Are Business Schools Ready for Romance?

by Professor Milenko Gudic 2006

From the Central and East European Management Development Association (CEEMAN) in CEEMAN News, April 2006.

CEEMAN is proud to announce that Richard Wood, a leading authority on professional service firms, will be the keynote speaker in the 14th CEEMAN Annual Conference on Creating Synergy between Business Schools and Business. He will talk on "Communication and Relationship Development: How to Improve Mutual Understanding between Business Schools and Business".

In your recent article, you were talking about the differences between the relationship and transactional approaches in dealing with clients, and for the former you were using the "romance" metaphor. In this context, how would you describe the prevailing practices in business schools today, when it comes to their approach to businesses. Are business schools ready for their romance with business?

RW: I don't think many business schools really want a relationship with business. I cannot speak for all countries, but in most places I go to, I see that business schools are still predominantly academic institutions, with scholarly values, not places filled with people who really want to engage with business. Oh, yes, business schools want to STUDY business, but from a detached point of view. Business schools want to be professors, they do not want to be managers. They want to be observers, not participants. Most of them are like anthropologists, studying mysterious tribes, but making no effort to join the tribe.

Business schools pretend that they are preparing people for business careers, but the truth is that they provide a very one-sided preparation.

This is what I wrote in a recent blog post of mine, entitled Why Business Schools Cannot Develop Managers:

As I have often reported, I have every business degree the planet has to offer, and even taught at the Harvard Business School. Yet at the end of all that I knew quite a lot about business and nothing about managing.

"Business" as a subject (and a degree program) is all about things of the logical, rational, analytical mind: Mike Porter's five forces, the numerous P's of marketing, Maslow's hierarchy of needs, etc, etc. It's about knowledge.

Managing, on the other hand, is a skill, and has nothing to do with rationality, logic, IQ or intelligence. It's a simple issue of whether or not you can influence individuals or organisations to accomplish something. It's about influencing people, singly or in groups (or in hordes.) No amount of intelligence will help if you are not able to interact with people and get the response you desire. (Believe me, I have experienced the difference. I know a lot about management from my education. That doesn't mean I'm any good at doing it.)

And of course, this is not accomplished by taking a college course in psychology, sociology, anthropology or any other "ology" where we sit around and intellectualise about "human resources" but never have to actually deal with a real live human being. (It reminds me of the Linda Ronstadt / Dolly Parton / Emmylou Harris song which contains the line -- you don't know what a man is until you have to please one!)

To help people develop as managers doesn't mean discussing management (or even worse -- leadership), but rather requires putting people through a set of processes where they have to experience it, try it out, and develop their emotional self-control and interactive styles.

MBAs are not getting the right education for management, although in developing their analytical skills the business schools are perfect for developing consultants, investment bankers and other professionals, as evidenced by where their graduates actually go. Henry Mintzberg, a professor at McGill has recently published a book -- Managers not MBAs -- which makes many related points.

What does it take for business schools to develop romance with business? Do they have to be "romantic" also internally. If yes, how?

RW: My original article contrasted relationships with transactions, which can be viewed as long-term interdependence versus loose temporary affiliations.

Business schools, like all university departments, are not created from people who want inter-dependency. Faculty in universities are not really wedded to their colleagues -- each is encouraged to be an intellectual entrepreneur, each developing his or her own intellectual capital. There is rarely a department-wide or school-wide point of view, because the faculty would hate that. Faculty want independence, not relationships. We are choosing for business school faculty people who absolutely do not want to be tied into an organisation which imposes common obligations, common purpose and common mission. Yet we ask these people to study and teach about organisations that need exactly that!

Similarly, there is not relationship with students or executive education. There are only short-term transactions with undergraduate, MBA or executive audiences. There is no real pretense at long-term relationships at most places. Maybe one or two in the world, but the truth is that these are marriages of convenience. We'll pay you our fees and pretend to listen to you if you'll give us the rubber stamp of your qualification.

In the last CEEMAN Deans and Directors Meeting on the Challenges and Methods do Faculty Development, when we discussed what kind of faculty students appreciate we heard an expression that you also frequently quote: people do not care how much you know, until they know how much you care. The question is whether the concept of care is related only to individuals, or it could be also something that schools as institutions could and should embrace.

RW: Yes institutions can care, if there is clarity about who you are truly trying to serve, and a real commitment to do that. That's what REAL missions are about. However, scholars are not committed to serve anyone, except maybe their intellectual peers. It would be theoretically possible to imagine a business school that truly lived up to its mission, but I have never seen one. Like most organisations, business schools know what they say they SHOULD be committed to (excellence, teaching, serve the community, provide practical business advice) but they don't enforce these standards. Or they don't enforce them at a high level. Mostly, you can keep your job as long as you don't actually mess up.

Large businesses have been increasingly developing their own internal education and training, including corporate universities. On the other hand, in the context of the increasing competitiveness in the globalising business education industry, schools have been "corporatising" themselves. What kind of challenges and/or opportunities these trends offer for the development of a real romance that business schools and business should strive for?

RW: Many large professional firms, in an attempt to develop their own managers, are linking up with prominent business schools to train their partners in management. The partners may be learning about business, but when it comes to managing it's a case of the blind leading the blind. If you want to get experience (or even understanding) of how people actually respond and function, individually and in groups, it's not clear that a group of scholars who are super-intelligent but have never actually managed anyone are the best providers of that service. Firms would be better off hiring the Dale Carnegie trainers.

But such approaches remain the exception rather than the rule, and, I suspect, are still being designed and conducted by faculty who were specifically selected for their interest in things of the mind -- intellectuals who predisposition is to draw analytical lessons from the experience, rather than to help people hone practical skills. Business schools are becoming MORE scholarly places as the years go by, not less.

I'm not saying business schools don't do wonderful things for people (and perhaps to them.) I'm very grateful for what my education did for me, and proud of the institutions I was affiliated with. I just don't think any of it had anything to do with making me a better manager -- or much of one at all.

As Coert Visser pointed out on my blog, Jeffrey Pfeffer has provided some additional reasons which explain why many MBA graduates often don't turn out to be great managers. One of those is that economic theories and models have a too dominant position in MBA's in particular and in management science and education in general. Many authors, like Jeffrey Pfeffer, Daniel Kahneman and Robert Frank have shown that many of the economics theories and practices are based on faulty premises about human behaviour. Management education needs better theories!

Peter FRIEDES said on my blog that there are two fundamental skills that managers need to have to be effective. The skill to Relate to their employees and the skill to require of their employees. Relating includes the skills to Ask, Listen, Include, Coach and Encourage. The Requiring skills include the ability to focus on goals, Declare, Insist, Control and Confront. If a manager has both sets of skills, and a reasonable sense of when to use each set, they will be a good manager. Almost no schools teach the Relating skills.

(Peter Friedes, the ex-CEO of Hewitt Associates, wrote a FABULOUS and PRACTICAL book called 'The 2R Manager". I still think it is essential reading for anyone taking on a managerial role.)

There's a lot that business schools COULD be, but I don't think the current faculty in most places have what it takes to go there, because they don't WANT to go there. They are (terrific) scholars, not people who really want to engage with the world.

Strategy Means Saying "No"

I was helping a prominent global company explore the strategy of achieving high levels of client service. We were discussing ways of investing resources and redesigning processes to accomplish this goal. The longer the discussion continued, the more uncomfortable some members of the organisation became.

"But what about the clients and customers who don't want all this high-touch contact?" they asked me. "What are we supposed to do with them? Won't we scare away a significant portion of our current customer base by doing things they don't want?"

"Yes, you will," I replied. "A strategy is not just choosing a target market, but is about actually designing an operation that will consistently deliver the superior client benefits you claim to provide.

"However, each decision you make to be more effective at delivering the preferences of those you target will (inevitably, inescapably, unavoidably) make you less attractive to clients or market segments that look for different benefits.

"But consider the alternative," I continued. "You could try to design your operations to meet a wide variety of preferences and needs, serving each client or customer group differently, according to their individual wishes.

"Your market appeal will then come down to 'tell us what you want us to do for you and we'll do that. We'll do something different for other people tomorrow!'

"You may get by with this approach, but you will be unlikely to achieve a competitive differentiation or reputation, except as people who, as long as they are getting paid, will do anything for anyone. Which is not an image I think you want to have."

Finally, someone said out loud what was on everybody's mind: "But do we have the courage to turn away business? Do we really have the confidence to tell paying customers that we are not right for them?"

My answer? "Not only should you do that, but the only way you can achieve any strategic distinction is to do that. Strategy is deciding whose business you are going to turn away."

The Focused Factory

One of the first lessons I was taught at business school was Wickham Skinner's principle of the "focused factory." No operation, Professor Skinner pointed out, can be good at everything simultaneously.

An operation designed to provide the highest quality is unlikely to be the one that achieves the lowest cost, and one that can respond to a wide variety of customised requests will be unlikely to provide fast response and turnaround. Any business that tried to deliver all four virtues of quality, cost, variety and speed would be doomed to failure.

This is not just an operational point, but a marketing one. To be differentiated in the eyes of the marketplace, you have to be known for something in particular. It's not enough just to be known. (That's name awareness, which is not the same thing as being seen as differentiated.) And you can't have a reputation for being something specific if you only do it occasionally.

The very essence of having a strategy is being selective about choosing the criteria on which a firm wishes to compete, and then being creative and disciplined in designing an operation that is finely tuned to deliver those particular virtues.

Consider McDonalds. For any customer that truly places a premium on low cost and speed, McDonalds is hard to beat, because it has been optimised around a clear market positioning.

However, if someone were to walk into a McDonald's and say, "I feel like having a curry today," the service provider would not reply "Sure. That will increase our revenues. Let me shut down the grill and make you one."

Instead, the reply (except, perhaps, in India) would be, "I'm sorry, but we are not designed to meet every possible need. Perhaps I can help you find somewhere nearby that can give you what you want?"

As companies keep discovering to their cost, it is certain business decay if you try to please all possible market segments. The broader the group of clients to which you try to appeal, or the wider the range of services you try to provide, the less customised your operation can be to each segment within that group.

If you never say "no," you will just be one more undifferentiated firm, trying to do a little bit of everything and, as Skinner pointed out, will almost certainly be superb at none of them.

Why It's Hard

As obvious as this all may seem, translating it into reality can be very difficult. The practical reality of most businesses is that they find it very difficult to say "no" to a revenue-generating opportunity.

As Dick Tyler, managing partner of UK law firm Cameron McKenna, says, "The hardest thing in the world for most professionals to do is to turn work away. It offends our desperate desire to be liked by everyone and plays to insecurity that afflicts even the best of us. The moment we aren't worked off our feet, we think we'll never work again."

The situation has been made worse by many firms' explicit (if misguided) efforts to transform themselves into "one-stop shopping" operations with extensive efforts at cross-selling additional services to clients and customers.

Too many firms have made growth and size their strategic priority, rather than differentiation. Instead of identifying and executing a clear market positioning, many companies and firms have consciously pursued a policy of "If you need it, we can do it!"

Many have learned the costs of doing this -- a lack of focus and reputation that, while it helps you get more business, may actively work to prevent you getting a reputation for being the place to come for the best business -- the most attractive work for the most attractive clients.

Another concept they taught me about at business school was "the wheel of retailing." Apparently it is a common syndrome that new retail stores often succeed by establishing a differentiated positioning in the marketplace, but are then continuously tempted, in the name of pursuing revenues, into selling an ever-widening range of things to a continually broadening audience.

Eventually, the store ends up looking like every other general store, and is outperformed by new upstarts who go back to the core and establish focused shops with clear, differentiated appeal (and start the cycle all over again).

Staying focused and true to a strategy is something that has always been, and will always be, hard to do.

The hunger for volume (and the use of managerial scorecards that emphasise it) has meant that many individuals and firms are often uncomfortable with (or even shocked by) the notion that, to achieve a distinctive strategy, they will need to turn away work that a major competitor might reasonably want to serve.

"Oh, we don't want to take it that far!" they say. "Our strategy is to emphasise certain things, not to exclude others. If a client opportunity comes along outside the strategic areas we have chosen, we'll serve that client. We're under too much fiscal pressure to turn away cash opportunities. Can't we just develop a clear and crisp value proposition and then let the clients decide if they want to pay for it?"

My answer is that (as I argued in my previous article "Strategy and the Fat Smoker") you can't get the benefits of a strategy that you don't implement, and half-measures are unlikely to work. Strategy is not about understanding something -- or planning to get around to it -- it's about having the courage to make it happen. You can't let other people, even clients, determine the pace at which you create your distinctiveness.

A Personal Experience

When I first launched my consulting business, I was terrified. For the first time in my life, I had signed an office lease, and had my first employee.

I had this dream (more a hope at that stage) that I could distinguish myself from the general mainstream of financial management consultants by focusing on a particular sector -- professional service firms.

However, one of the first phone calls I received was from a car manufacturer who was familiar with some of the work I had done while still a teacher in the more general area of customer service. How would I like, they asked, to provide training in retail customer service to their dealers?

You can see the problem. Did I want the cash? You bet! I was just starting out. But if I spent my time doing generic customer service training for car dealers, I wasn't going to make myself special as a consultant. I would be one more competent guy doing what any number of other people could do.

I had to make a choice. Did I believe in my own strategy and did I have the courage to spend my time making it a reality, or was I sufficiently insecure that I could be tempted away from my chosen strategy by the promise of cash?

I'm not saying the choice was easy, and I'm not saying that I was or am a better (or more noble) person than anyone because I turned the opportunity down and chose to pursue my differentiation strategy.

I am saying that facing such decisions is the very essence of what having a strategy is all about. If you don't have the courage, you will never achieve a differentiated strategy.

And, of course, courage is one of the scarcest commodities there is. That's why it's a significant source (perhaps the major or even sole source) of competitive advantage!

Excuses, Excuses

Even when people acknowledge all this, they still come up with many reasons why they think it is unwise (or even forbidden) to say "no."

Many people worry that it would be perceived as being unresponsive or tantamount to being a bad service provider if they were to decline to serve an existing client on a new need. They think that it would be taken amiss if they said, "We don't want to serve you in that additional area."

This, however, misses the point. What you say to the client is not "We don't want your additional work," but "We are not your best choice for that new need. We can do it if you insist, but you may be better served to go to a specialist who can focus on providing the particular client benefit you seek."

Done this way, you are likely to cement your relationship with that client, not hurt it, because you will have demonstrated your trustworthiness and your willingness to place the clients' interests ahead of your own short-term gain. If you really believe in the power of relationships, having a client that trusts you must be of greater economic value to you than having a group of clients who are always suspicious of your motives.

Thomas Davenport, author of Thinking for a Living, notes "I've seen a number of cases where turning down business actually helped the firm immediately. For example, when some top consulting firms turn down work because they do not think it can be done effectively without the involvement of the prospective clients' senior management, the client's middle managers will often redesign the assignment try to take it upstream to their top managers. So, by sticking to its guns, the providing firm gets more business of the kind that it prefers, and impresses the client with its strategic integrity."

Still many people are unconvinced. "Yes," they observe, "It may be more noble and a good way to earn trust, but doesn't it just allow a competitor to get his nose 'under the tent'? Once you let a competitor start serving your client, don't you run the risk of that competitor stealing your relationship? Shouldn't you work to keep your competitors out of dealing with your clients?"

The first answer to this is that, even if you tried to pull it off, it is actually impossible to keep your client away from all other providers. The typical corporation already uses multiple law firms, many consulting firms, many IT providers and numerous marketing communications agencies. The hope, in any of these professions (or any other), that you can keep everyone else away is delusional.

Secondly, the real-world truth is that you keep clients loyal to you by serving them superbly, earning their trust and making them want to have a relationship with you above all others. A person or firm would appear very insecure and not very impressive if they were seen to worry about the client talking to anyone else.

Strong, self-confident professional businesses who know who they are do not try to do everything for their clients. Ask the world's most profitable law firm (Wachtell, Lipton) to do a broad range of your legal work, and they will patiently explain that they should only be hired when you truly require the world's experts in their chosen field(s).

The same is true of top consulting firms like McKinsey. Almost certainly, in the course of their strategy work, they will uncover the need for say, training, or market research. Would they attempt to offer training and focus group services, merely to keep other management consulting firms away? Highly unlikely!

"Ah, yes," people say, "It's all very well to cite examples like that, but these are established, successful firms. They can afford to say 'no'. We can't."

There's a chicken and an egg problem here. If you can't afford to say 'no' until you are successful and distinguished, then you'll never be successful and distinguished.

Everyone has an excuse why they cannot make the hard choices, and why they need a special exemption. Small firms claim they should be excused because they are not yet established. Large firms, on the other hand, bemoan the fact that they have a big "factory" of people on the payroll that they have to keep busy.

Young people claim they cannot afford to take risks and be selective because they have student loans and are too junior to decline opportunities. Senior people point to their mortgage obligations, the need to pay the college fees for their kids and so on.

Everyone's got a reason why it's especially hard for them to be strategic and say no -- and most of them are excuses, not reasons. It reflects a lack of courage and a risk aversion.

David C. Baker, who specialises in advising marketing communications firms, puts it this way: "If you are any good at all, eventually you'll have more opportunities than you can handle. Not choosing carefully between those opportunities is far more likely to harm you than the occasional opportunity that slips by because you say 'no.'

"You need to say 'no' to save your energy for the opportunities that are worth pursuing. Entrepreneurs, especially, have a hard time not pursuing any opportunity for learning and stimulation, but the successful ones are really choosy. Don't let panic tempt you."

What Does Management Really Want?

Perhaps the single biggest problem in achieving the implementation of a strategy is the difficulty of ensuring that everyone in the organisation understands what the strategy is, and that top management really wants everyone else to follow it.

In the global meeting that I described at the beginning of this article, someone eventually asked, "How can the management of this firm ask me to achieve a distinctive market positioning while simultaneously pressuring me to meet budget numbers? Given a choice, and there is one, what do they really want me to do?"

If the strategy is to become real, then the answer from management must be, "We want both current cash and the benefits of sticking to a strategy. But if it ever becomes a choice, we want you to place execution of our strategy ahead of meeting the budget. Following this rule, and pulling off our strategy, we'll make more money, not less."

The CEO's message needs to be as unambiguous as Warren Buffet's description (to a U.S. Senate subcommittee) of his managerial philosophy: "Make an honest mistake and I will be understanding, but lose the reputation of the enterprise and I will be ruthless."

Needless to say, few top managers convince their people that this is what they truly want. As a result, strategies go unimplemented.

When helping companies develop new strategies, I frequently organise meetings with anonymous voting machines. After everyone has voted for the strategies they want to pursue, and that they want management to implement, I then ask the question, "How many of you think we will actually do this, will run the company this way, and actually will implement these strategies?"

In a remarkably high proportion of cases, even the most senior vice-presidents or partners indicate that they do not think the new strategies and policies will be implemented. If they are sceptical about the company's own ability to implement its own declared strategy, can you imagine how cynical the employees are?

Creating a New Religion

It is incredibly hard even for sincere leaders to get their colleagues and subordinates to believe that they have changed, and that they will manage to new standards.

People almost never believe this. They just don't accept that there has been "a conversion on the road to Damascus." They never believe there truly is a new religion in place. They always worry that their leaders will, when they are tested with a trade-off, go back to managing the way they did during the prior five, 10 or 15 years. Until they have hard evidence to the contrary, they don't think that management has the ability to say "no" to temptation.

When you think about it, this cynicism is to be expected. Why should people think the leopard has changed its spots? If those closest to the leaders (the rest of top management) often have a hard time believing that the leaders have truly changed their thinking, what hope is there for convincing the rest of the organisation?

Managers must work constantly to act as a countervailing force to powerful financial reporting systems, which almost inevitably fail to make a distinction between strategy and volume: revenues and profits that are obtained by acting in ways consistent with the strategy versus those that were obtained in ways that involve compromises of the standards implicit in the strategy.

The required changes fall into one of three categories: measures, behaviour and personnel.

First, it is necessary to create new scorecards -- built into the firm's regular reporting systems -- that can distinguish between on-strategy work and off-strategy work.

In one firm, as a piece of special analysis, it was discovered that 65 percent of their business came from only 100 of their total of 4,000 clients, and that most of the remainder were unprofitable.

The realisation soon dawned that such analyses are not very effective if they are only done periodically and in retrospect. Given the will, it was not too difficult to build this analysis into the firm's regular monitoring and managing approaches, making the firm's regular reviews of its results more "strategic."

Firms need to address the question, "How do we put in place early indicators that our strategy is being implemented and succeeding?" For example, any firm could and should examine and regularly report such questions as where it gets its business from, what percent of clients generate what percent of income, what percent of business in each year is from brand new clients and what percent is from clients (or types of work) that had been predesignated as targets.

As I discussed in "Measuring Your Marketing Success," there are also ways to monitor which revenue streams are "building your asset" (i.e., helping you strategically) and which ones are "milking your asset" (good for the bottom line but not moving you forward).

Next, a CEO or managing partner will need to ask what it is that he or she can do personally that will give dramatic evidence that top management is serious about adhering to the strategy in spite of short-term temptations.

Shawn Callahan of Anecdote, an Australian management consulting firm, points out that people will continue to be sceptical while the stories they hear about top management stay the same. It is necessary for top management to do something (not just say something) that is both sufficiently dramatic and sufficiently different from the way that management has behaved in the past, so that people in the organisation start to discuss the story and pass it on to others.

The challenge is figure out what the CEO (or others in top management) could do that would be dramatic and a break with the past, but that would also be seen as credible and not just window-dressing. The answer will depend on the specific company situation, but I often suggest that CEOs and managing partners ask their people the question directly: "What could I do that would convince you that I was serious about sticking to our strategy and enforcing the standards that flow from it?"

It is perhaps sad to report this, but since people are always sceptical that specific individuals have changed, the most dramatic evidence that things have changed is when new people are put in key positions of influence. As one of my clients said, "The only way to change people is to change people!"

The Wisdom of the Ancients

In The Wisdom of Confucius (translated by Lin Yutan London, 1958) there appears the following exchange:

Zigong asked Confucius "What would you say if all the people of a village like a person?" "That is not enough," replied Confucius.

"What would you say if all the people of the village dislike a person?" "That is not enough," replied Confucius.

"It is better when the good people of the village like him, and the bad people dislike him."

This ancient wisdom (Confucius died in 479 BC) summarises what we have said in this article. You cannot and should not try to please everyone. Make sure that the right people like you, and it will be expected that others will not. That's how the world works.

The Only Competitive Advantage in Professional Services

by Coert Visser 2006

from Managementsite, 2006

Let's proceed with a question about marketing. Many professionals don't seem to pay much attention to marketing. But you say marketing is of crucial importance for any professional. Why is that so?

RW: The better you are at marketing, the more control you have over your career. If you are really good at developing business, then you can work for only the clients you find interesting and can care about, and only on the type of work that you find fulfilling and challenging. The weaker you are at winning business, the more you are forced into accepting business from anyone who pays you, whether you respect them or not, and whether the work is enjoyable, developmental or meaningful to you. I don't ever want to be stuck in that situation. I don't think that having to work for anyone who pays because I am desperate for cash sounds like much fun!

People think that marketing is about getting more business. It's not. Marketing is about getting better business -- the work that engages your enthusiasm and allows you to serve clients you like. The better you are at marketing, the more you can afford to say no to things that do not help your career. Marketing is not something you do for your firm -- it's what you owe to yourself. If your readers want more detail on these points, I have written about them many times.

Alas, it is easier to get hired for things you already know how to do, so if you are not careful, you end up milking your existing skills instead of building them. You can have it all -- it is easier to get hired for things you care about by people you care for, and that way you are more likely to get premium fees, too! Your clients will treat you better and give you a better work experience if they think you care about more than just the money they give you. Recently, I wrote four articles which explore the themes of marketing as sincerity. I hope I have been consistent over the years!

I think you have. I like what you say about the essence of marketing. That it is not a matter of just getting more business and money but rather getting more of the right business. While we're on the subject of money, I'd like to focus a bit more on that. Writers like Alfie Kohn and Jeffrey Pfeffer have criticised the fact that many managers focus on financial incentives as the most important means to improve organisational and individual performance. This trend is more and more common, even in the not-for-profit sector. What role do you think money plays in improving individual and organisational performance?

RW: What Kohn and Pfeffer have to say is very important, and everyone should be aware of their work. Another important writer is Jon Katzenbach who recently wrote a book on the importance of pride in motivating people and getting things done. The trouble with financial incentives is not that they are weak tools -- the problem is that they are too powerful and distract attention away from any other factor or source of motivation. They are very blunt, unsophisticated tools that people rely on too much. If you say to someone "Do this and I will pay you" it always ends up coming across as "Don't do it for any inherent meaning, purpose or value, just do it for the money." And the minute people start doing things with no commitment other than to get paid, they do it less well, not better.

The trouble with financial incentives is not that they are weak tools -- the problem is that they are too powerful and distract attention away from any other factor or source of motivation.

The problem is compounded by the fact that it is impossible to include all possible outcomes in the incentive scheme. You end up being required to reward people if they achieve the things included in the incentive scheme, even if they have failed to do other important things that are essential for the organisation's success. An obvious and common example is having incentives for individual performance. Where these exist, people will always omit teamwork, but since you have promised an incentive, you have to pay them anyway. None of this means that you don't pay more to those who contribute the most. It just means that you must have a reward system which is based on qualitative judgments, not explicit quantitative incentives.

It is also important to note that reward systems ARE good at rewarding performance -- they are just not good at creating it. To help people achieve more, it is insufficient just to say "Get there and I will pay you." That assumes that the only barrier to performance is motivation. However, there are many other reasons people don't or cannot perform at a higher level. Maybe they don't know how. If that is the case, no amount of incentive will change things. As I tried to show in my article, you raise performance by managing people, not just by creating incentive schemes.

I think that is a great article. It is the one in which you talked about how, years ago, you had just started your final year at University of Southern Queensland as a student and felt you weren't really performing too well. You described how a senior professor walked by your room and talked with you informally for just a very short time and managed to really get you going in the right direction. Very impressive! What's the essence for you in what happened in that conversation?

RW: There were many lessons, but the key comes down to this: like a good parent, my senior professor was able to show both a disciplined commitment to standards like "Come on, you can do it" while simultaneously being on my side and actually helping me. This duality has often been recognised. The people who wrote the book back in the 1960s about The Managerial Grid called it having both a task focus and a people focus. The authors of Built to Last called it avoiding the tyranny of the either/or. My friend Peter Friedes wrote a book called The 2R Manager where the 2 R's stood for requiring and relating. It's all the same idea. The fact that it's a common thought does not make it easy to do. I used to think that I was getting the balance correct by being demanding on some days, and supportive on others, averaging out -- I hoped -- to a balanced approach. Of course, this is not the message. If you do it that way, all you end up with are schizophrenic people who never know how you are going to behave. The real art, which you have to learn with your kids as well as your employees, is how to be both demanding and supportive simultaneously. It's not that easy to learn if you are not a natural. It takes lots of practice.

Talking about being a natural ... a popular perspective in the field of human performance development is the strengths perspective. The people from Gallup for instance have argued and shown that focusing on strengths is critical for achieving career success. They say you have to identify your talents and complement them with skills and knowledge so that they become strengths. I understand you put the focus more on interest and passion, don't you?

RW: I like the Gallup material very much, and think they have made a significant contribution. To the extent that you are just comparing strengths and weaknesses, I think they are entirely correct that the focus should be on building on strengths, not on correcting weaknesses. However, they would be the first to say there are also other dimensions that determine career success.

My research -- and my own life experience -- suggests that if you were really to examine the difference between who succeeds and who only does okay, what you would find would not be a difference in abilities, strengths, IQ, interpersonal skills or any other kind of capability. Instead, my work suggests that the only competitive advantage is something variously described as energy, excitement, enthusiasm, engagement, passion, drive, discipline, determination or ambition. Those are not all the same thing, but I think they are all facets of the same glittering diamond -- a state of mind that says: "I'm going to try, and fail, and try again, and just get somewhere!"

If you accept that it is the lifelong willingness to keep trying that determines success, in spite of strengths or weaknesses, then it raises an interesting question. Are you just born with this frame of mind, or can good managers create it in others? I'm not completely sure of the whole answer, but I do know that bad managers can and do destroy enthusiasm, passion and excitement. I think the best managers can not only "get out of the way" but can also find a way to uncover and channel the enthusiasm that most people want to bring to their work. Finally, I think that good managers have to have the courage to ask employees or colleagues who do not feel passionate about the organisation's work to leave. There is nothing more certain to suppress energy and enthusiasm than being forced to work with others who do not show it. Because of all of this, management is not easy, but it is crucially important.

I guess this is linked to your point of view that management is mainly a matter of attitudes and principles, more so than a matter of knowledge, intelligence and experience. Why are attitudes and principles so important in your opinion?

RW: A key to my thinking is that whenever I am trying to think through what would work on other people, I always begin by asking "What would work on me?" In this situation, the question becomes "What kind of manager would have the most impact on me, and cause me to stretch, raise my game and perform at the highest levels?" My answer is that before I care about the manager's skills, I would want to know why he or she is trying to get me to do something.

If I believe he or she is trying to help me, then I will accept challenges, listen to input and, maybe, even accept some criticism. But first, I need to believe that the manager is on my side. If I believe that you, the manager, are not here to help me but are trying to get me to do more, or different things only to make you, the manager, look good, or to help the company, then I will listen a lot less, only grudgingly accept criticism, and will be unlikely to be excited. In spite of what many managers think, only a very few people will do things for the greater glory of the company or because I buy in to some institutional vision. It can happen, but it's not very common. So, above all else, managers must be able to convince those they manage that the manager has the right attitude -- that the manager is focused on helping the subordinate achieve more. Notice that this is not meant to be idealistic. The manager's goal is to get me to raise my game and perform more, so that the organisation can win and the manager can look good. There's nothing wrong with the manager having those goals, but that's not the reason I'm going to try hard.

The trick of managing is getting people to do things for themselves that turn out to help the organisation. And if I believe you motives are pure -- you are really trying to help -- I will forgive you some poor skills, some weak language or occasional wrong actions. When it comes to winning my co-operation, your attitudes as a manager matter more than your skills.

Many of our readers are interested in the topics of managing change and executing strategy successfully. These require buy-in from the employees. How do senior executives demonstrate leadership while still letting good initiatives bubble-up from the workforce?

RW: As I have written previously, you can choose to manage the WHAT, the WHY and the HOW -- what the organisation is trying to do, why it is a worthwhile thing to do, and how it can be done. The secret to effectiveness, I believe is that management needs to be very clear about the WHAT -- that means removing too many dreams, and setting do-able, achievable targets. If everyone is completely clear about what the organisation is trying to accomplish, then it is possible to delegate decisions and get hundreds or thousands of people to do the right thing as they do their work. If management has been vague -- or has exaggerated or misrepresented what it really is aiming for -- then what results is confusion. People need management to be clear, consistent and to practice what they preach -- otherwise they don't really know what they should be doing.

The second thing that management needs to be good at is providing a meaningful reason WHY the goals that have been set are worth striving for. Management must be convincing that there is a worthwhile purpose to what the organisation is trying to achieve. If people do not agree with the purpose, they will still come to work, but they will only act in "compliance" with the work rules -- what they must do. This is not enough. If the organisation is to excel at its purpose, people in the organisation must accept that there is a valid reason to struggle, to solve problems, to deal with difficulties, collaborate with others, and all the other little and big things that come up every day.

And, of course, make money for the shareholders is a valid reason, but might fail the test of being a source of great motivation for the thousands who work in the organisation. It's a valid goal, but it's not a very motivating purpose. If you want me to do the things that make the shareholders rich, give me a reason that *I* can believe in to do those things. Tell me what it means to me. Because of this, the most effective managers are those who actually have ideals and principles that other people also believe in and want to follow.

For example, if you say you believe there is a morally correct way to treat customers, and I believe that you believe it, it is more likely to "get me on the hook" than saying it will make the shareholders rich. It turns out, from research that I have done, that the managers who are seen by their people to believe in something -- to have an ideology -- actually make the most money. If a manager has been effective in managing the WHAT and the WHY, he or she does not have to be too specific on the HOW. The rest of the organisation can be trusted to solve problems, and you can tap into the creativity and strategic problem solving of everyone -- and make a lot of money this way!

I'd like to get back to the word strategy once more. Some cultures don't seem to value strategy as much as others, leaving them to react rather than "pro-act". What is the value of strategic thinking in your opinion?

RW: I am not a fan of Grand strategic thinking either for individuals or for organisations. Too frequently, this just results in identifying dreams and visions which change nothing. However, I do believe that every person and every company must and should do something each and every three months, to build for the future. If we do not invest in our future, we will fail to adapt as the world around us changes. So, on a regular basis, it is necessary to ask "what can I/we try next, as an experiment that will make things better and get us more of what we want?" Most innovation fails, but individuals and organisations that don't innovate die. The key is to keep trying something new, making small incremental investments as a regular part of the way you live. It's the difference between strategic thinking (about which I am sceptical) and regular strategic behaviours, which I support.

I like that way of putting it. As a final question ... what are the small incremental steps forward you are trying to accomplish yourself right now. Would you like to share that with our readers?

Very slowly, after 10 years of focusing exclusively on professional businesses, I am experimenting with expanding my scope to other kinds of companies and organisations. I was frightened before about doing this, because I didn't want to become just one more generalist consultant who did a little bit of everything.

But, I calculated that, at age 34, I can afford to broaden out a little. So, I have just done my first piece of work with a non-profit organisation in the social sector, and also some strategy work with a manufacturing company. Luckily for me, my thoughts and ideas seem to apply in those new areas, but I am going to proceed with caution. No over-night revolutions, just steady innovation and continual learning -- I hope!

Coert Visser is a consultant, coach and trainer using a positive change approach. This approach is focused on simply helping individuals, teams and organisations to make progress in the direction of their own choice. Coert wrote many articles and a few books.

A Natural Manager (and Free Podcasts)

Today I have posted on my website my new article A Natural Manager, a description of Jerry Labbate, a young man who, without formal training, understands and applies the core principles of managing professionals.

Jerry's story is also the lead episode in my new free (audio) podcast series, which is made up 15 episodes (roughly 20-minutes each) entitled MANAGING PROFESSIONALS: ATTITUDES, SKILLS & BEHAVIOURS.

The first 4 episodes are now available on my website, and a new episode will be added each week.

The previous series of 14 podcasts on MARKETING PROFESSIONAL SERVICES is still available on the website.

New Free Podcast Series on Managing

As promised (or threatened) I have posted on my website today the first 4 episodes of my 15-part podcast series, entitled MANAGING PROFESSIONALS: ATTITUDES, SKILLS & BEHAVIOURS.

Each week, a new episode (approximately 20 minutes each) will be posted.

The previous series of 14 podcasts on MARKETING PROFESSIONAL SERVICES is still available for download.

Are Law Firms Manageable?

After spending 10 years saying that all professions are similar and can learn from each other, I'm now ready to make a concession: Law firms are different.

The ways of thinking and behaving that help lawyers excel in their profession may be the very things that limit what they can achieve as firms. Management challenges occur not in spite of lawyers' intelligence and training, but because of them.

Among the ways that legal training and practice keep lawyers from effectively functioning in groups are

• problems with trust;
• difficulties with ideology, values, and principles;
• professional detachment;
• and unusual approaches to decision making.

If firms cannot overcome these inherent tendencies, they may not be able to deliver on the goals and strategies they say they pursue.

The problem of trust

Much current practice in firm governance, organisation, and (not least) compensation comes from the fact that partners vigorously defend their rights to autonomy and individualism, well beyond what is common in other professions. There is nothing inherently wrong with that.

However, as major corporations consolidate their work among a smaller number of firms, domestically and internationally, they expect that firms will serve them with effective cross-office and cross-disciplinary teams. Firms are vigorously responding to this with a stampede of lateral hires, mergers, and acquisitions. Their goal is to create big organisations offering many disciplines, locations, and cultures.

The unanswered -- actually, barely asked -- question is whether these firms can shift from a managerial approach, based on partner autonomy, to new approaches that can create a well-coordinated set of team players. Is the tradition of autonomy at the heart of a partner's identity, or can it change?

In addition to fighting vigorously to preserve their autonomy, lawyers are professional sceptics: They are selected, trained, and hired to be pessimistic and to spot flaws. To protect their clients, they place the worst possible construction on the outcome of any idea or proposal, and on the motives, intentions, and likely behaviours of those they are dealing with. As Tony Sacker, a solicitor in the United Kingdom, says: "I am paid to have a nasty, suspicious mind."

Lawyers carry this view into their dealings with their own partners. It is hard to unbundle which is the cause and which is the effect, but the combination of a desire for autonomy and high levels of scepticism make most law firms low-trust environments.

Recently, I was advising a firm on its compensation system. They didn't like my recommendations. Finally, one of the partners said, "Richard, all your recommendations are based on the assumption that we trust each other and trust our executive or compensation committees. We don't. Give us a system that doesn't require us to trust each other!"

A former managing partner with whom I have discussed this says, "It's not that I don't trust my partners. They're good people, mostly. It's that I don't want to have to trust them. Why give up any degree of control over your own affairs if you don't have to?"

Actually, a low-trust environment has plenty of unfortunate consequences -- and they are readily observable in many law firms:

• Initiatives that depend on teamwork and joint efforts will rarely be implemented well, if at all. People may show up to a practice group meeting and help develop a joint plan, but they rarely feel mutually committed to or accountable for the group's decisions. When lawyers cannot depend on their colleagues to live up to commitments made in these meetings, they give themselves permission to have a similar attitude, and the situation spirals downward.
• When a firm's prevailing atmosphere is one of competition, not collaboration, partners rarely make sacrifices for the good of the firm. For example, they will be reluctant to take on managerial roles that might require them to limit their full-time practices, for fear that their partners will not treat them equitably when the time comes for them to re-enter full-time practice.
• There is low tolerance for ceding power or influence to practice group or firm leadership. The result is that even in the largest firms, executive authority can be so severely limited as to be meaningless. Decisions are made slowly, if not avoided altogether.
• Committees proliferate to address all topics, large and small. They are designed not only to ensure extensive participation, but also to put in place checks and balances intended to circumscribe the ability of any individual (or group) to decide anything on behalf of the firm. This may have the virtue of being democratic, but it is a primitive form of democracy that requires everyone to be involved in every decision. It both slows down decision making and unnecessarily distracts from other, more productive tasks.
• There is a drive to seemingly objective formula-based compensation systems. These serve only to entice partners into gaming the system through hoarding work and bickering over origination credits in order to look good in the official statistics. Partners constantly ask, "What's in the compensation formula?" and they do only those things that are. As a result, many behaviours necessary for the firm's success cannot be enforced, because they are not in the formula. Firm leaders have bemoaned this situation for decades, but few have found a way to solve it.
• Most important, absence of trust may be a significant contributing factor to the extremely short-term orientations of many law firms. If partners don't believe the firm will remember or value their contributions to future success, why would they make any investment that they may not ultimately get credit for?

As one of my clients -- a former managing partner at a high-profile firm -- observed about many law firms he knew:

"Most partners were recognised and rewarded for being the smartest person in the class or the most accomplished. They have rarely experienced or understood the power of succeeding as part of a larger group or team. Their focus tends to be selfish and self-serving, even narcissistic. The result is that the firm resources are squandered and poorly used, clients don't get the best lawyers assigned to their files, and firms are less profitable. This selfishness also leads to a short-sighted approach to decision making that inhibits long-range success because investments of time or money that don't yield immediate results are rarely made."

Scepticism about ideology, values, and principles

The single biggest source of trust in an organisation occurs when everyone can be depended upon to act in accordance with a commonly held, strictly observed set of principles. Examples of such principles are "Our clients' interests always come first; if we serve our clients well, our own success will follow" and "We have no room for those who put their personal interests ahead of the interests of the firm and its clients." (Both of these, by the way, are from Goldman Sachs.)

It is important to note that commercial benefits do not come simply from believing in or encouraging these principles but from actually achieving an organisation where partner behaviour is always consistent with them. When this is the case, less time is wasted in internal negotiations and posturing, strategies are implemented, and true teamwork results. Partners allow others to make decisions on their behalf or refer work to each other across the boundaries of practice groups and location because they can be confident that the other person will make decisions using the same values and principles that they would themselves use.

Law firms appear unable to achieve this level of ideological consistency. They will buy into principles -- firms can have very high ideals as long as they remain ideals -- but they have difficulty with the concept of enforcement. Firms are seemingly willing to adopt strategies and statements of values and mission, but are usually unwilling to specify what the penalty would be for non-compliance. Not surprisingly, that rarely results in effective implementation.

There is a reason for this. As a partner in an eminent U.S. firm points out, "Lawyers raised in the common-law tradition are trained to have a deep suspicion of overarching principles. The essence of the common-law approach is that decisions are made incrementally, always leaving open the possibility that the next case could be treated completely differently."

In my consulting work I have repeatedly advocated a system of help and coaching for partners who fail to meet the firm's standards. If coaching fails to bring a partner up to the firm's standards after a fair and reasonable amount of time, the partner is asked to leave. This is, in fact, close to the system that firms employ with respect to partners who fail to hit financial targets such as billable hours.

However, the point I keep trying to make is that if a firm wishes to excel in other areas, such as client service, collaboration, or associate supervision, the same process should apply. The response is predictable. Most law firms say that the idea of tackling a rainmaker on these "soft" issues is unrealistic, idealistic, uncommercial, and suicidal. In vain I point out that these standards are what firms already preach in their client and recruiting brochures and claim as their values.

While a majority of firms will vote to proclaim standards, they will usually not vote to enforce them. Indeed, the signs are that they vigorously prefer the opposite: Law firms have a proliferating plethora of rules, not functioning principles, because they don't or won't trust that their partners will adhere to the values, standards, and principles that they agreed upon. So firms end up with a mishmash of bureaucratic red tape in the hope that mandatory processes will achieve compliance when adherence to common values does not.

Professional detachment

In their legal training, lawyers are encouraged to be dispassionate. They have been schooled to leave their personal feelings at home. One lawyer told a consultant friend of mine that when he hung up his jacket on the back of his door in the morning, with it went his personality, both of which he put on at the end of the day as he left the office.

As many researchers have shown, lawyers score very low in the areas of intimacy skills and sociability. They tend to prefer role-to-role interactions with people, inside and outside the firm, rather than eagerly seeking out person-to-person connections. This doesn't mean they don't like people. It just means that, statistically speaking, lawyers prefer focusing on the job at hand rather than investing in relationships with those they are working with (other partners or associates) or for (clients).

This can have unfortunate, if unintended, consequences. Consider this e-mail, which I recently received from Marein Smits, a Dutch lawyer:

"At your recent seminar you made fun of me because I laughed at the idea of being genuinely interested in the industry and business of the people who are my clients. Rightly so: My laughing was cynical ... The first thing you learn when you become a lawyer is not to care. The legally sound judgment, the intellectual sparkle, that is what counts. The personal, the emotional, what is right: Throw it away, because it will taint your professionalism. 'Do not get involved' is the credo."

A major rainmaker once pointed out to me, "I can't convince my partners that this is all about human beings, that you market most successfully by showing an interest in the client as a person. My partners really don't want to express that level of intimacy with anyone at work." This lack of intimacy affects not only marketing and client relations, but also the way in which partners deal with each other and how firms are managed.

Rather than describing a highly interpersonal approach to coaching and helping each other succeed, the term "management" has come in many firms to mean a cold, detached, analytical approach to business. Financial scorecards are put in place, and everyone is told (implicitly or explicitly), "Here's what you will be measured on; see you at the end of the year!" They are not helped to achieve, merely rewarded if they do, and they live in fear of what might happen if they do not. This can achieve the goal of getting everyone to work harder, but it comes at a significant price in terms of partner morale and cohesion. Help, teamwork, and mutual support are often absent, since they depend on personal interactions. Instead, there is a system of measures and rewards.

While this approach is the one preferred by many partners (and many firms) it inherently limits creation of a strategically responsive organisation. In these days of ever-accelerating partner and associate mobility, a firm tied together only by measures and rewards will be inherently unstable.

There are signs that a few firms are recognising the importance of this issue. Says one managing partner: "The idea has slowly taken hold in our firm that one should deal with people as people, show warmth and empathy, and build personal relationships with others in the firm ... My leadership style has evolved over the years from trying to be comprehensive and logical to relying more on developing personal rapport and trying to motivate people." This insight might be gaining ground. But the behaviour inside many law firms has yet to catch up.

Approaches to decision making

When it comes to discussing their firms' affairs, lawyers have peculiar ways of conducting discussions and arriving (or not arriving) at decisions. The essence of lawyers' training and daily practice is to contest with other lawyers. While winning arguments against non-lawyers (such as consultants like me) is mere sport, winning them against other lawyers is a deadly serious business -- a challenge to their core ability.

In a room full of lawyers, any idea, no matter how brilliant, will be instantly attacked. Lawyers are expert loop-hole finders, trained to find counter-examples of or exceptions to any proposition. Accordingly, within a short time, most ideas, no matter who initiates them, will be destroyed, dismissed, or postponed for future examination.

Frequently, this leads managing partners, committee chairs, and practice group leaders to substantially over-invest in decision making. They want to be armed in advance with a lengthy memo about every decision so they can dump it in the lap of the complainer as part of fending off the attack.

Another common management strategy is to keep all proposals ambiguous, so that there is nothing specific to be attacked. As a result, law firms have a remarkable propensity for half measures, launching poorly specified programs with minimal chances of success. A common law firm dialogue is as follows: Let's have client service teams! (All agree.) What do we mean by such teams? (We don't want to say yet.) What shall their responsibilities be? (That's to be worked out.) What are the obligations of team members to each other? (We'll let them figure it out.) Combine all this with the obligation to resolve issues through committees, and you have a recipe for business constipation.

This is not necessarily a problem for lawyers. My own solicitor pointed out, "You are taught in law school that there are no right answers. We are actively trained to be non-decisive and are comfortable with a lack of closure."

When lawyers reason with each other, the primary objectives are not necessarily logic, consistency, reasonableness, or fairness. In their professional practice, whether in trial or deal-making, many lawyers are more frequently rewarded for persuasiveness, rhetoric, verbal agility, and point scoring. These habits of a professional lifetime readily spill over into internal firm discussions.

Lawyers also have a strange view of the concept of risk. In any other business, an idea that was likely to work much of the time would be eagerly explored. This is not necessarily the case with lawyers. If one partner says, "This works in the vast majority of cases," you can be sure that another will say, "Maybe, but I can construct a hypothetical scenario where it will fail to work. That makes it risky." Probabilities do not seem to influence the discussion, only possibilities. There is no greater condemnation in legal discourse than to describe something as risky. Contracts, deals, and court cases must be bullet-proof, not risky.

In other businesses, innovative thinking and action are considered a primary requirement for success. Companies eagerly search for strategic ideas and initiatives that their competitors have not discovered.

Lawyers are usually different. Presented with a new business idea, the first thing they ask is, "Which other law firms are doing this?" Unless it can be shown that the idea has been implemented by other law firms, lawyers are sceptical about whether the idea applies to their world. If everyone has these problems, they can't be so bad, the thinking goes. As long as we are no worse than anyone else, we don't need to change! It's hardly a recipe for a strategic advantage.

What can be done?

If lawyers deal with each other so poorly, why do they do so well financially? My answer is only partly humourous: The greatest advantage lawyers have is that they compete only with other lawyers. If everyone else does things equally poorly, and clients and recruits find little variation between firms, even the most egregious behaviour will not lead to a competitive disadvantage.

A persuasive case can be made that lawyers will not change, because times are good and partners (and associates, for that matter) earn a lot of money. However, the question always arises as to how the money is being made. Many law firms have discovered that you can truly make a lot of money if you work everybody very, very hard and really slash your costs and don't care about how people -- partners, associates, or staff -- feel about their work lives.

While that's one approach to riches, it can be shown (as in my articles) that it is not the best or most sustainable approach to riches. "Let's succeed by working more hours with ever-decreasing amounts of support" is not the most sophisticated piece of business thinking I have ever heard. The answer, for firms that choose to pursue it, lies not in ever-more-sophisticated (and tough) business management tools, but in a head-on confrontation with the issues of trust, values, interpersonal behaviour, and decision-making logic that I have explored here.

If firms are to deliver on the visions they have set for themselves, they must address such issues as what behaviour partners have a right to expect from each other, what the real minimum standards and values are, and how common values and standards can actually be attained, not just preached.

I have written about these topics extensively before and will not repeat either the arguments or the advice here. (My past writings are available on my website, vistageconsulting.com.) Suffice it to say that unless law firms undergo a cultural revolution, not just minor changes, most will not be able to achieve their ambitions. Dysfunctional behaviour by partners, currently not only tolerated but vigorously celebrated, will prevent firms from functioning as they desire.

There is some hope, because what has been reported here are common tendencies, not iron-clad laws. There are firms that are exceptional, singular counter-examples to the propositions explored here, and they are tackling head-on the core issues of culture, trust, and partner behaviour. On the other hand, many other firms are doing the very things that will prevent them from creating the truly collaborative organisations their lawyers say that they want.

One of the central things we know about trust and collaboration is that they come mostly from repeated interactions between people who have not only a history together, but also the certainty of a future together. Trust comes from relationships and the expectation of continuing relationships. Over time, as they interact with each other, they as partners, practice groups, and offices may actually come to trust each other.

Unfortunately, in many of today's firms that have been cobbled together from lateral hires and newly merged practices, the personal history that forms the basis of trust is often missing, as is the confidence that everyone will be practicing together for a long time. In many firms, even solidly successful partners live in fear that they will be among the next group of partners to be "let go."

In such an environment, the natural evolution of trust may be difficult, if not impossible. Instead, what firms need, literally, is a constitutional convention where their lawyers draft the explicit, basic law that is going to govern their firms -- the precise behaviours, rules, and principles that will determine what partners have a right to expect from each other.

When thought of as aspirations (which is usually the case), firms' values are usually explicitly articulated and remarkably similar. However, if a value is seen as a minimum standard of behaviour that all members agree to live by, then the true values remain ambiguous in most firms and vary immensely among firms.

Firms have historically flourished without constitutions that spell out minimum partner behaviours. For many, profits and revenues keep rising. What then will be the force that might create the need for change? Most likely, it will be client pressure on firms to act as firms -- delivering seamless service, practice areas that have depth (and not just a collection of individualistic stars), and true, cross-boundary teamwork.

Many firms have collections of great lawyers. The time may be coming when clients will expect them to go beyond this and become effective organisations. Without a prior, explicit agreement on minimum standards, and the resolve to enforce them, many law firms will not function well as firms but will remain what they are today: bands of warlords, each with his or her followers, ruling over a group of cowed citizens and acting in temporary alliance -- until a better opportunity comes along.

The Art of Blogging

by Coert Visser 2006

from Managementsite, 2006

Richard, how come you're so productive now?

RW: As I briefly mentioned in my article, I had a period of two or three years of extreme tiredness, just after working 80-hour weeks for three years. I did not know the cause, but it turned out to be a medical condition called sleep apnea, which basically meant I had not had a good night's sleep in that time. The treatment is to sleep every night with a breathing mask and to lose weight. I lost 30 pounds and suddenly, I had the energy of a teenager!

As I always do, I turned the personal experience into a business and management lesson, which became my article which has been my most well-read piece for many years. This all happened at a time when my wife and I decided that we did not want to do the same amount of national travelling as in the past, cutting back to about 50 percent of the previous level. (As a natural performer, I still need audiences from time to time!)

So, I decided on a strategy of trying to serve my national audience by really committing to the internet. Realising that people like to receive information in many different ways, I tried to offer alternative ways of absorbing my messages: traditional articles, audio podcasts and videos. Interestingly, the video is the least visited portion of the site so-far. I think it's because video command your full attention, while you can multi-task with an audio (listen while you are driving) and an article can be printed out to be read at any time. However, I will keep experimenting.

There has not been a problem with material. In my 2-to-3 year "sleepy time" I had still done consulting work. It was only the writing that I had stopped. So, I had years' worth of ideas that I had been thinking about while lying on my couch. I also discovered the fun of blogging. At first, the thought of putting something relatively new or fresh down many times a week was scary, but now, three months later, I find it exhilarating. It's a perfect place to share "smaller" thoughts that do not yet deserve an article, and quite frequently, you get really helpful and stimulating reactions from people around the world. I am learning a lot.

There's an old writer's joke that says "You don't know what you know until you write it down." I am finding that to be true. The mere act of committing to writing on a regular basis is forcing me to think more clearly, and also more deeply about my work experiences. I am now writing at least once a month, and posting a blogpost four or five times a week. Readers can subscribe to these at no cost by registering on my website. I'm having a wonderful time! And I'm healthy!

It's interesting that you mention your blog. I wanted to ask you about that. It seems like blogging is exploding! Even I have one now :). What do you think about this trend? Is it the next hype? Do you think it will last? And what are your thoughts on how to make a blog really successful?

RW: I must rush to say that any advice I have about making blogging work is the result of a great deal of advice I have received from other bloggers, and from my own technical advisors (including Shaula Evans.) I only began in January of this year, less than four months ago. As with everything in life, there are a few key principles to bear in mind.

First, you do not get half the rewards by showing half the effort. If you want to make something work, you must really commit serious effort. Don't just try things a little. I now post new thoughts four and five times a week, in order to make it worthwhile for people to come to my blog on a regular basis. That's a serious commitment, but as I pointed out in one of my posts entitled Is Blogging Dead, blogging, like everything else, is about relationships, not quick hits.

Second, it must be recognised that, at this stage, blogging is an act of faith. There is just not enough time and evidence to show whether consultants can get a return for the effort. I published an article with Steve Rubel, the master blogger, who has won a lot of business that way, but he is in the business of blogging about blogging. His audience is likely to be reading blogs.

For general management consultants (or other professional advisors like lawyers, or PR advisors, or accountants) it's not yet clear that the customers and clients you want to reach are watching and reading. However, here's why I think it's a good idea, even if they are not. You get the chance, as I have pointed out, to capture your thinking in writing. Putting it in a blog is not the final use of the material. I fully expect that I will turn small blogs into articles, and maybe (perhaps one day) turn collections of blogs into books, probably e-books. Blogging helps me make progress.

This is not a new thought. I have always argued that the benefit of writing articles was not just the initial publication, but the fact that you had readily available things you could reprint and give to new and existing clients. I am already finding it very helpful (when I get an enquiry from a prospective client who asks about me) to be able to say: "Well, actually, I just wrote about that topic last week and you can go, right now, to see what I had to say."

I think you raise some very interesting points on blogging and I'd like to ask a bit more about it. Thanks for mentioning Steve Rubel, I did not know him. This makes me curious: who are some of your favourite bloggers? What makes their blogs fascinating to you?

RW: I will confess that there are very few bloggers that I read every post, and few bloggers that cover the full range of my interests. But, I think that's the point about the "blogosphere". It's very fluid, constantly changing. The "feeds" that automatically come into my Outlook email program (using the Attensa add-on program which costs US$30) include Guy Kawasaki (who has written many terrific books about entrepreneurship), AccManPro (or Dennid Howlett) who writes about the accounting profession, John Sviolka from consulting firm DiamondCluster who is thoughtful about the future of technology, Brian Sommers (blogging under the name Services Safari) an ex-Accenture partner who is good on consulting.

You can find all these people listed (with easy quick-through links) on my blogroll (the listing on the right hand side of my blog.) These are only a tiny fraction of the blogs I monitor -- I actually look at about 100 per day, just to see what's there. It's like quickly flipping through the index and content pages of a lot of magazines before deciding whether to stop and read.

What I have found useful are the emerging attempts to provide guidance. There are so-called carnivals (one on marketing, one on capitalism, one on law) where someone lists the interesting links for the week. I watch out for those, in order to get an early indication as to where to go and new places to discover. It's hard work, but the whole point of the blogosphere at the moment -- it's wonderful, wonderful attraction, is the ability to hear new voices from around the world and engage them in conversation. So, I try NOT to stick to the same old places.

Like everybody else, once I find an interesting blog, I click on THEIR blogroll links (the people THEY like) to see if the philosophy that "I will probably like a friend of a friend" is true. It's a bit hit-and-miss, because there are so many people playing reciprocal blogroll games "You list me and I'll list you, and we'll both go up in the automated rankings." I hate that, and do not play that game. I only list other blogs that I actually visit regularly myself, and the list changes frequently.

At the moment, there is no choice but to hunt a lot and find you own favourite "magazines" to read.

What are your thoughts on how to write a good blog message? What helps well to get many readers' responses?

RW: I think there is a danger in asking the question that way. This is a little silly, but many people know that I love popular music and I love to make analogies from my personal life. In this case, the analogy I would make is "why are you making music?" There are two possible approaches. One is because you just have music in you and would pour it out even if you didn't have a place to perform. (Let's call that the "Artist" reason.) Then there are those, equally "noble", I think, who are "Entertainers" -- they do not pretend to be making art, but are just trying to give the public what they want.

I don't think one approach is more noble than the other, but I would point out that it is, in fact, easier to be an artist than an entertainer. Worrying about whether or not people are going to "like" you, and constantly changing your music to catch fashion is actually (if pop music is any guide) a very, very difficult thing to do, and one that usually gives you an immediate lack of credibility.

For me, the only viable approach to blogging is the same approach I give as marketing and career advice -- "figure out who you want to serve, find out what they need and start trying to help." The only way to find out what they need is to try something, and listen carefully.

So, I guess my real answer to your question is that I am not entirely sure what causes people to join in conversations with me. I don't go out of my way to be provocative, but I do try to tell truths that I think are being ignored. I have a personal point of view and I am not afraid to let it show. As I said in one of my blog posts, there is a quote from Confucius that all is well if the good people like you and the bad people do not.

I have seen that, everyone likes to join in discussions about what THOSE GUYS are doing wrong. You'll get lots of response if you criticise bosses or big companies or traditional media. However, I think that's too easy and not very enjoyable. I may get fewer responses, but I try to create conversations where we learn something that we can use personally.

I am also told that there are "tricks" like making lists. Apparently, there is some evidence that people love lists (so do I) and respond to "top 10 reasons why ..." I think that's true, but personally I do not want to be too self-conscious in the way that I write, and only write, to be referenced or quoted. That's a little too planned for me. So, I use that approach sparingly.

You mention that making blogging successful is hard work. Do you think there will be a big shake out soon?

RW: As with everything in life, I think hundreds of people start things, and only a few finish them. But in the case of blogs, the cost is so small that blogs won't disappear -- their authors will just stop adding new posts. It's not like real-world magazines where you go bankrupt or the cost of distribution gets too high.

However, eventually, I think that the "neighbourhoods to hang out in" will become a lot clearer than they are now, and only a few groups of blogs will make up the interacting community where people with a special interest go. But note, that event is still a long way off. I don't think that at the moment there are any clear neighbourhoods to go to if you are interested in things like consulting, or strategy or management. There is still a lot of room for individuals to turn themselves into the "hub" around which a network of other people concentrate. It's still very early days.

To be continued ...

A Natural Manager

Dyelry (Jerry) Labbate is the manager of an exercise gym in downtown Boston with four full-time and four part-time personal trainers. What follows is his description, given in March 2006, of his managerial approach, along with my comments on the lessons that managers can take from Jerry's experience.

I never wanted to get involved in business. Born in Brazil, I have lived in the USA since I was 12 years old. I remember coming on the plane, not speaking a word of English, and asking the cabin attendant for some agua (water) and she brought me some Sprite. I thought to myself: "This is going to be a great country: you ask for water and you get Sprite. Wow!"

I got my undergraduate degree as an exercise physiologist, went to work at a major chain of gyms, and then moved on to the place I work now.

After only two or three months here, my family asked me to come and run their Brazilian ethnic food manufacturing business selling to the Boston Brazilian expatriate community. My brother had been running it for my parents, but he did not seem to be on top of things. At the time, three years ago, my Dad was 75, my mother 66, my brother 29, and I was 25.

It soon became clear to me that we could do a lot more if we had the proper tools. The bottleneck was the fact that everyone was still making items like the cheese-bread by hand, so I flew to Brazil and researched how it was made there. I bought the right machines and had them brought back to Boston.

I also noticed that we were distributing our product in a truck that broke down a lot, so I bought a new freezer van, which increased our capacity to do deliveries from 10-15 per day up to about 30 per day. It was simply a matter of investing in becoming more efficient.

I always thought of it as just common sense. My brother didn't see it because he was focused on getting the orders out the door, and he wasn't really looking for ways to improve the operation. He wasn't focused. When he tried to change things, he didn't know where to start.

At the time, we had about 80 stores that we sold through. My brother wanted to expand that to 120, but I said, "No, let's just sell more to existing customers."

We asked our customers (supermarkets) to track their sales of our products on an inventory sheet, so that we could forecast when they would run out, and we could make sure we had production scheduled and ready to go when they needed it. We arranged for deliveries every week instead of every 15 days, and our sales to existing customers went up by 35 to 40 percent.

We also offered different sizes of the frozen cheese-bread, so it could be baked in the store. Another way I increased profits was in the way I bought flour. We had been buying it by the bag from the back door of a Chinese grocery, which made it very expensive. I contacted an importer and made a deal with him that if he imported a container (40,000 pounds), we would buy from him as we needed, but contrary to normal practice, we would pay him up-front for our purchases, instead of the usual wait for 30 days that he had to endure with his other customers. The cost of our flour went from 65 cents per bag to 24 cents per bag.

I also arranged to pay the guy we bought our cheese from with our products, so we could save a lot of cash. Unfortunately, that only worked for a month because I did not do my homework on whether our products could be sold to a different market segment.

After a couple of years of doing this, the owner of the gym where I had worked for two or three months approached me to come back. I sat down with my parents, and we decided to sell off the business. My dad and mom retired, and in May 2004, I went full-time with the gym. By June 15, they had made me the manager.

When I took over, the staff was dissatisfied with their hours, how they were being treated and cared for, their scheduling, or their pay.

A trainer would typically work from 6 a.m. until 8 p.m., with some hours off during the day. Even if you didn't have a client, the owners wanted you to stay on the premises until quitting time. They would do things like make an appointment without telling you, so that you had to change your personal plans.

I've always believed that this is a business that is run by the trainers -- if they do things right your business will flourish. So to make money, I had to increase the level of service to the clients, and the only way to do that was to improve the quality of the job for the trainers. I had to change the environment they were working in.

Before I came here, the owners did all the hiring of the trainers. I went to them and made my case that I couldn't really manage the business well unless I could choose the people I believed in, people I thought could meet my standards, and people who would operate the way I wanted them to operate.

I didn't want to insult the owners, but I put my case in terms of improving their bottom line. I told the owners: "You're not in the centre of all this -- I am. I know everyone's personality. I can figure out who will communicate well with the other trainers and who won't."

Anyway, the owners, to their credit, accepted my argument and let me do my own hiring.

When I first came in, all three of the existing trainers were just in the process of giving their notices of resignation because of the way they had been treated. I persuaded two of them to postpone their departure so I could do some new hiring.

Actually, the first new hire after I came in was someone whom the owners had selected, but I could see that he had what it took to do well. I liked him straight away. The owners then told me they had hired a second guy. When I asked him about what he wanted to do with his career, it was clear that our gym was obviously just a transitional job for him.

I told the owners it wasn't going to work. The owners said, "Give it six to twelve months." I did work with the guy, and he did become a good trainer. I supported him in getting his certification, knowing that it would only speed up the day he would resign to move on, and that's exactly what happened.

I had two part-timers I could use, but I knew I needed to begin hiring.

In this industry there is a lot of "bait and switch" with employees. They are told one thing before they are hired, but then discover that the reality is different once they begin work. For example, people are promised 40-hour work-weeks, but the reality is that it is almost always closer to 60-hour weeks. It's common for every single person on the staff to feel cheated within weeks of coming to work.

Trainers are a special kind of person. They have strong personalities, they are athletic, they play sports, and as a result, some of them can be a little rough around the edges in dealing with clients.

I only wanted to hire people who shared my philosophy of personal training. Some gyms and some trainers are just out to get clients to sign up for more classes, but I'm committed to passing on the knowledge I have about exercise, fitness, the body, and health.

I believe you train because you want to help educate clients for their lifetime. You want to give them things they can and will do on their own and use for the rest of their lives. A lot of competitors in this business just get caught up in the fitness numbers (percent body fat, etc.), but it's not about numbers. It's about helping people integrate new things into their lives. I always ask myself, "Can this client do this repetitively? Let's make him understand that it's a commitment he has to make."

When I hire people, I look for this attitude. I ask them, "If you were not doing this, what else would you be doing?" I'm looking for people who feel passionate about all this. The body is so amazing, and the more you learn the more you want to know. The adaptations it goes through as you stress it and develop it are really fascinating, and when I hire I'm looking for people who share that fascination. When I ask an interviewee a question, I can always tell if I'm getting a rehearsed answer.

I require that every new hire has a bachelor's degree in physiology, not just a certification. Many other gyms will only require trainers to have a certificate. Not here.

I knew that I had to set out to make my gym the best, and that wasn't going to be defined as the most operating sites -- a common goal -- but by achieving the highest levels of client satisfaction.

My first full-time hire was someone who had heard from a friend that we were becoming a great place to work. It meant a 45-minute drive each way from his home-town, and I asked him if he could handle that. He said, "No problem," he really wanted to come to work here.

I began by laying down my expectations with everyone. I was very clear on the hours expected. I showed everyone exactly how to clean the locker room, how to set appointments, how to talk to clients, and how to resolve conflicts. I created an evaluation form, which I went over in detail with everyone.

It contains five categories: Punctuality, for example. My inflexible rule is that the trainer must be there before the client, so if it is a 3 p.m. appointment, I expect the trainer to be in the gym ready by 2:45pm. I asked everyone: "Is all this clear? Do you understand my expectations?"

The other performance categories are "Floor Performance," "Team Orientation," "Technical Skill and Knowledge," and "Administration."

I don't have a problem monitoring performance. If something is not being done to my standards, I come to them and I ask: "Do I have to show you again how to do it? Do you have any questions on how to do it? If not, then I expect you to do it. It's black or white."

I devised a training program for the trainers. For two weeks, they have to be "clients" of the gym and be trained by the existing trainers. I want them to have a healthy dose of what it feels like to be a client, and to think about how you like to be talked to, recognised, and responded to. Then the new people have to guide one of the experienced trainers through their fitness routine, so the experienced employees can help the new people and give them feedback on their training approach and style.

While they train each other, a bonding takes place. They come to respect each other and support each other, which makes for a better workplace and a more smoothly functioning operation.

I talk to my trainers a great deal about their self-growth. I ask them what their vision is for themselves and for their career. I ask them where they think our profession of personal training is going. Among other reasons, I do it to learn more myself. The people I hire are usually straight out of college and they have heard the new things the schools are teaching, and I want to know.

To get a new person started, I ask one of our regular clients if they would be willing to be the guinea pig and have the new person train them. I promise the client that if they don't like the new person it will be a freebie, I won't charge them. I've never had to invoke that -- the client always accepts the person and pays.

The essence of training is getting people out of their comfort zone, and that's not only what I do with my clients physically, but it's what I do with my trainers in their jobs. I have failed sometimes here, because not all the trainers want to grow. Some of them just want to train.

Once a month, I get all the trainers together around a table. I give them the big picture of what's happening in the business, what's going well, and what we need to improve. I try to light a fire under them, telling them what the competition is doing, and I remind them that in this business you must re-earn your reputation every day.

I ask them to contribute to the meetings. I ask them to bring a new theory of training, or a new idea for an exercise, or a way to deal with a specific client training challenge. We discuss client problems, physiology, and the administration of the business. For example, we had a big discussion last week about sit-ups, with everyone sharing their views about which muscles were really involved, the best way to develop the complete set of muscles, and so on.

At the meetings, I hand out responsibilities for the things we need to get done: cleaning, renewals processing, etc. I ask for volunteers for each task (everybody has to do something above and beyond the training) but I'll assign it if no one volunteers. I try to rotate tasks so people don't get stuck with one thing.

I always ask them: "Is there anything I can do as the manager to make your job better? If you don't tell me what's wrong, I can't help to fix it." Last week, at a meeting that the owners attended, I told the group that I was going to leave the room so they could discuss my performance, and give me some feedback when I came back in. The owners were amazed I would do that, but it worked very well.

The main thing the part-time people said was that they wanted more help getting more bookings with clients. So I walked them through the difficulties (their part-time schedule might not match the weekly schedule the client has, so matching them up is difficult) and I told them I would do my best for them, but I could not promise to make the problem go away completely.

The part-time staff is one of my areas of weakness so far. I should spend more time and creativity with them, to make them feel more a part of the team we have created.

In 2004, the owners realised they had to do something about compensation. A normal target for a trainer is to have 32 appointments per week, plus eight hours of "coverage," i.e., other duties in the gym. I presented an idea of a bonus structure if the trainer saw more than a certain number of clients per week. It was modified a little, but it was accepted and it has really pleased the staff.

I don't have control of salaries here, so it's hard for me to discuss them with the trainers. I tell them "if you want more, then show me the extra performance that I can tell the owners about. Help me create the reasons, make the case, so I can go to the owners on your behalf and fight for you."

I had one trainer who just wasn't a team player -- he didn't share his load in cleaning up after himself, and so on. He was very knowledgeable, but he wasn't doing what I believe in -- sharing his knowledge with his clients.

I told him: these things have to be improved or we will have to part -- I don't compromise my standards. He said, "I can't do that." So we sat down and explored his options. I said "I don't WANT you to leave, I like you. But if you can't meet my standards, you're not going to fit in around here." I continued to work with him, because I wanted to make sure everyone gets a fair chance.

After four months, I stopped assigning him work. He didn't take it well. He said, "It's not fair, I'm a great trainer." I said, "Yes, you are. But you're not a great employee."

I want all my trainers to become great employees so that if they leave here and go to work somewhere else, the next employer will say, "He (or she) was well trained." Eventually he got it, and he left with no bad feelings.

I think with all of this we have created a welcoming atmosphere for our clients. We think we have created something they want to be part of. It's very professional and we don't fool around with our training, but it's not an intimidating place.

It's not a complex process. I have a rule that every trainer must know every client's name within two or three days, whether they work with that person or not. (We have about 100 clients.) I want everyone to watch what other clients are doing in their training. That way, if the client's regular trainer can't make it, any other trainer can pick it up and know the exercises and the levels that the client is used to.

I also changed the health history and chart system, so that if we have to substitute a trainer, there will be no problems knowing the special needs of each client. I am constantly in touch with all of our clients, making sure that if they have even the smallest concern, it is easy and comfortable to talk directly to me about it.

I am now being asked by the owners to train the trainers and managers in the other locations.

I'm personally doing about 30 client appointments a week, and then, on average, working an additional 30 hours managing the business.

We now have four full-time and four part-time trainers, 107 clients, and 159 appointments per week. That's 33 percent more business than the same time last year. And it is growing still. The owners are very happy with the turnaround.

The Lessons

As a consultant, it has been my job to teach people how to be effective managers, and how to build successful businesses. Jerry seems to have figured it out on his own.

Here are some of the management principles commonly taught or advocated, to which Jerry implicitly refers. (I won't catch them all -- which ones did you spot?)

• To improve efficiency in any operation, start by looking for the constraining factor -- the bottleneck.
• Never get so busy earning today's income that you fail to look to make improvements in how things could be done better.
• In looking for improvements, research how other people do what you do -- find out demonstrated best practices.
• Invest in the right tools -- don't be afraid to spend if it makes you more efficient or productive.
• Focus on improving business with existing clients before you chase after new clients.
• Focus on getting better, not on getting bigger.
• Help your clients help you by making their lives easier.
• Look for waste and inefficiency -- ways to cut costs without affecting quality or production.
• Find ways to do deals that benefit the other person, so he or she wants to help you.
• Fail fast. Don't be afraid to experiment with unconventional arrangements, and be prepared to drop promptly the ones that don't work.
• The key to giving your clients a great experience is making your people want to give that to them.
• You can't delight the clients with unhappy people.
• Hiring people who share your philosophy, values, point of view, and approach makes managing them a lot easier. Be very clear about what your philosophy is.
• The key to successful management is in the hiring: If you don't get the right people "on and off the bus" right up front, you won't be able to implement your strategy.
• Hire for passion and attitude.
• Never compromise hiring standards just to meet a volume need. Set high minimums in entry qualifications.
• To get the best out of people, have clear, enforced standards together with an empathetic, supportive style. One without the other won't work.
• Even if people are going to leave, take the high road in dealing with them. All your other people are watching.
• Never misrepresent, exaggerate, distort, or lie just to get something done, or to get someone to join you. People will find out the truth sooner or later, probably sooner, and there will be no benefit if they think you have misled them.
• You must help your people learn that there is more to serving a client than being technically skilled at what you do.
• If you focus on being the best, the revenue growth and profits will come, and your people will enjoy it more.
• Don't be soft -- have very high operating standards that are clearly communicated and strictly enforced.
• Then give people the freedom to meet the standards without being micro-managed.
• Work at helping people actually experience what it is like to be a client -- they will do a better job as a result of it.
• Work at creating team bonding by finding ways for people to work together, as well as get together to discuss common issues.
• Learn from your people -- let them teach you what they know and what they are discovering as ways to improve your operation.
• Commit to helping your people grow professionally: don't let them cruise.
• If you want people to be accountable, go first. Let them evaluate your performance, and let the results be publicly known.
• No one expects you to solve everyone's problem as a manager: All people want to know is that you're prepared to work with them to help them overcome the barriers and obstacles.
• For all of the emphasis on working with your people, you must never lose contact with your clients. Make sure that you have made it easy for them to talk to you and to raise any concerns they might have.
• Even though you are a manager, keep practicing your profession to some degree. It will help you to understand and relate to both your people and your clients.

* * *

Now, how's that for a quick and really helpful MBA course?

And, of course, it's all generalisable. All these lessons apply in other workplaces, even among highly paid people with advanced degrees in glamorous professions (though they don't always like to admit it).