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A Home Fit For Heroes?

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

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?


Stephen Seckler said:

The best way to attract the “warlords” is to have a compelling story to tell. Most firms are quick to say they want to grow by adding partners with $1,000,000 in corporate business; but few offer compelling reasons why someone should want to move their practice. Everyone says that they offer a collegial and entrepreneurial environment where profits are growing. The key is finding a way to differentiate your firm from the pack.

The importance of positioning the firm as a great platform for a “warlord” is twofold. For starters, if you can articulate the synergies that the new partner will experience and you can convey that the firm has a real strategy, then you are more likely to get the attention of the rainmakers in the first place. But the other compelling reason is that you want to find partners who want to move for “positive” reasons (i.e. they are not just running from a hornet’s nest.) The best lateral prospects are partners who get along well at their existing firm but see ways that the new platform can help the partner to better achieve his or her goals.

posted on January 16, 2007

david foster said:

Why would a top warlord want to join a kingdom whose ruler has shown an utter inability to develop his own warlords? Wouldn’t this failure demonstrate that the monarch has little respect for the work that warlords do and for the kind of environment in which they thrive?

posted on January 16, 2007

David (Maister) said:

All I can tell you is what people tell me (and have been telling me for more than a decade.) Most warlords just want the maximum autonomy to operate and a very high percent of what they kill. That’s not what all of them want, but that’s the most common.

In raiding, many firms (for example in investment banking, law, consulting) look for younger people on their way up whose way is blocked by the existence of more senior people already occupying the top positions. Such “younger sons” (see the mediaeval analogy?) are ripe for what Boris and Robin call “Lifting out.” Thery don’t want to wait for the father or the older brother to die or to pass on the franchise. They want theirs – now! So they are easy to tempt into a breakaway.

posted on January 16, 2007

Bryan I. Schwartz said:

Nothing is more compelling than the track record of prior warlords or professionals joining the firm. Have they flourished since coming to your firm or have they leveled off? What is yoru lateral track record? If you can show the track records of warlords over a period of time and of the growth of other existing partners as a result, peole will want to join a shop where people are nutured on a path towards excellenec.e. If you are a warload or a slave, people want to ride a wave, not drown in a sea of medocrity. Professionals with choices will want to join firms with energetic people already in the firm.

posted on January 17, 2007