post # 137 — Wednesday, July 19, 2006 — a Managing, Strategy post

The High Priest's Catechism

Kieran Flatt, with whom I have corresponded, has written a piece about IT strategy in law firms called "Pick a side...and stay there. "  Here's what he had to say:

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.

Order your copy of David Maister’s new book, Strategy and the Fat Smoker today!