Notes from an Interview

by David Maister 2002

Professional firms in the US have become more organized in the past twenty years. Unfortunately, this does not mean they are necessarily better managed. Firms have been encouraged to become more “business-like”, but they have sometimes borrowed the worst of business and not the best. For example, there is now much better financial reporting and a greater focus on profits.

However, if managing means that someone spends time worrying about the success of the group, works with people on a one-to-one basis to help them achieve everything they can, and spends time creating a team out of independent individuals, then not much managing is taking place. Firms have administration, not management. Many of them have missed the critical lesson that you don’t make money by focusing on money. Money is a consequence of being truly outstanding at being valuable to a client. The excellence needs more managerial attention.

A professional firm is defined not by its aspirations, dreams and goals, but by the rules that it agrees to follow. You cannot manage if there are no agreed rules. There must be an agreement on the non-negotiable minimum standards that the firm will live by. For example, is it acceptable to be competent, or do we only accept excellence? Is teamwork just desirable, or is it mandatory? The job of the manager is to enforce the rules, but (unless the firm is a dictatorship) not to invent the rules.

The manager must be someone that everyone trusts to act in the best interests of the firm, and not to act selfishly for his or her own interest. (This is not as trivial a test as it might seem.) My 2001 book, Practice What You Preach, provided strong evidence from an international study that the key to superior financial performance in professional firms was not systems, structure, processes or strategy, but the character and skills of the individual manager.

There are many common weaknesses in professional firms around the world. The first is the rejection of management. Professionals like their autonomy, and don’t like rules. Second, many professional firms are very short-term oriented. They lack the courage to stick to a strategy that will pay off in the future. They are easily tempted by off-strategy work, because it means cash today. They don’t value the investment activities of their people: only billable work counts and is valued. (See my article The Courage to Have A Strategy) Third, professionals are most comfortable with logical, rational, intellectual issues. That is usually their training. They are not so comfortable with emotions, interpersonal issues, and this makes many of them bad at client relationships (see my book The Trusted Advisor) and people management inside the firm (see my book First Among Equals.)

Hiring

There is a familiar saying that you should “Hire for Attitude, and Train for Skill.” This is good advice. Obviously, there is a (high) minimum level of intelligence that any professional must have. But, above the minimum, intelligence is not the key predictor of success. Social skills are critical: can you get a client to trust you? Do you work well in teams? Can you explain what you were trained in to a person who was not trained in your area? Do other people want to work with and for you? Finally, I will report that the only competitive advantage I have seen in professional life is energy, drive, enthusiasm, excitement, passion and ambition. Only where those things exist is excellence (as opposed to competence) really attained.

Motivation

Most people want to perform at a high level (you should fire those who do not!) What people want is the encouragement and the assistance to perform. (My new book First Among Equals is entirely about this subject)

People will only accept your guidance and feedback if they believe that you are truly trying to help them. As Dale Carnegie (the American author of How to Win Friends and Influence People) said “The only way to influence anybody is to talk about what they want and show them how to get it.” This sounds inspirational or religious, but it is not. It is the central basis of exchange capitalism. If you want to get an employee or colleague (or client) to give you what you want, then the only way to accomplish that is to first give them what they want.

Notice, that getting people to perform is necessarily a one-on-one activity. If you try to manage professionals as a group, leaving out the one-on-one, you will fail.

Retention

The ONLY way to get mobile professionals to stay is to create a firm that they want to belong to. It cannot be done with money alone. You must create a firm that stands for something, that has a purpose, where professionals feel immensely proud of their colleagues because they share values (and standards of performance.) It must be a firm that is interconnected, where things are done that could not be done by one individual or small group alone. A firm held together through a pay scheme is not a firm.

Professionalism

It is always hard to be an authentic professional. It always was, and always will be. It is easier to focus only on today rather than to build a long-lasting, mutually beneficial relationship. But those willing to invest in relationships (with their clients, their colleagues and their people) will win in the long run. It is easier to spend your time working at what you already know how to do, than to invest in yourself and try to get involved in scary new things. But those who work at personal growth will win. Does society help? No, Do firms help? No. It’s about believing in tomorrow, when the world only asks you what you have done today. It’s never easy. But it’s fun (and very rewarding)!