One of the least focused functional aspects of
running a professional service firm (“PSF”) is human resources. We call
it human capital within PSF’s. This includes the Partners, the
Principals or Directors, the Senior Managers, the Managers going on to
the associates and interns. This also includes the admin and other
non-billing staff in the PSF.
The challenge has always been to
recognise that PSF’s can grow well and scale up enough only and only if
the human capital is in alignment. This recognition comes to most firms
very late in their life span; sometimes so late that not enough course
corrections can be made. Most good firms that have succeeded and grown
over decades have done a remarkably great job at aligning their human
capital.
It is therefore, required of PSF leaders to understand the dynamics of human capital early in the growth curve of the PSF.
This picture outlines the various stakeholders that draw on an individual’s time:
Let
us analyse the dynamics of human capital engagement for each of the
stakeholders, starting with the PSF’s internal team members – i.e., the
individual himself: 1. The self: Internal teams are the most critical
asset of any PSF. It is all about managing the human capital responsibly
and effectively.
A few questions to ask and examine of each individual team member are:
Who is this professional?
How did he come into being in to our firm?
What are his aspirations?
What
drives him? Is there a conflict in his thought process, his goals and
career aspirations? Will he be a Partner in the firm in a few years? Is
he a good mentor and a team player? Is he a good fit for the firm
currently?
The above are some of the hard questions that a PSF
needs to answer. If the responses to some of the above are not very
encouraging for the firm, then it is clear that the human capital is not
optimally aligned and PSFs have a lot of work to do to bring about an
alignment. The individual within the internal team needs to be
understood, mentored, coached and encouraged to give his or best. His
working style is irrelevant, beyond a point. His weaknesses can be
corrected to a point; but the focus of the PSF should be to “make his
strengths productive” to the firm. It is far more effective to recognise
an individual’s strengths and make it work for him, his team and the
firm, as opposed to trying to constantly correct his weaknesses. Peter
Drucker exhorted this proposition and articulated that people work best
when their strengths are aligned to the needs of the firm. The challenge
for a Partner in the PSF to identify the strengths of his internal team
members and make this happen.
The professional – an individual within a PSF:
It
is incumbent upon the professional to be the best that he can be in the
environs of a PSF. For that to happen, the professional has to learn to
“Manage himself”. Managing oneself is a very critical aspect of
effectiveness and alignment. Unless a professional learns to manage
himself, the team dynamics and client delivery is never going to be
optimum. Managing oneself is all about knowing thy time, assigning
priorities and taking responsibilities for action. A professional is a
manager, akin to an executive in a business, who is required to make
effective decisions, conform to an execution framework, focus on
priorities, have a growth orientation, think with a solution mindset and
multitask between production and management.
The individual has
to have a strong sense of affinity to the society, his family, his
friends, his work colleagues and his clients. It is these interpersonal
relationships and their dynamics, which largely influence the way the
individual conducts himself. Thus, managing oneself is a starting step
in aligning human capital.
2. Teams
Individuals in
PSF’s need to be effective in teams, this would mean being collaborative
in teams, sharing knowledge with the team members, generating a spirit
of camaraderie and sportsmanship and having a congenial disposition on a
day-to-day basis.
Teams get most influenced by team dynamics.
E.g.: If the senior most member in the team cannot set the tone, he will
quickly lose respect. Similarly, someone who is technically brilliant
as a professional will still not be the favourite of the team if he does
not learn to be a go-getter and a real team player. Being technically
brilliant does not mean that they should be intellectually arrogant. In
fact, if these technically brilliant people are also respectful to their
peers and have an intrinsic habit of sharing their knowledge and
expertise, it will go a long way in creating successful future leaders
in their respective firms.
Sharing of ones’ knowledge is
critical to have the team come up to terms with the thought process of
the team leader. This, in other words, assumes that over a period of
time, each professional in the team will get upgraded to a level of
knowledge which will help them converse with their senior team members
and their clients with equal ease. It is also imperative on the team
members themselves to have a constant quest for learning and upgrading
themselves. And, in that they have somebody to look up to in terms of
the team leader, the technically superior member amongst them, who’s
depth of knowledge is a vital resource for the firm to access. The
question then is – Is the congeniality quotient in the team at a level
that permits such free and fair exchange of knowledge? To be in
alignment, PSF’s have to get this rolling, ensure that teams work in a
spirit of sharing and caring, have tremendous respect and affinity to
each and other and for their firm, and truly care for the growth of the
firm and their peers within the firm.
3. Clients
Professionals
have their foremost duty to solving client’s problems and servicing
client efficiency. PSF’s have to create an environment and pursue a
culture where professional respect each and every client and clients
feel that the teams are responsive to their problems and challenges on a
continuous and sustained basis. This needs hard selling of the concept
of “client comes first”.
As the great Mahatma Gandhi eloquently
put it “We exist because of our clients”; “The customer is not an
interruption of our work; he’s the purpose of it”.
Professionals
have to have a mindset of solving problems and challenges of clients.
To be in a continuous frame of mind of being a solution provider needs
reiteration of this tenet and at a deeper level “a connect” with the
client. The Partner concerned does not really have to sell his
expertise; all he needs to do is to engage into a conversation with the
client and understand the client.
This includes the following:
If
you want to win a client’s confidence, give him the chance to talk to
you, person to person, about his needs and his expectations. Make it
easy and comfortable for the clients to share his secrets. In short, if
you really want the client’s business, talk to the client and have a
conversation, make him feel that you are using normal language and not
“corporate speak”. Both parties should engage into a conversation, it
cannot be a monologue.
It’s about a mindset of joint problem
solving, not about trying to win or prevail. Finally, its about allowing
people with different views to learn from each other.
If teams
can achieve this dynamic with their clients and if they work hard at
doing this consistently, the PSF would have created and aligned its
human to create a winning client base.
4. Market
Partners and managers and everybody in between, have to be focused on the markets.
Where is the profession heading?
Would our services be relevant, three years from now and seven years from now?
What do we need to do today to continuously adapt to the marketplace?
Is there a better way of doing what we do?
What are the trends in the market place that the professional can see and that helps him to think about generating more opportunities for his firm?
What can he do about it? In capital markets, they say that the market is a great leveler; one can extend this to professional service market and say that the market is very discerning and will choose the most appropriate service player for its requirements.
Often, what is perceived is the truth. E.g.: If a lawyer provides very high-end technical solutions, he is perceived to be an expert with a very busy schedule with very little time to spend. This preconception comes because of a perception. Perceptions take long to create but can dissipate very quickly. Thus, a PSF should make sure that what Partners say and do is relevant to his chosen segment of clients and stays that way on a continuous basis. A PSF would than be omnipresent in the Market and would be aligned for faster growth.
Regulators
Professionals have to be trained to deal with the entire regulatory ecosystem. We have in our day-to-day existence, a need to deal with various set of regulators, authorities, governmental agencies and the likes. This would include the regulator of the profession; Example: the Bar Council for the Lawyers, The Institute of Chartered Accountants for the Accountants etc. This would also include the revenue authorities, the courts, the justice delivery system, the administration in the state and all departments thereto.
The Chambers and associations, who influence policy making, the public representatives who make the laws, and a wide gamut of people who form the servicing (internal) team of these constituents also deal with Regulators constantly. And professionals need to learn to deal with the Chambers and Associations too.
Professionals need to have skill-sets to deal with them differently, as these are not clients. Some of these are watchdogs, some of them are policy makers and the others are policy implementers. The most successful firms have aligned their human capital to a point where a group of professional within the firm deals with each one of them effectively. This needs lots of training and high quality communication skills that work with bureaucrats and a deep understanding of policy formation.
The best firms thrive in such an ecosystem by having specific people earmarked to deal with this breed – the Regulators.
Peers
PSF’s constantly have a cliental pressure to benchmark themselves with their peers; especially when it comes to the relative size of the firm, the size of the team, the infrastructure, the quality of the delivery, the timeliness and responsiveness and the professional fees/compensation for the engagements.
In this context, the most compared resource is the quality of human capital. That is the biggest differentiator between the good firms and the better and the best firms, as it is partners and managers who are the touch point of the firm and the face of the firm across the ecosystem. The quality of delivery is also a reflection of the level of training, the level of knowledge base, the expertise of the firm and therefore its unique positioning in the marketplace and all of this ties in to the human capital of the firm.
Most successful firms have been growing primarily because relative to their peers, they have done a great job at mentoring their teams.
And most successful firms have been successful because they have been constantly aligning their human capital to the firm’s growth trajectory.
