Re-engineering a Professional Business
post # 67 — May 3, 2006 — a Strategy post
When doing strategy work with professional businesses, I sometimes ask the people in the firm (senior and junior) to choose the four or five key things they would work on changing if they became their firm’s czar or czarina. Among the possibilities:
- The range of services (more or fewer)
- How we compensate people
- Which clients / market segments we serve
- Ownership structures (Equity v. Partnership, etc.)
- What we train people in
- How we are organized
- Financial controls/measures
- Performance appraisal criteria
- Degree of specialization of people
- How we decide investments
- Use of technology
- Degree of worldwide integration
- Change way we staff projects
- Disseminate knowledge and skills around the practice
- Use of paraprofessionals
- Approach to dealing with underperformers
- Who we hire
- Number/location of offices
- Approaches to R&D
- How we market ourselves
- How we train and coach
- How we choose managers and other practice leaders
- How we gather market intelligence about what clients want
- How we price services
- What we invest in
- Use of Methodologies ratherthan treating each assignment as unique
- Retirement policies
- How we do quality assurance
- How we use support staff
- Management of overheads
- How we hire
This is obviously not a complete list.
But if you were concerned about strategic strength (and not just short-term profit gains) which 5 would you pick to focus on?
Brian Sommer said:
While the list is good and you’ll no doubt get a variety of responses, I beleive a little clarity could help the respondents.
I’ve some highly dysfunctional professional services firms, some truly great ones and a number in between. The top 5 priorities vary greatly from each of these three firm types and for solid business reasons. Obviously, the more broken the firm is, the more likely they’ll need a czar/czarina to focus on those matters that bring a level of trouble-free operations to the company. These firms need things like PSA software, standard processes, improvements in how and who gets staffed, etc. In other words, they have a number of gaps to close just to be operational and modestly profitable.
Firms that are already functional are looking for improvements that make them operationally excellent. They don’t just want a process or system, they want to be first quartile and ahead of their peers in most/all categories.
The best run service firms are looking for ways to transform their firms and to outpace future competitors. These companies want the vision to make big successful changes that will work in the global services economy that is currently redefining itself.
This last group of firms is a small club today. These companies already have global delivery models, they’ve correctly allocated their workforce in high-cost and low cost countries. They’re ready to move to the next leve o competition in services and they’ll smoke the folks still struggling just to operate a service firm.
So, my vote for the top 5 is a variable answer. However, eventually every service firm will likely need to get through that entire list (and then some) if it wants to remain vibrant, relevant and profitable.
posted on May 3, 2006