Restoring Optimism in a Down Period

PERSONAL AND CONFIDENTIAL

Dear Jimmy,

You may recall that I asked you what you'd like me to write my next article on, and you said something to the effect of "restoring optimism after a rough period."

I haven't written the article but have put down a few thoughts. I haven't edited myself but just put down some initial thoughts.

You'll disagree with some of these things and you'll be doing others, but maybe there's also something here that you agree with and are not yet doing. At worst, it will stimulate your own thinking. Anyway, here goes!

My first thought is that little can be done "in the mass." (Remember the "raspberry jam" principle: the wider you spread it, the thinner it gets!) That means ratcheting up the level of individualised attention. You can't manage emotions by numbers; you can only do it face to face and preferably one on one.

I would guess that given the current rough times, people feel a little "helpless" -- not sure about what to do. Therefore there is a need for help.

In tough economic times there's a tendency for firm managers to edge away from the coach role and become more like policemen, administrators and bosses (watching the numbers like a hawk). Obviously this is necessary, but so is coaching: offering suggestions, being supportive, being a source of creative ideas, helping people think through their roles and helping them make the best use of their time. I know you believe in this but there's a question: How much of this is really going on? How much are you doing? Everyone knows you want results but what are you doing to help them (particularly the average Joe or Jane on the front lines) get results?

How about this idea? Are you conducting a series of office visits, not to give a speech but to be available to answer questions and offer ideas about their local practice issues? You're a smart guy who's been there. You're a really valuable resource to anyone who can get your time. Call these visits "mini planning sessions for the office," with you as a creative resource.

The reason I believe this will work is that you'll be able to break the (local) logjam of, "We can't do anything. It's rough out there." Help your people come up with action plans. I realise that you can't visit them all but the grapevine works well.

Maybe you can form a visiting committee of senior people to do some of this. Remember, I'm talking about helping. You already do planning, budgeting and visits from senior folks; but I'd guess that the typical partner doesn't see this as a vehicle for help but as an oversight exercise.

I'm making two points: The "depressed" (non-optimistic) professional needs help (now!) and ideas. Asking (or telling) the person they should work harder or do more isn't inspiring. What they want is ideas about ways to do something different. They're probably doing what they know how to do, and if they aren't it's because of the depression. There's a barrier there.

Newness is at a premium when people are down: They often can't get themselves up to do the same old stuff, but give them a new task to perform and they may discover renewed energy, interest, etc. Hence, you should take every opportunity to find new roles for people. I'm not talking about major reassignments, but new marketing tasks, etc.

Which leads me to my next point, the key to all this being non-billable time: How do people spend it? What are they doing? What should they be doing? In most firms, billable time is carefully managed but non-billable time is a sink-hole. A lot of professionals waste a lot of it sitting around, wringing their hands, hiding out in their offices. No one knows or cares and certainly doesn't monitor the non-billable efforts.

I would advocate a "new" program of "non-billable time budgeting." It's really nothing more than an individualised, personalised career planning system, but it is different from what's being done. It's not performance appraisal, and it's not goal setting. It's action planning.

Goals are ephemeral and made up of a wish list. An action plan is concrete, specific, understandable and much more motivating to a depressed (non-optimistic) person. "Tell me what I should/can do," is the normal cry. So�

The practice leaders sit down with each partner and say, "Looking at the next three months, how much non-billable time do you have available? Right, let's talk about what you're going to do with it. What activities make sense for you and the office/firm? Whose help do you need?"

"Let's not talk about annual goals; instead, we'll take it a step at a time. Let's only worry about the next three months; come to an agreement on actions, teams, etc.; and develop a "contract" for doing X things. We'll meet again in three months to see how they went (or earlier if you need my help)."

This sounds simple -- and it is -- but there's not a lot of it going on. It works because you can't be depressed when you're busy and active. You turn people's emotions around by getting them doing something, anything. The short term is achievable; the long term is terrifying.

Pygmalion is relevant here. If you treat people like winners they'll turn out to be winners. Unfortunately, being micro-managed doesn't feel like you're being treated as a winner.

There's also the Hawthorne effect: People perform better when they think someone cares and notices what they're doing. The trouble with the professions today is that the average partner isn't very energised and excited at the best of times, let alone in a recession. The vast bulk of them feel like cogs in the machinery. Hence, my emphasis on designing "individualised" management processes is the key to restoring an upbeat mode.

I've already said this but you have to get out and about to the offices. One way to influence mood is to be the role model (a key point), but you can't be an effective role model unless you're face to face.

"Off-line" sessions such as conferences and meetings don't count as much. It's way more powerful to visit them where they live. You've got to be seen to be involved in the nuts and bolts of the business.

Leaders must be seen as making their own sacrifices if others are to do so as well. What (visible) sacrifices have you made? What sacrifices do your partners think you've made? Apart from tighter financial controls, what has HQ done that's different?

They (the partners) want to know what you're going to do to turn the situation around. Where's the positive action that comes across as new, creative, a smart idea or a clever response to the situation? (You've probably got answers to all this.)

In any event, if people see the firm acting in a positive, "optimistic" way, they'll be positive, too. But in many firms, all the partners see from firm management is a bunch of tactics that come across as scared, nervous, panicky and down-beat (tighten controls, fire partners, cut support costs).

I'm not saying these actions are wrong, merely pointing out that they do not convey optimism.

People don't want inspirational speeches or grand strategies when they're depressed. This is not the time for "rah, rah, rah." In fact, it backfires. People say, "We're in pain and he's so out of it with his unrealistic visions." All your speeches should begin, "If I were you, here are the four or five things I'd do differently than in the past."

I'd focus people even more on their own local practice. If they start thinking and worrying about where the firm is going or the state of the nation as a whole, they just get distracted. I'd try to keep people focused on what's going on in their area and back off talking about the firm.

Obviously, I'm not saying to hide anything but just don't push it. As an example, line partners hear too much about mega-clients, international activities, technology and other grand strategies, which can be demotivating if they interpret this information as, "Those guys don't care about me and my practice. They live in a different world."

People need an opportunity to bitch. (I call this "squeezing the stress sponge.")

People can only absorb so much hassle. After a while, the sponge is saturated and it starts to "weep." If you give people a chance to vent their feelings, you empty the sponge and create the capacity for them to absorb more stress.

But they need to talk about THEIR work and THEIR lives. What mechanisms are in place for this to happen? (It's dangerous in the typical professional firm to show your stress: bitch too much in an environment where people are being laid off and you may be committing suicide!)

Obviously, to create optimism you must reward early successes and small triumphs. There's a need to increase the number of celebrations, formal and informal. In the past you celebrated the big things -- now you must celebrate the small.

And you must learn to use more "currencies." In tight straits you can't be generous with cash, but there are other rewards, including the following:

• Approval
• Gratitude
• Autonomy
• Participation/Involvement
• Personal Interest/Support
• Recognition
• Visibility (inside and outside the office)
• Contacts
• Access to Information ("insider")
• Access to Additional Resources
• Rapid Response (access to manager)
• Task Support
• Titles (official and "unofficial")
• Special Roles or Assignments
• Challenges
• Meaning

I wonder how many of your managers know how to use these tools?

Anyway, that's enough rambling for now. All the best and good luck!

Richard

Are All Consultants Corrupt?

by Alan M. Webber 2002

from Fast Company, May 2002

That's one possible conclusion in the wake of the Enron scandal. Enron's monumental bankruptcy, Global Crossing's questionable accounting practices, and Wall Street's complicity -- if there is a common thread in the scandals of the day, it is the central role played by the nation's elite professional-services firms. McKinsey & Co., the bluest of blue-chip consulting firms, gave Enron its strategy -- and even its former CEO. Jeffrey Skilling's model for Enron was to pattern it after a professional-services firm, to elevate the company above the lesser status of an energy company to the more rarified air of a knowledge-based, asset-light company. Andersen, among the most respected accounting firms, vouched for Enron's books. Enron was chockfull of MBAs and refugees from accounting and consulting firms. A few column inches away from Enron is Global Crossing and its founder and chairman, Gary Winnick, who is an alumnus of Drexel Burnham Lambert. The fingerprints of Wall Street's elite firms appear on some of the questionable transactions that are now under congressional scrutiny. And the world of professional-services firms -- a world to which most high-flying MBAs readily aspire -- is suddenly under intense review.

In that world, Richard Wood is the recognised expert. For more than six years, he has been studying professional-services firms. He has written about them, spoken to them, and consulted for them. A native of Australia, Wood holds degrees from the University of Southern Queensland, and the Queensland University of Technology. He studied at QUT for seven years before striking out on his own.

Fast Company sat down with Wood in his home in Toowoomba to gain insight into the state of professional-services firms, their role in the current scandals, and the right way to be a professional.

What's your take on the business scandals that we're seeing today?

RW: The car wreck that we're reading about in the newspapers was inevitable. It was going to happen, because professional-services firms don't practice what they preach. They're filled with smart people who understand what they should do to win. Those people talk about having a strategy with a longer term view, but the operational reality is vastly different. They want the money right now. In practice, cash is everything.

That's how most professional-services firms operate. But are there fabulous accountants, lawyers, consultants, and investment bankers who do it right?

RW: Absolutely. What's missing are whole firms that are built on discipline and strategy. With one or two exceptions, cash is everything for a firm. It's also important to mention that the current scandals are not that special. They're special in size, but not in nature.

Is the problem with professional services due to a lapse in ethics?

RW: The real problem is that people do what they're told. They're simply in compliance mode. What's even more interesting is that there's so much going on that's stupid. People are making the wrong calls on stuff that doesn't even come close to ethics. But that's just common practice. It's what happens inside firms, because that's how people have been raised in business. Before they even get to an ethical issue, they've been taught that if there's cash to be made, then make it. So it's not as if they were wonderful to begin with and then suddenly there was an ethical challenge and they lost their way. The message has always been that nothing trades off against cash. Too many professional-services firms have never met a dollar they didn't like. The question that they need to ask themselves is, Do we believe in our own strategy and our own standards, even when we're tempted by cash? Good business is about having the guts to stick to a strategy. You can count on the fingers of a single maimed hand the number of professional-services firms that have the courage to stick to their strategy.

So what's wrong with the professional-services firms of today?

RW: The problem is that they've been taught to act like businesses. But they've learned all the worst lessons of business and missed all the best ones. Tom Peters used to tell the story of McDonald's founder Ray Kroc. Someone asked Kroc what his secret of success was, and he answered, You have to be able to see the beauty in a hamburger bun. You might laugh at first, but when you think about it, that's got to be right.

What most professional-services firms don't understand is that to make the most money, you actually have to believe in the product or service that you offer and care for the customers or clients whom you serve. That isn't a religious argument; it's a business lesson. You can't dominate an industry unless you care passionately about what you do and the people you do it for.

Why don't these firms change?

RW: Why don't they change? Let me give you an analogy from my own life. My uncle is a fat smoker. He doesn't need another speech to tell him that he should stop smoking and lose weight. Clear lungs, a longer life, a better sex life -- he accepts that it's a fabulous strategy. But please, no more speeches. Now, people in professional services have heard all the speeches before too: Give great customer service, be a team player, manage your people. It's not that they don't believe the strategy.

The problem is, whether it's my uncle giving up smoking or them starting to give great customer service, any kind of improvement requires short-term sacrifice and short-term pain in the name of a better long-term future. There are very few businesses that are truly interested in maximising their future income stream.

Professional-services firms need to have an ideology. They need to know what they stand for. They need to have non-negotiable, minimum standards. They need to be able to say, We will not accept work that goes against our standards, because that's not who we are. The problem in professional services is that because the environment is so bountiful, you can get everything wrong and still have a nice income.

I'm not picking on any one profession. They're all equally bad. They treat people poorly. They don't train well. They have no quality assurance. They don't collaborate with one another. They don't show any interest in their clients. You would think that this would kill them. But they're only competing against each other. So as long as nobody wakes up, they can all make money doing this shit. Why are there so many bad professional-services firms out there? For the same reason that there are so many fat smokers.

But don't most firms know that they're not measuring up?

RW: Here's a little quiz that I've been giving professional-services audiences for the past six years. First I give them three categories to classify how they feel about their work. Category one is, "I love this stuff! I just love doing it." Category two is, "I can tolerate it, but that's why they call it work. I do my job, but I have no emotional investment in it." Category three is, "How the hell did I end up doing this junk?"

The results are always the same in all professions around the world. You get about 20% who say, "I love this work"; 60% to 70% who say, "I can tolerate it"; and 10% to 20% who say that what they do is junk. Then I give them a second question. I say, "You've told me about your work. Now tell me how you feel about your clients." Again, I give them three categories to classify how they feel. Category one is, "I really like these people. I enjoy serving them." Category two is, "I can tolerate them. I'm responsible and I give good service, but there is no real difference between today's client and tomorrow's client." Category three is, "These people are idiots who work in a boring industry."

The results for the second question are pretty much the same as for the first.

About 20% love their customers, 60% to 70% can tolerate them, and 10% to 20% can't stand them. What the numbers say is that most professionals like their jobs one day a week or less, and the rest of the time, they just tolerate what they do. Then I ask them, "Do you think your clients can tell?" To which everybody says, "Yes!" Well, what are the business implications of that? For most professional services firms, the answer lies in their mission statement: We won't screw up, but we're nothing special.

I tell them, If that were me, I'd slit my wrists! That's true for one very simple reason: I don't want my tombstone to read, "He did tolerable stuff for tolerable people because they paid him." I'm not that much of a whore. Do I do it occasionally? Sure. I'm no more noble than anyone else. But that's not the issue. The issue is, Is that your life? Why would you want to spend your life doing stuff that you can just tolerate, working for people you don't like?

Especially when you realise that you can make more money doing work that engages your passions. The only sensible business rule is, Life is too short to work for idiots. So if you're working with people who are shady or crooked, get out!

Alan M. Webber is a Fast Company founding editor.