meetings where the minds in the room caught fire, where ideas were spiraling toward group genius.

What made those meetings special, and what makes the average one so agonizingly… well, average? I spent the rest of the meeting trying to work out the formula for the group IQ of the meeting.

The calculation of Intelligence Quotient is standardized, so that 100 is the mean, so let’s start with a score for meetings of 100 and then add and subtract from that. We’re after mental energy and the goal is to quantify the types of places and people that hum with energy and ones that suck the life-force right out of you.

MEETING IQ (or MIQ) = 100

• Minus the number of cell phone rings,

• Minus the number of Blackberries in the room (times ten),

• Minus double the number of fluorescent tubes lighting the room,

• Minus the distance, in feet, between the two farthest participants,

• Minus 50 points if there are rules (formal or informal) about

   who sits where,

• Plus triple the number of times the highest-ranking person in

   the room makes a note of something said in the meeting,

• Plus the number of magazine subscriptions by the participants,

   not counting industry publications,

• Plus the number of novels read by all participants in the past

   six months,

• Plus the number of minutes a lousy boss is out of the meeting,

• Plus the number of minutes a great boss is in the room,

• Minus the number of times an assistant enters the room to give/say

   something to one of the participants (times ten),

• Minus the number of clichés used during the meeting (with each

   “out of the box” counting as five and each PowerPoint slide

   counting as an instant cliché),

• Plus the number of times the word “customer” is used,

• Minus the number of times the word “budget is used,

• Minus the number of times “hold on”, “wait a minute” or “could

   you repeat that?” is used,

• Plus triple the number of genuine laughs during the meeting,

• Minus double the number of polite chuckles,

• Plus the number of workplace compliments anyone in the group has

   received in the past 30 days,

• Plus the number of new ideas/experiments tried in the past six

   months (times 10)

• Plus the number of years between the youngest and oldest person

   in the meeting,

• Plus the number of industries worked in by all the participants,

• Plus the number of customer locations visited by people in the

   room in the past 90 days.

• Plus 25 points for use of a phrase similar to “There has to be

   better way,”

• Plus 50 points if the group applauds an idea,

• Plus 100 points if someone says “We need to come up with

    something truly unique.”

As you can see from this list, it’s entirely possible, likely even, to have a negative Meeting IQ score. When this happens, the IQs of all attendees are diminished by about ten percent for the rest of the day. Repeated exposure may cause a permanent reduction in IQ.

In other words, bad meetings are an intelligence suction device, pulling mental energy out of organizations. Where does all that lost IQ go? That’s how they make neon lights.

I work quite a lot with CEOs and managing partners, each of whom wants to get their organization to stretch for greater achievement. The two most common approaches they seem to try, at opposite extremes in style, are the Vision and Technocratic approaches.

The Vision approach tries to bring about organizational energy and determination by “selling the dream.” Managers ask the people in our organization to stretch for ambitious goals and be accountable for higher or different standards, all in the name of achieving fame, glory and riches for the organization. 

There would be nothing wrong with this approach -if it worked. However, few of us pass the reality test of actually being able to energize large numbers of other people either through the glamour of the dream we describe or our skill in presenting it.

The sad truth is that we cannot automatically assume that people care enough about the organization to contribute extra energy. It may be a depressing commentary on the human condition, but except in some very special cultures, “do it for the glory of the group” works on only a very small percentage of people.

The second common managerial approach to creating energy and excitement that I see attempted (a lot of the time) is the Technocratic process. This is made up of three steps: (a) announce goals, (b) put in place new metrics that monitor those goals and (c) design a reward scheme for those who score well on the metrics.

If this were all it took to head an organization, effective managers would be ten-a-penny, and every business school in the world would have to be shut down due to a lack of customers. Contrary to what we are often told (and many people believe) it takes more than a pay scheme to move an organization. (See– or, rather, hear– my podcast on this topic.)

If the Vision approach is too inspirational to work effectively for most of us in the real world, then theTechnocratic approach is too devoid of human feeling to accomplish its goal. In essence it says: “Do these things and we’ll pay you.” There is nothing illogical about this, but as Alfie Kohn has pointed out in his book Punished by Rewards (Houghton Mifflin, 1993), the very act of asking people to do things primarily for the money diverts their attention from any meaning or purpose in what they are doing. As a result, they do it with less passion, care and attention to detail, and performance will, surprisingly, decline, not improve.

There is yet another problem with trying to energize, enthuse and engage an organization through measures and rewards. Itis often true that  as strategies accumulate over time, so do reward metrics. New metrics are often added, but only rarely are old ones taken away. Confusion inevitably arises as to which metrics management really wants people to pay attention to.

As a result, people inevitably default to measures that track short-term financials. New, strategic metrics are rarely viewed as equally powerful. On his blog, Stanford professor Bob Sutton describes this as the “Otis Redding problem,” based on a line from the song “Sitting on the Dock of the Bay” – “I can’t do what ten people tell me to do, so I guess I’ll remain the same.”

It is worth pointing out that, if the Vision and Technocratic approaches to bringing about organizational energy are difficult to pull off, trying to use them in combination is often a disaster. “Do it for the glory of the organization, but by the way we’ll pay you less if you don’t do it!” may not be absolutely contradictory, but the tone and style of the messages are completely different. We are unlikely to be effective if we try to inspire and threaten in the same sentence!

Some questions for the community:

1. Do you agree that these approaches are very common?
2. Do you agree that these approaches usually fail?
3. Why do people keep trying them?
4. What works?

Good idea! Not too many examples of such ‘EVPs’ were given, but it was observed that a major theme could be delivering to talented people the “learning organization” – the chance to learn, develop and grow. However, the Economist concluded that few organizations knew how to create that.

The topic of marketing your organization to the people you want to attract has never been more timely. What The Economist got absolutely right was that you need a specific proposition to market successfully. You can’t possibly be attractive to all possible recruits. Some will want to be team players, some will want lots of autonomy. Some will want immediate rewards, some will want o be part of building something.

Some, in the language of Bob Sutton’s blog and book, want a “No Assholes” policy. Some of them want the freedom to BE the asshole!

Here are the (strictly enforced) rules I would establish to form MY company’s employer value proposition:

• EVP rule 1: Anything that can be delegated must be
• EVP rule 2: Only true team players allowed – no lone wolves, no matter how big their book of business
• EVP: rule 3: Grow or go – no room for anyone who doesn’t want to take on new responsibilities and skills every year
• EVP rule 4: Only those who are interested in helping OTHER people succeed are allowed to hold managerial or supervisory positions.
• EVP rule 5: No (repeat offender) assholes (we all get it wrong sometimes.)
• EVP Rule 6: Ten percent of everybody’s time and everybody’s budget is to be spent investing in the future
• EVP 7: As soon as we know you aren’t going to et promoted, we will tell you. No faking it.
• EVP Rule 8. If we part, we will do all we can to ensure that we part in friendship
• EVP Rule 9: If we part, we will provide more assistance in helping you find your next job than any of our other competitors.

 
What do you think? Would that be an attractive EVP in your business? Would it make talented people want to work there?

What would YOU offer as a viable Employers' Value Proposaition that would attract the  best and the brightest?

My message is one of the economic benefits of optimism, professionalism and high standards, but it is met most often with a dejected, beaten-down cynicism.

Many times during my latest trip I was told things like: “David. It would be very nice to have your ideals: to believe that the managers with the highest integrity get the best work and the highest profits out of the group they manage. But don’t task-masters and slave-drivers also get results?”

“It would be nice to believe that the way you get the best out of employees and clients is to try - at least try – and understand them as human beings, and get better, if necessary at meeting their human needs. But don’t such idealistic people get rejected in companies – can you really get promoted as a manager if you care about your people – or your customers – too much?"

I keep meeting people who have given up their ability to believe in the power of standards and ideals (or to believe that anyone else in business has them).

Some Examples

A consultant (age 50 or so), who worked for one of the most famous ‘brand names’ in consulting:

“I was as simple boy who grew up in the country. When I came to the city, they taught me that to get on in business you have to lie. You exaggerate and misrepresent in proposals in order to win the work, you claim to have done things you have not done. That’s the way the game is played, you are taught.”

A 30-year-old middle-level supervisor at a European-wide training program:

“The firm pretends that it wants to inspire us, but the truth is that we do boring work, and so do those more senior than us. We cannot imagine that there are people who do work they are still excited about. That’s a luxury we cannot dream about. They just want us to work harder and get the people who report to us to work harder.”

A partner in a tax firm:

“We know many ways to save our clients money, but that just would mean we would bill them less and take home less pay, so we don’t work at getting efficient. That would be the 'right' thing to do, and may even get us a good repuation in the long run, but no-one would seriously suggest changing to that way."

A senior national-level director of a professional business, in charge of 6,000 people:

“It’s OK talking about all this quality and employee motivation stuff, David, but we just want to make money – lot’s of it. What’s wrong with that?”

So here’s my question to you: How did we / you end up here? Clearly, something was missing from my education and upbringing - the world forgot to "beat out of me" my ideals, but seems to have done a good job of beating them out of most other people.

I'm really interested: What (specifically) happened to you that made you lose your innocence about how business (or academia) was run? (Stories please.)

That’s why in modern businesses, the organization IS the strategy: if the organization functions smoothly, the firm will excel. If it creates barriers, the firm will stumble continually.

This week's free audio seminar, Competing through Organizational Functioning, discusses the diagnostic tools for a smoother functioning organization:

5 Imperatives to structure your organization for success

1. Examine structure, process and people
2. Recognize shifting priorities in structural design
3. Establish mandates for each group
4. Clarify agreements within the groups
5. Choose the right group leaders

I also discuss how to create your own customized solution for managing a complex firm that goes beyond the motions of establishing “theoretically correct” structures and obtaining “false consent” from key players to effect real change.

A slightly modified version of this podcast (with the same title) will be posted as a new article on my website later this week. [Update: the article version of Managing the Multidimensional Organization is now available on the site as both a screen version and a downloadable PDF.]

You can receive new seminars automatically with iTunes or other podcast players. (Click here for step-by-step instructions on how to subscribe.) My Business Masterclass audio seminars are always downloadable at no cost.

Many people serve as internal consultants or advisors. The more they act with the same intensity as outside providers, the more value they will bring to their company, the better they will get, and the more fun they should have.

Internal consulting is a bit different from being an external consultant. You have a very limited market, and you can’t fire your clients. Since prophets are rarely celebrated in their own land, you are positioned differently with your ‘clients,’ and must engage with them differently

One of the challenges is figuring out the right metrics to use in monitoring and managing internal consulting groups (or any other staff advisors.)

A few obvious metrics used by outside providers still apply to in-house providers: client satisfaction (post-engagement surveys, internal referrals) and staff (employee satisfaction surveys, skill development monitoring)

You could also try to monitor “market positioning” - share of core capability work done in-house, share of overall capability work ‘under management’ (for example, acting as a broker for outside resources, such as the in-house legal department managing the outside law firm providers.)

The most difficult area is financial performance. Most internal groups are cost centers. Few companies still use “internal pricing and bill-back” systems anymore because it turned into an administrative nightmare.

A few initial thoughts:

Measuring the utilization of in-house staff (hours engaged/people hours available) still works, though it is a hygiene measure and does not describe effectiveness.

Leverage could work (ratio of total people to senior practitioners, defined by credentials and pay grade)

It would be tough to use a margin measure. I suppose you could do a ratio of overhead cost to employee cost.

Rates are the real question. If in the outside world rates are the market's perception of your unique value, how do you do that in the inside world? Overall department budget? ROI/hours invested?

(but ROI can be a tricky number for a lot of internal consultants)?

Clearly, if it could be measured, ‘value’ is the ultimate measure for internal consultants.

In many firms, internal groups generally track it by how much budget they get, but this seems incomplete to me somehow.

(End of Ted's Question)

Ted has posed so many questions that I’m going to ‘hold my fire’ until all of you have the chance to jump in. (Also, I’m traveling in Europe and I'm a bit jet-lagged!)

However, I would extend the challenge by pointing out that, in these days of outsourcing, internal groups probably will need to develop metrics that are at least part-way comparable to those being used by the outside providers pitching your management for YOUR job!

So, what metrics are used where you work to measure internal consulting / advisory / staff work?

What did this person DO, that made them so effective in raising your performance? (Specifics, please.) What was it about them as a person (if anything) that contributed to the effect they had on you and your colleagues?

Let's not include any generalizations, theory or principles here. I'm looking for real stories about real people.

What do effective managers actually DO that makes them effective?

Since I am not a lawyer, and this blog site is meant to appeal to a broad international audience working in a wide variety of professions and industries, I have (as previously announced) restricted my choices to the themes of work and professional life, firm management, marketing, strategy and careers (rather than legal topics per se).

1. Competition v. Collaboration in Firms

Tom "Bald Dog" Varjan has the blog post of the week in my view.

Of Sailors and Mountaineers: The Inherent Dangers of Internal Competition is a compelling piece of analysis, which nevertheless still leaves us wrestling with the mysteries of why our organizations run as they do. Are we all too competitive for our own good? If so, how has civilization thrived? Don't miss it.

2. Throttling Clients

Ed Wesemann has a terrific blog for law firms called Creating Dominance, and his latest post is about “throttling” clients (no, it doesn't mean what you think it means). It’s not glamorous stuff, but it’s important.

He discusses how he went about analyzing low-profitability clients, and then engaging actions which induced the clients to change their behavior (or leave). A clear exposition of some basic that all firms should be doing – and don't!

3. Work-Life Balance

Stephanie West Allen at idealawg introduces us to Hot Worms and Workaholics: Let the Workers Be! She tells us that some worms live in water so hot that it would kill other worms:

“I have met many hot worm lawyers and I suspect there may be whole firms composed primarily of hot worms. These lawyers thrive on conditions that might prove injurious or even fatal to other lawyers. I am concerned for the hot worm lawyers and the damage that might be done to them if someone decided that these torrid wigglers needed to swim in cooler waters, to achieve life balance as defined by some other worm. In many cases, a cool, balanced worm may be an unhappy or dead worm. Lawyers come in a wide variety of temperaments, each with a unique, individual, ideal allocation of what and how much goes on each scale of life. That uniqueness is best respected for the sake of the lawyer, the firm, and the client.”

Fascinating – a wonderful counter-conventional blog post.

4. Advice for Young Professionals

Bruce MacEwan at Adam Smith, Esq. has a review of "The Curmudgeon’s Guide to Practicing Law” (ABA, 2006), a wonderful book from Mark Hermann (of Jones Day). With great humor and deadly accuracy, Mr. Hermann cuts through the cant and provides tough love advice for those on their way up (and a few who have stopped rising).

I have read the book, and “Adam” is right. Managing partners in law firms should buy copies for all their junior lawyers. In addition, I would estimate that at least one-half of the book applies to all young professionals, in any industry.

5. Leadership, Emotions and Performance

Arnie Herz at legal sanity, reporting on a Harvard Working Knowledge forum, explores the role of positive leadership in creating the motivation, creativity, and performance of the knowledge workers.

Arnie reports that, according to the piece, a key discovery the researchers made is that workers’ performance is tied to their “emotions, motivations, and perceptions about their work environment". There are lots of other good links in the blog to research in the field of “Positive Organizational Scholarship.”

6. Must BigClients have BigFirms?

JD Hull at What About Clients? estimates that ‘bet the company work’ is perhaps 10% of legal corporate work out there, if that. So what about the other 90% of available corporate legal work? Is there any reason why firms ranging in size from 5 to 150 lawyers with the right talent and specialties can't do that work for BigClients?”

The questions is raised: when firms large and small can serve your needs, where do you go? Think carefully, and on the back of examination booklet explain why friendly neighborhood grocery stores no longer exist.

6. Future Earning Potential of Firms

Gerry Riskin of Amazing Firms, Amazing Practices provides a link to an article by his EDGE International colleague, Friedrich Blase, on assessing a firm’s future earning potential by examining its human capital, its structural capital, its relational capital and its investment capacity.

It will start your thinking processes – there’s a lot to be done exploring these topics.

7. Advice on the road to L

F/k/a [formerly known as] links to a number of law professors offering advice to first-year law students, and offers the observation that “much of that “lost” feeling never does go away — because far too many law school applicants, law students and practicing lawyers never took the time to assess who they really are and what they actually do want from life and from a career.”

Like the rest of us.

8. Client Satisfaction

Mark Beese at Leadership for Lawyers continues the (re)announcement of survey company BTI’s results that clients’ satisfaction with lawyers is going down dramatically, but provides link to other surveys and sources with confirming data.

BTI’s findings (which have been extensively reported for a while now) should be the springboard for deeper discussion of the sources and cures of low client satisfaction in the law, but so far the analysis hasn't progressed – at least in the blogosphere. Let’s hope the firms themselves are taking the hint.

9. Recruiting Interviews

Eric Muller at Is That Legal? contributes a memory about being “conned” at an interview by one law firm partner into commenting on someone at another law firm who turned out to be her husband.

Ethical or good recruiting tactic? You be the judge!

10. Spotting the Winners Early

Carolyn Elefant at Law.com Legal Blog Watch reports in A Future Billing Machine is Born about a Washington Post story on a young man, Dravidian, who:

“whipped through college in one year, relying on a combination of 72 AP credits that he collected in high school, followed by 23 credits his first semester in college (instead of the usual 15), a whopping 37 credits the next (he'd complained that he had too much time on his hands the first semester), with the last three, needed for a double major, completed during the summer. The article reports that after finishing up a master’s in math, Banh will forego the doctorate and head to law school to become a patent attorney."

As Elefant puts it: law firms, start your recruiting engines.

11. A Harvard Business School Case Study

Nathan Koppel, guest blogging at Larry Bodine’s Professional Services Marketing blog, informs us that Harvard Business School has written a 40-page case study on Philadelphia’s Duane Morris.

Based on my memory of how MBA students treated the companies offered up to them for dissection, this may not be the privilege that some at Duane Morris think it could be.

12. Diagnosis in Law and Medicine

Jim Belshaw at Managing the Professional Service Firm (what a catchy name!) picks up on a contribution by Prem Chandavarkar to begin an analysis of how diagnosis is performed in law versus medicine.

It doesn't go deep, but it’s a useful beginning on an important topic.

13. Branding a Fruit

Dilanchian Lawyers and Consultants caught my attention by telling the history of transforming the humble Kiwi fruit, through wise use of Intellectual Property tactics, into a branded product.

A bit of a diversion from our theme here, but a fun blawg tale.

Next, let’s turn to some interesting blogs about blogging.

14. Marketing Yourself and Your Practice

Kevin O'Keefe at Real Lawyers Have Blogs reports on “Blonde attorney gets new clients at MySpace.”

No comment. Decide for yourself what you think about it.

15. Profile of a Prominent Blogger

Dennis Kennedy provides a useful link to an interview with (and about) him on the JD Bliss site, entitled Success Story: Dennis Kennedy: "TechnoLawyer of the Year" Bridges the Gap Between Law and Technology.

For the few who don't know his background, it’s a good place to start getting to know the well-known lawyer, consultant, speaker and writer who is considered among the most influential experts on the application of technology in the practice of law.

Dennis was very kind and generous with his time when I was trying to understand what a blog was. If you don't know him and his work, you should.

16. Blogging by Trainees

Scott Vine at Information Overlord picks up on a UK Legal week report that Watson Farley & Williams is getting its trainees to write a weekly blog on the firm’s web site. Each of the firm’s 12 trainees will take it in turns to write the weekly blog, describing the work they have been involved in and the firm’s training and social activities. Neat!

17. Blogging During a Court Case

Justin Patten at Human Law has a brief piece speculating on how blogging might influence the practice of law: “I envisage scenarios where lawyers in conjunction with PR Professionals and blogosphere monitoring tools, assess how a case is being seen on the web. Thereafter an assessment will be made whether a legal remedy is the right solution.”

18. Regulatory Restrictions on Blogging

Walter Olson at Point of Law collects some links pointing to the emerging concern that new Bar regulations in New York “might make it nearly impossible for attorneys in the state to publish or contribute to blogs about the law. (Each individual post would trigger elaborate compliance obligations of its own.)”

19. Blogging as a Substitute for Law Reviews

Ian Best at 3Lepiphany speculates that blogging by law students and others could create a much more powerful substitute for law review articles.

Seems persuasive, important and powerful to me.

That’s it!

Blawg Review has information about next week's host, and instructions how to submit your blawg posts for review in upcoming issues.

Personally, I find them to be a very effective tool when executed properly (which I believe I do and have done for small firms up to a Big 4) though I see them poorly executed sometimes with what can be morale-damaging consequences.

In a well-done 360, I appreciate the contrast that comes to light between the subject's views of him/herself, their managers' perspective, their peers' perspective and their direct reports' perspective. And sometimes, the clients' perspective.

Interestingly, but not surprisingly, the subject usually underestimates or overestimates (significantly and consistently) how they perform across a broad variety of management and leadership areas such as decision-making, crisis management, teaching, learning, follow-up/accountability, delegation, etc. Done well, I've seen 360s build confidence around strengths and indicate a clear path of important areas for people to work on.

My questions for you are:

1) What do you think of 360 evaluations for those who manage others or will be doing so?

2) Do you know of or use other tools that help establish measures of management characteristics such as those just listed?

3) If used, do you think they should be private to the subject for personal development or as a tool the organization uses to evaluate the effectiveness of their people?

Michelle, I find this question to be on a par with the question: “Should we ask our clients for feedback on how we are doing?” It astounds me that, even in some very elite firms, that battle is still being fought, yet it rages on, as does the debate over 360 for managers.

The simple truth is that, if you really want to be more effective at anything (sports, playing an instrument, romance, managing) you have to find a way to get constructive feedback, somehow. In life, the absence of complaints is not a dependable indicator of the absence of opportunities to improve.

So, it all starts with that big “IF” — do you care enough to want to improve? If so, then we’re just discussing mechanics. If you don’t (and the vast majority of people do NOT want to do what it takes to improve unless they are absolutely compelled to) then no 360-degree program is going to prove effective: there are too many ways for such systems to be gamed, subordinates intimidated, feedback to be ignored and change made optional.

We have discussed getting feedback on this blog particularly in the discussion: Getting Good at Getting Feedback (16 people joined in on that one so far).

I also reported in another blog post on a manager who asked his people to evaluate him and promised to resign if he did not improve by 20% (Teaching Guts), which tells you something about my view on your third question, Michelle.

In my experience, the overwhelming majority of 360-degree programs fail to deliver the desired benefits of actual improved managerial performance for one (or all) of the following reasons:

a) There is actually a lack of understanding of what the manager’s role is, so it’s hard to provide feedback to and evaluate the manager if what he or she should be good at is ambiguous (or has a high level of deniability — “That’s not my job” “That shouldn’t matter if I deliver”, etc.)

b) Feedback is collected with highly structured, bureaucratic questionnaires which do not address the relevant behaviors and characteristics. They are too formal.

c) The feedback is delivered in such a way (eg without coaching) that the recipient is allowed to “misinterpret” what the information is really saying

d) The feedback is kept ‘confidential’ so there is no ‘embarrassment factor’ if the manager fails to improve. The system relies on best intentions — the system is not a strict accountability system, which it needs to be if it is to work. Mangers exempt themselves from accountability when they can.

My quick summary is that a manager who really wanted to improve would not need the formality of a companywide 360-program to get there, and managers who do not wish to be held accountable will not only not be helped by the system, they will ensure that it has no teeth!

There’s more, Michelle, but let’s see what you and others in the real world who have direct experience with 360-degree programs have to say.

And if the goal of an interview is to judge someone’s attitudes, personality and / or character then its going to take a LOT more training than most interviewers are given to detrmine those things. I don’t know too many people, even with etensive training, who could get a smart person to reveal his or her true character in such a format.

The best firms, in my view find a way to ask the people who already know the candidates to pass judgement. For examples, when hiring on campus, smart recruiters ask faculty members to give them the real low-down truth about the different students. Or they ask this year’s hires to tell them about the students in the year below them or that they met in other on-campus activities. It's usually well - known on campus which individuals have personality, ambition, integrity. Ask three or four faculty or fellow students and their lists will be close to identical - they have been working with them in close quarters for a year or more and their judgments will be accurate.

In our book First Among Equals, Patrick McKenna and I gave a couple of examples of this:

Two firms in our experience were creative about their interviewing process. The first, a law firm asked all candidates at their final interview to say which had been their favourite course in law school. They then called in a secretary and (with a half-hour to think about it) asked the candidate to explain the content of the course to the secretary. The secretary, in essence, had the final say on whether the person was hired. It was not enough, this firm believed, to know your stuff. Before you were hired, you had to demonstrate the ability to explain it to an intelligent layperson.

The second firm, of accountants, brought all their final candidates together, and put them in a room with a two-way mirror. The candidates were told they would be observed, and were asked to do a joint exercise (equivalent to building a house out of playing cards). The resulting behavior was fascinating to watch. Thinking that they were suppose to be demonstrating leadership, many candidates competed to "take charge" of their group. In fact, the accounting firm was looking for people who felt comfortable being part of a team without the ego need to be its leader, and made offers only to those who did not try to dominate.

I’d be interested in hearing about other creative ways that organizations determine whether potential recruits really have desired character traits. How do you really tell if someone is good with people? Is a team player? Is honourable, has integrity and is trustworthy? Is the type of person who can maintain their composure in a crisis? Has the "good kind"of ambition and detrmination without too much of the "bad kind?"

Have you commented in your writings on the value of a firm having both a senior partner and managing partner - akin to the corporate equivalent of a chairman and CEO - or can you direct me to some recommended material?

The first thing to note is that the use of the two terms senior partner and managing partner is not a common phenomenon worldwide. It’s normal in the UK and Europe, but very rare in the US, which tends to combine the roles into one. “Senior partner” is not a term you’ll hear used much in the US.

I haven’t written about this topic directly, although I wrote a chapter on governance in Managing the Professional Service Firm which included these thoughts:

Like a nation state, these (governance) elements can be divided into three groups. The firm’s board represents the legislative branch whose duty it is to approve (or disapprove) the policies under which the polity will operate. The managing partner, together with the executive committee and the business manager, form the executive branch. Finally, the compensation committee represents the judiciary.

 

The board of partners corresponds closely to the corporate model of a board of directors representing the interests of the “shareholders” (in this case, partners). Like a corporate board, a primary function of this body is to oversee and monitor the activities of the executive (the managing partner) to ensure that the shareholders' interests are being served.

 

Many firms have observed that where the firm's highest committee serves both a policy and executive role, the day-to-day minutiae tend to dominate the committee's deliberations and real policy debates are neglected. Accordingly, most firms have found it wise to separate the policy and executive functions. This same conclusion is generated by a "division of powers" consideration. By separating the policy and executive functions, the firm avoids having too much power located in one body.

The senior partner or chairman can play the policy / legislative functions (at least in the sense of the firm’s core constitution) or its judiciary functions - setting pay for those in high positions, or serving as a court of appeals for those who wish to protest an executive decision.

The senior partner, as chairman of a board of partners, could exercise the same policy formation and management oversight roles that a chairman in a public company is suppose to fulfill. I say “supposed’ because we all know that there is a lot of charades and facades in corporate governance. In the publicly-held corporate world, few boards really exercise much oversight – governments have had to legislate (i.e. Sarbanes-Oxley) to get them to do some basics. Most corporate boards have been “captured” my management, and do not really exercise an independent function.

All of which is to say that it would be dangerous to assume that the corporate model or terminology is a positive metaphor. It may be exactly the model you want to stay away from!

However, it does help us outline a choice that must be made about the senior partner role. In corporate governance theory, the chairman plays an oversight role towards the CEO / managing partner, holding the managing partner “accountable” in the same way that the managing partner holds top executives within the organization accountable for their targets and performance. 

This is actually a very intriguing model, particularly in a partnership where the chairman of the board of partners is supposed to represent the shareholder / partners (as, in theory, the corporate chairman is supposed to represent the corporate shareholders.)

It’s a good idea, but is it achievable and desirable in your firm? Is your CEO / managing partner really prepared to be held accountable? Especially when he or she spends his or her year holding everybody else accountable? It’s my experience that top people will say they want to be held accountable. But they don’t really. They will agree to the forms of accountability being put in place, but will neuter it when it actually tries to exercise any power.

There’s a completely different way of looking at all this, which is actually much more likely to work. That is to make one person (the senior partner) the external face and the other (the managing partner) the internal face of the organization.

In this (quite common) approach, the senior partner represents the firm to the marketplace and other external constituencies (governments, media, communities, media) while the managing partner focuses on actually managing the internal constituencies – partners, junior professionals, other employees.

While this division of labors makes a lot of sense, it’s worth pointing out that the skills (and orientation) involved are quite distinct. As a result, the (equally common) policy of automatically promoting the managing partner to senior partner at the end of the managing term is probably not a sensible idea.

Anyone else out there have a view on the right division of responsibilities between a senior partner and a managing partner?

(Lawyers are not unique in having this individualistic, lone-wolf culture, as we have frequently seen in this blog.)

However, as a result of this culture I get lots of emails from people in firmwide staff support roles – like marketing, HR, IT - who ask me “How can I perform my role if the partners won’t cooperate? How do I get individualistic partners to work for the common good and invest time or resources in HR,IT, marketing? How can I do my job if the partners won’t let me?”

(By the way, this is not just a problem of partnerships. The dilemma exists wherever there is an internal corporate shared services group. I’ve worked a lot wit those people, too.)

My answer is always the same: Forget the common good. As a lowly, subordinate staff person it’s not your place to try and convince people who are effectively your superiors to be better team players. If top management has failed in that, you’re not likely to pull it off.

Instead, my advice is to start small and go for an early success. Find a single person, partner or small operating group who WANTS your help. Help them with what they want to accomplish as an individual or small group. Prove that you can help.

You’re not looking for where you can make your biggest impact, but where you can make your quickest impact. If an powerful individual says “I worked with this staff person and they really helped me” then you’ll have your advocate to help get you used by others in the future. You will slowly build influence and power.

When many of them are using you, then you will be well-known enough and influwntial enough to drive for common approaches and collective action.

So, that’s my initial advice for a staff person trying to have an impact in an individualistic culture. Anyone else got suggestions?

b) That he / she really cares about the long term

c) That he / she really wants us to be team players

 *******

Suggestions?

"Just remember, wherever you go, there you are."

In other words, if you think change is needed in a situation, think about changing yourself first before changing everything around you.

I particularly like that lesson. In fact, I'm struggling to write an article with that theme, aimed at CEOs and other top executives who always want their people to change but overlook the fact that they have to go first.

If you have a story or an insight on that theme that I can use in the article, comment here or drop me an email (david@davidmaister.com ).

Wasn't it Gandhi who said something like "You must become the change you wish to see"?

1. We’re too busy doing the wrong things to have time to do the right things
2. We've got so many of the wrong people in the key positions that we can't get the right people appointed
3. We got too may of the bad clients to serve that we don't have the time to get the good clients
4. We've been known as people who do X for so long, that no-one will believe that we now do Y
5. I'm stuck doing stuff I hate but I can't afford to quit
6. He / She's never going to change, so why bother?

When I do hear such phrases, I'm reminded of this:

"The past has a vote, not a veto."

— Rabbi Mordechai Kaplan, Born in Lithuania in 1880s

Bob discusses this, and agrees that, the more consequential the outcome, the more power, greed, stress and irrationality come into play in influencing how people react and how individual and collective decisions are made.

I think there is something very important here. I have always been fascinated by the fact that (in spite of what they teach us in school) logic, reason, rationality and sensible analysis seem to play so little part in human affairs – at the office, in our home lives, and elsewhere.

It sometimes seems as if, for all of us, nearly all the time, rhetoric triumphs over reason, personality over substance, politics over merits, neuroses over facts.

I’m not saying this as a complaint. I’m saying that it’s a more accurate critique of human affairs than the misleading interpretation we sometimes fool ourselves with – that our smarts (logic, reason and rationality) are what drive the world.

Tom Davenport (author of Thinking for a Living) recently published an article in the Harvard Business Review arguing that there is a huge competitive advantage to be gained by companies if they were to develop a more analytical approach to business, using advanced analytical abilities. It’s a great article, but its truth and its power comes from the fact that so few of us, as individuals or as institutions, in our work lives or in our personal lives, actually do make our decisions primarily through logic and analysis.

That’s why it can be a competitive advantage for anyone who can escape Lovaglia’s Law.

Here’s an outline of Patrick’s step-by-step recipe:

1. Begin Before The Handoff (during the countdown before you officially take office)

• Position yourself as a leader who is eager to listen to the opinions of your peers.
• Build a working relationship with the departing Managing Partner.
• Create constructive dialogue with key thought leaders and power brokers within your firm.
• Tie up loose ends with key clients.
• Try to deal with sensitive problems before you take office.

2. Plug Your Gaps

• Figure out what you need to know and learn it as rapidly as you can.
• Establish your advice network.

3. Establish Performance Standards

• Negotiate your specific metrics for success.

4. Seize Your Day

• Pay attention to personal habits.
• Make symbolic gestures.
• Convey basic information.

5. Set Your Agenda

• Identify your one burning imperative.
• Get critical partner buy-in.
• Develop an action plan to implement your initiative.
• Launch a pilot project.

6. Exploit Early Successes

• Identify something that would not have happened had it not been for your burning imperative.

Patrick’s monograph is made up of 11 pages of his advice, followed by 11 pages of direct quotes from law firm managing partners reflecting on their experience. I showed Patrick’s monograph to some clients of mine outside the legal profession, and they agreed that it’s incredibly useful and well-written.

The word itself comes from the Latin (or is it Greek?) meaning three groups, but along the way a scheme was evolved which put people into four groups:

(a)    the sick (who really need you but can be hard to help),

(b)   the early sick (who you can usually help),

(c)    the worried well, (who don't really need you but want to hire you) and

(d)   the well (who don't need you). 

This is a very handy scheme to use in other environments. For example, if you are a manager in charge of a group of people, the scheme can help you decide how much personal time to allocate to each of the individuals in your group.

It can also apply to customer groups. In some businesses, including consulting, the economics of these different groups vary wildly. The sick, since they cannot really be cured, are often unprofitable. The early sick are reasonably profitable.

As long as they'll pay for your time, the "worried well" can be a source of very high profits - there's nothing really wrong with them, but they keep coming back for one more reassuring examination or study.

Of course, this is not all good news. There's an ethical issue here - do you really want to make your income from people who don't really need or benefit from your services ?  

In addition, unless you have the pricing right, the worried well can choke up your delivery capacity, making you unavailable to those who really need you.

Who are the worried well in your business life? How do you deal with them?

They report that the mood you bring with you to work has a stronger effect on work performance than mood changes caused by events in the workplace.

Think about that - if you come to work already in an optimistic or upbeat mood (because of things that have nothing to do with work), you are more likely to be productive, efficient and do better quality work.

This matches my life - if I start out right, I get a huge amount done; but if I start out grumpy I almost never turn it around. The start-of-day mood is disproportionately influential.

It also matches a phenomenon I wrote about 21 years ago in an article called The Psychology of Waiting Lines, where I offered a lesson learned by every waiter and waitress: - Its hard to play catch-up ball. If the customers sit down happy in a restaurant (or diner) it's not too hard to keep them happy, but if they sit down disgruntled, there's almost nothing you can do to please them - they are loaded for bear!

There are lessons here for self-management, and also for companies or managers trying to help employees become productive. As the authors point out, people rarely receive training from their employers in the problems they have in their personal lives, yet the moods they develop as a result of these problems may be (may be? - ARE!) a major determinant of employee performance.

So what does THAT say a manager has to be good at? Helping employees deal with personal problems, so that they come to work in a positive frame of mind?

There's no escaping the fact that the pragmatic conclusion is yes - even though many of us would love to believe it's not our place to get involved in employees' personal problems. Ignore this at your peril!

And what about us as individuals? Should each of us develop "start of the day" devices (uniquely tailored for what works for us as individuals) to start the day off right? Some might go for a run, some might meditate, some might just play the following Bee Gees song sequence: "In the Morning" "Words" "Melody Fair." "Islands in the Stream (Kenny and Dolly version)"( I said it had to be individual, right?)

Seriously, there are two questions for you to respond to: Do you have a personal device or approach to set up the day, and (b) what do you think managers can/ should do to help employees / team-members do so?

Here are her 10 lessons:

1. The grad you just hired didn't have a hard time finding a job.

2. They know they're underpaid, and they won't put up with it longer than they have to.

3. It's not taking them long to grow bored.

4. Even when they're happy, they're looking for another job.

5. Their bosses aren't their mentors.

6. Getting thrown into the work force is turning them into experienced pros before their time.

7. Some don't feel their universities prepared them for ... (insert profession or industry name here)

8. They're looking to find a balance between work and their personal lives. 

9. Many of them would love to become independent practitioners or start their own firms one day.

10. They think they'll stay in the (insert name) profession, but not necessarily in (the place they started.)

As Rachel writes when she quotes some of the 20-something's she talked to: "If you're not taking notes, there's a great likelihood you'll read some of these comments again anyway - in letters of resignation as up-and-coming talent goes on to bigger and better jobs."

"We have several overall departments in our firm, each with a number of product/service/discipline teams. We also have industry groups dedicated to developing a better knowledge of (and marketing to) specific industries. Recently, we added ‘client teams' targeted at increasing the level of service we provide to our best clients. And all of these groupings exist in (most, not all) of our many geographic locations.

With all this complexity (discipline, industry, key account, local office or region) a key player could (and does) spend an inordinate amount of time in meetings around here. There has got to be a better way to organize our firm!"

I don't have all the answers to this complex problem, but here are some rules I would apply in trying to solve it:

Rule 1: Use different levels of organization for different things: lots of little teams for client-level relationships, one large central group for administrative services; it doesn't all have to be (in fact, can't be) one clean organization. As long as everybody at any given time (say in a year) knows which team they are on and what their obligations to the team are, you can have teams of many different types and sizes.

Rule 2: Some forms of organization are better than others: Most successful global firms are now organized with the following levels of importance. Most important is the target client industry (or ‘vertical' as people seem to insist we call it nowadays). Before anything else, most people's primary affiliation is with an industry team (or two).

Next comes, any specifically targeted client team. Third (now a lot less important) is to organize by produce / service or discipline (i.e. your specific technical specialty.) Firms need to have highly focused an skilled technical people, but few, in most professions and industries, are still organized that way.

Finally, (and this is a huge revolution from the past) geography is the least important band powerful dimension of the complex matrix. Organize (and market) by client or client sector, not by discipline or geography

Rule 3: It's always better to get people feeling like they are (a) volunteers -self-selected to (b) small  (c) mission-oriented teams.  Rather than being "assigned to large departments." (see my blog post from last Wednesday on this  

Rule 4. Don't consume the scarce time of valuable people by assuming that ‘key players' should manage or be involved in everything - ask where their highest and best use really is. Get key players willing to let other people decide some things even when they're not there. (This is easier of the firm members share an ideology, impossible if they don't actually trust each other!)

Rule 5:. Apply all the well-known lessons of meeting management. For example, never have a meeting without a goal, not just an agenda.

Rule 6: Shut down all committees - assign responsibility for a task to an individual, charged with the responsibility of consulting, coaching and getting it done.

Rule 7: Adopt modern meeting techniques (everybody has to stand - no seats)

Rule 8: Use as much use as possible of modern technology tools: internal blogs, wikis and ‘jams' to get collaboration and participation around issue, without having to meet

Rule 9:  Make sure every team leaders' mandate, objective and accountability is agreed to up-front, and that team leaders receive training in how to be effective coaches.

Rule 10: Pete Friedes' Rule. (Pete Friedes was CEO of Hewitt associates.)

One practice I had was to remind all those who reported to me that part of their role was to have my role in relation to their group. One way was to say that they should wear a CEO hat in managing their group. That change in perspective is significant. They were not to just be an advocate for their group or their people. They had to have a "whole entity" view. If one or two managers didn't exhibit that approach and tried to gain advantages by doing things that didn't serve the whole, I could gently remind them that part of their job was to have a CEO view of their part of the business.

(Peter's a gentleman, but implicit in his remarks are the implication that if the various group leaders didn't take that view, they might be asked to play a different role in the firm.)

Rule: 11: Remember, even if you have an ideal structure, there will always be problems with cross-boundary, coordinated behaviors. Beyond structure, you need to examine whether you have the right processes in place, not only better structures. You don't get people to collaborate better by changes the boxes they're in

And, finally,

Rule 12: Never forget that it's always about personalities: getting the right individual people in key managerial roles is the essential lubricant in all of this.

The first is from a magazine called BUSINESS MANAGEMENT US (Q3, 2006). Here's an excerpt:

"The best way to form teams in a business is not to say: ‘you guys are in the same department, therefore you will cooperate with each other', because giving orders like that is just not very effective in human terms.

"However, if you go to your people and say: ‘I've got the following six projects that need to be done superbly well in the next year, does anyone want to volunteer for any of them?', then the fact that people all joined in to the same team and put themselves in voluntarily is much more likely to get them to want to get on with each other - they self-selected to be interested in similar things.

"The trick of it is to unbundle the larger purpose of the total department and turn it into short-term, temporary projects, asking for volunteers, and then at the end of it, when the project is done, you redesign the next set of challenges for the business."

*** 

The second interview is called "60 seconds with David Maister." Here's a snippet of that:

Q: I believe you love listening to music. Who is your all-time favourite artist?

A: The Bee Gees. Totally unhip. In and out of fashion. Determined to keep trying. I can relate.

There are a lot of firms out there with something of an identity crisis. Their profits are good but not stellar, their reputation is solid, their key client relationships are fairly secure. Do they choose the path of management theory and use IT to shift the bottom line? Or does the partnership buy into the philosophy espoused by David Maister, the high priest of profitability in professional firms, whose simple recipe for success is to focus almost exclusively on excellence ........ with much less emphasis on strategy, processes, technology and management structure than is the norm.

It is a tough call. Either get big and global, rely on good management and innovative systems, commoditise much of your business and slash your margins to compete - which gives the leaders of the IT department a vital role in driving profitability and running the business - or just focus on providing good support IT, keep costs to a minimum and expectations low, and let the fee-earners and partners get on with making the money.

While I appreciate being given yet another label to wear (‘the high priest of profitability"?) I'd like to offer some clarifications.

First, I think Kieren unnecessarily downplays the variety of roles that IT can play. It's not just (or even) about slashing costs - the greatest value may be in empowering the front-line professionals to deliver more value. As Richard Susskind's famous Grid illustrated, there are many ways to think about using IT and they are not all large-scale systems available only to mega-firms - and they are not all about lowering costs.

What I'd really like to clarify, however, is Kieran's description of my philosophy as "focus almost exclusively on excellence .... with much less emphasis on strategy, processes, technology and management structure than is the norm." and "let the fee-earners and partners get on with making the money."

I'd phrase my philosophies slightly differently. If I'm the high priest of anything, here's my catechism:

1)      The main goal of business success is to figure out ways to get better, not to get bigger. That mostly means changing the behaviors and habits of the people  who interact with clients and subodinates. Technology can help this, but is only a support instrument, never a substitute.

2)      If it ever comes to a choice between quality and volume, you must go with quality

3)      Strategy is not (yawn) about one more restatement of goals and plans but about permanently adopting new behaviors you are going to live your life by. I'm all for strategy. I'm just against strategic planning, which is nothing more than a diversionary device to avoid addressing strategic issues.

4)      The secret to business success does not lie in enhanced processes and systems but in enhancing one-on-one interpersonal interactions, inside and outside the business. Don't build a system before you have created the desire to use it. For example, you don't get people in silos to collaborate more by providing for the capability of better exchanges of jointly useful available data. You've got to manage them so they want to be team players.

5)      Technology is a wonderful tool to put in the hands of energetic people with focus and ambition. It's a terrible substitute for energy, focus and ambition. You don't hand out sophisticated weapons to people until they understand and believe in the cause for which they will be fighting.

6)      Too many places put in new tools so that the front-line senior people won't have to change what THEY do, - ie, they pass the task of achieving competitive advantage on to the techies. Firms have taken this approach for a long time - they would rather spend money on low ROI activities than change personally. They did this in marketing, always looking for something (branding, PR, brochures, websites) that could be done by somebody else, so they (the front-line senior professionals) wouldn't have to change the way they dealt with clients and customers.

7)      Management STRUCTURE is just another excuse to reshuffle the deck chairs on the Titanic - I vigorously support effective management and managerial processes, I'm just against believing that formal structures, systems, procedures, policies and one more bureaucratic initiative truly represent what management is. The mantra is: focus on changing behaviors, not structures!

So, yes, Kieran, I agree there's an alternative to the "get big and global with innovative IT systems to slash costs" strategy. But it's not to "de-emphasize strategy, systems and management" - it's to understand what these things really are, and to understand how firms of all sizes can adopt healthy philosophies and practices, even if they don't have the mega-bucks for investment that the big boys have.

And it certainly isn't "let the fee-earners and partners get on with making the money." That sounds too much like a cop-out, do-nothing strategy. The alternative to spending on IT is being vigorously active in helping individual human beings get better at interacting with other human beings inside and outside the firm, in ways that lead to greater enthusiasm, excitement dynamism and profits. (Of course, said that way, many firms will vote for the IT investment instead - which is my point!)

Here endeth the lesson.

Her blogpost elicited numerous comments on her blog and across the blogosphere. Virtually all of them provided sympathy and support, and took business (especially law firms) to task for failing to deliver on the promise of work-lifestyle balance options.

Since it is my normal role to be the provocateur, can I risk (without any lack of sympathy for Denise) exploring the opposing point of view, that it might not be possible for a business organizations to offer, in one firm, a widevariety of personal choices on work intensity?

I first wrote about the issue of shared intensity in my book TRUE PROFESSIONALISM in 1997. Here's an excerpt, from a chapter called How Firms (Should) Add Value:

The importance of having something shared is illustrated by a firm which asked me to moderate a retreat between its two warring factions. One faction was involved in a transactional, high-intensity, premium-fee type of practice which demanded significant dedication including long workdays and frequent weekend work. The other faction had a more small-business, relationship practice where the pace and the rewards were lower. These two groups labeled themselves the "Sharks" and the "Flounders." (These sound like David Maister labels, but I didn't invent them - they did!)

We struggled mightily at the retreat to establish firm policies which would accommodate both kinds of practice. All concerned hoped that differences between the groups could be resolved through compensation system adjustments. Of course they could not, and the firm eventually split up - which was probably the right outcome.

Neither group was wrong in any real sense. One group wanted the excitement of a fast-paced practice and the rewards that flow from it, and the other was willing to forego high rewards for a more normal lifestyle. Either group could be happy and get what they wanted in a firm of like-minded souls. Neither could live with the other. Differences in intensity could not be papered over with dollar differentials. At bottom, there was no reason for these groups to be in partnership with each other.

(I'll be discussing this example a little more in my new podcasting series on strategy.)

In another chapter in the same book, I reported a similar real-world experience:

The importance of shared intensity is also illustrated by my experience working with a consulting firm aiming (they said) to be the "truly excellent and clearly a leading firm". We spent months figuring out precisely how to get them there, and came up with a plan that, all agreed, would work. But then one professional, in front of the whole group, said: "We are all saying we want to be the best, and we agree on how to become that, but are we really willing to accept that much change in how we practice?"

I called for a secret, anonymous vote with the following scale: Vote "5" if you really want to "go for the gold", and vote "1" if you just want to make whatever changes we have to make to avoid ruining what we've got. Or you can vote something in between.

The result? The vote was split between one group with "4's" and "5's", and another with "1's" and "2's". In preparing their strategic plan, they had all acted as if they wanted to be "truly the best", but when push came to shove, half of them didn't really want that much change in their lives. Was either group wrong to make their choice? Of course not. It's each individual's free choice as to what to do with their professional lives.

However, the firm now had a problem. How was it to proceed? One approach considered was to attempt to use the compensation system to accommodate these differing preferences. Those who wanted to "Go for the gold" (and succeeded) would be compensated for their efforts, while the others (who wanted a different lifestyle) would accept the financial implications of this choice. We named this the "Tolerant" approach.

However, the more we explored this possibility, the less feasible it appeared. Even if the right compensation levels could be determined, how would firm decisions on investments be made when there were fundamentally different goals? How well would people of different intensity levels work together? Could one really apply two different performance standards?

The more we discussed, the more it became apparent that to function effectively, the firm needed its professionals to share an intensity level (be it high or low). There needed to be a shared "Social Compact". The firm needed to agree on a set of values, goals, and performance standards and then be intolerant about everyone working to fulfill those goals and meet those standards.

Neither side was wrong - not everybody has to aim to be world-famous, and not everyone has to make a lifestyle choice. But it is hard to achieve anybody's goals (income, prestige or lifestyle) if you're in partnership with others who do not share your goals. It was no-one's fault - they were just in the wrong marriage.

Those were my experiences and views in 1997. Has my perspective changed?

Not really.

Please note that I am NOT arguing for everyone working themselves to death. My argument is that a single, given organization, if it is to be cohesive and stick together, must have a SHARED, common intensity - whatever that level of intensity is.

It should be possible for all the people who want medium-intensity career choices to leave their high-intensity firms, join together with like-minded people, and run a medium-intensity operation, accepting the trade-offs that come with that choice.

Like most business leaders (who, contrary to popular opinion are not all venal monsters) I would love to believe that a single business entity could offer choice of intensity - but I'm not sure it can if it is aiming to be among the best in its field.

Can the Olympic team let people decide what work-life balance they want to choose? I don't know the factual answer to this next question, but I'd love to know: can a mission-oriented organization like the Marines or NASA offer work-life balance options?

Forget "management." In a high achievement context, would the rest of the team (the colleagues and co-workers) really be willing to let individual choices be made, without giving in to resentments that some people are not seen as carrying their "fair" share of the burden? I'm not arguing that such resentments are valid - but I am reporting that they are virtually unavoidable and poisonous when they do occur.

Is it really possible, as many (including Denise) would hope, that an organization can offer a Chinese menu of work choices and benefits (take one from column A, one from column B and so on), I doubt the practicality.

I'm reminded of one of the lessons of Jim Collins' book "Good to Great" that to cover the gap implied in the title of the book, it is first necessary to (and I quote) "get the right people on and off the bus." In other words, in you want to come on our ambitious journey, fine. If you don't that's also fine, but we're going there and your either with us or - you're not with us.

By coincidence, on the same day, I received the following email from Jay Bertram, President of the Toronto office of TBWA, the global advertising agency. This is what Jay had to say:

I know you don't remember me. I was at a seminar you put on last year. Like many, I was thoroughly moved by your passionate plea for senior management accountability. The difference is I actually did what you challenged all of us to do.

Maybe it's because I'm Canadian and we do what we are told to do, but I took your challenge to heart and acted the first day I came back to my office.

I want to thank you for encouraging me to be a better manager. It is because of you that I am making a real difference for my employees. I have never been happier and more productive.

What Jay had done was to go back to his office and immediately ask all his people to evaluate their overall job satisfaction, their feelings about the office and (most critically) their overall rating of him as a leader. As I had recommended, he announced to all of his staff that, if he did not improve significantly in their rating of him as a leader, he would resign.

I telephoned Jay to thank him for his kind words, and to ask what it was that had given him the impetus to act. This is what he said:

It wasn't that I learned anything new, but because of your bluntness and forcefulness, you made me act on what I realized I believed was the right thing to do - not what you believed was right, but what I believed was right. You helped me contemplate whether I really was acting in accordance with my own philosophies.

You challenged me to be prepared to be accountable. It struck home when you said that many people kept on lying -to others and to themselves - when they publicly proclaimed their commitment to standards of excellence or missions for their organization.

Mostly, you gave me the reassurance that living up to my standards, and being prepared to be accountable for them, was the right thing to do.

You'll all gather that when I do seminars and presentations, I ask the organizers for permission to "not hold back." I like being allowed to tell the truth as I see it, and invite the listener to face up to the "elephant in the room" (the truth that everyone knows but no-one has the courage to talk about.)   

For better or for worse, this can be very provocative, confrontative and disruptive. (Not all of my clieents give me permission to take this approach.) But, as in Jay's case, once in a while you get through to people by being dramatic, forceful and impassioned.

As I wrote about in Are You Abusive, Cynical or Exciting? and in  Strategy and The Fat Smoker I understand those who are trying for self-improvement, and I understand those who choose not to try. What I don't understand (and don't think works) is to PRETEND to be trying for something without being willing to be held accountable for how well you are doing. I call it lying.

In my consulting and speaking over the years, I have tried various approaches to getting people to get on the self-improvement path by accepting this accountability (including feedback.)

Among the approaches I have used:

• Making them feel dissatisfied with their current situation
• Trying to paint a picture of the glamour of the future situation they could find themselves in
• Helping people see that significant improvement in their lot is actually possible, if only they are prepared to try a little and then keep it up
• Revealing the hypocrisy of the difference between their words and actions
• Giving people hope that, yes, it is real-world to operate in different ways

As Jay reports, the most effective way to get people to change, and to accept feedback, has proven to be to cause them (force them if necessary) to articulate what THEY really believe and then to get them to ponder, in the dark midnight of their soul, whether they are truly living up to their OWN standards.

I am the Marketing Manager for a Technology Consulting firm in Perú. The partners and I have held long discussions over the real benefit and application of industry performance ratios such as operational ratios for our business.

What is your take on these indicators? Are they actually available and if so are they useful as benchmarks?

While there are many reputable firms who make a living producing industry reports on performance ratios, I always find them so darn expensive to buy. On the surface, they look as if they give valuable information, but the longer you think about it, the less information content they really seem to contain.

Many of these industry studies are based on information collected from the companies themselves, with little attempt at external validation. As we all know from financial scandals, there's more than one way for a company to present any set of financial statistics, and many of these studies do not spend much time trying to achieve consistency in what they report. In many cases they cannot.

For example, you say your firm has "partners." That probably means they would like to know a ratio like "profit per partner." But you can play a thousand games with that - who's  a partner? What's profit?

There is so much potential for misunderstanding when each ratio is taken in isolation.

For example, you might look at one company and see it has a margin of 50 percent, while a second has only a margin of 3 percent. Does that mean the first company is doing better? No, it could just mean that the first company is a jewellery store (high-end consultants, high fees, low-leverage) and the second company is a supermarket (low prices, lots of leverage). The supermarket could still have a better return on investment than the jewellery store, which has to finance its own very large inventory. 

This seems like an obvious example, but the reasoning applies to all ratios - they only make sense when you can put them in the context of all the other ratios and extract the whole picture.

Next, you have the problem of averaging. Suppose you relied on a survey company which averaged the margins of the two companies I described above, and reported that the average margin was 26.5% Does that average number have any meaning? Probably not, but that's what gets reported in most surveys.

A third problem I have is that I suffer the tragic history that I have a masters' degree in mathematical statistics. That means I can never look at a survey average without asking myself "But what's the standard deviation?" It tells you nothing to know you're 10 percent above the standard industry ratio if they don't tell you what the normal variation around the average is. Is 10 percent above a great performance or just "noise?" But the information to judge the variance rarely gets reported.

I could go on, but now I have to reverse my conclusion on you. In spite of all of this (and the problems of  inter-regional comparisons, etc, etc.) I still would want to look at the numbers. If you know what you're doing (that's a big IF) and you don't rely on them too much, then it's better to know the reported operational ratios than to not know them.

As someone trained in numbers, I always like to say that there is no such thing as an objective, stand-alone numerical measurement system. All measures are, at best, SIGNALS to prompt further investigation and reflection. Used that way, they can be very help[ful and I'd look at the industry ratios (as long as they weren't too expensive to get.)

Anybody else want to help the questioner with some experiences and views?

Once a staff person gets assigned to a client, we have always tried to keep them on that client for as long as they are with the firm. This certainly has advantages in reduced learning time, and clients don't complain about "training" someone new.

But I'm wondering if there is also benefits to looking upon clients as learning opportunities and moving staff members into new client assignments to help them advance. Continuity of staff can be important to clients, and can be one reason that they use a small firm. But I'm also thinking that we need to make more of an effort to put people into the assignments that they need to grow.

Jim, I first analyzed this issue in a chapter called "On the Importance of Scheduling" in Managing the Professional Service Firm.

I argued there that scheduling and staffing of work determines darn near everything a professional business needs to accomplish. Tell me which people get to work on which jobs, and I'll tell you with 95% certainty the following things:

a) Client Satisfaction Levels: (as your firm knows, continuity is important to clients for quality, efficiency and service reasons)

b) Skill Development and Learning (as you and your partners know, the pattern of work someone gets, and the degree of responsibility within the job, affects whether or not they are continuing become a more skilled professional.

This is JUST AS TRUE for senior people as it for juniors. If anyone (in any profession) does the same work for the same client repeatedly every year, that person will exposed to only limited developmental opportunities. More and more they will become a higher-priced person living off past skills, ie increasingly obsolescent.

c) Profitability. Over time profitability is only ever achieved by continually looking for ways to get the same quality job done at a lower cost than before. If you were to measure (on a fully-costed basis, as you should) the difference between revenues for a job and what it cost you to do the job, you will probably find that a policy of automatically reassigning the same people as last year is economically wasteful and not profit maximizing.

d) Motivation and morale. The single biggest determinant of excitement and enthusiasm (at ALL levels) in a professional business is the pattern of work people have to do. If they always do similar things, they will lapse into being good citizens, but will not be throwing themselves eagerly into the pursuit of excellence. Why should they, if they are going to end up (according to your firm's shorthand rules)with the same mix of clients and business next year, no matter what they do?

The key lesson here is that decisions on scheduling are inherently strategic, with lots of consequences and should not be dealt with as matters of administrative convenience ("If you were on the job last year, you're on it this year") or considering only a subset of consequences: "Clients like it, so that's the end of the discussion."

You say that you are a small firm. Actually, that should make it easier, not harder, for you to take a more thoughtful, managerial approach to this set of decisions. You have the chance to have regular discussions with everyone (top to bottom) about what they should be working on and how, COLLECTIVELY, you're going to handle the trade-offs. Large firms often suffer the disadvantage of having to deal with things like this through bureaucratic policies.

Ultimately, clients care about quality, efficency and service - continuity is just a short-hand rule-of-thumb to try to get to these things. If you can be more thoughtful about how you achieve these things, they will give you more leeway in pursuing your other goals and won't insist on always seeing the same faces. And, with more thoughtful staffing, you'll be able to improve leverage, profits, learning and morale. Go for it!

There are a thousand things I wish somebody had told me early on in my professional (and personal) life, that I needed to work at improving and never knew about because I didn't know how I was coming across, or what the other person's expectations were. All too frequently, I only found out the hard way.

People very rarely tell you the truth about yourself, which makes it even more important that you develop ways to get feedback on how you REALLY come across to the rest of the world. (In many ways, I still don't know the real truth about this.)

Even when they do try to get feedback, some people tend to wait until the end of things (a year, a project, an affair) to solicit feedback about what they COULD HAVE done better (or differently) This is all way too late.

The real key to success is being able to ask for feedback on a relationship, and act on it, while it is still going on.

Remember that people NEVER tell you the truth on formal occasions. It's a rare boss that's going to be completely candid during a formal appraisal, and a rare client that reveals something dramatically new or surprising in a formal feedback system. And you're certainly not going to say "OK, darling, let's sit down and make a list of what we don't like about each other!"

If you're ever going to develop the skill of getting feedback (and it is a skill) then you need to find ways to make it informal. Get out of the office to have this conversation. (Or if it's a personal relationship, break the routine and do something like going out for walk together!)

As marketers have discovered with formal focus groups, if you really want to get at something useful, then you need to find out is not what people have to say when they are in a logical, analytical mode, but what they FEEL about you. Scary stuff, but absolutely essential to know this if you are to get on in life!

Try subtle, gentle language: "If I had to change one thing about how we interact, what would you recommend we work on?" Find a friend or colleague, at work or in your social crowd, who you think will tell you the truth about yourself. Some clients, over a drink, will give you an honest and helpful answer to that question. So will some subordinates.

Good or bad, you need to take time to think about what people say, avoid reacting in real time (REALLY tough!) and internalize it. You can neither ignore it nor overreact to it.

Most importantly, if you're going to ask, be ready to change.  

Anyone else got some tips about how you get good at what the Scots poet Robert Burns called "the power to see ourselves as others see us"? (Many people know that line, but how many know the rest of the poem? It's about seeing an insect crawl out of the wig of a fine lady all dressed up!)

We all know we SHOULD be good at getting feedback. But how, exactly, DO you really get good at this?

A forgiveness index of 0 means that if you drop the ball once, the person or the organization will label you for life. You might just as well quit now, because you're on your way out. The blade might not fall immediately, but the decision to drop it has been made.

Few people would want to live in an organization (or deal with individual people) this tough-minded, though I know a few institutions and people that operate this way. Some even pride themselves on so doing, on the grounds that as elite organizations, they need to test people in action and cannot afford to carry those who can't make it.  

Lets call people and organizations that have absolutely no forgiveness "The Warriors." 

At the opposite extreme, a forgiveness index of 100 means that you can break an organization's (or person's) declared standards for a very long time, and there really won't be any adverse consequences. They are infinitely forgiving

This option also looks unattractive. An organization that has rules but never deals with departures from them is wasting their time, and an individual  who preached a lot of things but ALWAYS forgave himself, herself or others clearly did not live them would lose a lot of respect immediately (not to mention being very annoying and frustrating to be around.)

Let's call these people "The Infinitely Understanding"

BTW, I'm not making arguments here about valuing different aspects of performance, but how things are dealt with when an honest-to-goodness mistake or failure has occurred.

I've experienced both, personally and professionally, and have been on the receiving end of both high and low forgiveness.

As a manager and as a buyer, I've probably also been guilty of both GIVING too much and too little forgiveness.

It should be fairly clear that the ideal is to be somewhere in the middle, although it's not clear which way the balance should be tilted.

I have a theory that super-successful organizations have a forgiveness index that is lower than average, but still well above 0  ( a level which would suppress innovation and experimentation.)

Anyone out there got any views on the right amount of forgiveness, and how you know when you have found it?  

The way firms or companies attracted young talent was to offer an apprenticeship - the expectation that people would join the firm and would be helped to progress along a reasonable well-defined career path until they either became one of the senior officers of the firm (partners, for example) or moved on. People joined the firm for careers, not jobs.

This didn't necessarily mean that people planned to stay with one company for life. It did mean that, if the system was not exactly "up or out", then it was at least "grow or go." Talented people didn't expect to stay at a given "level" for extended periods of time, and firms did not want them to.

Senior people, in the past, understood the aspirations of young professionals, their ambitions, their fears and their needs. After all, they had come up in the same system. And it was a system. Explicitly or implicitly, eveyone knew what the "deal" was - what was being exchanged for what.

All that's gone now, of course. Companies did a number of things to abandon the apprenticeship model:

a) Lengthened the time and odds of making it to "partner-level" positions

b) Started hiring experienced people at advanced levels, thereby ‘blocking' the path for those who were coming up the old way

c) Established permanent non-partner positions, also ‘blocking the path' and signaling that not everyone was expected to have career advancement

d) Made partners lives so stressful and unattractive that many junior people increasingly question whether the benefits of partnership are worth the efforts that an apprenticeship would require

e) Placed greater pressure on partners to generate work and serve clients, thereby reducing the amount of partner time available for mentoring, coaching and development of juniors

f) Shifted responsibility for developing people away from senior professionals and reassigned it to trainers and HR departments (!)

g) Started holding back crucial feedback on whether or not people were going to ‘make it': ostensibly this was to avoid making misleading promises for future promotions, but increasingly gave the impression that the firm wanted people to hang around "one more year" without the firm having to give any reciprocal undertaking

h) Stopped viewing their employees as future partners, and started treating them like REAL employees - resources to be consumed, not assets to be grown

The problem with shift from an "apprenticeship" model to an "employee" model is that it couldn't have been done at a worse time - right when there was a scarcity of talent, and when a new generation of people came along who could not conceive of investing seven or ten or twelve years of their lives to "make it."

This is not just a minor change, but a major revolution. Every assumption on which the professional business model was built has gone out the window. Firms don't offer apprenticeships, and younger people don't want to serve one. (See the June 11 blogpost at Adam Smith, Esq .)

Firms that abandoned the apprenticeship model now bemoan the fact that turnover among the junior ranks is extraordinarily high and juniors are not "loyal." Well, duh!

Apprenticeship is dead, but no-one is quite sure what has taken its place. Whatever it is, it doesn't seem to me to be a well thought-out, internally consistent set of policies and practices. It's a patchwork quilt covering up the gaps in an old fabric that has been forever torn.

If training is viewed as an integral part of making change - and not as a stand-alone activity - it can be very powerful. However, the sad truth is that the majority of business training, by me and by everyone else, is a tragic waste of time and money.  

Regular readers will note that the article is an expansion of what began as a series of posts on this blog, including Why Training Is Useless , Saving the Training Baby and The Keynote Speaker Charade .

By turning the blog discussion into an article, I hope to make it easier to download and circulate the thoughts to people who might benefit from them but not otherwise encounter them. Do pass on the article to someone who could usefully consider the issues it raises.

Thanks to everyone who contributed to those original discussions (and to my thinking) - in particular, those I quote in the article: Bill Peper, Ted Harro , Cem Kaner , and David G.  

If you would like to be emailed automatically when I add future full-length articles to the site, (or know of anyone else that would benefit) I invite you (or them) to sign up for my (free) article email list.  

Finally, the training conversation is far from over. Please join in by adding your thoughts and experiences to this blogpost.

Without REAL shared values, top management can easily slip into being both controlling and dictatorial, and as a result, the company becaomes less flexible, adaptive and innovative.

In any but the smallest firms, it is necessary to decentralize decisions as to what to preserve, what to adapt and what to innovate. If there is any ambiguity in the ideology, then it will be hard for people within the organization to know what is expected of them when there are opportunities that might fall into any of the three categories. - And such choices appear every day, week and month!

While most firms have clearly articulated mission and values expressed as high-level principles, it is not always clear what, precisely, these translate into when it comes to senior day-to-day, week-to-week, month-to-month or year-to-year behavior.

Few firms have an unambiguous constitution: a clear, explicit understanding of what people in the firm have a right to expect from each other; what the rules of membership are; what the true "non-negotiable minimum standards" are and what is a matter for personal preference or personal strengths.

Companies and the people within them often understand their performance criteria and key values (different things, of course) in broad terms, but not all firms have achieved clarity in reality. Some values are truly "religious" - firms are prepared to be intolerant about them if coaching cannot restore performance. Others values turn out to be aspirational - encouraged but not necessarily enforced. The ambiguity both inhibits performance and makes performance counseling difficult (if not impossible.)

In my experience, the key differentiating factor between "excellent" and "good" firms is NOT a difference in the mission or values that they advocate, but in their ability to achieve diligent execution of their mission and values (to high levels) by introducing a culture of accountability.

The concept of accountability for living up to the firm's ideology is not a trivial one. In many firms, there is no practical mechanism - hard or soft - to ensure that senior officers (or groups of senior officers in different locales or different disciplines) are achieving - accountable for - living the values of the firm.

To "assume" that senior officers are all doing the right things is almost certainly an insufficient organizational approach. Excellence is only achieved, in any field of endeavour, when an artist or athlete volunteers to discuss his or her performance with a caring, supportive, trusted coach who is charged with the task of helping the performer cross the gap between good performance and true excellence. An athlete or artist who is never coached will accomplish less.

Most companies have procedures in place for ensuring accountability for financial measures. The next challenge they will face is whether their senior officers are prepared to be held truly accountable for the ideologies and value systems they espouse.

What's your company's approach for ensuring that everyone actually does live up to the espoused ideology? Or does you company and its senior officers shy away from real accountability on these things?

I think there has been some recent research proving all this - I'm sure each generation of students rediscovers the principle at exam time.

So what's the lesson for the rest of us? Keep a journal! Keep a diary! Sit at your computer late at night or early in the morning and transcribe what people said you to that previous day.

Transcribing and recollecting the day's events will help you understand your experiences better - just like it used to help me understand my math or english studies. It forces you to slow down the mental processs and reflect on what you are writing or typing, not just pretend you understand it.

And people - clients, subordinates, colleagues, spouses - will be very flattered that you later remembered (and thought about) what they said.  They won't mind if referring to notes is what helped you do it - they will just be grateful and impressed that you can do it at all.

I have used Trusted Advisor in my work for several years. The Reliability and Credibility factors you talk about there have always seemed like "table stakes" to me. The third component, A Low Self-interest, is sometimes less obvious, but once considered is equally non-controversial. The fourth factor, Intimacy, is always the one that gets people hung up. "Why intimacy?" they ask, "Why do we need that?"

What things would you recommend that companies of any size can do to be more intimate with their customers, employees and community? If you are a company who needs scale to survive, is it a given that you have to leave intimacy and trust behind?

For me, the secret to the ‘intimacy' aspect of trust, whether dealing inside or outside an organization, is the simple act of getting out of role-to-role interactions, and making them encounters between real people. In other words, treat me like a person, not an ‘employee' or a ‘customer.'

Viewed this way, the issue of creating intimacy is less one of systems, procedures and processes, than it is one of attitude and style. The famous examples are the cabin attendants and pilots of Southwest Airlines, who (according to their reputation) can make announcements conveying serious information but with humor, personality and individualism, proving that you don't have to be robotic, bureaucratic or rule-driven to get something done. And Southwest is one of the largest airlines out there. It's all about attitudes, mentality, empowerment, self image, and keeping things in proportion.

As I've written many times (and never tire of preaching) it's the RULES that grind us all down, and they tend to accumulate and take over when organizations grow. If managers only focused on WHAT needs to be done (superbly), and WHY it needs to be done (superbly), then they could empower and trust the front-line staff to figure out for themselves HOW to do it. And if, as a staff memeber, I can then do it MY way, I'm going to make it more real, more human and more intimate for both the customers and for myself.

What about the effects of scale? In my book Practice What You Preach, I studied 139 businesses analyzing the relationship between attitudes and financial results. While there were examples of great intimacy (‘human scale') the overall trends were a clear decline with scale. In larger offices in general, people did, indeed, give lower scores to such things as:

• Management valuing input
• Management listening to people
• Management being trusted
• Management practicing what they preached
• Management being successful in fostering communication and loyalty

These all declined with larger offices, even though I was able to prove that doing well on these things was a significant predictor of better financial results.

In addition to my statistics, the book contains portraits of nine of the highest-performing businesses I could find in my database. I interviewed not only the managers, but many other people who worked in these nine office.

One of the absolutely fascinating outcomes was that, in line with your question, everyone was worried that they could only achieve their level of excellence because they were ‘small' and had a strong sense of community and purpose - or, if you prefer, intimacy. But this reaction was expressed by offices that had over 300 people!

This convinced me that creating a sense of intimacy is a managerial phenomenon, not one simply determined by scale. It can be achieved by managers who know how to manage.

So what did the ‘great' managers do to overcome the effect of size? None of it was very dramatic. Most of the (hundreds) of specific messages are contained at the end of the book could be summed up as "Be human and never forget that we are, too."

Some specific advice to managers in the book?

• Do your own photocopying occasionally. Wash your own cup
• Don't hesitate to jump in and help and prove you've still got it
• Keep a level emotional keel, don't over-react to either triumphs or disasters
• Take work seriously but don't take yourself seriously
• Treat people as adults
• Let people know you as a human being, not just as their manager
• Believe in, and keep the faith with what we are doing

At the risk of repetitiousness, I must stress that these lessons from the book are NOT that these are ‘nice-to-have' behaviors, but that they are EXACTLY what the managers of the financially highest performing businesses in my database do.

Coert Visser, a Dutchman who has built one of the most useful websites about consulting , interviewed me first aout my experiences in blogging .

Then, he asked me to review some of the management and marketing principles I have advocated over my career, summarized as The Only Competitive Advantage in Professional Services.

For those who would like an overview of my philosophies and conclusions, the two new articles are a very good place to start.

A)    With clients

B)     With subordinates

C)    With colleagues

D)    With those you report to

E)     With your close family

F)     With your extended family

G)    With friends

Use the following scale:

1. I'm as good at this as anyone I know
2. I'm better than the average person at this
3. I'm OK at this, no better, no worse than anyone else
4. I'm a little weak at this
5. I'm really not very good in this area at all

What do your answers say about you? Are you happy with the situation? What could you do about it?

Also, it's time to offer my very sincere thanks to those who participated in People, Passion and Principles during the month of May. They are:

Commentors

Scott Allen , Stephanie West Allen , Annette , David B , Mark Baker , Martin Bamford , Uri Baruchin , Ben , Bill, Barend Blondé , Eric Boehme , Jerry Bogart, Ed Boulton, Gary Bourgeault , Kevin Brennan , Duncan Bucknell , James Bullock, Shawn Callahan , Geoff Considine , David , Norman Dragt , Francis Egenias , Eric , Anna Farmery , Brad Farris , Kathy Fish, Gareth Garvey, Phil Gott , Clive Griffiths , Dennis Howlett , Hunter, Jol Hunter, Lee Iwan , Patrick Jacques, Joan , Stuart Jones , Jose , Kok Van Der Weijden, David Koopmans , Bruce Lewin , Karen Love , Tim MMF , Bruce MacEwen , Greg Magnus , Lisa Mather, Hugo Matislaw , Ed Mays, Mike , Matt Moore, Steven Pearce , Bill Peper, John Eric Pollabauer, Manoj Ranaweera , Suzanne Rose , Bill Sherman, Carl Singer, David A. Smith , Brian Sommer , Ava C. Thorin, Stefan Topfer , Coert Visser , Ian Welsh, Jay Wynn, John Zapolski

Trackbacks

Adam Smith, Esq.
Anecdote (also: here)
Bruce's Blog (also: here)
BusinessMatters
Career Intensity Blog - David V. Lorenzo
Common Ground
Creating a Better Life
Debt Hater
Escape from Cubicle Nation
Expertise Marketplace - Professional Service Firm Marketing Blog
Golden Practices (also: here)
In Search of Perfect Client Service
legal sanity
Marketing - Communications - Greg Magnus at eoecho
Math class for poets
Oplossingsgerichtmanagement (also: here)
PR Studies
Slacker Manager
The Bell Curve Scar
The Small Business Blog
Working Solo

Come on in, everyone else - the water's fine and we don't bite in this pool!

Based on what I’ve seen , here’s what I’d look for: Someone with…

1. A modest background – not extreme poverty or riches. – Someone who had had to create their own success – a self-made man or woman, with above-average energy, drive and ambition
2. A character that shines through regardless of the role they are playing, as illustrated by references from past clients, subordinates, colleagues, superiors and friends. I’d want to know if everybody (from every direction) said the same thing about the person’s character.
3. A track record of having a hunger for responsibility, already demonstrated in volunteering for leadership roles in extracurricular activities Consistent high-rated scores from the beginning, not just as they approached final exams or the end of school.
4. Some evidence that they are driven by a restless curiosity, seeking variety, showing the initiative to eagerly taking risks with their careers. I’d worry about someone who had been too focused, or followed too logical a path.
5. A history of long, strong, stable personal relationships.
6. A desire to accomplish something that they can describe interms other than money, treating riches as the outcome of achieving their success, not as the definition of it.

Anyone agree? Disagree?

Do you think you could spot these things in a young person in the typical recruiting interview process? If not, how would you go about finding out about them?

(Would the criteria change if you were recruiting mid-career lateral hires - say, people in the 30s, 40s or 50s?

I believe it is almost always misleading to do this, and often injurious.

It is relatively easy to disclose what each person has been paid - it's not so easy to disclose all the factors (quantitative and qualitative) that were taken into account in arriving at the compensation decision. As a result, people are inevitably left to speculate (and inevitably misinterpret) WHY individual A got less than individual B.

This ambiguity becomes particularly invidious when the compensation setting group has (appropriately) taken into account some very personal factor that may have influenced performance, but which it would be entirely inappropriate to disclose openly.

As I discussed in Managing the Professional Service Firm (my 1993 book), it is meaningful for the compensation-setting group to disclose and discuss patterns and trends in compensation, but individual results will always be literally "meaning-less" without knowing the reasons for the decisions. It may be symbolically or legally necessary in some firms because of the partners' ownership status, but that doesn't make it of any constructive value.

My clients also want to know how to justify and pay for the increasingly ridiculous salaries that these young people can command. As one example, young people straight out of law school in the US are being paid more than $140,000 per year!

Similar ridiculous numbers are showing up in a multitude of industries and countries across the world. Ask some Indian parents how they view the incomes their 20-something children can earn in the outsourcing factories of Mumbai!

My clients insist that there is a new "Millenial" generation with different attitudes - that "they" are different than we were (or are.)

I think this is wrong. Because of differences in the supply / demand balance, younger people today may have more opportunities than baby-boomers like me (or like Generation X, Y or Z. or whatever) but the realities of building a career remain the same.

What a young person needs (in addition to a good paycheck) - in fact what he or she MUST have - is the opportunity to work on stretching, challenging interesting things - the chance to build skills.

Without this, they can not develop themselves and have a career - they will be stuck in low added-value jobs. For someone who has not yet "made it", learning and growing is not a "nice-to-have" - it's critical.

If they are not learning new things, they HAVE to move on in order to have a career and get somewhere with their work lives. 

So, there's a very simple secret to solve the twin dilemma of how to both hold on to mobile young people AND to justify their ever-escalating salaries. It is this - make sure that they are put to their highest and best use.

To do this requires that the organization has no "underdelegation" - work currently being done by a more senior person that could be done by the more junior person. It means that companies must outperform their competitors in establishing procedures, processes, templates, forms, databanks, knowledge systems and a multitude of other tools to ensure that the (expensive) junior talent can be economically justified by producing ever-increasing high-value output.

Companies that do this find that everybody wins - the juniors get fulfilling, developmental careers that provide opportunities to learn that they could not get elsewhere; the product or service that the company makes is produced more efficiently than when it is made by higher-priced people. Some of the savings can be passed on to the customers or clients in the form of lower prices or fees, while some can be retained as company profits. And the time of the more senior people is freed up to invest in and pursue higher-value opportunities that will keep the organization competitive.

Ah, but THERE's the problem for many firms and companies. To achieve this nirvana, the senior people must be willing to give up the comfort of holding on to the work they are already responsible for, and be willing to prove that a younger person could do what they have worked for so long to be able to handle!

In many places, this "delegation" solution is virtually impossible to achieve because the existing, senior people are afraid to expose themselves in this way. And company measurement systems that evaluate senior people on how busy they are only serve to reinforce this bad behavior.

This syndrome is not new. I first wrote about it in chapter 2 of MANAGING THE PROFESSIONAL FIRM in 1993. Kids today may be expensive and have an attitude problem, but wise management practices to deal with them remain the same as they always were.

Mel Bergstein, who has just stepped down as CEO of the major consulting firm that he founded (Diamond Cluster) pointed out in a comment on my blogpost that the issue was much more generalizable, and that creating trust in organizations was a common challenge for all organizations of knowledge workers.

I'll be writing a follow-up article about this in the future, but here are some preliminary thoughts about what it takes to create an organization where people trust each other and work for the common good, thereby also achieving more for themselves as individuals.

1. Selectivity in hiring, screening out those who don't want to be team players
2. A written constitution that spells out the common ideology of the organization, and what it means for personal behavior — explicit not implicit, no ambiguities, please.
3. Some kind of programmed socialization process so that new people (entry level or senior hires) are shown about the way the organization requires them to behave
4. Careful selection of managers with both personal values and the courage and skills to tackle untrustworthy behavior (even or especially that demonstrated by powerful people) early, rather than waiting till the problem is egregious. (Values, Courage and skill - that's a heck of a package to ask of managers!)
5. A focused strategy around selective market segments and services, so that there are lots of opportunities for people in different parts of the organization to interact and hence build up trust through repeated experiences of working together
6. Abandonment of measurement systems that report individual or small group results, and which create pressure on people to worry primarily about their own performance rather than the success of the institution.

This is not a complete package, but I hope it's enough to stimulate some discussion. What do YOU think it takes to create a "High Trust Organization?"

The problem derives from the fact that, in choosing when and where to get involved, I try to select engagements where I have a chance - at the very least, a chance - at doing something meaningful and purposeful, and making a difference through my presentations.

However, I am constantly astonished by what a small percentage of people organizing conferences and meetings actually want this, or have even thought about it.

Most of the time, they want a speech that is entertaining, informative, stimulating and motivating. What they don't seem to want is anything that specifically addresses the way they run their firm or the real-world changes they are really trying to make.

They don't, it seems, want anything that appears challenging, provocative, controversial or potentially divisive. They don't REALLY want to address the topics they ask their speakers to talk about.

For example, I recently received an enquiry asking me to speak about the topic of a book of mine, True Professionalism, and convey to the audience the importance of living up to the organization's "sacred values." They wanted me to be inspiring.

However, when I asked if I could take votes at the meeting as to how well everyone thought the organization was currently living it's values, the organizers were terrified - "No, that would stir up things too much!" they said.

I also discovered the problem in the few months that I experimented with working through a speakers' bureau. I met with their agents to explain the type of work I was willing to take on. I was astonished to discover that this was a relatively unusual request for them - most speakers and most clients operated on the principle that if the date was available and the date was free, then a booking was made.

The idea that a discussion should take place, to see if the speaker could be used to further the organization's goals, and fit into other changes that management wanted to bring about, seemed to be an uncommon desire.

Of course, the clients' experience with speakers could have contributed a lot to this situation. Many speakers have only their "fixed" presentation, and make no attempt to custom-tailor it to the specific situation.

Whoever is at fault, the fact is that, most frequently, meetings and conferences are organized as "stand-alone" events, with a life of their own, disconnected to the firm's progress.

This is also evidenced by the fact that, most frequently, it is not someone in management who calls me, but a "conference planner" or someone in "administration" - people who are not in a position to discuss what changes the organization is really ready to tackle.

Most meetings, and most keynote speakers, have agenda topics, but no clear goals. Twelve years ago, I wrote an article called Meeting Goals, available on my website, on the possible goals of a meeting- but to this day, most of the calls I receive are from people who haven't begun to think that through.

I think it's perfectly valid to want an entertaining speaker, and I've tried throughout my career to be both entertaining and inspiring in my style. But the thought of being JUST an entertainer no longer excites me - there's so much more that could be achieved with a conference presentation or seminar, if companies only had the courage to plan that version.

I'm changing that, so that from now on there will be only one global feed available. Since the vast majority of people signed up for that, the sub-feeds didn't seem to serve much purpose.

You don't have to do anything. It's just that if you only subscribed before to one of my sub-category feeds, you are going to start receiving posts on the other subjects, too. Sorry!

The answer is that while the business issues tend to be very similar, the style with which you respond to them must chnage a great deal.

It is always true that to have a successful company, you must energize, excite and enthuse your people. However, it turns out that the way that you excite a Brit is not the same way you enthuse an American. (They even show their enthusiasm in different ways.) In fact, it can vary regionally: the best way to get through to a New Yorker doesn't always work best in the rest of the US.

The same lesson applies in client relations. When I sent my article Marketing is a Conversation to a prominent UK lawyer, she observed that aggressive attempts to get to know the clients (at least in the fashion I described) would be considered very counter-cultural in the UK and Europe. The intentions and the motivations might be the same, but you would need to have a very sensitive ear to pick up what was being received well.

None of this says one cannot work well in foreign countries. It does say that a key to success is the need to pick up social clues quickly and integrate them into your style (a form of emotional intelligence). But then, that's true domestically anyway!

Noticing that he was being undercharged on his telphone bill, he speculated that the telephone company was undercharging many of their other customers. So, he wrote a letter to the telephone company's CEO, identifying the opportunity for the telephone company to make money, and landed an initial assignment that grew into a significant consulting relationship.

Quite a creative, impressive piece of initiative for a young person! The only problem was that, while the majority of the audience was incredibly (and appropriately) impressed by the CEO's piece of autobiography, only a minority thought they would have had either the ability or the courage to do something like that.

The behavior seemed very forceful and aggressive to many of them - they questioned whether they would ever have the courage (or the wisdom) to do something like that. It seemed "foreign."

There was a similar reaction to another point the CEO made. He was pointing out the benefits of staying in touch with everyone you went to school with, since your classmates may turn out to be people who, in future years, can hire you.

The CEO's intentions were pure - he pointed out that the key to business generation was having a sincere interest in people and a sincere desire to help them. He cited the example of one of the firm's great business-getters of all time, for whom there was almost no difference between his social circle of best friends and his customer base.

Again, while the impact of the speech should have been motivating, it was not so to all of the younger people present. Isn't there something false, many of them worried, in staying in touch with people for such mercenary reasons? Do I really want there to be such an overlap between my work community and my personal community? Yes, it worked for the superstars, but is it ME?

The CEO was sincerely trying to use his experience to help his junior people succeed, and was giving them wonderful advice. But it was the advice of a "natural." He wasn't getting through to his novices and apprentices.

They were not thinking "Oh, now I see how it's done - that's easy." Their reaction, just when anyone skilled is trying to show you how to do something was "Wow, I'll never be as good and as smooth at doing this as that person, why should I try?"

The truth is that if someone is going to help us learn something, we do not learn best from the "naturals." We learn best from someone who credibly, visibly, "been there - done that!" Someone who started out struggling with these issues.

If I'm struggling with a drink problem, don't offer me a teetotaler as my counselor - they just won't understand my struggle, and they absolutely will not be able to help me. If I'm struggling with weight, don't give me an instructor who never had an extra pound of fat on him or her.

I need to work with someone who knows how difficult it is to stick with the program, what it feels like to get the "midnight munchies" and someone who can give me tips derived from really personal experience about how a NON-natural, a NOVICE, begins to build the new behaviors into a lifestyle.

The best teachers and trainers prove to me that they understand my struggle, and give me tips, tactics and suggestions appropriate to my stage of development - not just the examples of what the superstars can do.  

This is a healthy initiative. As he points out, there may be a lot of talk about the need for good management of lower-level employees, but the life of senior professionals in most sectors has been revolutionized. The world's gone crazy around them - increasing client demands, new technologies, the need for greater concern about how junior people inside the organization are managed. Some sectors like accounting also have a new regulatory environment to contend with.

This reminds me of a speech I gave a while ago, where I was asked to talk about improving the morale of junior people in order to prevent increasingly high levels of staff turnover amid the war for talent. Early in my presentation, a partner in the audience raised his hand and said "Forget about discussing THEIR morale as employees - what about discussing OUR morale as partners?"

He had an excellent point. The traditional model of the professional business was to say to the juniors "Work hard and, one day, you too can have the life of the partners." Needless to say, if the juniors look at the partners' lives and don't like what they see, this is less than fully motivating, and they are not going to hang around for very long!

The efforts that my friend's firm are making to help their senior professionals succeed and manage the new stressful world can be divided into two groups.

First, there are what I call "off-line" support ideas. These include sabbaticals, leadership development processes and an interesting and innovative "comprehensive medical and lifestyle evaluation" service to help senior professionals find and deal with health issues before they are serious or even symptomatic. Apparently, they find solvable undiagnosed issues in 20% of the evaluations.

The second set of ideas for reducing partner stress is to go back to basics and start managing senior professionals differently through different approaches for normal "on-line" regular, managing. (In other words, start managing them instead of just administering a profit-and-loss scorecard)

This involves getting practice leaders, department heads, and office heads to engage more in one-or-one coaching, helping senior people to find out what activities turn them on, then helping them get rid of activities that do not and get more of the activities that do. Companies and firms have to start HELPING people succeed, not just demanding that they do.

It also means re-examining the way the firm uses metrics so they don't (as is traditional in firms like these) keep holding all senior people accountable for being good at everything, but are able to create super-successful teams by allowing individuals to pursue their interests and make a contribution in a specialized role that, through team management, is integrated into the overall needs of the organization through effective team leadership.

Needless to say, firms find it a lot easier to throw money and time at the "off-line" support initiatives than they do at holding accountable those with managerial responsibility to start being effective at managing. But the effectiveness would come with precisely the reverse priority.

If the CEO or Managing Partner started asking the office heads regularly "What's Jimmy doing to develop his career? What are his challenges and problems? What have you done as office head to help him?" then the office heads would start getting the message that a new regime really existed, and that they probably would have to start changing THEIR behavior if they wanted to keep their role as practice managers and leaders.

Done this way, things would change fast. However, without this change in managerial behavior (not just speeches) from the top, I have deep a skepticism that change can be brought about through off-line support initiatives.

If management wants other people to change, then management needs to figure out how they personally need to change in order to elicit the new desired behaviors from others. Change only happens if the people at the top change. We keep asking too much of those in support roles - they cannot patch over bad practices by line management.

I wonder what you think of the underlying premise of Positive Organizational Scholarship, a hot topic at the University of Michigan Business School these days. In particular, I am curious of your opinion of the Reflected Best Self exercise.

The underlying idea of the approach is that, as Marcus Buckingham pointed out in a series of books (starting with First Break All the Rules) a person's success is usually obtained not by working at correcting weaknesses, but by finding out their core strengths and building upon them. (This is the source of the word "Positive" in the name of the area of research.)

It's too soon to know whether this particular method of self-discovery is the best approach, but I am very sympathetic to the insight that most of us, for better or for worse, have a package of strengths and weaknesses, probably very hard to alter.

Two very important conclusions flow from this. First, know thyself. And second, find a way to play a role that fits who you are, not some organization's generalized statement about what we all need to be good at.

(The conclusions are critical insights in managing someone, too. To help someone succeed, you must help them find a role where they can flourish, not fit everyone into a cookie-cutter set of standards)

True Professionalism (1997), I wrote about it this way:

Don't worry about what you're good at. If something turns you on, you'll be good enough. If it doesn't, you won't. Your "strengths" are irrelevant: What you like is critical.

One key to discovering what you really like and love is to ask yourself what are the things you don't like to admit. "I don't like to admit it, but I need to be the center of attention." O.K., find a career path that will let you show off. "I don't like to admit it, but I don't like dealing with other people." OK, then devise a role that will let you make your contribution through things done at the office, such as intellectual creativity and true technical superiority. "I don't like to admit it, but I really want to be rich." Fine, go out and build a business. "I don't like to admit it, but I'm an intellectual snob." That's all right, so find a career path that will allow you to work only with smart people. Play to your "evil secrets." Don't suppress them. You are a lot less flexible than you think.

The summary quote from Goldman's CEO, Hank Paulson, is a brilliant insight. "Goldman", he says, "is a hard place to be hired, a hard place to be promoted and a hard place to stay." As the Economist's writer observes - "And if you want an explanation of how Goldman endures, that, perhaps, is the best explanation of all."

The article is rich with details of the intensive hiring process (a vice-chairman had to endure 150 interviews before being hired), the tough promotion process and, the enforcement of high standards even among the firm's most senior people. The article says "Often enough, someone important is asked to leave. This is one of Mr. Paulson's most critical roles."

What all of this proves is that, in professional businesses the essence of strategy, the keys to ongoing success, are not primarily the choices of which markets to compete in and which services to offer. Such decisions, important as they are, are secondary to having processes in place which force the firm, and the people within it, to live at (and to) higher standards than the competition.

Goldman does not preach different philosophies than most other businesss would preach - commitments to client servoice, teamwork, being a place for the best and the brightest -it just has THE DISCIPLINE and the COURAGE to achieve consistently higher standards on those principles, with fewer compromises.

Strategy and the Fat Smoker and the chapter The Value of Intolerance in my book True Professionalism)

The first 4 episodes are now available on my website, and a new episode will be added each week.

The previous series of 14 podcasts on MARKETING PROFESSIONAL SERVICES is still available on the website

What this measurement mentality misses is the fact that, as human beings, we are remarkably well-equipped to judge things, and we can form an accurate picture of what is going on by looking, talking and interacting, even for only a short period of time.

Take, for example, the issue of whether or not the employees in a business are excited, enthused, energetic and engaged.

In spite of corporate efforts to design questionnaires to monitor performance (including the infamously ineffective and bureaucratic 360-degree feedback programs), anyone walking into a business unit would be able to detect in a minute the difference between a ‘turned-on' group of employees and one where everyone was operating like a good, compliant soldier. It would have to be a very sophisticated ‘measurement' system to capture what any one of us could detect in an instance.

Embedded in the ‘management by measurement' mentality is a false hypothesis. That effective management can be achieved through detachment - that measurements will be reviewed by a top-level (corporate-style) manager who is not involved in a hands-on way in the business, but monitors what is going on through the scorecards.

There is much in business (perhaps most of the crucial decisions) that cannot be measured in such a way that an accurate meaning can be conveyed to the person examining ONLY the measurements. Measurements can be invaluable in giving guidance to someone who must decide and judge, but are a profoundly pathetic substitute for effective judgments.

The challenge of modern business is not to improve our measurement metrics, but to redesign managerial activities so that the organization is better able to make good judgments.

How would you think about designing an organization that outperformed others by making effective judgments? I don't think we yet have any science on this, but it would probably include:

a) Delegation of decision making to local managers who are more likely to understand what is going on and are able to make better, informed judgments;

b) A clear set of enforced guiding principles and objectives, so that trade-offs are made consistently across the firm

c) Careful selection and apprenticeship of those who are going to be placed in judgment (managerial) roles

d) Finding ways to ensure that the judges are credible and held accountable for their effectiveness

A good starting point for reading on this topic is an article entitled ‘The New Organization' in January 21^st issue of The Economist quoting Yves Morieux of the Boston Consulting Group.

M. Morieux says that, in the organization of the future, the main tasks will be to help improve the judgment-based decision-making processes that knowledge workers use, not find better ways to measure their performance.

Anyone else have some views on how you improve an organization's ability to judge, rather than measure?

If you are an organization (let's say a company or a firm) made up of professionals who are mobile and can take both their skills and their book of business elsewhere, how would you go about judging or measuring whether your organization was adding any value above and beyond the sum total of the individual talents (or books of business) of all the individual players?

In other words, how do you tell whether the organization is contributing anything?

It's been a long time since I was an academic, but I do remember that there was a lot of work around measuring the EVA (economic value added) in corporations.  Does anyone know if this can be readily be applied to professional environments?

I can imagine asking people whether they THINK their organization is helping them succeed more than they could either on their own or (probably a better question) at another firm. I can then imagine asking them IN WHAT SPECIFIC WAYS do they think they are benefitting from belonging to one organization. But that's pretty sooft stuff.

I know there are real differences between firms in this regard. My old model of "Hunters and Farmers" (written in 1985 but included in Managing the Professionals Service Firm ) analyzed the difference between firms of autonomous entrepreneurs ('hunters') and firms where the value was emebedded in the organization and everyone worked to make the overall entity succeed ('Farmers' or 'One-Firm Firms')

I can usually tell pretty quickly when I visit a firm where on that spectrum they are, but I haven't (yet) thought through a way of assessing it so that (a) managers inside the firm can judge whether they are making progress in building a firm that is cohesive and adds value beyond bringing in the right warlords and (b) observers and analysts could compare the progress of different firms in this regard.

Does anyone want to propose some metrics on measuring or judging 'value of the organization?'

I own and run a PR consultancy with 24 professionals. In the 13 years I've been in business, I've lost 7 of my best people. They either open up their own shop or move on to a client. In order to retain the great people, I tried offering bonus compensation (7 yrs ago) and opening up the chances for sharing in the ownership (3 yrs ago). Despite a great culture within the firm, I still had departures.

Now I'm reflecting on the idea of a Branded Free Agent Hub, a place where the best senior Communications/PR talent is exclusively pooled together, but where the senior professionals work independently (and even from remote locations) for their own clients. It could be somewhat like a cost sharing model found in some law firms.

The professionals could work, live and nurture the relationships with their respective clients at free will like an entrepreneur. They could work as flexibly as they wish. The hub would provide all the benefits of a large professional service firm - stuff we already have in place like coaching, online project management tools, service offerings/packages, service innovation, a strong brand, administration, billing, reverse seminars with clients, sharing of knowledge with peers......you name it).

The professionals would bill 100 per cent of their time to their accounts. In return, the hub would keep a percentage of the revenues, say between 10 and 20 percent. The hub would fly under the flag of the brand I've built in the past 13 years.

So what's in it for the client? I presented the model to four of my long time clients. The model is not really relevant to them. They say as long as they can keep the relationship with their consultant and as long as the hub secures the defined service level they'd buy in.

And what's in it for the professional? I talked to some inside and outside peers. They think I'm crazy. They say I'll lose business and above all, I'll lose the professionals who may be savvy experts but not so good in relationships. They could be right. My math tells me that out of the 24 staff I'd have only 6 or 7 who would go for the ride. A ride that, I think, would be beneficial to the client as well as for the professional.

Is the Branded Free Agent Hub a professional service firm (PSF) model that's built for the future?

Boy, this question raises a lot of profound issues. Let me give some quick conclusions, inviting other people to jump in.

First, I have heard other people propose models like this. In fact, over the years, I have been invited to join in on one or two. (I declined.) I have NOT heard from – or about – those people ever again, so I don’t think the model has had much success in general.

The single best example I know of where it has worked is with the EDGE group (which includes Patrick McKenna, my co-author on the book First Among Equals). They have an association of consultants who all advise law firms – each person is independent, but they work together to share knowledge, do joint research, publish a shared journal and do other activities.

I think it works because they all do related things and have many opportunities to work together and learn from each other. If, in your model, the senior professionals did very different things, I suspect the Free Agent Hub would be very unstable. Maybe Patrick or his colleagues would like to join in the conversation here on which of the activities work best for them.

Second, I doubt whether the hub will justify a “commission” of 10 to 20 percent. In many countries and in many professions there have been both informal networks of firms and ‘aggregators’ – companies who buy up smaller firms and try to add value by providing the network benefits you suggest. The trouble is that the benefits are really worth paying a lot for. Let me give you a quick comment on each one on your list:

Coaching – “I’m from headquarters and I’m here to help.” (No, not worth a lot – I can get input from my peers in the business community without paying a percentage off the top.)

Online Project Management Tools – Maybe this was scarce 10 or 15 years ago, but today there are so many vendors offering good software for a variety of things that it’s unlikely to be an ongoing benefit. Maybe as a one-time start-up I could use advice on these tools, but I’m not going to pay an ongoing premium to the hub / network / aggregator for their proprietary versions.

Service Offerings / Packages – Yes, by partnering with other individuals or firms, you may be able to offer a wider range of services, or a new offering that combines in one project a diversity of skills. As I argued in True Professionalism, the market recognizes an advantage in creating something new, but doesn’t consider a broader “menu” as much of an advantage if each of the dishes on the menu are available to them in the market anyway.

Service Innovation – It’s not clear to me that this is a guaranteed result of a hub of independent entrepreneurs. Yes, if they all agree to fund the same, focused research projects, then they can do more together than they can independently, but that requires true joint decisions and joint commitments, which not all hubs / networks / aggregators or firms achieve.

A Strong Brand – I’m a skeptic that a brand is what the individuals get from the hub. I think of it in reverse – if the individuals all live to a high standard, then the hub will have value in the brand (which, of course, is more than name recognition.) Exactly as your clients said, the brand value is in the achievement of consistently high standards. Fully-owned firms rarely achieve this, so I have my doubts about whether a loose band of individualists will.

Administration and Billing – The benefits here are real but very small. Not worth giving away freedom and autonomy to get this.

Reverse Seminars with Clients – If by banding together you can do more joint listening to and learning from the clients, then this could be a real benefit.

Sharing of Knowledge – Very beneficial if real and on-going.

My bottom line is this – I think all the topics I have just discussed need to be addressed whether you are an integrated firm OR a hub or network or aggregator. I don’t think structural form is the issue, but whether or not you have the processes in place to capture the “Let’s benefit by doing things jointly according to a common philosophy with mutual commitment.” If you have that, there is value in your association together. If you do not have that, then being a hub (or anything else) won’t solve your ‘departures’ problem.

The right response to turnover and mobility problems is not (just) pay schemes. Instead you (and everyone else) must address the question of why your firm exists – as a firm. What value does the organization add above and beyond the individual talents of the individuals?

I discussed these questions in How Firms Should Add Value, chapter 11 of True Professionalism and also raised them in my article Are Law Firms Manageable?

There’s a lot more to say on these issues, but let’s see what others in the blogosphere say first.

David, can this concept be taken too far? Is it appropriate to use administrative staff, or relatively low-paid resources to free up a partner’s time to the fullest extent? I know an accounting firm that encourages Senior Accountants and Partners to delegate anything and everything to the firm’s admin staff, including non-business related tasks (picking up out-of-town guests at the airport, dry-cleaning, grocery shopping, etc.). Their concept is that time saved will result in more billable hours OR a happier professional. What’s your take on this?

Josh – first of all, everything can be taken too far. Second, I do think it is a good idea for firms to provide ‘concierge’ services to busy professionals, as long as the same principles of wise delegation are applied at all levels. I would not want a trained administrative assistant – who can add a lot more value through administrative skills – being used to do grocery shopping.

The principles I argue for imply providing appropriate support all levels, not just the ‘elite’ professionals or the senior people. Special privileges for the bosses creates a very dysfunctional class system. (I’m from England – I know all about that.) But an organized, comprehensive program makes all the sense in the world to me.

Of course, the whole theory of providing good support rests on the assumption that people will use the time that is freed up to their highest and best use – and this may not always be the case.

First, people often use the ‘freed-up’ time inappropriately. More current billings may not be the missing element in the business mix. I frequently ask people why they are not executing and implementing their own plans for strategy, marketing, people development, self-development or a whole host of things. The answer comes back as a chorus – ‘Too busy!”

‘Too busy doing what?’ I ask?

It turns out that people are too busy overinvesting in making today look good (this month’s billable hours) an underinvesting in building a better tomorrow (their own ‘get better’ strategies.)

If they had more free time, they should use it BUILDING their business – finding the time to do the things they know they should be doing for the health of their careers and business and are not doing.

If more admin staff just results in more ‘billable hours’ it can be simultaneously both a benefit AND a lost opportunity.

Finally, you hint, Josh, at another very important perspective – does having more support to take care of admin or concierge needs result in HAPPIER people?

Well, fewer frustrations with admin and concierge tasks can eliminate sources of frustration (ie get rid of dis-satisfiers) and that’s no bad first step. However, they taught me in business school about Maslow’s hierarchy of needs which argued that the absence of dis-satisfaction does not mean satisfaction.

Firms that think they will have HAPPIER people through these programs are fooling themselves. In fact, they can (and do) backfire if the people think that, rather than being supportive, the firm is just trying to extract the last ounce of effort from them. Many people need the break provided by walking to the dry-cleaning store, just to clear their head and can return to their work tasks a lot more focused as a result of taking a break (I’m one of those people.)

This doesn’t mean I shouldn’t have support services available to me, it just means that the hope that you can eliminate ALL my down time and keep me fully operative all day long is…well, it’s nonsense. You can make me more productive, but not through support alone.

This last point allows me to stress a point where my own work has been misinterpreted and misapplied. In PRACTICE WHAT YOU PREACH, I was able to show statistically that firms that can energize, excite and enthuse their people make the highest profits.

However, there’s a world of difference between being energized, excited and enthused and having a ‘nice’ work environment with support services, concierge services, crèches, maternal and paternal leave policies, etc. These help make people ‘happy’ but ‘happy’ isn’t the goal – turned on is. And that requires meaningful work, challenge, a purpose, skilled managers and like-minded colleagues – none of which are provided but concierge services alone.

Yes, give me support – even for picking up dry cleaning – but it will all be a waste of time if you don’t also help me find the meaning and magic in what you want me to do with the time that has been saved.

There is also a previous blog post of mine with really good comments from other visitors here

I thought I would pick up he conversation and my reply with this new blog post.

In Adam’s summary of my arguments, he asks me a direct question as to whether a group of like-minded people could create a more effective firm, and whether or not that would create a competitive advantage.

As anyone whoever took an economics class knows, you cannot always assume that virtue will triumph. Even if something confers a competitive advantage, that doesn’t mean it will always emerge.

I seem to remember from my economics courses hearing about Gresham’s Law of money, that the existence of counterfeit money will always drive out the value of good money. The bad guys can triumph by destroying confidence.

So, in a competition between trusting partners and untrusting partners, which will win – within a firm and between firms?

My life experience is that, as often as not, disorder triumphs. A trusting partnership can and does exist, but it is a delicate flower, easily torn apart unless it is carefully nurtured.

Civilization will, perhaps, eventually triumph, but in the short run the warlords can and do stamp out what appear to them to be weaknesses.

Trusting, collaborative firms can be sustained, but I am very cynical whether they can be created by transforming today’s firms.

As Clayton Christianson reported in his book THE INNOVATOR’S DILEMMA, innovations almost always come from outside the existing order of things, not by getting established players to change.

If a truly collaborative, competitive firm would have an advantage (which I first suggested back in 1985 with my “One-Firm Firm” article, later included in Managing the Professional Service Firm), then why have collaborative firms not triumphed yet? Why are the internally competitive firms so much more common and getting all the press?

Can anyone show that the few collaborative are, in fact, more profitable or otherwise successful?

I can prove it with data outside law firms (my book Practice What You Preach, and Jim Collins has proved it with corporate entities, but could it be that, when it comes to law firms, I am completely wrong. Could it be that collaboration, trust, effective functioning as an organization is, in fact, not a competitive advantage? I think it is, Mr. Smith, and I think that you think it is, Mr. Smith, it’s just that the lawyers don’t seem to think so! And they’re our clients, right?

In architecture, we tend to assume that the ‘alpha’ Subject Matter Expert will be the firm leader. For ten years my Army Reserve assignment was at the Army War College’s Center for Strategic Leadership. That, my B-school background and my life experiences has led me to question whether and when this conclusion is correct. Can a member of the professional ‘manager class’ who is not a top architect / accountant / lawyer (fill-in-the-blank) professional lead a professional architectural / accounting / law (fill-in-the-blank) firm?

Carl, my experiences match those of your army, B-school and life background in questioning the (apparently common) assumption that the smartest technician should be the business leader.

The manager / leader’s task is to help the organization succeed by building the capabilities of others – and that is not best done by having better answers than they have and telling them the right path.

Rather, it requires being able to guide other people through the process of building their knowledge and skills. And, of course, being good at something doesn’t automatically make you good at teaching others how to do it.

On the other hand, to successfully manage or lead, you MUST have the credibility to be received as a good coach, as someone who has ‘been there and done it.’ The professional manager from outside the discipline will rarely be accepted as a coach. It CAN be done, but earning the trust of professionals is very hard.

(I described the coaching process in my article A Great Coach in Action.)

The formula given in my book Trusted Advisor is, I hope, helpful here.

Being able to lead means being trusted, and trust is determined by four things –

• Credibility
• Reliability
• Intimacy
• Lack of Self-Orientation

You have to be credible to lead, but you don’t have to be the absolute best.

You do have to be seen as dependable or reliable, able to relate to those you are trying to influence on a one-to-one basis (that’s intimacy) and be received as REALLY trying to help the group win, not just burnish your own glory.

Many otherwise fabulously skilled technicians fail these other tests and make pathetically bad leaders.

Contrast this with what happens in a system where everyone gets a relatively fixed salary or share of profits, which changes as you get more seniority – if you survive.

In such a system (often called a lockstep system because people move in lockstep up the pay scale), if someone underperforms, you have only two choices. You either (a) work with that person and help them improve to deserve the same income as their peers or (b) if you cannot restore them to full share, you have to ask them to leave. Notice that having lockstep without the guts to deal with performance issues is clearly a disaster! A fixed-share or fixed salary system FORCES YOU to manage, ie to be intolerant of underperformance.

In other words, by not paying for performance, you end up with higher performance by tackling performance issues. By paying for performance, you get less performance because the system allows you to accommodate underperformance.

As Gilbert and Sullivan said in The Mikado – A most ingenious paradox!

There are further problems with pay-for performance systems. If you have lived for the last 20 years in a performance-based system, which is almost always based upon individual pay, then by definition you will have no institutional loyalty.

The system has said to you for the last 20 years – the heck with the firm, you will be paid on what you do. We neither require of you to have any loyalty nor do we give you any loyalty, because if your numbers are down, we cut your pay.

So, the individual pay system is designed to minimize firm cohesion and thereby create the sort of “jumping ship” syndrome that we have seen in every profession.

If, however, you have lived for the last 20 years in a system where everyone is in the same boat together, and have all risen and fallen together, based upon sharing in firm-wide results, the probability that the people will stay together through hard times is measurably higher.

For the last 20 years firms have gone out of their way to say, “You are on your own. Never forget that.” That’s the message that every partner in the majority of professional firms gets from their firms.

There has been a very unfortunate history with all this. Many countries (for example, the UK and the Netherlands) had two ancient traditions, which proved to be unfortunate in combination. One was a tradition of lock-step compensation. They also had a tradition of being “tolerant”. Collegiality in Europe meant – you leave me alone about my flaws and I will leave you alone about yours.

The combination of these two approaches were disastrous. If everyone gets a fixed share regardless of how they perform, and trhere is no tackling of performance, you get the famous “free rider” problem.

About twenty years ago, firms began to realize that they had to either start managing their people, or they had to start dropping the equal salary or equal share system, introducing pay for performance. The bad news, of course, is that instead of doing the sensible thing, which is going toward an intolerant, fixed share or salary system – in other words, start MANAGING – they decided to go the other way and remained tolerant (unmanaged)and switch to pay for performance to accommodate wide ranges of contribution. It has been disastrous.

Compensation as an incentive system is a cop-out or a crutch, just an excuse for not providing proper management.

There are two ways to assess the effectiveness of a compensation scheme. First, is the money going to the right people and, second, what is the system doing to create desired behaviors and prevent bad behaviors?

A compensation system is and must always pay those that have done well. Most systems end up paying the right people. However, the design of the system also influences how people behave, i.e. what aspects of performance they pay attention to.

In assessing a pay scheme, you have to ask whether the system is getting people to do the right things. Most are not. Any time you try to use compensation as an incentive scheme, it will backfire.

The minute you tell a bright person what three things will be rewarded, you give them permission to ignore the ninety-seven other things they should be doing to make the firm work. People do like specificity. Every year people will come to you and ask what three things they have to do to get a good bonus. And every year, you must say: “Gee! I don’t know, and if I knew I certainly wouldn’t tell you.”

You must pay people as well as you can. You must be generous and fair, but you must never reduce the compensation system to a formula based upon a limited number of things. With a formula, you give people the permission to be an ugly human being and no one can do anything about it.

The problem is that firms are trying to use compensation as a means of raising performance, which it is not well-equipped to do. Most compensation schemes in professional firms are basically saying, “If you succeed we will pay you.” This is a wonderful system for someone who is already a natural superstar and knows how to win, but in a sense unneeded for the superstar. It doesn’t add anything to the success of the firm because the superstar is going to win anyway.

For someone who is not a superstar – and doesn’t know how to win, doesn’t know how to develop business, doesn’t know how to delegate, doesn’t know how to get organized – then just saying, I will pay you if you do it, is not exactly a tactic that is going to work. For the person who doesn’t know how to raise his or her performance, changing the incentive won’t help. And what about the person who underperforms? Is cutting their pay really the right way to energize them to perform better?

If you really want to raise firm profits by increasing performance, what you must do is manage people, and that involves one-on-one interactions. Talk to people and help them raise their game, by encouraging them, exciting them, lift their enthusiasm, and help them deal with their issues.

Fair enough. Here goes with some principles of mine for effective training.

1. It is usually better to train people in groups formed from the operating units they work in, so that the training can be action- and decision-oriented. (Collective commitments.) Training classes drawn from different parts of the firm force program to be ‘educational’ only. I prefer it when training sessions end with specific action commitments, which are monitorable.
2. You shouldn’t overwhelm people and cover too much territory: depth, then breadth! You’re better off with three 2-day programs than one 6-day programs.
3. It really helps if the operating group leader attends the training simultaneously, as a participant. In fact, it should be mandatory. This ensures action-orientation, public commitment (‘We’re going to do this!’) Too often, we send the junior people off to be trained, and they continue to speculate whether the seniors or leaders are really committed and serious about all this. Even if they’ve heard it a million times, it’s good for them to be there. If it’s designed to be action oriented, it’s also economic for them to be there.
4. To make changes in behavior, there are four key levels to make the change:
   System: Does the firm actually encourage, monitor and reward this (new) behavior?
   Attitude: Do the trainees want to do this? Do they buy in to its importance?
   Knowledge: Do they know how to do it?
   Skills: Are they any good at implementing and executing what they know?
5. Each of these levels requires a different intervention. But note that skills (ie training, is bottom of the list, not top! As I said in my first blogpost on training, training is a great last step in a new initiative, but a pathetically ineffective first step.
6. The best training is done by the firm’s own practitioners. Outsiders should be used only to help develop programs and ‘train-the-trainers.’
7. If there is not a monitoring system to ensure that training will be implemented, then you’ll get a low return on your training investment. A full program would have:
   a) Scorecards: (New, permanent measures of performance being trained)
   b) Coaching: (Continuous monitoring and Follow-up)
   c) Tools: (To help implement the training, in place before the training)
   d) Training:
   e) Rewards and/or Recognition for achievement
8. All professionals should be required to both undergo and conduct a minimum number of days training per year, but allow flexibility on what.
9. Don’t confuse training with (general) education. Training helps people do their job.(What do I need today) Education expands their horizons (What should I be thinking about for the future?). There’s a role for both, but they’re not the same.
10. To ensure discipline, training should have mandatory pre-testing (can’t attend if you don’t pass), and a survey (3 months later) not only of participants but of their supervisors, asking whether the training has been implemented to productive effect.

One of the best recent think-pieces on training that I’ve seen recently is by Mick Cope, a UK-based consultant. His website is here and he tells me he’ll be posting his new article there on April 1 or 2.

(a) How easy do you find it to get started? Do you procrastinate or attack each day with vigor?

(b) How easily do you bounce back from failure, determined to try again?

(c) How well do you handle rejection?

(d) What is your level of optimism? Do you usually have the confidence to try anything, or are you the worrying sort?

(e) Can you cheerfully get along with people with whom you have nothing in common, or do you tend to withdraw?

(f) When unfairly treated, do you withdraw from the game or engage with renewed determination?

(g) Do you forgive yourself your faults, or do you beat yourself up about them?

(h) Are you comfortable with ambiguity, not quite sure you’re doing the right things, but ready to act anyway?

(i) Can you function in a team, without feeling the need to dominate? Can you control your ego needs?

(j) Can you handle the stress that comes from juggling multiple demands on your time?

(k) As Kipling asked, “Can you keep your head when all about you are losing theirs?”

Every single one of these emotional conditions will affect your success. You don’t have to be perfect. Goodness knows, I’ve suffered from being on the wrong side of all of these at one time or another.

But if your emotions let you down, your talent won’t save you.

There’s no point having superior skills if you procrastinate in putting them to use. There’s no point being smart if you give up at the first sign of failure.

Getting control of your emotions, and yourself, is essential to let your true ability shine through.

I’ve been asked not to post the full article on my website until April 6, but here are some highlights. [Update: the full-length version of "Are Law Firms Manageable?” is now also available in the articles section of my website.]

My core argument is that the ways of thinking and behaving that help lawyers excel in their profession may be the very things that limit what they can achieve as firms. Management challenges occur not in spite of lawyers’ intelligence and training, but because of them.

Among the ways that legal training and practice keep lawyers from effectively functioning in groups are (i) problems with trust; (ii) difficulties with ideology, values, and principles; (iii) professional detachment; and (iv) unusual approaches to decision making.

The problem of trust

In addition to fighting vigorously to preserve their autonomy, lawyers are professional skeptics: They are selected, trained, and hired to be pessimistic and to spot flaws. Lawyers carry this view into their dealings with their own partners.

It is hard to unbundle which is the cause and which is the effect, but the combination of a desire for autonomy and high levels of skepticism make most law firms low-trust environments.

A low-trust environment has plenty of unfortunate consequences—and they are readily observable in many law firms:

• Initiatives that depend on teamwork and joint efforts will rarely be implemented well, if at all.
• When a firm’s prevailing atmosphere is one of competition, not collaboration, partners rarely make sacrifices for the good of the firm.
• There is low tolerance for ceding power or influence to practice group or firm leadership. The result is that even in the largest firms, executive authority can be so severely limited as to be meaningless.
• Committees proliferate to address all topics, large and small.
• There is a drive to seemingly objective formula-based compensation systems. These serve only to entice partners into gaming the system through hoarding work and bickering over origination credits in order to look good in the official statistics.
• Most important, absence of trust may be a significant contributing factor to the extremely short-term orientations of many law firms.Investments of time or money that don’t yield immediate results are rarely made.

Skepticism about ideology, values, and principles.

The single biggest source of trust in an organization occurs when everyone can be depended upon to act in accordance with a commonly held, strictly observed set of principles.

When this is the case, less time is wasted in internal negotiations and posturing, strategies are implemented, and true teamwork results. Partners allow others to make decisions on their behalf or refer work to each other across the boundaries of practice groups and location because they can be confident that the other person will make decisions using the same values and principles that they would themselves use.

Law firms appear unable to achieve this level of ideological consistency. They will buy into principles—firms can have very high ideals as long as they remain ideals—but they have difficulty with the concept of enforcement. Firms are seemingly willing to adopt strategies and statements of values and mission, but are usually unwilling to specify what the penalty would be for noncompliance. Not surprisingly, that rarely results in effective implementation.

Most law firms say that the idea of tackling a rainmaker on ‘soft’ issues like teamwork, supervision and adherence to firm values is unrealistic, idealistic, uncommercial, and suicidal. While a majority of firms will vote to proclaim standards, they will usually not vote to enforce them.

Professional detachment.

As many researchers have shown, lawyers score very low in the areas of intimacy skills and sociability. They tend to prefer role-to-role interactions with people, inside and outside the firm, rather than eagerly seeking out person-to-person connections.

This can have unfortunate, if unintended, consequences. Consider this e-mail, which I recently received from Marein Smits, a Dutch lawyer:

‘At your recent seminar you made fun of me because I laughed at the idea of being genuinely interested in the industry and business of the people who are my clients. Rightly so: My laughing was cynical... The first thing you learn when you become a lawyer is not to care. The legally sound judgment, the intellectual sparkle, that is what counts. The personal, the emotional, what is right: Throw it away, because it will taint your professionalism. ‘Do not get involved’ is the credo.’

This lack of intimacy eaffects not only marketing and client relations, but also the way in which partners deal with each other and how firms are managed.

Rather than describing a highly interpersonal approach to coaching and helping each other succeed, the term ‘management’ has come in many firms to mean a cold, detached, analytical approach to business. Financial scorecards are put in place, and everyone is told (implicitly or explicitly): ‘Here’s what you will be measured on; see you at the end of the year!’

They are not helped to achieve, merely rewarded if they do, and they live in fear of what might happen if they do not. This can achieve the goal of getting everyone to work harder, but it comes at a significant price in terms of partner morale and cohesion.

Help, teamwork, and mutual support are often absent, since they depend on personal interactions. Instead, there is a system of measures and rewards.

Approaches to decision making.

In a room full of lawyers, any idea, no matter how brilliant, will be instantly attacked. Lawyers are expert loophole finders, trained to find counterexamples of or exceptions to any proposition. Accordingly, within a short time, most ideas, no matter who initiates them, will be destroyed, dismissed, or postponed for future examination.

Frequently, this leads managing partners, committee chairs, and practice group leaders to substantially overinvest in decision making.

They want to be armed in advance with a lengthy memo about every decision, so they can dump it in the lap of the complainer as part of fending off the attack.

Another common management strategy is to keep all proposals ambiguous, so that there is nothing specific to be attacked.

As a result, law firms have a remarkable propensity for half measures, launching poorly specified programs with minimal chances of success.

When lawyers reason with each other, the primary objectives are not necessarily logic, consistency, reasonableness, or fairness.

In their professional practice, whether in trial or deal-making, many lawyers are more frequently rewarded for persuasiveness, rhetoric, verbal agility, and point scoring. These habits of a professional lifetime readily spill over into internal firm discussions.

Lawyers also have a strange view of the concept of risk. In any other business, an idea that was likely to work much of the time would be eagerly explored. This is not necessarily the case with lawyers. A lawyer would say ‘Maybe, but I can construct a hypothetical scenario where it will fail to work. That makes it risky.’ Probabilities do not seem to influence the discussion, only possibilities.

There is no greater condemnation in legal discourse than to describe something as risky. Contracts, deals, and court cases must be bulletproof, not risky.

In other businesses, innovative thinking and action are considered a primary requirement for success. Companies eagerly search for strategic ideas and initiatives that their competitors have not discovered.

Lawyers are usually different. Presented with a new business idea, the first thing they ask is, ‘Which other law firms are doing this?’ Unless it can be shown that the idea has been implemented by other law firms, lawyers are skeptical about whether the idea applies to their world. If everyone has these problems, they can’t be so bad, the thinking goes. As long as we are no worse than anyone else, we don’t need to change! It’s hardly a recipe for a strategic advantage.

What can be done?

If lawyers deal with each other so poorly, why do they do so well financially? My answer is only partly humorous: The greatest advantage lawyers have is that they compete only with other lawyers. If everyone else does things equally poorly, and clients and recruits find little variation between firms, even the most egregious behavior will not lead to a competitive disadvantage.

If firms are to deliver on the visions they have set for themselves, they must address such issues as what behavior partners have a right to expect from each other, what the real minimum standards and values are, and how common values and standards can actually be attained, not just preached.

One of the central things we know about trust and collaboration is that they come mostly from repeated interactions between people who have not only a history together, but also the certainty of a future together.

Trust comes from relationships, and the expectation of continuing relationships. Over time, as they interact with each other, they as partners, practice groups, and offices may actually come to trust each other.

Unfortunately, in many of today’s firms that have been cobbled together from lateral hires and newly merged practices, the personal history that forms the basis of trust is often missing, as is the confidence that everyone will be practicing together for a long time.

In many firms, even solidly successful partners live in fear that they will be among the next group of partners to be ‘let go.’

In such an environment, the natural evolution of trust may be difficult, if not impossible. Instead, what firms need, literally, is a constitutional convention where their lawyers draft the explicit, basic law that is going to govern their firms—the precise behaviors, rules, and principles that will determine what partners have a right to expect from each other.

When thought of as aspirations (which is usually the case), firms’ values are usually explicitly articulated and remarkably similar.

However, if a value is seen as a minimum standard of behavior that all members agree to live by, then the true values remain ambiguous in most firms and vary immensely among firms.

What then will be the force that might create the need for change? Most likely, it will be client pressure on firms to act as firms—delivering seamless service, practice areas that have depth (and not just a collection of individualistic stars), and true, cross-boundary teamwork.

Many firms have collections of great lawyers. The time may be coming when clients will expect them to go beyond this and become effective organizations. Without a prior, explicit agreement on minimum standards, and the resolve to enforce them, many law firms will not function well as firms, but will remain what they are today: bands of warlords, each with his or her followers, ruling over a group of cowed citizens and acting in temporary alliance—until a better opportunity comes along.

For the full article on which this blog post is based, see this month’s AMERICAN LAWYER. [Update: the full-length version of "Are Law Firms Manageable?” is now also available in the articles section of my website.]

One of the things that consistently surprises me is that one question in particular ALWAYS receives low scores – how promptly the manager deals with underperformers.

Managers are always rated poorly on this. According to my experience, different managers have different strengths, but everyone, it seems, has the same weakness.

In a recent article (A Great Coach in Action) I discussed the natural reluctance that all of us have to engage in uncomfortable conversations until we absolutely have to.

That article is also episode 3 in my new 15-part podcast series on Managing Professionals which will be launched on my website on April 14, 2006.

In both our personal and professional lives, most of us don’t like to complain, and we have never been taught the subtle art of offering a gentle critique to another person without eliciting defensiveness and hostile reactions. As a result, we don’t say anything until the minor irritation has turned into an unavoidable problem.

What’s significant, I think, about the fact that most managers are rated poorly in this area is that most people are, implicitly or explicitly, saying that they WISHED their managers were more prompt in tackling this issue. People want standards of the group to be enforced. It is very dispiriting to be trying really hard yourself, only to see that management is letting other people slacken and slide.

No-one wants to work in a place ruled by terror. But no-one wants to be part of a sloppy, ill-disciplined group either. People, I’ve been told over and over again. Want clear guidelines and rules of behavior, and then want everyone to be held to those standards.

We hear a lot about ‘ugly’ managers who are too demanding, but my experience is that the opposite problem – managers who are too easy going to tackle performance problems – may in fact be a more common and more resented situation.

Many managers think they are doing their job when they respond to and deal with egregious examples of bad behavior or underperformance. (‘We cut people’s pay or fire them if they don’t ultimately live up to standards.’)

The truth, however, is that if you have waited until someone has failed (or the problem has become intolerable) before you intervene, you have lost most of your options. The essence of management is not –‘do you respond to problems?’- but rather – ‘do you deal with emerging issues before they become problems?’

Failing to help someone in your group who could improve, but who is not yet a major problem, is, of course, a tragedy all around. The individual fails to improve, the group’s performance slips, morale plummets – because the standards are clearly seen to be set lower – and you have lost the (possibly one-time) opportunity to establish a counseling relationship when the issue is only a minor one.

You are most likely to be able to offer a critique – and have it accepted – if you are doing it with someone who trusts you because you already have formed a relationship. So, the most effective managing takes place if there is a history of talking together before there are performance problems. As the saying goes, the best time to build a relationship is before you need it.

The best time to offer performance guidance, counseling and concern is when someone is already performing well, and you’re only trying to help them get to greatness. Do THAT frequently, and it will be easier to spot and discuss emerging problems with greater ease and comfort. You’ll have fewer performance problems all round.

The test of real managerial skill is the courage, the tact and the art of intervening when there is only the first sign of a performance problem, not when it is obvious to everyone.

Do it well, and your people will thank you for it by raising their own performance – and they will rate you more highly as a manager!

I keep getting asked about this topic, so here goes my ten cents worth. I think more rubbish has been written about ‘leadership’ than almost any other business topic. A lot of it is patently false, and even more of it is dangerous.

The fatal flaw in discussions of ‘leadership’ is the implicit assumption that we want to be led. Not many of us do, especially not the highly educated, credentialed, well-paid group of us that like to call ourselves professionals.

We want to be helped, we’ll agree to be coached and (with careful definition of the term) we might consent to be managed. But we’ll rarely agree to be led.

I’ve quoted this before, but it’s worth repeating here: the word manager derives from a mediaeval French or Italian word, meaning the holder of horses. It should conjure up the image of the task of getting a number of fiery beasts, each more powerful than the manager, to act in consort.

The word leader, on the other hand, derives from a Chaucer-era word that meant the person who chose the route on the expedition (‘This way, people’!) That image evokes a model that won’t work – trying to tell me where to go, pretending to me more expert than I am, trying to take charge. That’s not how it’s most effectively done.

Yes, the business books and the business schools are filled with descriptions of leaders who inspired others with their ‘visions,’ but such descriptions fail to point out two key facts. First, the number of people in human history who have been able to energize large numbers of people through their vision is very small, and secondly, three of them were Hitler, Lenin and Chairman Mao.

I’m not saying that the leadership model cannot work – just that few people trying the approach of ‘Let’s go this way!’ actually can or do evoke a broad reaction of ‘Ooh, yes. Let’s do just that!’

Advocating that someone energize a professional firm or group through ‘leadership’ is like advising someone to be talented. You either have what it takes to get people to see you as a leader or you don’t. And by the way, if you’re not yet sure whether you have this ability – you don’t! You would have known whether you had it or not by the time you got out of high school.

For the rest of us who don’t have this innate ability, all is not lost. What we need to do is stop pursuing the mirage of leadership, and start learning the model of how to be an effective manager – helping other people, individually and in groups, truly accomplish their potential. This requires putting the people being helped at the center of the discussion, not the leader. Management can be learned, but not if you’re trying to be something you’re not supposed to be and are probably incapable of being.

Another dimension of real-world leadership is commonly misunderstood. Many writers on management (and many real world managers) think that the best way to evoke energy and create a strategy is to articulate (as Collins and Porras put it in Built to Last) BIG HAIRY AUDACIOUS GOALS (BHAGs)

This is a misleading and factually incorrect way of representing what great builders of professional firms (and other companies) have done over the years.

What is distinctive about the truly great professional firm builders is that they did not talk about destinations (number of offices, size of firm, range of disciplines, diversity of services.) None of these things mattered to David Ogilvy, Marvin Bower, Leo Burnett, Sidney Weinberg, David Packard – or Clint Stevenson, the main moulder of Latham & Watkins in the 1970s .

What these firm-builders cared about were the principles that were to be observed as the firm ran its affairs, served its clients, managed its people and invested its resources. The goals, the outcomes, the destinations were not the strategy, and were certainly not the defining characteristics of the firms they built.

Instead, it was the ideology they preached (and enforced) that mattered. They led not by the clarity of their vision of the future, nor even because of their better understanding of finances or marketing, but because they were able to get even highly talented, extraordinarily mobile people to rally around a fervently held, common way of doing things – a world view, a philosophy, a set of principles, values or standards.

These were not soft principles. They had to do with who would be hired, what quality standards would be enforced, how resources would be allocated.

At places like Sony and Hewlitt Packard in their heydays, it was effective processes that mattered – not which product happened to be that year’s hot toy.

Many firms still misunderstand this meaning of the word strategy. They choose a size to aim at, a set of new locations to be in and a set of new service lines they plan to enter through lateral hiring. None of these choices affect the underlying competitiveness of firms, which is about productivity, passion and purpose, not products and places.

Great leaders (there, I’ve said the dreaded word) get people to focus on the key elements of strategy – the standards on which the firm is going to compete. With a clear ideology to rally around, talented people get the choicee of saying – ‘I can believe in that. I think I’ll stick around to a part of that and be a member of a society of like-minded people operating together in accordance with common values.’ That commitment, in company after company, has led to service line and market sector choices not no-one anticipated, because they were not the guts of the strategy, but rather the outcome of the strategy – the firm’s own way of doing things.

If a leader can create THAT – then I’ll agree to use the term ‘leader.’

Accounting firms fail to have effective job-costing systems to track the use of their resources, law firm partnerships do not have up-to-date partnership agreements, management consultants keep appointing people to managerial roles who cannot manage and don’t want to. And of course, Advertising and PR people are really bad about creating favorouble public impressions about their agencies and their professions.

So why is this so common? The most common hypothesis is that professional providers get paid to apply their skills to client work, and they are unpaid when they have to apply them to their own affairs – and the individuals would always prefer to do paid work!

But I suspect something more profound is going on. I’m not sure what it is, and would love input from the readers out there.

There are times when I get the impression that professionals are only too well aware of the limitations of what their craft can actually accoplish, and they sell to clients things they actually don’t think would be benficial for themselves – or at least they would not be willing to do themselves.

In part it’s because of a belief that “we’re different from our clients”, but it’s also in some way a hidden skepticism about the value of their own services.

Why don’t advertsing agencies advertise? Other business-to-business services like Accenture do – what does Y&R know that Accenture does not? (Or vice-versa?)

Most large management consulting firms reject the concept that their group leaders should spend their time managing, instead preferring them to be big business getters. But that’s not the advice they give their clients.

Business School academics are always preaching the need for buisnesses to be client-centric and responsive to markets, but how many actually redesign what they do around the needs of their students or employers? Universities are designed to meet the needs of the providers (the faculty) not their markets.

If any of this is true (and fair), then why does it happen? Why is it so easy to see the fleck of dust in the other person’s eye, while ignoring the plank in our own?

You don’t hear much about the quality movement these days, but it’s still out there. Nowadays, it has (unfortunately, I think) been subsumed into the “Six-Sigma” cult, and re-branded as part of “client-centricity.”

It would be nice if we could return to simpler days of speaking plain English and tackling real issues, instead of launching grand programs and initiatives that are long on idealism but short on real commitment.

The 1980s quality movement had its own jargon, but I still find some of it helpful in working with professional businesses. For example, it is still useful to distinguish between four possible kinds of quality.

1. Make the aspirin – conformance (reliability, consistency, dependability) to technical quality
2. Nurse the patient – conformance (reliability, consistency, dependability) in interacting with the client
3. Do the brain surgery – higher-than-market performance (superior outcomes and value) in technical quality
4. Be the trusted counselor – higher-than-market performance (superior outcomes and value) in consultative quality (be the clients family doctor or psychotherapist.

(I first write about these as four different kinds of practice in my book, True Professionalism)

The point, of course, is that each of these four ways of improving quality requires different initiatives.

Improving the aspirin means studying the work processes of how you get things done. Improving the nursing means getting your people both motivated and trained to know how to work with clients and their idiosyncrasies. Improving the brain surgery means getting to the frontier of your field and becoming true innovators. Improving the Trusted Counseling means entering the client’s world and learning how to affect how they think about their problems and issues.

These are four very different initiatives.

Of course, one of the major ways of ending up with poor quality is to think you are providing one of these services when your client is actually trying to buy another!

In a meeting of consultants, I asked people to vote on what they thought were the major causes of quality failure in consulting. Here’s their list, with the most common cause of quality problems listed first:

• Mis-Specification of goals of project
• Lack of Skills in dealing with clients
• Work-teams overloaded / overscheduled
• Poor staffing of engagements
• Overselling
• Shifting client expectations (Mid-engagement changes in client desires or needs)
• Proposing bad project solutions
• Attitudinal or motivational problems
• Engagement budget pressures
• Failure to access expertise elsewhere in firm
• Inadequately trained staff
• Lack of incentive (internally) to do a quality job
• Poor methodologies
• Excessive reliance on standard methodologies
• Inadequate support staff
• Poor management of project mix
• Available skills

I also gave these consultants a list of possible places to ‘attack’ quality problems, and I had them rank the ones they would put at the top of their priority list. Here are their choices:

• Hiring for different attitudes and skills
• On-the-job training
• Client feedback systems
• Management behavior
• Creating the quality culture/climate
• Proposals (negotiating quality dimensions)
• Formal training
• Peer review systems – during projects (are we doing the right things?)
• Reward system – senior professionals
• Peer review systems – end-of-project (did we do the right things?)
• Principal/Partner promotion / admission process
• Managing project mix
• Monitoring procedures
• Methodology development and improvement
• Reward System for juniors

Among the initiatives that came out of the discussions I ran were:

• A need to shift from analytical to ‘client-involved’ consulting techniques.
• A need to assess the client’s sophistication and need for consultative help, not just technical help
• Rehearsals of client interactions, to help people improve skills in a low-risk environment
• Holding upward reviews, asking junior engagement personnel to evaluate the engagement leader on how well the project was managed
• Using outside experts to review project quality
• Formal project debriefings
• Formalized procedures to ensure that all communications with client are shared with those that need to know (including clerical and other support staff)
• ‘Second set of eyes’ review of proposal prior to sale to ensure achievability
• A quality assurance professional on staff and involved in operations
• Use performance evaluations to stress quality.

There are a lot of ideas and good intentions here, but here’s my point: people have been talking about all of this for decades, but how many people are actually doing these things?

In the rush to globalize and build multidisciplinary, megalithic professional businesses, how many truly have in place effective quality processes that truly serve the client?

I now believe that the overwhelming majority of all business training, by me and by everyone else, is a complete waste of money and time, because only a microscopic fraction of any training is ever actually put into practice and yield the hoped-for benefits.

The main reason is that companies keep trying to bring about changes in behavior by training their people in new things, and then sending them back to their operating groups subject to the same measures and management approaches as before. Not surprisingly, little, if any of the training ever gets implemented.

What companies don’t seem to understand is that training is a wonderful LAST step in bringing about changed behavior, but a pathetically useless first step.

Take, one example, the many speeches and seminars I have been invited to give since the publication of my 2000 book The Trusted Advisor. Companies have paid my co-authors and I loads of money to come in and be (a) inspirational and (b) informative about the importance of, and mechanisms for, growing relationships with existing clients. However, in vain do I point out that in order to have the time to nurture these relationships, it follows that you need to be more selective on which new client proposal opportunities you pursue – there are only so many hours in a day.

This doesn’t always go down well. In fact, I got fired by one firm after the training seminar, for suggesting that it was OK to decline to pursue something. ‘In this firm’, the National Managing Partner said, ‘we pursue all new business opportunities.’

That’s fine by me. He may be right and I may be dead wrong. But why did he spend all that time and money encouraging his people to do something other than what he believed in, and what they all knew he was going to evaluate them on?

Another example of wasted money are the calls I get to put on training programs to help people become better managers. I put my callers through a standard set of questions: Did you choose your managers because they were the kind of people who could get their fulfillment and satisfaction out of helping other people shine, rather than having the ego need to shine themselves? (No!) Did you select them because they had a prior history of being able to give a critique to someone in such a way that the other person says- wow, that was really helpful, I’m glad you helped me see all that. (No!) Do you reward these people for how well their group is done, or do you reward them for their own personal accomplishments in generating business and serving clients? (Their personal numbers!)

So, let’s summarize, I say. You’ve chosen people who don’t want to do the job, who haven’t demonstrated any prior aptitude for the job, and you are rewarding them for things other than doing the job? Thanks, but I’ll pass on the wonderful privilege of training them!

The truth is that most firms go about training entirely the wrong way. They decide what they wished their people were good at, allocate a budget to a training director and ask that training director to come up with a good program. Note, of course, that a training director (or Chief Learning Officer, if you prefer) is the LEAST influential person in the firm in the sense of being positioned to bring about any real changes in how things happen in daily execution. Pathetic and useless. A waste of everybody’s time.

The correct process would be to sit top management down, ask ‘What are people not doing that we want them to be doing?’ and then figuring out a complete sequence of actions to address the questions – how do we actually get people to change their behavior? What measurements need to change? – what behaviors by top management need to change to convince people that the new behaviors are really required, not ust encouraged? – what has to happen before the training sessions to bring about the change? What has to be in place the very day they finish?

Only if done this way will firms and companies get a return on their training dollar,pound, euro or yen.

A good test is as follows. If the training were entirely optional and elective, and was only available in a remote village accessible only by a mule, but people still came to the training because they were saying to themselves ‘I have got to learn this – it’s going to be critical for my future’, then, and ONLY then, you will know you have timed your training well. Anything less than that, and you are putting on the training too soon.

‘We’ve been managing this firm for profitability and cost control, and pulled it off. We’re in terrific shape. Now we want to initiate a new era of inspiration. We want our people to be client-centric, to become trusted advisors. We want them to collaborate across boundaries so we can become a one-firm firm, and we want them to focus on developing our juniors so we can be a great place to work. Can you come and help convince our people to do all this?’

Since these are all goals and values I advocate and believe in, I have (in the past) frequently accepted this assignment. I have often been successful at building enthusiasm for these strategies. It’s not because I’m so talented, but because most people, it turns out, would love to work in a company or firm that subscribed to those values. Getting buy-in is not that hard.

However, I frequently run the final strategy meetings with anonymous voting machines, and after everyone has voted that these are strategies they want to pursue, and that they want management to pursue, I then ask the question – how many of you think we will actually do this, will run the company this way, and actually will implement these strategies?

In the overwhelming majority of cases, people indicate with the anonymous voting machines that they do NOT think the new strategies and policies will be implemented. Notice that the people voting are not some group of lowly employees – they are the partners or senior vice presidents of the enterprise. If they are skeptical about the company’s own ability to implement its own declared strategy, can you imagine how cynical the employees are?

As I have touched on in two of my recent articles – Are You Abusive, Cynical or Exciting? and Strategy and the Fat Smoker people’s depressing view of their own future comes from two sources.

First, their fear that they will not themselves live up to their own high aspirations when faced with temptation. Second, they believe that those in leadership positions will not ‘keep the faith’ – leaders will continue to manage as they have done in the past (usually driven by short-term financials) rather than the way they say they are going to manage in the future.

During the past 20 years of doing what I do, I have seen leaders of all kinds. Some really DO want to change, and are sincere about trying to lead their organizations in new directions. Other leaders truly are as cynical as their colleagues suspect them to be. These leaders want everyone else to change and live to high standards, but fully intend to go on managing the same old way. This second type is just trying to get more from others (the organization) without having to give more.

What has been fascinating to observe is how hard it has been even for the sincere leaders to get their colleagues and subordinates to believe that they have changed, and that they will manage to new standards.

People almost never believe this. They just don’t accept that there has been ‘a conversion on the road to Damascus.’ They never believe there truly is a new religion in place. They always believe that their leaders are going to go back to managing the way they have done for the prior 5, 10 or 15 years.

When you think about it, the cynicism is to be expected. Why should people think the leopard has changed its spots? What could the leader possibly do that would get those closest to them, those who know them very, very well, to think that they have shifted the basis on which they will make decisions? And if those closest to the leaders have a hard time believing that the leaders have truly changed their thinking, what hope is there for convincing the rest of the organization?

I don’t mean to become a cynic myself, but I have to report that new strategies and change efforts are easier for a new CEO or managing partner to implement than for the existing CEO or managing partner to be credible about. Leaders who want to convince their organizations that they have changed have a very difficult task.

Anyone out there have suggestions about how to overcome all this organizational skepticism?

Here’s a list of possibilities.

1. The Personal Request – Do it as a favor to me. I’ll owe you one.
2. The Ego Protection Ploy – You’ll look bad in the eyes of others.
3. The Team Play Appeal – It’s important to the team.
4. The Fun Promise – You’ll enjoy it once you start doing it.
5. The Isolation Gambit – You don’t want to be the odd person out.
6. The Guilt Plea – You’re a better person than that.
7. The Values Volley – It’s consistent with what you believe in.
8. The Perspective Point – It will pay off for you in the long run.
9. The Have Mercy Message – Other people will suffer if you don’t.
10. The Contractual Comeback – You agreed to this when we discussed it.
11. The Principle Principle – It’s the right thing to do.
12. The Context Framer – When you do this, it has the following consequences for others.
13. The Achievement Temptation – You could get good at this if you wanted to.
14. The Recognition Response – People will really think highly of you if you do this.
15. The Desperation Resort – Do It and We’ll Pay You (We promise.)

Anybody out there have an opinion on which of these work most often? Least often?

Which ones have I forgotten to list?

TO: The Partners
FROM: The Managing Partner
SUBJECT: Our Visionary Mission, and our Missionary Vision

Our firm, like our best competitors, is aiming at familiar goals. We want to be the best, and perceived by our clients as such. We want to be innovative, and at the frontier of identifying and responding to the needs of both global and middle market clients. We want to capitalize on the latest technological developments. We want our clients to receive from us an unmatched level of client service.

In addition to all this, we want our firm to be a place that provides professional fulfillment and personal growth opportunities for each and every one of our partners, non-partners and staff. We believe that doing these things will make us one of the most profitable firms in our profession.

Little, if any of this, is new, and little, if any, is much different from our best competitors. If we are to outperform them, what we need is not a better vision, but a better approach to making it happen. We will succeed not by aiming at different targets than our best competitors, but by devising better ways to reach those same targets. We must develop and adhere strictly to sound philosophies: ways of doing business, ways of dealing with our clients, our staff and eachother.

In sum, what we must find agreement on is not our destination, but a way of conducting our affairs. We must design systems to ensure that we are living up to our principles.

In what follows, therefore, I have not attempted to picture what the firm will look like in 5 or 10 years. Rather, I have tried to convey the philosophies I hold about how we should behave as individuals and as a firm. If we follow these principles, we will achieve our goals. If we do not, then we will fail.

As I prepared these thoughts, I have tried to avoid being inspirational. These are the principles I live by, and intend to apply in executing my responsibilities. By sharing these beliefs with you, I am making you a promise that these are the principles I will operate by – and I expect you to hold me accountable for them. If I depart from these principles, let me know – in person, in a letter, or even, if necessary, in an anonymous note. But let me know!

I do not expect that all of you will necessarily agree with everything I have to say. That’s OK, and we should talk about it. But what is here is what I truly believe. You have the right to know where I am coming from, and how I am likely to react when you ask for my views on issues as they arise.

For better or for worse, then, this is what I believe.

On the Role of the Partner

Since clients hire people, not firms, our success will be built a partner at a time. That means that what really matters is not “firm strategies”, but personal career-development strategies for each partner. If, and only if, each partner is finding some way to make himself/herself more valuable on the marketplace each year, then the firm will succeed.

In turn, this means that the role of the firm is to help each individual grow as a professional. The firm exists to help the partners (and staff) succeed, not the other way round. However, it also means that the firm has the right to expect each partner to develop a personal development plan, and to hold that partner accountable for the execution of that plan.

In this profession, the need for personal development is life-long. The minute you begin to cruise, to rely on skills learned last year, that’s the moment you begin your decline. All of us, from the 30-year-old’s to the 60-year old’s must constantly be asking “What new skills can I acquire?”. And the firm has the right to ask that same question of you.

My experience has taught me that success comes not to those who swing for the fences every time at bat, but those who commit themselves to a continuous program of constant improvement, base-hit by base-hit.

There are many ways to make yourself more valuable on the market: intellectual leadership, better client counseling skills, greater ability to run large projects, and so on. But one stands above all else: specialized industry knowledge. Regardless of your discipline, and your command of it, I believe that each and every partner should have one or more industries that they know in depth, to the level that the clients perceive you as up-to-date in their industry as they are. There is no better way, in my view, for each of us to succeed than for every one of us to declare a specific industry specialization.

Partners, in my view, have five key responsibilities, and should expect to be held accountable for all of them. First, and foremost, partners must satisfy their clients, and we should be vigorous in establishing mechanisms which ensure this is happening. Second, partners running engagements are responsible for building skills in themselves and others, for adding to the human capital of the firm. We sell skill and talent, not time. We should devise tracking mechanisms to allow partners to see how well they are fulfilling this responsibility.

Third, partners have a responsibility to contribute to the economic success of the firm by running their engagements profitably, and constantly seeking out ways to improve the economics of their work. We must learn to be efficient in the use of our resources, and vigorous in tracking how well we are using them. Each partner owes us all the responsibility of managing well not only our fee levels, but the costs to the firm in delivering our services.

Fourth, all partners should participate in some way to developing our practice by attracting and winning quality new business that allows us to be in the flow of stretching, learning, growing assignments.

This does not mean just getting more business, it means getting better business, and we should establish procedures to judge not only the volume of our business, but its nature. Our goal should not be to chase any and all new business, but to get more than our fair share of the best business. Being big is not our goal, being best is. When you hear from me, expect to hear more questions about the quality and nature of what you’re doing than how much you are doing.

In the pursuit of quality new business, everyone should play a role. Some will do it directly through selling and proposal efforts, others through writing articles, others through deep involvement with existing clients and their affairs. But each one of us must play some part in the improvement of our practice through attracting interesting, challenging new work.

Last, but not least, every partner has a responsibility to contribute to the success of others. We are a partnership, and not a collection of solo operators (or independent offices) trading under the same brand name. If the firm is to achieve its goal of helping each partner succeed, then we must help eachother. Each partner should be able, each year, to point to some specific contribution to the success of others. This might be bringing in work for others to do, it might be developing methodologies or technical ideas that others can use, it might be transferring your skill to others by coaching. But one way or another, we each must do something if we are to be a firm.

The same requirement to contribute to the success of others should (and will be) applied in judging the success of practice units, offices, and disciplines. Any group that focuses only on its own results and does not help others will not be judged a success.

On Accountability

If someone has accepted a responsibility, and agreed upon a goal, then we should get out of their way and let them do it. None of us should wait to be told what to do, or how to do it. We should expect each of our partners to exercise greater judgment. That doesn’t mean abdication. It means that we should agree on clear goals, and put in place clear accountability (result) tracking systems, and give individuals the freedom and the responsibility to figure out how to get there, giving assistance only when it is asked for. We must not micromanage.

On Rewards

In judging performance, we must be thorough in conducting performance appraisals which focus on non-financial as well as financial objectives, and we must be vigorous in ensuring that each partner receives in-depth feedback, assistance and coaching on performance.

On Management

We do not have room in our firm for people in managerial positions who spend their time on administration. We need managers, but not to play cop or boss. I believe that the job of a manager or practice leader is to help other partners succeed. Management is a responsibility, not a reward. We must not glorify those who occupy “positions”, but choose the person most skilled at managerial duties, and reward them only if they are effective managers.

Managers should be deeply involved in client affairs, not necessarily by being the lead partner on their own engagements, but by spending significant time on client relations with clients of the office, by being a practical source of help on other partners’ assignments, and participating in practice development activities.

Managers should also be deeply involved with the activities of the partners in the office. They should be available to resolve issues, form teams, provide assistance and make it easier for partners to focus on their clients. Managers and other practice leaders should be hassle-absorbers, not hassle creators.

We must devise methods to ensure that our Managers operate in these ways, and truly add value. All of us must be willing to be accountable for performing our respective roles well. If client partners are to be held accountable for their performance (financial and non-financial), the same must be true of those asked to accept managerial responsibilities.

On Clients and What They Want

I believe that clients can make few distinctions on the technical capabilities of the best firms, and place great emphasis on the ability of the individual partner to enter their world, relate to them in their language, talk to them about their business. We will never succeed by being technicians alone, no matter how high our level of technical skill. Clients want us to know their business. They want us to be interested in them.

On My Style

I like to be decisive. I have learned that we can often live with a bad decision, but we are certain to be hurt by no decision. I am willing to take risks, and to encourage and reward risk-taking. Call me on that if I depart from it.

I like to ask “What new things have you tried lately?” – only by trying new things will we get better.

I like to be consultative. That doesn’t mean unanimity, or even consensus. It means soliciting views, asking a lot of questions, and then deciding. I like to hear other people’s opinions. Don’t let me behave any other way.

I don’t like to launch things that I’m not prepared to follow through on. If I’m involved on an initiative, expect me to monitor it carefully – and let me know if I don’t. I don’t make promises I can’t keep – you should fire me if I don’t live up to that promise..

I like to be straight and tell the truth, and I like to be told the truth. I want to hear the bad news, if there is any, and I want to hear it early enough for me to try to help, and do something about it. Life’s too short for politics and games playing.

I believe in extensive communications between management and partners, in both directions. This will mean meeting with clients and partners frequently. Keep me honest on this one, and let me know if what I’m doing is insufficient.

Summary

That’s not all I believe, but it’s enough for now. I hope you found these thoughts of interest, and of help. If not, well then,....yes, you’ve got it. Let me know!

So, that’s the speech I suggested he make. (Of course, he never did.) What speech components do YOU think new managing partners should include?

Here’s one way I could see it working. There is a blog to which, initially at least, only partners have access. The managing partner (firm leader / practice group leader, whatever you want) could blog regularly about what’s going on in the firm / practice, not just restricted to the formal announcement of new business wins and losses, but actually addressing issues of interest to partners, answering candidly, and allowing partners (anonymously if necessary) to pose questions to firm leadership about what is happening and why things are happening the way they are.

As firms get larger, more dispersed and more complex, the disaffection of partners (in professions and businesses of all kinds) is becoming more evident. I get calls all the time enquiring about my availability to consult on the issue of partners’ unhappiness and their feeling that they are treated like employees in an increasingly corporate culture.

Of course, this feeling exists because it is accurate – partners ARE treated like employees, and a blog would be a way to involve them, provide interactivity and participation, resulting in the feeling of ownership that all firms say they want their partners to feel.

When partners (and other people) say they want more or better internal communication in firms, it doesn’t actually mean that they want to hear more from firm leadership (although that’s how it is usually translated.) What it actually means is that people want to be listened to more – they want the chance to voice their views and to have management take them seriously. Internal blogs would allow this.

Professional firms (along with other types of corporate entities) always SAY they want to be consultative and participative, but the truth is that often managers in such firms are often terrified of participation. They would be frightened of what would be seen as open dialogue and discussion of firm management issues (horrors – open dissent!) However, there probably could be no better way to re-energize today’s bloated partnerships than using today’s technology to engage, enthuse and involve the partners.

And one day – who knows? – firms might act as if non-partners were real citizens, too.

Are any firms out there doing this already?

What follows is an article I coauthored with Julie Lindy, the editor of INSIDE Public Accounting. I plan on revising it into my usual article length, but thought the blogosphere would like to see the shorter version which appeared in Julie’s newsletter/magazine this month. Julie Lindy is a veteran journalist who has been covering practice management of accounting firms for more than a decade. Contact her at (678) 686-6528; jlindy@hudsonsawyer.com.

Let’s face it: lying is a very common human activity. Not only is it easy to lie – it can even be the polite or politically correct thing to do. “Your baby is beautiful.” “Don’t worry, spilling your drink on my carpet is no big deal.” “Your party was so much fun.” We often find ourselves lying for the sake of kindness and social graces.

However, equally common are the times when we lie not to preserve the feelings of others, but to try and create an advantage for ourselves. That’s when we get ourselves into trouble – almost always. We are so eager to impress that we end up saying things that are so hackneyed and improbable as to backfire immediately: “My child is brilliant” “Trust me, I’ll do the right thing” “The check’s in the mail” “It’s not about the money.” (Does any listener ever believe any of those claims?)

The lies accounting firms tell flow just as easily. And, like social lies, accounting firms often tell them knowing that nobody really believes them. Everyone, speaker and listener, knows we are making conventional, time-worn claims (often phrased the same old way) that have little correlation with reality.

There are four categories of accounting firms lies:

Lies to clients: These lies occur throughout most firms’ marketing materials. Look at some obvious lies prominently placed on the Web sites of three firms in the INSIDE Public accounting list of the largest 100 accounting firms:

• “We dedicate all of our resources to the long-term success and general well-being of our clients.”
• ”[Firm X] is uniquely qualified to provide audit and accounting, tax, information technology, estate and financial planning, and management consulting services to a wide range of industries, individuals, estates, and trusts.”
• “Our core purpose is to use knowledge, experience and innovation to solve problems and enhance opportunities for our clients.”

Do the firms that say these things about themselves really think clients and prospects who read these statements will believe them? And if everyone knows that the claims are not going to be believed, why do firms continue making them? All that happens is that by continuing to make claims that are (literally) non-credible, less trust and confidence is built, not more. It’s all very peculiar!

It’s no explanation to argue that firms really believe that they are superb at these things. It’s always been true that what you think about yourself is irrelevant data. It’s what others think of you, not what you think of yourself that determines your success. Unproven claims have become a hallmark of marketing, but in a reputation-based business like accounting, it’s much more effective to provide some evidence and let people draw their own conclusions. For example, client testimonials are an effective way to deliver your message. They allow you to avoid the perception of lying, because you’re not making a claim.

Lies to staff: One of us recently spoke with a firm that claimed to be a terrific place to work. When he asked for proof, firm leaders replied, “Well, we can’t prove it, but we just know we’re a fantastic place to work!” Saying something is true doesn’t make it so. In these times of desperate staffing situations, it’s tempting to say what employees and potential employees want to hear: “We have great communication between partners and staff.” “Our people are our greatest asset.” “We offer flexible schedules and believe in work/life balance.” “We live by the following core values …” We want to believe we are great at these things, but are we really? When was the last time you asked your employees how well you were living up to your espoused values?

Lying to staff can have damaging long-term consequences. Recently a tax senior felt so compelled to vent his frustration with the firm he recently left that he wrote a confidential letter to the editor of IPA: ”[Firm Y’s] partners … have to lie in interviews to get people to come work for them. When I interviewed with this firm, they made multiple promises that they didn’t keep.”

Is this what you want former employees saying about your firm in your community, or to the press? Again, testimonials are extremely powerful. The only people really qualified to say whether your firm is a great place to work are your employees.

The biggest danger in lying about our performance and effectiveness (without confirming feedback) is that it can lure us into believing our own PR. Once you start lying to yourself about what you are good at, you’re really in trouble, because you’ll stop looking for ways to improve and you’ll suffer doubly – once for the poor performance and secondly for being so manifestly “out of it” that you can’t even see what you need to improve.

Lies partners tell each other: Here are some common ones: “We act like team players, putting the interests of the firm before our own.” “We treat each other with respect.”
“We keep our word to each other in contributing non-billable time to help the firm develop.” “We don’t care who gets the origination credit. We help each other with marketing and business development”

These are all very nice things to say. We might even mean them when we say them. But how many times do partners catch each other dropping a ball or breaking a promise to the practice group or some other team – and do nothing about it? “The trouble with law firms is that the culture is: Promise big. Deliver little. Get forgiven. Repeat until totally frustrated,” says consultant Patrick McKenna. Accounting firms aren’t much different, are they? Forgiveness, toleration and understanding are certainly virtues, but failure to hold each other accountable isn’t good business.

Successful businesses don’t tolerate broken promises and uncompleted actions. “At McKinsey & Co., there is very little you have to do. But if you say you’re going to do it, you must keep your word,” Managing Director Ian Davis reported in a speech at the London Business School. People who don’t keep their word create a chain reaction of consequences – wasted meetings, redoing of tasks, unnecessary downtime, and missed deadlines that are deadly to an organizations efficiency and quality. And of course, the attitude quickly spreads that if the other guy doesn’t have to keep his word, I don’t have to either, and the whole thing spirals!

Lies partners tell themselves: Do any of these sound familiar? “We manage for the long term around here.” “We balance financial metrics with soft contributions like mentoring and being a good citizen when dividing the pie.” “We reward our group leaders for time managing their groups and forgive them if that means fewer personal billable hours or less origination. We want them to focus on their groups.” Sounds nice, doesn’t it? But is it the truth? We’d save ourselves from so many blunders and foolish notions if we could only see ourselves as others see us, the poet Robert Burns points out. Like the other types of lies that firms tell, these lies aren’t mean or malicious. They’re the lies of self-delusion. We want to believe them. Often, the claims we make don’t have the desired impact, so we raise the temperature of our tone. We exaggerate to make affect, and in the process, hurt our own credibility.

Exaggeration, misrepresentation and lying – however innocently or well-intended – has never made good business sense, as tempting as it may be. Lying and getting away with it puts you at risk of being found out in the future. Lying and not being believed destroys your credibility immediately. It’s just not worth it!

How do professional service firms obtain independent, external input at the leadership level? Do they add a few independent directors to the board of (inside) directors, if there is one? Do they form an external advisory board of people? Do they hire specialized consultants on an issue-by-issue basis? Do they bring in outsiders as co-CEO, COO or as a full- or part-time vice chairman?

Corporate boards bring valuable experience, expertise and networks to their managements. But doing this in a professional services firm would pose numerous challenges, not least of which is the amount of time it would take the outsiders to really get to know the business, the top managers and customers before their counsel would be valuable and valued.

As to advisory boards, in the 1970s a number of high-profile American companies created international advisory boards peopled with former heads of state (e.g., Willy Brandt), high-profile foreign corporate leaders, statesmen (Henry Kissinger) and others.

Hiring a highly talented retired executive or regulator as full- or part-time vice chairman or senior advisor might be a viable approach to accessing ongoing independent thinking at the top. However, in a number of years the thinking might lose some of its “independence.”

Are any of these approaches wise or viable for today’s professional service firm?

Let’s begin with the cheap shot. What does it tell you that one of the most pioneering, prominent, distinctive and heavily promoted advisory board in professional services (with the caliber of people you mention) was that of Arthur Andersen? I have no way of knowing whether that instance was cynical window dressing or a real strategic advantage to the firm, but as a professional cynic I incline towards the former interpretation, especially given the way events unfolded.
I would be more impressed by a firm that had such a Board, but told no-one about it. Now that would be a good clue that they weren’t doing it just for the image!

I am willing to believe that getting high-level input and access to great minds is helpful to any top executive (CEO or managing partner) in any business, large or small. That’s why organizations like The Young Presidents’ Organization, Rotary Clubs and private dining clubs in every major city exist to allow business people from different industries to get to know and help each other.

I don’t at all accept your implication that professional service firms are going to be particularly difficult for an outsider to understand. That’s pomposity. Professionals themselves pretend they can quickly understand all their clients’ industries and businesses when they get hired, but to turn around and say “our business would take years to understand” is the (unsurprising) height of arrogance (and self-delusion.)

The biggest barrier for professional firms acting like corporate businesses and getting high-level input at senior levels would likely be their (un)willingness to accept advice! Who is going to successfully get the world’s top advice-givers to accept critiques and suggestions that what they are doing could be done another way? Who’s going to tell some of the world’s smartest brains that they have reached a faulty conclusion? Who’s going to get away with doing this more than once, and still be asked back again and again? It’s a very peculiar set of skills to have, and only a (small) subset of top professional firm leaders who would want this on a regular basis. (I don’t think I ever could have got started in this business without the crimson H of Harvard glowing out of my forehead!)

So, should firms have these formal structures? One of my eternal rules is to eagerly look for productive processes, but beware of sticky structures. The key here is to engage in activities (or processes) that get input from fresh perspectives (dinner clubs, mentors in other industries, use of consultants to do make evaluations and recommendations and to do so in such a way that there is a route for the input be surfaced, dealt with and responded to, not just collected and ignored.
However, for me the warning sign would be that if this ever goes beyond being a process (the regular way you do business) and becomes a structure (an board, a committee, a bureaucratic system) then that’s a pretty good sign that you’re only playing games, and its likely to be of limited value. There’s no more certain way to avoid facing hard issues than to form a committee, establish an oversight board, or hire a new executive to a new position who actually cannot influence how the firm actually does things.

One final thought: you may be overestimating the impact of corporate boards. We all know they are not only supposed to provide wisdom to top management, but also to exercise oversight on behalf of the shareholders. So it is, in theory also, with professional firms. Many partnerships, for example, have a board of partners whose job it is to oversee the activities of the firms’ executive. My take is that, most of the time, these are no more and no less effective in controlling management than they are in the corporate sector. And adding outsiders theoretically should give the board more power, but rarely does. It’s usually a well-paid boondoggle for the board member who is expected to behave.

One division of our private banking unit is 5 years old, with 7 investment directors and 7 client relationship managers. As we grow we are in the process of dividing the 14 people into 3 sub-groups, each with informal team leaders who support me by helping their team members to be motivated, to fulfill their aims and to solve problems.

As we do this, we want to avoid internal competition between the teams. We want members of each team not only to cooperate within their team, but to be supportive of other teams and to have a feeling that we stand for the same purpose. We also wonder how we should measure the teams, the individual team members and the team leaders to accomplish both small-team performance and group-wide collaboration.

When you get big, it may be necessary to have formality and “official” structures, but it is not clear to me why you need it now. Managing 14 people should be possible without official structures and, as you point out, the minute you draw a circle around a group of people, you automatically get less collaboration across boundaries. Always.

So, I would work hard to make the team assignments feel informal. You want mission-oriented teams, not structurally-defined departments. For example, I would not “publicize” or “publish” any official team metrics, but only discuss performance in private with individuals and small teams, making sure that you insist on making judgments, not just sticking to measures.

In private meetings, you can say “The hard numbers look great but people do not give you great praise for collaboration. Both are important to us. Can we discuss ways to improve? Can you tell me what you have done to help others look good, within your team and outside your team?”

Done this way, here will be little opportunity to play games with the system by trying to look good on fixed metrics, individual or team. Again, the rule – for firms and groups large or small – is: “Avoid ANY fixed system of metrics – always make judgments.”

Your people will not like this. Everyone, especially the quantitative types attracted to banking, wants a precise formula as to how they will be measured and compensated. It is always a mistake to give in to this request. There is no quantitative system that cannot be “gamed.” Some firms like to think that financial measures are “objective,” but that’s a delusion. They are not objective if people are making the numbers look good by hoarding work, failing to share and collaborate and thinking of their own metrics. What’s objective about that?

Something else I would try is to make team assignments short term or temporary – rotate people between the teams as the months and years go by, and make sure everyone knows that this will happen. It will be good for their careers (they will be better advisors for having worked in all our areas) and they will have more opportunities to be close to people who were once team members even if they are not now. People collaborate with individuals they trust, and you need to give them repeated experiences of working together, (I wrote about this in the chapter Creating the Collaborative Firm in Managing the Professional Service Firm)

Finally, look at the Nine Case-Studies in my book Practice What You Preach for some wonderful examples of how nine managers got teamwork going and built a sense of community (and made lot of money by doing so.) Among the things they did were:

• Arrange a series of group days out of the office (picnics, films, shows)
• Eat lunch together every day as a group.
• Regularly throw a good office party!
• Make sure people believe management is not ONLY out to make a lot of money for themselves.
• Discuss all financials (except salaries) with everyone – open disclosure of how every group is doing.
• Have a bulletin board where you list everything anyone wants to celebrate either for themselves or for someone else.
• Ensure everyone knows why a decision is made.
• Give regular “State of the Union” addresses to the entire firm.
• Have team leaders meet with you regularly to discuss cross-group issues

Does anyone else have ideas about avoiding cross-group competition?