post # 285 — Tuesday, January 16, 2007 — a Strategy post

A Home Fit For Heroes?

There’s a really good article by Boris Groysberg and Robin Abrahams in the December 2006 issue of the Harvard Business Review called “Lift Outs: How to Acquire a High-Functioning Team.” It provides advice to professional businesses whose strategy is to grow not organically, but by attracting whole departments out of competing firms.

The desire to do this is huge. In a lot of my consulting work in a variety of professions, across the globe, it is amazingly common to find that the core strategy for getting into new markets, locations, disciplines and specialties is to go and raid effective groups that, for one reason or another, are less than completely happy in their current firm and can be “lifted out” to the new firm. Building capabilities organically is something that many firms have lost either the patience for or the ability to do.

When “doing strategy,” many prominent firms are not really scheming less about how to win clients, nor about how to win in the war for junior talent (who can be subsequently nurtured). What they are REALLY worried about is winning the competition for warlords.

I analogize it to the emerging formation of nation states in mediaeval times, when the barons and warlords throughout had to decide which coalitions they would join, and which emperor they would (temporarily) swear fealty to. In the modern situation, the firm is the (relatively unstable) nation-state. The real power is with the warlords who have the “following.”

So, the main question firms are asking themselves nowadays is: How can we make OUR firm the firm that the best warlords (those with the established reputations and existing book of business) will find the most attractive?

It’s proving to be an interesting question.

There’s a lot of firms out there hoping that their strategic problem will be solved by a white knight coming in from the outside and solving the firm’s problems without the current citizens having to change much.

However, ask any headhunter and he or she will tell you that one of the major concerns of warlords is that they do not want the surplus that they generate (or at least that they think they generate) siphoned off, so they don’t like to join firms that don’t have tough discipline throughout the rest of the firm. Powerful warlords don’t want to join a firm of unenergetic underperformers.

But notice a degree of circularity here. If the rest of the population begins to “raise its game” to make the firm a more attractive place for the new warlords, maybe the current population doesn’t NEED the warlords! Maybe they can succeed themselves.

But the core question remains: what makes an emerging nation-state (i.e., a firm) an attractive place for the best warlords? Assuming it does (indeed) want to attract these “lift outs,” what’s the best way to run your firm so that the warriors want to come with you?