If the answer is never, then either the firm has no bad deals or clients, or it is not being aggressive enough in managing its risk. The answer is most often the latter.
Quality Control
A constant program of self-analysis is essential to ensure the quality of professional services delivered. Client complaints should be channeled through someone who is not directly involved in providing services to the client. If the professional who is serving the client takes the complaint, the firm may not get an honest and immediate reaction to the complaint. Client satisfaction surveys and regular, focused discussions between clients and firm management should be used to create an independent channel through which clients can give the firm their complaints or suggestions for improvement, without the filtering bias of the service team that failed to meet expectations. Having an independent channel through which clients can contact the firm’s management is critical.
Training, continuing education, and appropriate credentialing are also essential for quality control. Weak or unsuccessful professional practices usually do not have a dedication to the highest standards of training and supervision. Such firms do not survive for long. No professional services firm in any industry can enjoy sustainable success without a plan to ensure the constant improvement of its professional staff through training and education. The topic of training and professional development is addressed in Chapter 10.
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Tracking the turnover of the firm’s professional staff is another important part of quality control. If a firm has high turnover, it is clearly not meeting the needs of its professionals. Unhappy professionals can, unfortunately, often be translated into unhappy clients. The firm needs to understand how internal staff issues affect its client relationships. Consistently successful professional services firms do not have high turnover of professional staff.
Professional staff retention is discussed in Chapter 9.
Summary
In a professional services firm that understands the needs of its clients, business development strategies are really just techniques for broadening the scope of the firm’s market base. In other words, business development is a natural by-product of understanding the needs of the firm’s clients. If the professionals in the firm understand how they are or are not satisfying the needs and expectations of their clients, then as the firm adjusts its service delivery model, it also affects its ability to compete and differentiate itself in the marketplace. The more proficient the firm is at meeting the specific needs of the markets it serves, the greater its ability to expand its business base.
That is what is so revolutionary about the process of strategic firm management. A firm that understands how to manage itself first, and do so strategically, gives every professional in the organization a strategic mind-set. When they are making contact with the firm’s constituencies, they are automatically asking the right questions, inquiring about the strategic needs of their clients or prospects, and developing new business naturally. It’s typically the same people developing new business who are delivering services because the two processes are integrated.
When professionals and administrative staff are managed in this way, the strategic perspective on professional services becomes a natural part of the way they think. When they are at lunch with a potential referral source or prospective client or they are speaking at a conference or seminar, they will adopt the strategic perspective: “How do I attack that problem with that client? How do I attack that need of the marketplace? How do I think about that issue? How should they think about it?” Staff who understand how to convey the message of the strategic approach of the firm ensure that the professional services delivered will be of consistently higher quality than those provided by competitors.
A firm, however, needs traditional marketing support to help grow its client base and sustain the clients it currently serves, but the firm must act strategically in the way it markets. It should also take some risks—redesign professional services and reach out to the marketplace that the firm currently does not serve.
Service Delivery
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NOTES
1. Anthony Greenback, The Book of Survival: Everyman’s Guide to Staying Alive and Handling Emergencies in the City, the Suburbs, and the Wild Lands Beyond (New York: Harper & Row, 1968), p. xi.
2. Eliyahu M. Goldratt and Jeff Cox, The Goal: A Process of Ongoing Improvement (Aldershot, Hampshire, England: Gower, 1993), p. 337.
3. Edi Osborne, CEO, Mentor Plus, phone interview by the author, Pasadena, California (March 15, 2004).
4. Jim Collins, Good to Great: Why Some Companies Make the Leap—And Others Don’t (New York: HarperBusiness, 2001), p 44.
5. Dale Cordial, CEO, PT Group, phone interview by the author, Greensburg, Pennsylvania (March 20, 2004).
6. See note 3.
7. See note 3.
13
Resource Management
JOE SANTANA
Nothing is denied to well-directed labor, and nothing is ever to be attained without it.
—Joshua Reynolds (1723–1792)1
In this chapter, we focus on the key ingredient behind the success of any professional services firm: the effective and appropriate utilization of its people.
According to analyst firm Aberdeen Group, service-centric organizations make up approximately 75 percent of the economy in developed nations. In their report, Aberdeen states that “these organizations are now realizing that success hinges upon their ability to efficiently leverage their intellectual capital.”2 Clearly, nowhere is Joshua Reynolds’s statement about well-directed labor truer than it is in the professional services industry.
Why This Topic Is Important
Professional services firms are classic knowledge-based service-industry enterprises that have few physical assets and are built on a widely distributed intellectual capital base. As noted by many in these consulting businesses, all you really have as the engine behind your offerings in a professional services business are people and their experience. If these people are utilized im-properly, profitability will suffer, or at best it will be substantially lower than it could be for a similar organization that is more mature in its people practices. To build their profitability and competitive advantage, professional services firms, therefore, must (1) hire the best talent on the market in their space, and (2) make the best use of the talent they have in-house. This chapter focuses on the latter: how we make optimal use of the people already inside the organization.
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To be successful and to gain and sustain a competitive advantage, professional services firms must specifically do four things very well with the people they have in their organization:
1. Maximize productivity through optimal utilization and engagement.
2. Reduce the hard cost of turnover (e.g., cost of replacement) as well as the associated soft cost (e.g., talent and experience drain).
3. Increase customer satisfaction through effective deployment and coordination of talent.
4. Maintain a high level of quality control through an appraisal process that ensures that only the best talent is kept in the organization.
In the balance of this chapter, we address how you can achieve these goals by focusing on the following key areas:
• Identify your requirement profile.
• Assess the talents, skills, capabilities, and passions in your resource pool.
• Determine the optimal level of individual sustainable capacity and potential resource utilization.
• Install an employee pool performance ranking and management system.
• Manage your aggregate billable resources.
• Automate the administration of your resources.
• Develop engaging management skills.
Identify Your Requirement Profile
For people-centric professional services organizations, having top performers is clearly a critical part of gaining a competitive advantage. In some instances, you may decide that for a small assignment with limited revenue potential, it will suit you to hire someone at a lower salary level with less talent, experience, or knowledge in order to get the job done and make a reasonable profit. Or perhaps part of your unique selling proposition to your market is lower prices for a finite medium-level set of skills that can get the job done. For example, the skills sought by a legal practice that specializes in tax preparation and advisory for corporate clients versus the skills sought by a tax preparation service for general consumers will be quite different in terms of the level of tax-knowledge depth and sophistication they seek in their employees. Unless you are pursuing the lower price end of the value chain or resourcing for a low-margin, short-term project, you should, for the most part, pursue the top talent in your field.
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Services Delivery: Taking Care of Business
Many organizations, unfortunately, have a difficult time finding the top performers they need because of a common misconception. This misconception is often voiced when managers and executives speak of people as being either top performers or low performers as if some people were naturally born to excel at everything and others were doomed to plod through life.
Numerous studies, however, show that being a superstar performer versus a poor performer is situational. More specifically, people generally perform as superstars when their work engages their best talent, skill, capability, and passion mix.
Talent is the natural endowments of a person, including special aptitudes sometimes referred to as the person’s gifts. The Gallup organization, which has performed one of the most extensive studies in this area, has specifically identified 34 talent themes that explain the differences between how people relate to one another and why different people will excel or fall short based on various settings. These key themes grouped under talent types as presented by Gallup are shown in Exhibit 13.1.3