Practice Management Teams
In this model, members typically rotate on and off a small team that may focus only on service quality or may involve itself in both service quality and business results. Decisions are often determined by consensus, and few substantive issues are decreed by the team’s chair. The span of control for the team may entail only setting goals for their specialty and monitoring progress against plan, or the committee may oversee all issues related to specific performance of the practice specialty.
This model allows those closest to the work to manage the creative and work product unencumbered by the disparate concerns of other firm members, who often operate in different specialty areas that may not share the same operational or profit guidelines. In a consulting firm with a litigation support practice, for example, the work f lows and processes differ sharply from those of an applications’ engineering practice focusing on problem solving and code generation.
Representatives from each of the practice management teams within the firm usually constitute either the board or its executive committee.
Summary
Managing the professional services firm has never been easy. The analogy of herding cats comes to mind. Firms that adopt an effective structure for governance, wealth accumulation, and equity transfer give themselves the best chance for prosperity and growth. Whether the firm begins with one principal or a key group, creating a structure using one of the models identified will enable rather than constrain opportunity and is a first step in increasing the likelihood of long-term success.
Building on this structure, initial equity is allocated fairly, and the processes of the firm govern the f low of equity into new hands. This process is the lifeblood of the professional services firm. In the Four Stages of Business
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Managing and Governing the Professional Services Firm
Growth7 (survival, liquidity, profit, and sustained growth), we see a cycle that many businesses in general, and professional services firms in particular, fail to master. Few survive into a second generation of leadership. But those few firms that do survive have mastered the f low, and their vitality is evident, both professionally and financially.
Principals and professionals in these firms have been nurtured both in terms of equity participation and performance recognition. Sound and progressive compensation programs provide a stable environment that nurtures and sustains high performance professionals. Such policies also facilitate retention and, coupled with a full array of competitive benefits, encourage both the best and the brightest to cast their long-tem lot with the firm.
Successful firms have also identified and documented their workf lows and supported those workf lows with decision management techniques designed to facilitate process. Mastery of workf lows allows for leveraging the potential of each professional and support person within the firm.
Finally, successful firms typically acknowledge that there is no shortcut to improved performance, no magic pill. Success is earned on a day-by-day basis.
Structure supports ownership and facilitates reward. Defined processes make the going easier and propel the firm into its future. In speaking to clients in professional services firms over the years, I have often asked what most facilitates growth, given a talented group of professionals. In hard times and prosperous times, the answer is the same: f lexibility.
NOTES
1. John J. Reddish, CMC, IPO Decision Tree (included in the Resource CD).
2. Mark J. Gundersen, Esq., PSI 2004 Technology Conference, 2003, pp. 5, 6.
3. Robert Morris Associates, Annual Statement Studies (also known as the Ratio Book) includes comparative historical data and other sources of composite financial data categorized by SIC code, available from www.rmahq.com.
4. U.S. Department of Labor, Bureau of Labor Statistics, www.bls.gov.
5. Several online sources provide individual salary surveys, including www
.salarysource.com.
6. One national source for site selection and local demographics is available from www.developmentalliance.com.
7. John J. Reddish, CMC, press release and article, © 1995, 2004 (included in the Resources CD).
SECTION II
The Front Office:
Driving Sales and Growth
4
Sales Management
JANA CARPENTER
If there is no wind, row.
—Latin Proverb
This chapter introduces a totally unconventional concept: The formation of a separate sales organization within your professional services firm. While the direct salesforce model is a generally accepted practice in technology consulting, performance consulting, and product-driven companies, the formation of a separate sales organization does not have serious traction in the professional services industry. Buckle up. This chapter—through guiding philosophies, anecdotes, and case examples—demonstrates why going against the mainstream is good for your business. In fact, a professional salesforce is required for any professional services firm looking to grow with velocity. This chapter provides you with the steps, tools, and insight to build and manage an effective sales organization in your firm.
It is very easy for people to understand the need to hire salespeople to sell a product; however, professional services firms are typically not trained to put a structure around selling intellectual capital and the process of consulting, nor do they often want to. An Economist article notes that consultants’
professional skepticism teaches them to “dig holes in constructive new ideas,”1 and to many practice leaders, a dedicated salesforce is a new idea.
Reasons for the reluctance to hire and work with sales professionals are many and include the stigma associated with sales; the belief that sales is personality driven, thus a formal organization and sales “professionals” are not necessary; and, most importantly, sales conf licts with the rainmaker mentality of the “expert” industry. Traditionally, partner status, esteem, and big money in the professional services industry are associated with strong sales ability.
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The Front Office: Driving Sales and Growth
The highest status for a consulting professional is to be identified as one who can make rain, and bringing in salespeople creates conf lict.
To illustrate the pervasiveness of these challenges, I share a story that describes the process navigated as I introduced a sales organization into FTI Consulting, Inc.
Coming Out
Three years ago, FTI posted an online employment advertisement for a director of sales for the Chicago office. The Chicago office was looking at different ways to drive revenue. They built their business on a few major client engagements, did extremely well, and grew exponentially. In 2001, as litigations pushed and settled, the practice leaders found themselves with a good-size organization of outstanding professionals, but not enough clients. One creative and innovative practice leader understood the need for new revenue streams and decided to try an experiment. He hired one experienced sales professional and identified and dedicated two current employees with great client facing skills to outside sales. In 2000, I joined FTI as their supervisor and FTI’s first director of sales (or so that was my impression coming in). However, as I began my career with FTI, I saw that I was identified as a senior consultant, even in the language contained in my offer letter, and not as a director of sales. As a new employee with a background in sales, this struck me as, “ Yikes, what have I gotten myself into?” Here was a company in need of new revenue streams and not ready to “go public” about the hiring of a sales management professional.
I continued in the sales management role, with the support of my di-
rect supervisor. Focused on generating new revenue, we dug in and did the hard work. After one year, the sales team was performing exceptionally well, and the division president asked my supervisor, “How did you get these budget busting months?” Even with demonstrated results, my supervisor was hesitant to “come out,” but the time had come to disclose the truth—that a sales team, in concert with the consulting professionals, was responsible for the tremendous revenue growth. When I met the division president and shared our methods, he said to me, “But, I thought you were a senior consultant.” While the division president was ecstatic with the new revenue stream and improved sales performance, he still found it hard to believe that a salesperson could sell professional services. In his disbelief, he put the sales team through rigorous tasks including recalculating our forecasts repeatedly and testing our ability to sustain the growth. Even after our group brought in $13 million in self-originated engagements that year, the division president still did not want to acknowledge the need for salespeople. Slowly and hesitantly, the firm leaders came to acknowledge the impact a dedicated sales organization within a
Sales Management
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professional services firm could have on the bottom line, and today FTI’s sales organization is viewed as a tool for success.
The lesson I learned from this journey is: While there is still an enormous stigma attached to the word salesperson and a fear that sales professionals and professional consultants cannot mix, you can establish a sales organization in your firm, no matter how biased it is against such a measure, as long as you have the support of at least one person who is willing to sustain you until you prove yourself. Today, I am a respected leader in FTI and a vice president in charge of sales and marketing, where I lead an organization of 30 sales and marketing professionals.