TOP BOOKS ON PROFESSIONAL SERVICES MANAGEMENT

INTRODUCTION

When compared to
the study of business management, the study of professional services management
is of recent vintage. While business management education is most sought after
the world over, the knowledge and skills required for managing professional services
are usually acquired on the job,and many times through trial and error.
Professionals study technical subject, but often leave out the management
aspects, which impact their growth and profitability. It is therefore
imperative to keep in touch with the developing management thinking and best
practices about professional services.

David Maister, an
authority on this subject, emphasises that professional services involve a high
degree of customisation with a strong component of face-to-face interaction with
the client. A former Harvard Business School professor, Maister argues that
management principles and approaches from the industrial or mass consumer
sectors, which are based on standardisation, supervision and marketing of
repetitive tasks and products,are not only inapplicable to professional
services but may also be dangerously wrong.

Thankfully, there
are many books to study and learn the art and science of professional services
management. Some of the top books which also feature on several recommendation
lists are:

This feature
attempts to summarise and highlight key learnings from some of the above books.
This article presents the summary of the first such book.

The Trusted
Advisor by David H. Maister, Charles H. Green and Robert M. Galford

THEME

The central theme
of this book revolves around the fact that the key to professional success is
not just technical mastery of one’s discipline, which is most essential, but
also the ability to work with clients in such a way as to earn trust and gain
their confidence.

At one time, being
a professional automatically carried prestige and easily win clients’ trust.
However, things have changed. The notion of embedded trust has been affected.
These days, professionals often find that they need more client access, more
ways to cross-sell and more opportunities to show the quality of their work
(beyond price considerations). Many clients now treat professionals as
untrustworthy, because they question the advisors’ motives or do not see them
as experts.

To break out of
these boundaries, one must become a “trusted advisor.” This requires
developing an ever-deepening relationship with each client. As such a
relationship evolves, the client will involve you in a broader range of
business issues. Along the way, you can progress from being a subject-matter
expert, to being an associate with expert knowledge and additional valuable
specialties. Moving from one level to the next is evolutionary, but once you
become a trusted advisor, your client will openly discuss both personal and
professional issues with you.

As an example of a
“trust-based relationship”, the book narrates the case of sports
agent David Falk and basketball star Michael Jordan. In 1977, Falk helped
negotiate Jordan’s $2.5 million endorsement deal with Nike. As Jordan’s career
progressed, Falk negotiated more endorsements. Eventually, Falk sold his agency
for $100 million, but he still collects 4% of Jordan’s earnings. Falk earned
Jordan’s trust and friendship by knowing what his client wanted, including
Jordan’s opinions about his fees. There were a few times when Falk waived his
fee without any discussion with Jordan because Falk knew Jordan might object to
the cost. He continues to work with Jordan today mainly due to the trust with
Jordan that Falk built.

With deep insights,
examples from real life and practical tips, the trust and behaviour framework
from this book has become a key element of management education for
consultants, and it has been helping a large number of professionals to pursue
the right approach and technique in their journey of being trusted advisors to
their clients.

Ambitious
professionals invest tremendous energy in improving their specific expertise
and gaining experience, but do not give adequate thought to creating and
strengthening the trust relationships with their clients. Many professionals do
not know how to think about or examine trust relationships. A useful framework
is provided to gauge the depth of the client relationship:

The three basic
skills that a Trusted Advisor needs:

• Earning Trust

• Building Relationships

• Giving Advice Effectively

Key characteristics
of trust are:

1.  It grows instead of just appearing – it
results from accumulated experiences over time.

2.  It is both rational and emotional – trust is
lot richer than logic alone and is a significant component of success.

3.  It presumes a two-way relationship – between
two persons and is highly personal.

4.  It is intrinsically about perceived risk –
creating trust entails taking some personal risks.

5.  It is different for the client than it is for
the advisor – just because you can trust does not mean you can be trusted.
However, if you are incapable of trusting, you probably can’t be trusted.

6.  It is personal–trust requires being understood
and having some capacity to act upon that understanding which can be performed
only by individuals and not institutions.

A sound advice
requires asking the following critical questions:

1.   What options do we have for doing things
differently?

2.   What advantages do you foresee for different
options?

3.   How do you think relevant players would
react?

4.   How do you suggest we deal with adverse
consequences of an action?

5.   Other people have encountered difficulties
when they tried that. What can we do to prevent such things from occurring?

6.   What benefits might arise if we tried a
different approach?

A good process for
the advisor to follow is:

1.  To give them their options

2. To educate them about the options
(including enough discussion for them to consider each option in depth)

3. To give them a recommendation

4.To allow them flexibility to choose

Building a business relationship involves similar elements you would use
to build a personal relationship. You need to be sympathetic, understanding,
available, reinforcing and respectful. You need to understand the clients’
business and know what a decision involves. When you get to know a client, you
will often be able to tell when your advice is being sought and when it is not.
Both matter. Do not assume you can solve everything.Trusted advisors have
strong professional and personal relationships with clients.

A trusted advisor
must develop appropriate attitude or “mindsets”, the most important of which
are:

1.  Client-focus — instead of “how this
reflects on me”, “solving my client’s problem”, make that
transition from the power of “technical competence” to the power of
“facilitating competence”.

2.  Self-confidence — instead of worrying about
insecurity, focus on the problem at hand.

3.  Ego-strength — instead of assigning
credit/blame, focus on bringing about the solution. “It’s amazing what you
can achieve when you are not wedded to who gets the credit”.

4.  Curiosity — instead of “knowing”,
develop an attitude of inquiry.

5.  Inclusive professionalism — seeing the client
as a peer and solving the problem together.

Sincerity is
crucial to both trust and relationships. If you have it and can show it, you
will do well. If you try to “fake it”, it will show up, making it not only
ineffective, but also creating an adverse reaction.

Getting into the
right mental frame of mind happens in two ways, simultaneously:

• “from within” —
  feeling a genuine interest/caring for the client and their success

• “from without” —
  acting in ways that express interest/caring for the client.

Sometimes you have
to start with one end or the other; “from without” is easier to initiate.
You can have genuine human contact without being a personal friend. In very
rare cases, you may not be able to work with someone. One of the most important
lessons to learn is that to earn trust, you must bet on the long term benefit
of the relationship. The hallmark of trusted advisors is that they don’t bail
out when the times get tough.

THE STRUCTURE OF TRUST BUILDING

The most critical
learning from this book is the ‘Trust Equation’. The authors suggest that there
are four primary components of trustworthiness, as shown below:

These components
have to do with the trustworthiness of words, actions, emotions, and motives,
as shown in below table:

Credibility – The notion of credibility includes notion of both accuracy and
completeness. Accuracy, in the client-advisor world, is mostly rational.
Completeness, on the other hand, is frequently assessed more emotionally. While
most providers sell on the basis of technical competence, most buyers buy on
the basis of emotion. What we tend not to do is to enhance the emotional side
of credibility: to convey a sense of honesty, to allay any unconscious
suspicions of incompleteness. The best service professionals excel at two
things in conveying credibility: anticipating needs, and speaking about needs
that are commonly not articulated.

Reliability – It is one component of the trust equation that is action-oriented
and that distinguishes it from credibility. Reliability in the larger rational
sense is the repeated experience of links between promises and action. It also
has an emotional aspect, which is revealed when things are done in a manner
that clients prefer, or to which they are accustomed. In this emotional sense,
reliability is the repeated experience of expectations fulfilled.

Intimacy – The most common failure in building trust is the lack of
intimacy. Business can be intensely personal surrounded by obvious human
emotions related to issues at hand without involving private lives. It is the
extent to which a client can discuss difficult topics/agendas with you.

Self-orientation – There is no greater source of distrust than advisors who appear
to be more interested in themselves than in trying to be of service to the
client. The most egregious form is to be in it for the money – it extends
beyond greed and covers anything that keeps us focused on ourselves rather than
on our client.

DEVELOPMENT OF TRUST IN FIVE STAGES 

It is important to
understand how trust-based relationships are developed; indeed, when examined
closely, you can see five essential stages that lead, consistently, to trusting
relationships.

__________________________________

1   a person who talks at length but says
little of any value

1. Engage – Give your clients and
prospects individual attention. Offer customisation. Make personal, timely,
topical connections with clients about their business challenges. Find out all
you can about new prospects. Seek opportunities to discuss activities of mutual
interest. Discuss more than factual content, because that can pigeonhole you as
a technician, instead of as an advisor.

2. Listen– Sometimes an advisor’s most
important job is to listen, sympathise, integrate and get involved. Listening
is an activity and not a passive process. When arranging a meeting, set an
agenda. That can help you prioritise various decisions, prompt a conclusion and
foster action. When clients share the agenda, they become involved in the
meeting and gain a vested interest in its outcome.

3. Frame – Once advisors can clearly
state their clients’ problems, they are more than half-way toward reaching a
solution. Framing a problem is challenging, but when you do it correctly, it is
very rewarding. You can frame problems in a rational or emotional context.
Rational framing breaks a problem down to its component parts. It works best
when it reveals a new perspective. Emotional framing uncovers any personal
feelings that may be linked to a decision. This can often be uncomfortable since
it involves saying things that have been left unsaid, often deliberately.

4. Envision – Articulating a possible new
reality opens a client’s imagination to new ways of doing things; it can spark
creativity or challenge the status quo. Envisioning, which is crucial to
problem solving, sets the stage for future actions.

5. Commit – Once you frame a problem,
shape a vision and determine a general course of action. Explain the
implementation details to your client. Covering all the pitfalls and barriers
is an essential part of getting the client to agree to future action. This
links the plan to the nuts-and-bolts of execution. Manage the client’s
expectations on what will happen. Restrain excess anticipation by clearly
stating what you plan to do and what the client should do. Give details to
avoid misunderstanding.

PUTTING TRUST TO WORK

The following behaviours can help a professional gain trust that would
have the highest impact, or fastest payback:

1.   Listen to everything: Force yourself
to listen and paraphrase, in order to get what the client is trying to say.

2.   Empathise (for real): Anyone who
understands us has earned the right to engage in discussion or even debate;
anyone who empathises with us has earned the right to disagree and still have
our respect. Listen to where the client is coming from, understand that
perspective and acknowledge that understanding.

3.   Note what the client is feeling: Note
what clients say and do in your interactions with them. Make careful deductions
about what their feelings might be. Acknowledge your own feelings and voice
them as well, but carefully.

4.   Build a shared agenda: Whether you are
in a large or informal meeting, share your ideas for an agenda and ask the
client to add their ideas as well. This creates buy-in and shows you have a
“we, not me” attitude.

5.   Take a point of view: Go out on a limb
with an idea or perspective, even if you are not entirely sure of it. Such
articulation stimulates reactions and crystallises issues, serving as a
catalyst to draw ideas out of your client.

6.   Take a personal risk: Put yourself
“out there” for your client — reveal something about yourself, even though such
revelations carry with them risks of personal loss, even ridicule.

7.   Ask about a related area:
Advisors who notice and express interests outside their particular realm of
experience make an impression on their clients. They show that they care enough
about the client to not merely focus on the narrow realm of their professional
issues and interests, but to expand that focus to address a wide array of
client needs.

8.   Ask great questions: Open-ended
questions allow you to probe the client’s needs without artificially framing
the client’s response or biasing them one way or another. The objective is to
hear what the speaker has to say, in the speaker’s own terms. By doing this,
you show the speaker respect by allowing him or her to set the frames of
reference, not contorting them to fit your viewpoint.

9.   Give away ideas: Expertise is like
love — not only is it unlimited, but you can destroy it by not giving it away.
It cannot be scanned into a database; rather, it is the unique human ability to
redefine a problem and come up with creative solutions for solving it. It is
what a successful advisor brings to every situation, and it only gets better
with practice.

10.  Return calls with unbelievable speed:
Getting back to the client, fast, could be the most trust-creating thing you
do. No one expects it, and it demonstrates how much you value your client.

11.  Relax your mind: Critical meetings with
your client can be stress-inducing environments; it is crucial to rid your
mind, however temporarily, of internal distractions prior to entering into such
situations. Think about one saying or one question at a time. Write out your
feelings about the one you choose, or talk through it, aloud, prior to a client
meeting. Doing so will help cleanse your mind of distractions or internal
conflicts prior to heading into a potentially stressful situation.

SUMMING – UP

The experience
suggests that trusted advisors form a strong professional and personal bond
with their clients. They focus on their clients’ needs and believe that doing
the right thing has long-term benefits.

Trusted advisors
place the client relationship first and foremost, even if a current project
fails. This often means that the professional makes a substantial commitment to
the client even when there is no immediate prospect of a profit. Successful
trusted advisors continually explore new ways to help, define problems and work
on solutions.

In an organisational context, the
behavioural framework is also helpful to the subordinates in gaining greater
trust from their seniors.