post # 48 — Wednesday, April 12, 2006 — a Strategy post

Welcome to the Real World. Figure it Out Yourself!

Adam smith, Esq, reporting on a survey about rising salaries for young lawyers, points out that, and I quote him here – (a) paying people richly, and (b) expecting them to work like dogs in exchange, is the perfect introduction to what the life of a partner is like. Consider it akin to an 8 to 10-year hazing process; I predict that those who emerge alive and kicking at the other end of this funnel will indeed be partnership material. (end quote)

Adam is astute, as always. I was once trying to persuade an accounting firm that they should have a managed work assignment system, which could balance the competing needs of developing different people, balancing differing clients’ requirements, etc.

His reply was that the unmanaged ‘Gotcha!’ system (whereby juniors ended up on jobs – or not- only by having partners act like independent warlords, playing favorites or looking for cannon fodder) was critical as a screening process for partnership characteristics.

He pointed out that, in an unmanaged system, the only people who end up getting developed are those who can sell themselves and otherwise ingratiate themselves; those who are self-starters willing to take the initiative; those who can play politics, spot the good people to get to know, spot overdemanding problem people early and avoid them, etc., etc.

These were all essential partner skills, he pointed out. Anyone who sat there saying ‘develop me, develop me’ was, by definition, a loser who would not make it. The firm, he argued, MUST NOT look after people, but must test them in action and see who survives. Anything else would mean a generation of useless, wimpy partner-candidates.

That kind of thinking has mostly (but not entirely) disappeared from accounting firms and (most)consulting firms, but it’s alive and well in law firms.

And it’s a good argument, isn’t it? Or is it?

It’s not. It’s actually rhetoric, not logic. The fatal flaw of the reasoning is that what it’s really saying is that, under the unmanaged system, winners win and losers are rejected.

But the test of a system is not what it does to the extremes – winners would win and losers lose under MOST systems.

The real question that tests a management approach is not whether it rewards good performance and punishes underperformance, but whether it creates performance.

What does the system do to develop the ones who are neither natural winners, nor natural losers? Does it help us end up with MORE people who have skills?

To argue that something ‘screens’ for talent (or anything else) is to reject the organization’s responsibility to create something. Professional businesses are not (or should not be) wholesalers who buy talent at one price and just re-sell it at another. They must create value.