No matter how good professional staff is, no firm can operate without a strong support staff to assist various engagement teams and practice groups. Support staff also perform necessary corporate functions such as finance, human resources, information technology, systems, and facilities management. Although support staff are not client-facing in the precise sense of the term, they are a vital part of the process that delivers value to clients. Chapter 20 discusses the role of administrative professionals as well.
Specific roles and titles may vary from firm to firm and from industry to industry, but all firms have some form of senior support staff that perform the role of firm administrators. These staff members run the day-to-day operations of the firm, in tandem and accordance with the wishes and preferences of the partners or managers. One of their key roles is to manage the remaining support staff. They play an important role in helping manage and mitigate the perception of second-class citizen status that many support staff feel.
210
Attracting and Retaining the Best Professionals
FUNCTIONAL
HYBRID
PRACTICE
MODEL
MODEL
MODEL
• Staff specialized in
• Staff specialized in
• “True experts”
sales/business devel-
sales/ business
involved in selling
opment more efficient
development
makes most
in identifying and
• Sales staff focused
compelling value
qualifying new busi-
on particular prac-
statement—best
ness opportunities
tice facilitates closer
positioned model for
Advantages
• Single point of con-
linkage to delivery
growth
tact with customer
• Better pricing and
• Increased credibility
account for sale
performance man-
with customer/ dif-
across all practices—
agement due to con-
ferentiation
allows for maximum
tinuity through sale
• Better pricing and
control of customer
and delivery
performance man-
activity
agement
• Generalist sales peo-
• Need to support
• Senior team needs to
ple have less depth of
higher cost structure
carefully balance use
expertise in cus-
of dedicated business
of time; can lead to
tomer’s business
development and
higher cost structure
needs or potential
product management
• More complex cus-
Disadvantages
solutions
• More complex cus-
tomer interface, if
• Sales bring less
tomer interface, if
practices do not
insight needed to
practices do not align
align with
identify need and
with customers/
customers/
provide differentiated
segments
segments
custom solution
• Sales and B&P pro-
• Senior delivery team
• Senior delivery staff
cess needs to ensure
members paired
team members must
delivery team
with customer-
have strong business
involvement
aligned business
development
throughout—particu-
development
competency
larly in scoping
• Tools to track alloca-
• Senior delivery team
• Clear interface and
tion of time and
members play multi-
Key Success
smooth hand-off
resources among
ple roles along ser-
Factors
between sales/ BD
delivery, business
vice/function and
teams and delivery
development and
customer matrix
teams
capability develop-
• Tools to track alloca-
ment
tion of resources
among delivery,
business develop-
ment and capability
development
Exhibit 9.2
Pros and Cons of Each Organization Model
Organization Structure
211
Firm administrators are also heavily involved in recruiting, training, and career development mechanisms for support staff. They should play a critical role in the career development of employees and should have the ability to ensure that support staff is exposed to much-needed project variation.
Because they make contributions to deliverables across a range of functions and roles, it is critical to ensure that compensation and performance metrics for support staff are accurately set and defined.
Setting Responsibility for Pricing,
Marketing, New Service Development,
and the Budgeting Process
Professional services firms tend to place significant decision-making authority for pricing, marketing, new service development, and the budgeting process on their practice teams.
Firms most often set pricing policy globally, including target margins or billing rates, allowing local variations depending on organization structure (particularly the geographic model). Ultimately, pricing authority lies with the delivery team, although partner or higher authorization is most often required for discounts. It is important to include mechanisms for timely and accurate view of revenues, gross margins, average billing rates, utilization, investments, accounts receivable, and overhead costs; to be able to track margin realization versus target; and to ensure compliance with discounting and pricing policies.
Most organizations have a specialized marketing function providing support to individual practices. The role of the marketing function typically includes marketing communications, market research, sales support, and branding. Customer-facing staff is central to the marketing process, however, both through adherence to the firm’s overall marketing and branding strategies and through activities such as writing white papers and articles and presenting at conferences.
Although firms may place responsibility for new service development with delivery teams, the marketing function, or a separate development group, initial development of new services usually comes about when services that are already done on an ad-hoc basis for one or some clients are turned into products or service offerings for use across multiple clients. Regardless of where responsibility for development lies, the marketing support function is generally involved throughout the process.
Generally, “hard” investment decisions are made through a centralized budgeting process with practice leaders accountable for their targets. However, firms often fund new service development and capability-building activities through allocation of delivery staff time. Chapter 6 discusses the process for determining investment priorities for new service lines.
212
Attracting and Retaining the Best Professionals
Career Progression
At most firms, progression occurs along an established continuum from entry-level (associate) to stakeholder (partner); some models also support a nonpartner track. As in other aspects of firm organization, the expectations and responsibilities for progression within the firm need to be clear, explicit, and well defined.
As an individual ascends the firm hierarchy, responsibilities shift from a tight focus on delivery toward business development and other institution-building activities. A recent study3 found the division of labor at typical consulting firms is as follows:
Division of Labor between Partners and Project
Managers at Consulting Firms
Percentage of Time Spent
on Responsibility
Partners
Project Managers
Client engagements
45
64
Business development and marketing
25
12
Administration
8
7
Thought leadership
7
4
Recruiting/training
4
4
The apprentice model, with fixed leverage ratios for junior to senior staff, is dominant. It is important to make it clear to all new candidates in an “up or out” policy that only a select few will travel the entire path to partner. Other firms have a nonpartner track that provides long-term career options for individuals with specialized knowledge or training. Regardless of which model a firm chooses, training mentoring, work allocation, and feedback and evaluation are critical to ensure the professional development and preparation of junior staff. Firm training and development, both formal and on the job, are critical parts of preparing individuals to assume the increased business development and administrative responsibilities that accrue over time.
Typically, professional services firms use specific competency models as a part of their organization model, with those moving on a partner track need-ing the following:
• Project delivery: This competency follows an hourglass model where entry-level generalists develop specialized functional or industry
Organization Structure
213
knowledge and then build expertise that can bridge many industries
and functions across projects.
• Project management: The lowest level staff begins as a team member, developing the skills necessary to manage increasingly complex projects and eventually evolving from a supervisory to advisory role.
• Account management: Over time, staff increase both their frequency and quality (in terms of seniority) of client contact. Senior staff “own”
client relationships and are responsible for developing and maintaining new relationships for the firm.
• Business development and implementation of marketing plans: Eighty-six percent of consulting firms have no salesforce, relying instead on the partners and other staff for business development. New staff initially contribute to client proposals, but over time their role evolves into responsibility for revenue generation and the management of a portfolio of clients.
In addition, over time, employees are expected to increase their competency at firm administration and staff development, as well as to contribute to the firm’s marketing efforts, initially by supporting the development of new ideas through directed research but eventually as visible and internationally recognized thought leaders (see Exhibit 9.3).
Organization Model Example
The general principles of career progression are similar across professional services firms regardless of specialty.
Firms are generally organized by practice model, with practices identified according to industry and /or functional specialization. The leverage of junior to senior staff is usually fixed. In a typical consulting firm, for example for each partner, the firm has an average of five to six full-time equivalent (FTE) professional staff as follows:
• 1.25 project managers (senior associates/principals at Booz Allen)
• 1.75 consultants (associates)
• 1.5 associates (consultants)
• 1 support staff
The organization structure usually includes an explicit career development path with well-defined standards for promotion in relation to performance, behavior, and client development. For a consulting firm, titles of levels might be:
e
ee
e
ee
ears
ears sinc
ed degr
ears sinc
ed degr
ears
.
EXPERIENCE
anc
anc
o 12 y
o 7 y
o 4 y
>12 y
7 t
4 t