The Problem of Standards

A speech I recently delivered at the Legal Solutions Conference, The Hague, Netherland. It includes many topics addressed in other articles, but shows how some of my themes were combined in a single presentation.

Technology is potentially wonderful, but professional firms will never capture its benefits because there is no point in giving advanced tools to a group of people who do not have the discipline to do the basics.

If you really want to get the commercial benefits of any strategy, you must put in a system that forces you to execute that strategy. The tragedy is that they will not accept accountability for standards. Giving them technology is like giving a machine gun to a baby. You first teach the baby that there are certain standards to live by, and only then can you give them the advanced tools.

You have all heard of EDS, the computer services giant. It is about a $15 billion company. They have a web-based project management system that records everything about the project -- the next due dates, what's been done, what's on time, what's delayed, how much of the budget has been spent and accumulated. Here is the key point: This information is entirely accessible by the client! At any time, the client can log in and see where his or her project stands, with budget, due dates and deliveries.

They ask their clients to log in every two weeks to indicate on a simple scale of one to four their level of satisfaction with the client project so far. The chairman of this $15 billion company (EDS) can log in and see the feedback from every client for the entire company, and that is the first thing he does every day.

The likelihood that you will do good project management and great client service with this system in place goes up 1000 percent. The system keeps you honest by introducing an unavoidable accountability.

What's impressive about EDS is not the technology but the willingness to be held accountable to high standards. Most professional firms haven't even got an internal project management system, let alone one where you would give access to the clients.

Professionals say, "Well, I am not very good at project management. Can't I ignore it?" Oh yes, the firm replies, we forgive you as long as you're good at your discipline (or bill a lot of hours).

Another Example: Client Service

Take the topic of client service: You all have in your mission statement, or on your website, a commitment to client satisfaction and client service. But how many of you have a feedback system where you regularly ask clients at the end of every transaction how happy they are? (About one-fifth of audience members raise their hands.)

How many of you publish those results, with the name of the relevant partner, to everybody in the firm? (Two people raise their hands.) What you have is a belief that client service is very important, but except for one or two shining examples, there is a refusal to accept accountability to do it. You leave it to self-discipline to accomplish the standard, and that doesn't do the job.

Firms often have inspirational speeches at their partner meetings about service and commitment to clients. But if there is no system that keeps people honest about actually doing it, then you don't get the benefits. The only way to get the benefits is to accept the discipline.

Like all of you, I believe in outstanding client service. The way I try to make that real for me is that even though I charge obscene fees I give an unconditional client satisfaction guarantee. Every invoice that goes out from my office (I don't discuss it with my business manager; it's a standard invoice) says, "Here is the bill in the [obscene] amount that we agreed on. However, if you are anything less than completely satisfied pay only what you think it was worth." That's my system.

Now, if you think about that system you can see where the benefit comes from. It doesn't come because it's a marketing tool; it comes because I have no choice but to do my best. The key is, if you really want to make something happen, don't leave it to self-discipline. If you really want to make something happen, create an external discipline.

And if you don't want to try that hard, if you don't want to be held strictly accountable, then fine -- drop that strategy and move on to something else. But if you can't find anything you're prepared to actually commit to, then recognise that you're probably never going to be anything other than no worse than anybody else.

There are times when I get my client service wrong; I'm not saying I'm perfect. All I'm saying is that I'm prepared to be accountable. Now, I blow it occasionally, and all I ask is that people tell me why. And if they tell me why, I can say, "You know, that's actually fair." I probably should've done that or done this differently. And then I'm going to carry on working for them.

I'm not that good. I don't always get it right. But I'd rather have a system that forces me to try because over time I'm going to make more money on a system that forces me to try.

If you don't want to try that hard, you don't have to. Just don't announce client service as your strategy. That's my message. You can pick whatever strategy you want. But if you're not prepared to be strictly accountable for what you declare your strategy to be, you're fooling yourself and you're wasting time. Pick something you actually believe in.

Supervising Work

Consider another topic: meeting the following standards in matter supervision. Imagine a world where I come to your firm, let's say six to nine months from now, and I stop every professional that you have working for you and ask, "What's it like working here?"

And they say, "In this firm, one thing you can bank on, guaranteed, is that you will be superbly supervised on every transaction because it is a matter of professional principle with us. We don't do work unless we supervise it superbly."

Tell me what commercial benefits would come to that firm if it were true that this was always done superbly. Where would the firm see the benefits? [Audience: Clients would notice.]

Which is terribly scary because maybe that means they notice now that we don't supervise their work superbly.

What else can I write down? [Audience: We would retain people.] Of course. Do you think the quality of the work would go up? [Audience: Yes.]

If we always supervise, the quality would go up. What else? [Audience: We would spread skills faster.]

Is that good for the law firm? OK, what else can I put up there? [Audience: Clients might be less fee sensitive if they found someone who always supervised the work well.]

That's your theory? So incrementally we get higher fees. How else does profit go up if you do it? There would be less wasted time and rework, right?

So the direct profit effect is that you have lower write-offs and higher realisation because there would be less work done that we could not charge for because we had better supervision.

Also, if I knew that every junior had been treated this way since the day they joined the firm, I might actually trust those people and delegate, whereas if I am living in the normal firm where nobody ever does this, then it's quite logical never to delegate because the juniors are untrained, unguided missiles. You get better leverage because people would feel more confident to delegate to trained people. So you get lower write-offs, better leverage, higher rates.

There are two lists on the screen now. A handwritten list of benefits: higher profits, greater client satisfaction, more retention of people, more motivated staff. And what do you have to do to get the benefits? Basic supervisory actions!

When you give somebody a piece of work, make sure they know what they're doing. If you've got more than one person on the job, make sure the left hand knows what the right hand is up to. This is not advanced PhD stuff; even your tax partners could do this!

So here is the issue: Why are firms not getting these benefits, when the benefits are everything we say we are after -- quality, professional pride, money, great work environments -- when to do it requires only a set of very basic skills that can be taught in a weekend with a copy of the One Minute Manager? Why does the average firm not enforce this standard? [Audience: We can get away without doing it.]

That's called professionalism, right? We will only do what we are forced to do. Professional firms are completely unprofessional. They have no standards of quality whatsoever that are actually enforced. They have wonderful standards of quality that are preached. But we forgive any partner who does not do this as long as he does not go to the opposite extreme and do something ugly -- like sexual harassment or getting us sued.

As long as it is not the other extreme, we will let anybody live who does a sort of okay job of this. Business is a lot simpler than everybody thinks it is. If you are not supervising your work it doesn't matter which market segment you go after.

Reading Clients' Trade Press

Take another topic: You go to the typical firm and say, "How many partners in this firm could put hand on heart and say they regularly read every issue of their main client's trade magazine?" Not all your clients, just your main client.

Anybody want to guess in a typical firm, whether it is in Lithuania or New Zealand or the United States, what percentage of partners could honestly answer, "Yes," to that? [Audience: 3 percent.]

The percentage is in single digits, isn't it? The lesson is pre-biblical that clients like us to show an interest in their business. Do you act as if you care about your clients? In the typical firm the answer is, "No, our partners don't like clients. They love the work; they hate clients."

What Team Do You Want to Belong to?

Let me give you a piece of biography that illustrates the point.

My friends' first teaching job was at a good, solid regional university. They were really nice people and as a result it was friendly, supportive and collegial. But part of the consequence of that niceness is that it was a very tolerant place. If, as an individual, you wanted to go for national fame, then people would be friendly and supportive and collegial and help you do what it takes.

But if you didn't want to do that, if what you wanted to do was teach introductory economics for the seventeenth year in a row that was okay, too. They said, "Oh, that's covering your billable hour target; that's acceptable."

Then the tragedy in his life occurs. The phone rings and a voice says, "How would you like to be a professor at Harvard Business School?"

You can probably guess the emotions. The first emotion is, "Somebody has made a mistake but I am not going to tell them." And the second emotion is, "I can't wait to tell Mum."

But then the third emotion kicks in: "Oh my goodness, this is a life changing choice. Am I willing to give up a firm that has only the basic standards in place and voluntarily join the Olympic team, where I know from the start that it is run on intolerant principles because it's actually trying to win Olympic gold (and the consequence of that is the standards are real)?" And the questions to ask are, "Which game would you rather play?" and "Which team would you rather belong to?"

You can see attractions on both sides. My friend can stay with his tolerant institution where it's impossible to not meet the standards. In fact, it's impossible to get fired because they don't believe in that; they believe in keeping the family together. So no matter what you do, as long as it doesn't actually involve indecency with a child, you are one of them. Other than that, no other standards are enforced -- though they are preached. They preach client service, they preach supervision, they preach collaboration, but which ones do they actually enforce? None of them -- because different people have different strengths and therefore they try to understand each other. It's a wonderful environment. You can do what you want and as long as you cover the basics you are left alone. You do things your way and nobody ever bothers you.

The question now is, why would he join the Olympic team where you've got to show up for practice and if you don't you are off the team, and you've got to accomplish certain standards and if you don't then you're out? It is not that the Olympic team is unfriendly. They say, "Well, where else do you want to work? Tell us what you want to do. Take your time. We will help you with whatever you want to do, but we are actually serious and our standards are real. If you can't or won't meet them, you cannot be a member of this team."

The question is, why would people want to choose a team with high standards, strictly enforced? You can argue that it's neurotic behaviour. That's what my friend at the regional university thinks of me. He says, "Richard, why are you writing another book? The last book's selling well; the phone's ringing." And I am saying, "Look, I am the kid from the farm in Queensland. I've got a little bit of recognition, which I never expected. I want to see how far I can go if I try." And my friend says, "Richard, that is insecure, paranoid, schizophrenic behavior. You're doing well. Why don't you enjoy it?" And I say, "But I want to see how far I can go."

So here's the choice that you have to make: Which firm would you rather belong to -- one where they are going for the gold, seriously, or one where the slogan is, "Let's not mess up. As long as it's not broken we don't have to change anything"? There's nothing morally wrong with either side. But it is the height of idiocy to keep running your firm, pretending you are going for the gold when you know you don't have the discipline to do it. If you know you don't have the discipline, stop making New Year's resolutions. Enjoy the choice you have made.

The only sin, I believe, is hypocrisy. The only sin is lying to yourself and pretending you are going to do something when you are not. It's okay to have no quality standards. Most firms do not. Seriously, you know, most firms don't have any requirement of energy. If one of your partners hasn't written an article in ten years you don't care. You don't actually have any expectations of each other but you still shine. Your expectation of each other is that you are not completely messing up. There is nothing wrong with that. That's okay. Feel good about it -- just stop coming to conferences. Stop listening to consultants.

Your Lives Are Miserable

I can usually get a firm's partnership to vote for the "going for the gold" by proving to the partners that their lives are miserable. I say to people, "Please be honest with me, or at least semi-honest. I want you to tell me about your work and divide it into three categories. Category one: Is this work where you say, "God, I love this. The hairs on the back of my neck stand up every time I do a transaction like this"? It's not a strategic question or a moral question -- it's a taste question. "I just love this stuff" and you're allowed to love what you love. You're allowed to love tax; you're allowed to love wills. The only question is, are you doing stuff that you love?

The middle category is, "I don't love it; I can tolerate it." That's why they call it work. My passion I save for my family. This is work, and I'm a responsible, conscientious, dutiful citizen, so yeah, I do what I'm supposed to do. I'm a good player, but do I have any positive charge from this? No, this is what I do for a living. I'm just waiting for 65 to come. My enjoyment comes from things that are outside the firm (if the law firm ever gives me any time to enjoy it).

And the last category is this: "I cannot even tolerate it. This portion of my work here is junk. How the hell did I end up getting stuck doing this?" If I asked the partners (and if they were honest with themselves and with me) to give me three numbers that add up to a hundred that describe their lives, what do you think the average is for the typical established firm? What percentage of partners can say, "God, I love this"? What percentage says, "I can tolerate this"? And what percentage says, "You know, this is crap"? Anybody got a reasonable guess? Don't be stampeded up or down. Give me a reasonable guess. [Audience: 10, 80, 10.] Is that good enough for discussion for everybody? Can I use that for discussion?

Now the question is, having told me what you think about your work, please tell me what you think about your clients. And I'm going to make this a hard test. Category one is, "I like these people." I don't have to defend it or justify it to anybody -- I'm allowed to like who I like and dislike who I dislike. I happen to like these kinds of people. And notice, this is a tough test. I'm doubling a few things up; not only do I tend to like the people who are my clients, but the sector they are in fascinates me. I read their trade magazines for fun. Notice again, it's a taste question; you don't have to justify it to anybody. I happen to like this sector -- for my own idiotic reasons. But the key point is, is it a company or a government sector that energises your own passions?

The middle category again is, "I can tolerate them; they're clients." You know, throw engagements, throw money, bend over, let me get to work. I'm a good citizen, I will do all the right things, I'll be responsible, but do I have any care that this is this client versus any other? No. I'm responsible. I'm going to do the proper thing, but I have no positive energy to add it.

And the last category as you can see is, "I can't even tolerate them." You know, it's not a strategic question. It's not a moral question. There's always mismatch. I'm sorry, but by my taste these clients are idiots in boring businesses. Possible? Yes.

Give me your best guess; again, without exaggeration. Don't be negative; don't be optimistic. Best guess, what does the typical lawyer feel about his or her clients? What are the three numbers that the typical professional would give me? [Audience: 5, 85, 10.] Boy, you have really added an inspirational note to the proceedings. Good enough for discussion?

Just look at those numbers, and if those guesses are correct, tell me what the implications of those guesses are. What flows from the fact that the average professional in the average successful firm loves what he or she is doing about half a day a week and likes the people they are doing it for about a quarter of a day a week? Tell me what the implications of that are. [Audience: They won't be doing their best.] They'll be good citizens, they'll be conscientious and they'll be at half energy -- and that means what? Go to the next level for that.

[Audience: They are never going to achieve excellence.] Is that fair? They'll do okay. They'll have the famous slogan that every firm should put on its website, "We are no worse than anybody else." That's the main strategic plan of most firms. What else is an implication if those numbers are true, if they are true?

[Audience: Turnover.] We're going to get a lot of turnover because it's not an inspirational environment. Well, what you're saying is, the partners are telling us that they are basically bored to tears. And you want them to get excited about marketing and growing to bring in even more junk work that they don't care about! You guys are making the money. Most of the average firms pay good money. The issue is not that you're not making the money. The issue is that you've got an entire firm filled with incredibly intelligent, incredibly qualified people who have miserable lives.

If those were my numbers I would slit my wrists. I'll tell you why. Because I am not going to reach my tombstone with it saying, "He did tolerable work for tolerable people because they paid him." I'm not that much of a whore. These numbers say that the basic operational principle is, "Pay me and I'll do it but don't expect me to care. I'll fake it if you want me to." That's the dictionary definition of prostitution.

I hope I'm making clear that this is not an anti-commercial argument. You cannot pull away from the pack as a firm if this is how you view your work and your clients. The only way to pull away from the pack is to do stuff that turns you on for people you can care about. Because if you are doing stuff that excites you for people you can care about, you will get re-hired, you will get the premium things, you will get the referrals. You can go back to the dictionary definition of what it is to be a professional, which is putting the client's interests first, caring about your clients.

Deciding on the Level of Commitment

I will report to you that I can get eight out of ten professional firms to get an 85 percent majority vote to go for the gold -- because I can prove to the partners that they are very, very bored; that they are living in a world they can't stand; that they are sick of having no standards; and all it's about is billable hours. And how about we live in a place that's got high standards and we help each other achieve the standards?

I had a Dutch firm (I won't tell you where in the country) but it was a consulting firm and we went through this and I said, "Now, okay, we're going to have a vote. Which firm would you like to belong to?" And there were about 16 partners in this firm and we did a scale of one to five, with one being, "Let's not mess up," and five being, "Let's set and enforce high standards." Half the partners voted for one, and half voted for five. Now you're all advisors in one way or another. Give me your business advice. What would you advise that firm at this point? [Audience: Split up.]

See how easy the answer is when you are not personally involved? There is only one answer that is not about you, which is that the people on the left are not morally wrong. If they want to serve their local clients and just socialise locally, and the other people on the right want to be the hyperactive egomaniacs and write an article a month and get famous -- you can't argue about who is morally correct. All you can say is [that] these people should not be partners with each other. They want different things. It's like a bad marriage. You don't have to be unkind to your spouse but sometimes you just marry the wrong person. The best thing you can do is say, "We made a mistake. We don't actually want the same things. We need to be as nice to each other as we can and separate as fast as possible, so we can each get on with what we want in our lives."

Now, my point is, you all saw the answer when it was about somebody else. I'm going to say that this is your firm. You've got partners who want to really go for excellence and are prepared to accept the disciplines to do it, and you've got partners who just don't want to accept those disciplines. And the only right solution is to split the firm. You cannot run a firm if its partners fundamentally want different things, and you don't have enough guts to make that happen. Whenever there's an issue like that, you say, "Well, let's not address that issue. Let's bring in the IT people to develop something new."

Dynamos, Cruisers and Losers

I've talked about supervision. I've talked about quality. I've talked about liking the client. You can reject all of those and maybe it's something else. I'll just give you one more standard: the level of energy and ambition. I talk about meeting three kinds of partners -- dynamos, cruisers and losers. Please allow me to define these my way. It's not about business getters versus those who only do billable hours -- that's not the definition.

A dynamo is somebody who is always acting like they have a career, but in addition to taking care of this year, every year they are doing something to bring about their personal future. Am I making sense? Every year they're always saying, "Where do I want to go next and what do I do today to make that happen?" Am I making sense on what a dynamo is? Somebody who is acting as if he or she was in the middle of a career.

Losers -- this, by the way, is not about different people -- this is all of us at different stages in our lives. My theory is that you don't get through life without being a loser sometime. If you were Australian, it would be the usual reasons: divorce, alcoholism, cocaine, manic depression, the kids have been arrested again. You know that things happen, and at some stage in your life you're probably a loser. If you're lucky you deal with it and get back; if you're unlucky you get stuck.

Now the cruisers are a very important category. You can see by definition that the cruisers are not losers. The cruisers are your good, solid citizen partners. They come in each week and they make the sausages. They come in next month and they make the sausages. They come in next year and they make the sausages. And everybody knows those sausages are fabulous. You've got a sausage job, call Henk, because Henk is fabulous at sausages. The quality is there. The hard work is there. But Henk isn't actually going anywhere. All he's done for the last seven years is make sausages. In other words, he's acting like he's got a job, but if you said to Henk, "Where do you want to go next, Henk, with your career? What kind of transactions do you want to be doing three years from now?" he'd say "sausages." Henk has no particular desire to advance his professional career. So if you accept my definition, a cruiser is a good solid citizen, meeting every standard you've got, but acting as if he or she has a job, not a career.

Another guess from you, please. In the typical firm -- don't get optimistic on me, don't get pessimistic, give me your best guess -- what percentage of all the partners might fall into those three categories? [Audience: 15, 75, 10.] If that guess is correct, tell me what it means. If that's the makeup of the typical partnership in the typical firm, what flows from that fact? That only 10 percent of the partners are trying to get somewhere. Seventy-five percent are absolutely good solid citizens, let me say that quite clearly now. What flows from that mixture if that's accurate?

[Audience: They're not going anywhere.] So just don't waste your time with strategic planning. Just don't bother. Leave them alone because strategic planning in that environment is like trying to figure out which way should we point the thundering herd when the herd isn't thundering. The issue is not direction or strategy. The issue is, do they or do they not have the appetite to go somewhere? You can get by. I know 75 percent of partners who have never wanted to go anywhere for the last 30 years. And they're on not a bad income. But if you've got a partnership made up of three quarters who don't want to go anywhere then don't come to conferences on technology and strategy and marketing and branding because these people are not interested.

We come to the choice again. The choice is in which gang you want to belong to. The tolerant gang says, "If you want to cruise, that's okay. Not only is it acceptable, but it's actually the overwhelming norm," just like your law firms. The overwhelming norm in this law firm is that everybody cruises. And if that's what you like, stay with it, God bless. Or you could say, "How would you like to join a law firm where the rule is that you've got to be learning and growing or otherwise you're not meeting your requirements as a partner? It's something we have a right to expect of each other, that we are all continually learning and growing." Notice there's an option here. The choice is whether you want that standard in your partnership agreement.

What it Really Takes

I'll give you one more, very silly example. Some high school students I know say, "Richard, how do I do well at university?" And my answer is always, "Go to class; do the homework." And they say, "No, what's the secret?" "Go to class; do the homework." "But there are these parties, Richard." Well, if you want to be a party animal and work at Burger King for the rest of your life, do it. You know, I'm not going to tell you what to do with your life, but if you want me to give you dispensation to say you can get the benefits without doing the work, sorry, I won't play that game. If you want to get a benefit in life, you've got to do the work.

You keep getting seduced by consultants like me who come in and develop the next strategic slogan or the next branding or the next positioning because you think that as long as you just announce it you'll get the benefit. You get no benefit by announcing anything. You get the benefit of that which you actually do. I'm sorry that it's so intellectually trivial but it's a lesson most of you still need to learn. You get the benefit of that which you actually do, not that which you encourage. Just don't pretend. You pretend to have a commitment to client service, you pretend to have a commitment to supervision and you pretend that your partners are energetic. Your partners are not energetic -- they're asleep. And pretending gets you nothing.

The way you make money in business is not to be good at managing the money. The way you get money in business is that you decide what you want to compete on, whether it's quick delivery at McDonald's or fabulous cooking for some cuisine connoisseur or whatever it is. You don't have to be McDonald's and you don't have to be the best restaurant in town, but you had better decide which you want to be, and once you've decided which it is you want to be, the key to making the money is enforcing the standards appropriate for that choice. The thing that makes the money is not the money. The money is an outcome of how high your standards are. He or she who has the highest standards wins.

You get the partners together and say, "What standards do we want to live by? Should we all be expected to be dynamos? Should we all be expected to learn and grow? Do we think we're prepared to accept accountability for supervising the work? Should we be accountable for our clients' satisfaction?" You do not say, "Is it a good idea?" The question is, are we willing to be accountable? Quite simply, what are the rights and responsibilities of a partner? What do you have to do to be a member of this firm? That's all I'm saying you should debate. And at the moment all it is, is be billable and don't get us sued.

Notice the topic applies no matter what the issue is we're talking about -- collaboration, client service, supervision -- be energetic. Your problem is not those topics. Your problem is the inability to pass a law, the inability to establish a standard that you're actually willing to enforce. That's the problem. It's not what the standard speaks to. It's the fact of a standard, because you've bought into this medieval notion of a partnership, which is that a partnership is a place of no standards and the partner can do what he or she wants to do.

All I'm trying to say is (and I hope this is clear) that this is what a strategy is for. It's something we all agree to do and are prepared to be held accountable for. But notice, that last clause must be there. If I agree to do it, but don't hold myself accountable, that is not a strategy. This is not a moral point, just a simple fact of life. If people aren't willing to be accountable for it, it's not going to get done well enough.

That's a recommendation I suggest you do with your firm. Take your mission statement off the website, turn it into a questionnaire and say, "How well are we living up to this mission?" Now that is my point. You've probably got a great mission -- I do not recommend changing it -- I'm just saying there is no point having a mission if you never live up to it.

So the real next step for you is to put in place something that keeps you honest and is sent around every quarter saying what all of us think about how well we're living up to our mission statement (and is sent to your clients, too). And again, that's not a moral point. If you really want to live up to it, make it as embarrassing as possible not to do it. If you really want to make something happen, the best way is public exposure -- you'll do it.

Making yourself a promise that you'll lose weight this month doesn't do anything compared to turning to your spouse and saying, "I give you permission to withdraw marital favors if I don't do it." You know, if you really want to make something happen for yourself, the way to keep yourself honest is design an embarrassment mechanism by making the commitment even more public.

The Research Results

Let me tell you about the results reported in my latest engagement. I went to one of the global marketing conglomerates and said, "Will you give permission for me to survey everybody, in 139 offices around the world, in 29 different businesses, and will you also give me the financial results for every one of those offices for the previous three years?" Some of these companies are high leverage, some of them are very low leverage, some of them work for the CEO and some of them are just dealing with purchasing officers -- there's a huge mixture of the types of businesses they're in.

I threw all the answers to 74 questions from 5,500 people in 139 offices into the computer. (I asked them, basically, about the culture of their office.) Then, as I told you, I got the financial results of the office for a three-year period. So I threw all the financial results in, and I said, "Dear, beloved computer: I'll stay out of it. Don't let me interject any of my biases. Are there some things, some attitudes of people in the business, that are more predictive of profits than others?"

It's pretty simple technology and the computer said, "Yes!" Nine factors account for more than 50 percent of all profit differences:

1. Client satisfaction is a top priority at our company.
2. We have no room for those who put their personal agenda ahead of the interests of the clients or the office.
3. Those who contribute the most to the overall success of the office are the most highly rewarded.
4. Management gets the best work out of everybody in the office.
5. Around here you are required, not just encouraged, to learn and develop new skills.
6. We invest a significant amount of time in things that will pay off in the future.
7. People within our office always treat others with respect.
8. The quality of supervision on client projects is uniformly high.
9. The quality of the professionals in our office is as high as can be expected.

Look at number 7. If the people in the firm, in the office, agree with the statement, "People treat each other with respect around here," then I can prove you will make more money than if the people in the office don't agree with that. It plays to a hell of a lot of values that many of us share.

Here's the test. In order to get that benefit, you must not only advocate that standard -- the message of the data is you make the money when you enforce that standard. What it's saying is [that] if you've got a partner who does not treat others with respect you must counsel that partner, and if the counseling doesn't work you must fire that partner. We do not accept as a partner somebody who does not treat others with respect. If you're prepared to go that far, you'll make more money.

Again, look at the others; number 2 is teamwork. The news is the team players are winning. It doesn't say, "We are team players around here." I can prove you will not make more money if people agree, "We are sort of, kind of, team players." I can prove you will make more money if people in your firm say, "We have no room for any individualist who puts him or herself ahead of the team." If people in your room say that's us, I can prove you'll make more money. Teamwork wins. And again, that's not a new idea. This is not meant to be an intellectual contribution that I'm making. This is boring old rubbish.

"Around here you are required, not just encouraged, to learn new skills." Now again, I'm not a moralist; I'm purely reporting data. If the people in your firm say, "Yeah, that's us. In our firm you are required, not just encouraged, to learn new skills," then I can prove with hard data that you will make more money because people who are always adding to their skills make more money. This is not hard, intellectual stuff.

You can see the rest of the list. Care about your clients, act like team players, supervise the work -- do you see that one coming in at number 8 there? You make more money if the people in your office say, "The quality of supervision is high around here." Again, my whole point and my whole message is this is pre-biblical. This was the work manual for the pyramids. If you want to know how to make a lot of money, stop looking for the latest consultant's intellectual contribution. It's not the latest technology, but technology will help you do all of these, just like EDS. Let's have a web-based client feedback system so that when the client logs feedback, every partner and junior staff member in our firm can see what the clients think of every partner. Now, all I'm saying is I'm not moralist. I'm not saying that's a morally good idea. I'm just saying [that] the quality of client service will go up if you do that. The technology will offer you new ways to enforce old ideas, but you've got to really believe the old ideas first.

Now again, please notice -- these are not my values. I did not choose these. This is purely numbers. I said to the computer, "What best is correlated with profit/performance?" and the answers are these things. Now again, I must confess I like it. It makes sense to me; it's basics. But I didn't choose them.

In other words, we have evidence that you win if you enforce standards on basic things. It's not about pay. We should all be in this together, all committed to each other, and what makes us in this together is that we enforce our common standards. Personally, I believe that's how you make the most money. Unfortunately, law firms don't want to manage that much. The idea of actually having to manage partners makes them break out in spots. So they stay tolerant and often introduce a differential reward system. "We'll still be tolerant. We'll just pay the higher achievers more and the low achievers less and leave everybody alone." And personally, I'm not sure that's as good a solution because you heard me say the issue is not compensation; the issue is standards.

Morale and Company Performance

by Editors at BRW 2001

from Business Review Weekly (Australia), 2001

Why don't enough companies care about the issue of low morale, especially considering its impact on the bottom line?

RW: Most managers do care about morale (or at least want it to be higher), but whenever there's a trade-off between morale and short-term cash, cash wins every time. The issue is expediency. So rather than take the time to coach someone who needs it, the manager dashes off to make the next sales call. There are very few bad people out there with bad intentions, but there are lots of managers with bad habits.

Second, most of us who were trained in business were taught nothing about dealing with people. We were taught analytics, systems, processes. How do you energise someone? How do you enthuse a group? How do you get people to buy into your vision? It's actually a skill that many of us lack. Most of us (including me) are not naturals at it, and as a result it's hard emotional work, which is much tougher than intellectual work. And when we fail, instead of saying "I'll try harder next time," we tend to react by saying "Ah, forget it. This ain't my thing." So we fail to improve.

How much does it cost to "fix" morale?

RW: Nothing. If you've got an enthusiastic, excited, motivated, enthused, driven, passionate, ambitious workforce, you'll save a bundle on recruitment and retention costs; you'll be hugely more efficient; and, since the people will work harder, your unit labor costs will go down. That's what it looks like once you're there, so what does it take to get there?

Contrary to common belief and practice, it has little to do with extras like free day care, concierge services, beer bashes at the beach or things like that. (Although they don't hurt at all!) What I've been able to prove with my global statistical study is that it's all about the character, beliefs and behaviour of the local unit manager. In other words, if you've got managers in place who actually know how to manage, you can take the same market conditions and the same employees and make a lot more money. That's not going to cost a lot of money (except for severance pay for existing managers who can't change.)

In many businesses, the manager is chosen because he or she was the best business-getter, or the best technically, or the most senior, or the most comfortable with financial reports. It turns out that none of those are key. You need to choose that person who best has the ability to challenge, cajole, excite and enthuse a group of people into doing what is truly their best. They then serve your customers extraordinarily well, and that's how you make the money!

How did you uncover the link between employee satisfaction and a company's performance?

RW: I approached a conglomerate that has 139 offices in 15 countries and asked them if they would not only let me send out a 74-question survey to all their people worldwide but also give me the financial results (profitability and growth) of each office. And they did!

I then threw it all into the computer and, using standard statistical techniques, asked which employee attitudes, if any, were correlated with financial performance. Financially successful businesses did better than the rest on virtually every employee attitude. I was able to prove that attitudes affected the financial performance, and not the other way around. The big message is that success is not about any one employee topic of, say, coaching or training or pay. Financially successful companies did it all better. It's all about where you think the main lever is to influence your business. We all say that we care about clients, profits and people. But which causes which? Which should occupy your attention? I've been able to show that there is an order and it's this: managers excite people who serve customers who pay money. So if you want the money, focus on what produces it!

From your experience, what is the happiest workplace you have encountered and why?

RW: What's happy? I used to work at one place where everybody was content, glad to be where they were, and none of them were really striving for excellence or to achieve anything else with their careers. The place was doing OK. They were content.

Is contentment the same as happiness? Not for me. I've also worked at places where everyone was challenged, stretching themselves to the limit, and all felt proud not only of themselves but of their colleagues. They acted like a group of people who really were out to win the Olympic gold. Were they happy? You bet! Yet they were working harder than the other folks, to higher standards. The key point (and this comes out of the study in my article) is that the people who are making the most money and are the happiest are those who are treated like they are part of a team that is going somewhere, is doing something meaningful and takes their standards seriously. Not everybody wants to be part of that, but those are the guys who are winning financially.

From your experience, what is the worst workplace you have encountered and why?

RW: There are many types of "worst." One is the Dickensian sweat shop that just wants to hire output machines that happen to be biological entities (hence the term "human resources") to churn it out. I know a lot of those places. But for me, I can actually develop a grudging respect for that, because many of the employees working at those places don't want more. They wouldn't want to be on the Olympic team. Too much like hard work! They just want a job, a paycheck and no hassles. It's a deal with the devil, but if both sides understand what the deal is, who am I to say no?

Far worse, in my view, are the "muddle-through," "it's all right," "mustn't grumble" kinds of places filled with bright people who are operating far below their potential. They're spending their lives doing tolerable stuff for tolerable customers because "it's a living" and "what else can you expect? It's just work." These are companies that are always pretending to be going somewhere, but never do because the managers have no follow-through, no theory of the business and no real standards. "It's about the money. If you pay me I'll do it!" There's a word for that, of course! I think that's a human tragedy and I see it all too often.

In what ways do some consultants fail when they come in to "fix" morale? e.g., what are your competitors doing wrong that you are doing right?

RW: I don't blame consultants, I blame the managers that hire them. There's an incredible appetite for quick fixes and add-ons because they allow you to think that you don't need to change the way people are actually being managed. I mentioned some before, but here are others: dress-down days, tinkering with benefits and reward systems, focus groups and employee surveys. All good ideas, but none of them the real point, which is to improve the quality of management. The data I have is very clear: success is about personalities, not policies.

I've got many, many suggestions, but here's one. Survey everyone in each operating group and ask them if their manager

1. Enforces the values articulated in the company's mission statement
2. Acts more like a coach than a boss
3. Gets the best out of everyone in the group
4. Ensures that everyone in the group treats people with respect
   
5. Refuses to tolerate individualists who disrupt the group's teamwork
6. Makes client or customer satisfaction the top priority of the group

Then publish the results openly to everyone in the company, and let every manager know that if he or she cannot get top scores within, say, 18 months, then he or she will be removed from a managerial position! I absolutely guarantee that if you did that, employee morale would go up and you would see a dramatic increase in profits.

Notice, none of this is about being nice, or gentle, or undemanding. That's not what produces high morale. I can prove it! It's about what my article is about! Set high goals that people can believe in and actively work to help them get there. That's motivating!

Is it possible to estimate how long it will take to rebuild morale?

RW: You can turn it around very quickly (in three months) with a great (new) manager. All he or she has to do is fire the selfish SOB who makes a lot of money for you but who treats people around him or her badly. Tell everyone why you did it. I've seen this in action, and it's incredibly powerful. At the opposite end, tell the lazy buggers that they can have any support they want (training, coaching, tools, personal attention) for 18 months, but that if they don't shape up in that time, they're out. The vast majority of the rest of the employees will be cheering. Standards at last!

It's almost impossible to turn morale around with the existing manager, because everyone has come to disbelieve that this person actually cares about them (or anything else except themselves.) Leopards don't change their spots, or at least people don't believe that they do.

Key Account Management

To help professional firms design and implement programs for key account management, I have interviewed clients of firms in a wide variety of professions and countries to obtain those clients' views of their relationships with their outside providers.

Many of these clients' concerns are similar. A few of the more commonly expressed concerns are these:

• They are only interested in selling their services, not in solving our problems.
• They don't do anything to make us feel that our business is important to them. We are taken completely for granted. They never call up to inquire how our business is doing. We only see them when they want to sell something.
• The quality of service is variable between departments and locations. We don't have the patience for "adequate." There's no point courting us at HQ unless they're impressing our people everywhere. We consult broadly with our executives before deciding whether to use them again.
• There are few signs that they're really listening to us. They bring us generic issues faced by all companies. We want to hear about the specific opportunities for, and challenges facing, our company.
• We don't want to be "romanced": We already have many opportunities to go to fancy dinners or attend sporting events. They should focus on being useful to us, not on becoming our friends.
• Their main problem is at their junior level: More quality assurance is needed. We are sceptical about the value of a lot of what's done by their junior people.

A number of key conclusions can be drawn from this list. First, it is clear that clients want their providers to earn future business. They don't want a "sales pitch." The emphasis in key account management must clearly be placed on investing the firm's own time to build the relationship. This notion is in direct contrast to what many firms have in place. Rather than relationship plans, firms tend to draw up sales plans. The difference is readily apparent to clients.

Second, it is clear that account management for a major client is not a simple matter of a single member of the firm (the key account manager) focusing his or her attention on a few key decision makers.

A proper relationship with a major account requires the full participation of a large number of people who service or deal with the account. Everyone who participates in serving the client can, and does, affect the relationship. Multiple contacts must be established, and a consistency of service and attentiveness must be attained.

Next, it is clear that clients want their outside providers to spot their specific needs and opportunities, and to customise any suggestions for additional work. This also requires teamwork among all the outside firm's people, since the key account manager is often poorly positioned to identify the client's emerging issues.

It is often the case that the client CEO and other HQ personnel are among the last ones to know about emerging issues. Frequently it is the client's junior executives and "field" people who are most aware of developing issues and are most willing to talk openly about them. Accordingly, the junior professionals on the provider's team, the individuals who have the greatest contact with these people during the current engagement, are often best positioned to surface new needs.

Finally, the clients' concern about junior-level people is not an absolute distaste for young people but rather for the fact that they are placed on major accounts in an unsupervised, untrained fashion. Internal training and good project supervision, it turns out, are major account retention and growth instruments. Unfortunately, many senior people at professional firms fail to pay attention to these instruments until disaster occurs.

What Clients Want

What do clients want firms to do to grow their relationship? Here are a few of the most commonly expressed suggestions:

• Make an impact on our business; don't just be visible
• Spend more time helping us think and helping us develop strategies
• Lead our thinking. Tell us what our business is going to look like five or ten years from now
• Place some of your people here for a couple of months so they (and you) can truly "know" us
• Schedule some off-site meetings together. Join us for brain-storming sessions about our business
• Provide more benchmarking studies comparing us to our competitors
• Do more things "on spec" (i.e., invest your time on preliminary work in new areas)
• Jump on any new pieces of information we have, so you can stay up-to-date on what's going on in our business. Use our data to give us an extra level of analysis. Ask for it; don't wait for us to give it to you
• Make an extra effort to understand how our business works: sit in on our meetings
• Tell me why our competitors are doing what they're doing
• Discuss with us other things we should be doing -- we welcome any and all ideas!

What many of these suggestions have in common is that they are about expending serious effort on getting to know the client's business and industry in great depth. Some of this exertion can take place in the professional firm's "back room" (conducting studies, benchmarking, etc.).

However, much will require greater contact with the client. It is notable that while clients want more contact, they want it to be in settings that allow mutual discussion and exploration of the issues.

It is also clear that clients want a business partner, not a friend. The good news is that clients clearly do want to be brought new ideas: they want a relationship.

The Key Account Manager

How does a firm respond to these client needs? The answer, increasingly, has been to develop a system of key account managers who are responsible for the firm's total relationship with each key client. These managers have the responsibility of managing (and growing) their firm's relationship with major clients, co-ordinating professionals across the various disciplines of the firm and often across geographic boundaries.

Since geographic or discipline groups are frequently made up of separate profit centres, the role of the key account manager remains a complex and often ill-specified responsibility. Even where such positions have existed for many years, there continues to be significant experimentation and frequent change as client needs and the required response from firms continue to evolve.

Luminary or Manager?

The most important decision that must be made in determining the role of the key account manager is which direction he or she should be facing. Should the key account manager be primarily a "luminary," the firm's representative to the client (i.e., facing outward), or should he or she be facing inward, acting as the client's representative to the firm (perhaps even the client's advocate), ensuring that all of the firm's resources are brought to bear on the client's problems?

Naturally, both roles must be played, but the most effective key account managers I have encountered see themselves primarily in the second role. The logic of this should be clear: If you ensure that the client's needs are met, the firm will benefit.

Many firms refer to their account managers as "relationship officers." This captures a profound truth: Key account managers are most effective when they focus on the (long-term) issue of strengthening the relationship. When key account managers see themselves primarily as salespeople, focused on generating more fees from the client, they are less well accepted by the client and become less effective.

Many key account managers see their role as carrying the primary burden of building the relationship. This is usually a mistake. The job is to manage the relationship, not to try and build it alone. The team of people serving a major client should be made up of individuals from all levels of the organisation, from numerous disciplines and many geographic locations. The team must serve this client, and the team should be responsible for building the relationship. This creates a managerial task of no small proportions.

Key account managers must truly be managers, since key account teams are rarely simply defined organisational units. While the account manager may be dedicated to serving his or her key account exclusively, few of the team members will be. Most frequently, their work for the key account will be only one of a number of responsibilities they bear.

While in aggregate the key account may be of major strategic significance to the firm, each team member's portion of that account may be only a minor activity compared to the priority clients of his or her office or of the discipline team to which he or she belongs. Accordingly, the job of the key account manager is to create the team to serve their mutual client and then to energise and motivate that team. This means devoting significant time to being a terrific coach.

Influence Without Authority

Key account managers often have responsibility without full authority. Team members assigned to their account report primarily to local discipline and geographic business unit leaders, who are often the primary influences on the team members' performance appraisal and reward. Accordingly, many key account managers must learn to manage without having the power of the purse to influence their team members.

Fortunately, this can be done. While money is a major motivator, there do exist a number of "non-financial currencies" available to the key account manager that can be used to attract and energise members of the client team. Among these are the following:

• Challenge
• Meaning
• Participation/involvement
• Visibility (inside and outside the firm)
• Contacts
• Special roles or assignments
• Access to information
• Access to additional resources
• Personal interest
• Recognition
• Appreciation and approval

The key account manager's task is to make the team members want to participate actively in serving and nurturing the account. This can be done by providing what they often do not find in their regular work. Among these things are challenge and meaning. In principle, work for key clients should be exciting and challenging, even more so than serving other kinds of clients. However, meaning and challenge should not be taken for granted. In the hurly-burly of busy professional lives, it is easy to lose sight of the significance of what you are working on. Effective key account managers work at helping their team members find the excitement, the challenge and the drama in their client's problems.

Effective key account managers also work hard to make the people on their team look good. They create opportunities for other team members to participate in highly visible activities that help their careers. They are willing to suppress their own ego needs and to work hard to give the team members valuable client exposure. They work hard to create new contacts for the team members and to get them involved in stretching, learning activities that are out of the norm of the team members' daily lives.

Outstanding key account managers are always looking for ways to be helpful to their people before they need those people's (often last-minute, emergency) assistance. They think about ways to make it easier for their team to serve the client. They give them tools, research, industry and client information, all in easily digested form.

They arrange for someone to read, summarise and circulate every trade magazine, industry association publication and financial analyst report in their client's industry, so that all team members are up-to-date about what's going on in the client's world.

Good managers go out of their way to make their team member's lives easy in ways large and small, because the best way to get someone to co-operate with you is to do them a favour first.

Above all else, the best key account managers travel a great deal. They maximise the amount of contact not only with client personnel but with their team members. They demonstrate a personal interest in every person on the team, and use the immense power of face-to-face appreciation to motivate enthusiastic involvement in their account. They work on the principle that if they serve their team, the team will serve the client.

Summary

The most important fact to note about key account management is that it is an investment activity for everyone involved. While it is relatively easy to define the roles and responsibilities of the key account manager, ways must be found to convince and reassure other team members that participation in the key account program is a valid, recognised firm activity, even when it is not billable.

It is for this reason that some firms allow the key account manager to "buy" the time of other personnel for what would otherwise be non-billable activities, thereby allowing those helpers to get "full billable credit" for their participation. Significant (non-billable) budgets must be set aside, and the program should be launched with a longer-term perspective than the traditional "fee credits" or "bookings" systems usually allow.

The best news is that key account management is in everyone's interests. Clients want it, and it benefits the firm by growing relationships and generating new fees. Done properly, it can provide career-enhancing opportunities for every professional involved. Studies in many industries have proven the economic benefit of creating customer loyalty, and my own work with professional firms over the last 15 years have convinced me that there is a clear link between profitability and success in nurturing key accounts. It's hard work, but it's a clear path to economic success.

Managers and Values

by Greg Thomas 2001

from weLEAD Online Magazine, 2001

Richard Wood is recognised as one of the leading authorities on the financial management of professional service organisations. He consults and advises on a wide range of issues, from financial management to marketing. Richard gets to the heart of a matter in a down-to-earth and colourful style. He has authored a number of other acclaimed articles.

Richard, I have completed reading your latest article, Practice What You Preach, and found it to be very insightful and well written. Many of the leadership professionals who write articles for weLEAD Online Magazine emphasise the importance of "personal example" or "walking the talk." Your article confirms this point. What events or experiences led you to write Practice What You Preach?

RW: After 5 years as a consultant, I thought I had learned some lessons about good management. When I shared these with my clients, they would usually agree that what we discussed was sensible and logical, but they would always ask "But does anybody DO that?" I would trot out my anecdotes and stories of famous companies and managers, but neither my logic nor my stories seemed to be satisfying to my clients. So I decided to collect some systematic data on what successful businesses were doing differently from the rest. To my delight, the evidence confirmed what I suspected all along: the best performers were not doing things that others didn't know about, they were just doing them. Business is a lot less complex than we try to make it. Does any leader not know the importance of client focus, outstanding teamwork, continuous learning for everyone and the rewards of quality? We all know this stuff. But how many leaders can confidently say that those standards are lived to a high level in their operations every day? The problem isn't what we don't know about how to win. The problem is that we're not doing it.

The real lesson of the article was the fact that the most successful operations were led by individuals who did not merely advocate these standards as a matter of business opportunism ("Oh well, I suppose we had better try quality, if we have to"). They were led by people who lived and breathed the standards they advocated, almost to the level of religious enthusiasm. It turns out that if you want to get your people to follow the standards and principles you preach (and that will make you money) then they must believe that you mean it, that these are real principles, values and standards with you, on which you will not tolerate non-compliance. Very few managers believe in ANYTHING to that level, or at least they can't convince their people that they do. As one company said to me, "Our values only apply to you if you don't have a book of business." Notice that when I use the word "values," I'm not trying to be moralistic or religious; it's nothing more than a strict set of standards that make up your theory of how you are going to win.

What should a leader or manager do when their personal values differ from the organisation's values?

RW: There are only three choices. One, fight to have your values in place where you are in charge. Don't wait to convince your superiors, or to get permission. Just start running the place according to what you believe in. If they want to fire you, fine. But since we are talking about values that breed employee commitment, excellence in client service and extra profits, they won't fire you. In other words, prove that what you believe in works. Second option, quit. Life's too short to work with and for idiots. Unless you're a Buddhist or a Hindu, you probably believe you only have one life to live. Do you really want to spend the one life you were given doing things you don't believe in? The third option is to buckle under, give in, give up. You don't really believe those values anyway, do you? You certainly can't have believed in them if you're prepared to compromise them. But it's not my job to be a moralist, and it's the option most business people take: compromise, concede and get on by going along. If you want to do that, it's your privilege. I just want to meet my maker saying, "I failed often and I made lots of mistakes, but I really did my best." Perhaps even more important, I want to look myself in the mirror each morning and be able to say the same thing. Nobody knows what real truth is, and you can believe lots of different things. But someone who doesn't believe in anything, who has no fixed principles, isn't going to attract much of a following. He or she cannot be a leader, because no one will follow.

What do you believe is the single most important quality or lesson the survey revealed?

RW: It isn't about systems. It isn't about processes. It isn't about strategies. It's about having managers in place who know how to excite, enthuse and energise people. Again, this isn't "be nice to people" time. It's strict logic (and now data). To make money, you've got to serve the market-place to superior standards. To do that, you've got to be able to get your people energised, excited and enthused to never settle for competence, and see the fun and drama and challenge in never settling for less than excellence. And to do that, you've got to have a manager who knows what he or she is doing. What this sequence shows is that if you want to make bucketfuls of money, the only way to do it is to begin the chain of events that produces the money, and that's to focus on getting people excited. Yet the truth is that most managers focus on the money and neglect the people's enthusiasm levels. (Keep your heads down and grind it out, ye swabs!) Somewhere mangers got told that this was good businesslike behavior that produced the most money. Somebody's been lying to these managers. It isn't how the game works!

Richard, some leaders or managers have personalities that lack expression or emotion. What are some of the ways they can get people "energised"?

RW: I hope I haven't miscommunicated either my findings or beliefs. It's absolutely not about being an extrovert. In fact, extroverts make bad managers (which is why I'm solo)! The best managers in my research are even-keeled types. As I said in the article, they manage with a style of insistent patience. Patience in that they don't expect Rome to be built in a day, but insistent in that everybody understands that we are building Rome; we're going for the gold, we're going to be excellent and never settle for competence. They create energy, drive and enthusiasm in others, not by force of personality but by getting them to believe that we ordinary people can accomplish great things if we really try. It's the degree of convincingness (if that's a word) that the leader can create that we are doing important, meaningful things with our work lives that are worth our commitment. Being convincing on that point doesn't take open displays of emotion; in fact, it's usually the opposite. Think of Gandhi, think of Mother Theresa. We follow because of the strength of their convictions, not their bubbly-ness!

You use the words "manager" or "managing" often throughout the article. How do you personally see the difference between a "superstar" manager and a leader?

RW: I hate definitions and labels: all that matters to me are behaviours, skills, attitudes and actions. Put whatever label you want on it. I like the word "management" because it comes from medieval French and, literally translated, means "the holder of horses." The manager's job is to get all these feisty stallions and broncos to move at roughly the same pace, in vaguely the same direction. The skill is not the vision, "Let's go this way, folks!" Direction is very valuable if you can manage the horses, but if you can't it's kind of irrelevant. The managers I studied were not visionaries. They got incredible performance out of people by having clear standards and principles that they operated by, and people could decide whether to opt in or opt out. But if you were in, then the value statement wasn't just a bunch of aspirations; it was a set of non-negotiable minimum standards: You will keep learning! We will never compromise quality, no matter what the financial temptations. We will be team players to the extent that we'd fire our biggest business-getter if he or she didn't join in and tried to be an individualist. You get the benefits of that which you are prepared to enforce, not that which you hope to be someday.

In a dynamic section in the article, titled "The Courage to Manage," you state, "In my experience, the single biggest barrier to implementing any strategy is courage." Would you expand on this statement for our readers?

RW: It's real simple, and it's real tough at the same time. Everything we want in life takes effort and discipline, and that comes first, with the payoff later. Want to be thin by Christmas? Then diet and exercise now. Want to do well in university? Here's the secret; go to class and do the homework! Want to do well in business? Never compromise on outstanding quality and service to your clients and customers, energise your people and act like team players. Any questions?

So what's the problem? Why didn't we all get great grade point averages; why aren't we all fit? Because life is filled with daily temptations: attractive, deeply satisfying acts of expediency. (Hey, want to party tonight? Doesn't that cream donut look good? How about taking in a little off-strategy work; c'mon, it's cash! You weren't really serious about that strategy rubbish, were you?)

We don't need help figuring out what works. We need help finding the courage to stick to the diet. Human beings are incredibly short-term focused, and it's hard to work on an improvement program if all you care about is how it feels today. If we're going to make it, we have to really want that goal, really believe in our bones that it's worth striving for and really believe that there are no quick fixes, that the only way to live is doing the right thing. (Sorry, can't come to the party, got to study!) That's courage, and that's what it takes.

The articles balances a lot of beneficial information with actual "case studies" of high-performing offices or organisations. Which case study did you find most interesting and why?

RW: I hate to wimp out on you, but I can't pick. Readers can decide for themselves, but to me the whole point of the nine case studies in the article was that, in different words, each of these leaders (and their people) were saying the same thing, again and again. You can read one case study and get the point. I suppose my favorite is the British company (I can't tell which it is). But if even the Brits can believe in the power of openly expressed passion, ambition, enthusiasm and can show that you can make a bundle of money doing it that way, well, there's something powerful going on!

What is your next project? Any more articles planned in the future?

RW: I've already authored my next article, due out in April 2002. It's called First Among Equals, and is a detailed how-to article on how to manage a group of professionals. Only seven or eight months to wait!

Thank you, Richard!

How to Give Advice

Many professionals approach the task of giving advice as if it were an objective, rational exercise based on their technical knowledge and expertise. Alas, giving advice is almost never an exclusively logical process. Rather, it is almost always an emotional "duet" played out between the advice giver and the client.

If you can't learn to recognise, deal with and respond to client emotions, you will never be an effective advisor.

Early in my career, the management team of a large professional firm asked my opinion about how they were conducting their affairs. I responded with a very direct and candid answer. "Here are the things you are messing up," I said, "and this is what you should have been doing!"

To my surprise, I was fired for being a disruptive influence. This was hard for me to understand because I knew (and they knew) that I was correct in my diagnosis and prescriptions.

Eventually I learned the obvious lesson. It is not enough for a professional to be right: An advisor's job is to be helpful.

Among other things, I had to develop the skill of telling clients they were wrong in such a way that they would thank me for giving helpful advice! I had to learn how to disagree without being disagreeable.

Proving to someone that they are wrong may be intellectually correct (and let's be honest, occasionally fun), but it is not particularly productive for either the client or the advisor.

Criticising one's clients is, by definition, a part of every professional's job. However, suggestions for improvement always carry the implied critique that all is not being done well at the moment, and it is usually the person hiring you who is responsible for the current state of affairs.

Lawyers are usually retained by the in-house general counsel, accountants by the chief financial officer, marketing and communications consultants by the vice president of marketing and actuaries by the head of human resources or the pensions officer. More often than not, the person hiring you is a key player in the issues you are being asked to address. The advisor therefore needs to tread carefully!

Because of this, the diagnosis and solution of a client's problem can never be performed without considering the sensitivities, emotions and politics of the client situation. No matter how technical one's field or discipline, the act of giving advice is crucially dependent on a deep understanding of the personalities involved and on the ability to adapt the advice-giving process to the specific individuals involved.

The Client's Perspective

To understand some of the emotions surrounding the client's use of professionals, think of the personal risks (reputation, promotion opportunities, bonuses, perhaps even one's career) that go along with the responsibility for choosing (and working with) any outside provider for a risky or expensive corporate matter. How would you like to be known by the board as the person to blame if the corporate headquarters designed by the architect you chose doesn't work out? If the major lawsuit is lost? If the new marketing campaign fails to deliver the goods?

Viewed in this light, the client has every right to enter the process of using an outsider in a high state of anxiety. What's worse, the client's inevitable caution and trepidation are reinforced by the fact that outside professionals often see complications in a project that the client doesn't see.

In fact, it is an essential part of the professional's craft to reveal nuances, problems, barriers and issues that the client is unaware of. If these are not conveyed with tact and skill, the client could easily believe (however unfairly) that, rather than relieving fears and being helpful, the professional is creating complications.

There are other emotional issues usually present. In the normal course of their business lives, client executives are people of accomplishment, authority and respect within their organisation. When hiring an advisor, they are forced to place their affairs for an uncertain period of time (and cost) into the hands of a practitioner of an impenetrable art, who often uses indecipherable jargon and engages in mysterious and unexplained (but probably expensive) activities. It is predictable that the average client experiences unwelcome feelings of dependency or loss of control.

What clients really want is someone who will take away their worries and absorb all their hassles. Yet all too often, they encounter professionals who add to their worries and create extra headaches, forcing them to confront things they would prefer to ignore. ("Doctor, I came to you about my sore feet, and you are giving me grief about my weight. Can't you just treat my feet and leave me alone about my weight?") Since clients are so anxious and uncertain, inevitably they are looking for someone who will provide reassurance, calm their fears and inspire confidence.

It can take some time for many professionals to realise that it is a central part of their profession to develop these skills. Certainly no one ever teaches us these skills in our professional training, neither in school nor inside the typical professional firm.

A Chat with Mum or Dad

Essential to being an effective advisor is having a good understanding of one's role. This is illustrated by something a lawyer once told me: "Sometimes I feel like I'm explaining things to a child. My client can't seem to grasp even the basic logic of what I'm trying to convey. I feel like saying, 'Shut up and just accept what I'm telling you -- I'm the expert here!' "

What makes this lawyer's comment so understandable is that in almost every advisory relationship, the client is usually untrained in the professional's specialty, while the professional may have seen the client's problem (or variants of it) many times before. There is thus an almost natural tendency to come across to the client as patronising, pompous and arrogant.

While it is understandable why advisors can feel this way, it is equally clear why clients resent it. After all, when I'm the client, I'm the one in charge. If I don't understand what you are saying, then maybe the problem is you, not me.

Maybe you don't know how to convey what you know and understand to a lay person. Of course I don't know your field; that's why I hired you! Explain it to me in language I can understand. Help me get it! Your job is not just to pitch solutions at me, but to help me understand why your recommended course of action makes sense. Give me reasons, not just instructions!

Although advising clients sometimes feels like explaining things to a child, the secret to becoming a good advisor is to do exactly the opposite: Act as if you were trying to advise your mother or father.

If you are going to convince Mum or Dad to do something, you are more likely to find the right words to convey your point so that it comes across with immense amounts of respect, so that the implied critique is softened as much as possible.

This doesn't mean avoiding the issue or rolling over and playing dead to whatever they say. It may be that what they are doing is disrupting the rest of the family or that it goes against their own interests. You need to get your point across. Nevertheless, you must enter the encounter with the right attitude and with careful attention to phrasing.

When talking to a family member or a client, a primary task is to diffuse defensiveness (which, it should be noted, is always present). If you are to influence a parent, you must find a way to prove that you are trying to help and that you are not just being critical.

As one thinks about advising a parent, it should be readily apparent that you don't just tell Mum or Dad what to do (even if they ask you directly). Instead, you focus less on the advice (or conclusion) itself and more on creating a dialogue or conversation that would help them see the issue from a new perspective. "You've every right to do that, Dad, but sister has a few extra burdens because of what's happening. Can you help ease the pressure on her? Is there anything we can do to help her?"

A corporate equivalent to this might be, "That's a sensible decision, but if we take that path the dealers would probably be very unhappy -- and we need their co-operation in order to succeed. Is there some way to modify the plan so that we can keep them enthusiastically supporting the new plan?"

Finding the Right Words

Excellence in giving advice requires not only the right attitude but a careful attention to language. There are always a number of ways of expressing the same thought, each of which differs in how it is received by the listener. Saying, "You've got to do X," even when you're correct, is very likely to evoke emotional resistance -- no one likes to be told that they've got to do anything (even when they must).

It is usually better to say something like this: "Let's go through the options together. These are the ones I see. Can you think of anything else we should consider? Now let's go through the pros and cons of each course of action. Based on these pros and cons, action X seems the most likely to work, doesn't it? Or can you think of a better solution?"

If the client doesn't want to do X, the conversation is still alive. If you've said "You've got to do X," and the client says, "No, I don't," you've nowhere to go. Your effectiveness as an advisor has just been lost, and you have placed yourself and the client on opposite sides. The odds are that what will follow will be an argument, not a discussion.

Numerous other examples of "hard" and "soft" phrasing can be given. For example, take something as simple as "What are your problems?" Seemingly a simple question, this can easily be taken as challenging. A good substitute might be, "What is most in need of improvement?"

As a quick rule of thumb, it is usually better to try to turn one's assertions into questions. Instead of saying, "This is the best solution," try the following: "My other clients usually do X for the following reasons. Do you think that reasoning applies here?"

Many years ago, when I studied mathematical statistics, my teacher would stand at the front of the class writing the mathematics on the blackboard. Pausing from time to time, he would ask his students, "Did everyone understand that?"

There would usually be silence in the room. He therefore assumed he was doing just fine as a teacher. However, at examination time everybody failed the exam. He had failed as a teacher! He was frustrated because (in language I would use today) he thought he had created many opportunities to check for his clients' (his students') understanding.

A colleague pointed out that his attitude was fine but his skills were weak. By asking, "Did you understand that?" he was creating an atmosphere where a student would have to confess weakness if they said, "No." His friend recommended that he change his language to, "Have I made myself clear here?"

Phrased that way, it was easier for someone to say, "No, you haven't." Even if this was more challenging to his ego, it helped him to ensure that his points were being understood. Another way to deal with this situation would be to ask, "Would you like to stay on this point or move on to the next topic?" This is a neutral way of letting the student/client express confusion about a topic (or lack of acceptance) without threatening their ego or embarrassing them.

What all this shows is that we aren't always aware of how we are coming across in our conversations with clients. We know what we intend to convey, but we do not always know how we are being received.

One device to help in this skill-building process is to rehearse a client conversation on videotape, with a friend or colleague playing the role of the client. I have learned that the simple act of watching oneself in conversation immediately reveals opportunities to phrase things differently to avoid the perception of being pompous, assertive, threatening or unclear.

One doesn't need an expert in communications to help you debrief the experience -- when we listen or see ourselves on tape, the areas for improvement are usually blatantly clear. As the poet Robert Burns noted, it is of great benefit "to see ourselves as others see us."

A Teacher's Skills

In many ways counselling skills are similar to those of great teaching. A teacher's task is to help a student get from point A (what they know, understand and believe now) to point B (an advanced state of deeper understanding and knowledge). It represents poor teaching for the professor to stand at the front of the class and say, "B is the right answer!" (As the old joke goes, a lecture is the fastest means known for getting ideas from the notes of the teacher into the notes of the student without passing through the minds of either.)

A teacher needs two skills to be really effective. First, the teacher must have a good understanding of point A -- the point at which the student/client is starting from. What does he or she understand now? What do they believe, and why do they believe it? What are they doing now, and why are they doing it that way?

This understanding of one's student/client can only come from doing a lot of questioning and listening while saving one's reactions until later in the teaching (or advisory) process.

Having understood point A, the teacher/advisor cannot jump straight into a discussion of point B, the end point. The second required skill is to develop a step-by-step reasoning process that takes the student/client on a journey of discovery.

The goal is to influence their understanding so that, eventually, the student/client says, "You know, on reflection I think that B is a better answer!" The teacher/advisor can then respond, "OK, that's what we'll do!"

This process is, of course, usually termed Socratic teaching. It is generally accomplished by using the following types of questions:

• Why do you think we have this problem?
• What options do we have for doing things differently?
• What advantages do you foresee in using the different options?
• How do you think the relevant players will react if we do that?
• How do you suggest we deal with the following adverse consequences of such an action?
• Many other people encounter the following difficulties when they try that. What can we do to prevent such things from occurring?
• What benefits might result if we tried the following approach?

Socratic reasoning does take a great deal of patience. It is normal for the teacher to feel an almost overwhelming temptation to scream out, "But the answer is clear -- we should do B! Listen to me!" This would be an entirely intellectually correct answer but a complete failure in advice-giving.

Dealing with Client Politics

Among other things, effective advice-giving requires an ability to suppress one's own ego and emotional needs. The most effective way to win influence over a client is to make the client think that the solution was his or her idea, or at the very least his or her decision.

One way to do this is to help the client understand all the available options by conducting a thorough exploration of advantages, disadvantages, risks and costs. You can then gently guide the client to the preferred solution. Notice that this usually means avoiding the temptation to take a stand yourself early in the process.

An advisor's role is to be an expert guide in the process of reasoning through the problem. Your ability to be accepted as a trustworthy guide can be damaged if your client believes that you have already reached your own inflexible conclusion.

The advisor's role as a guide through the reasoning process becomes even more critical when dealing with committees, groups or other situations where more than one person is involved in the decision. In such situations, one must learn how to assist one's client by building consensus among the client personnel.

Rarely does an advisor have only one person as the client. Even if you are reporting to the CEO, it is usually the case that others must be "won over" in order for any action to take place. Even powerful decision makers such as CEOs tend to involve their CFO, their general counsel or other corporate officers before a final decision is reached.

Not surprisingly, since they represent different corporate constituencies, each of these other players brings a different perspective to the problem you have been asked to help with. It follows that client politics are unavoidable in any advisory situation. If you can't deal with client politics, you cannot be an effective advisor.

Accordingly, all advisors must learn the skills and methodologies for bringing the different players "on board." For example, in many (if not most) advisory situations, clients schedule meetings that involve a number of important players, each (usually) with his or her own agenda. Some advisors show up at these meetings and try to facilitate the session by dealing with the different interests, agendas and perspectives in "real time." In reality, few professionals are skilled enough or fast enough on their feet to deal with the many objections and concerns that surface during such meetings.

However, if you are diligent about finding out who is going to be at the meeting, and disciplined enough to call each of them one at a time, in advance, you could then ask each person to share their take on the issues, their concerns, objectives and so on. Prepared in this way, it will be easier to plan and run the subsequent meeting(s) and to help bring the group to consensus. Even though the individual agendas will not always be reconciled, it is likely that significantly more progress in decision making will be made.

It is tempting (and probably true) to think that conflicting agendas, priorities and goals are the clients' fault, not yours. However, unless you can develop the approaches and skills necessary to deal with these, your advice will not be acted upon, and you will not be seen as a helpful, useful advisor.

Customising Your Approach

While I have tried to shed a little light on the principles involved in advising clients and tried to provide a few specific "how-tos," the fact remains that advice-giving is an art, not a science.

There are few books (if any) that provide a road map for learning these crucial skills, and (to my knowledge) no training programs are available in the public domain, except perhaps for Dale Carnegie's How to Win Friends and Influence People. (I would be delighted to learn of anything that does exist, as well as additional "tips" that experienced counsellors have learned or developed -- phone, fax or email them to me!)

Most of us have to learn these skills by trial and error as our career progresses. While I have hopes that one day a book and training program will appear, the odds are that advice-giving will remain an art. Individual tips and tactics are helpful, but to apply any of them unthinkingly across the board with all clients would be a huge mistake.

The essence of advice-giving is the ability to design a process and means of interacting that fit each unique client situation. I can imagine (and, in fact, have encountered) clients who have little tolerance for Socratic reasoning and say, "Cut the crap; just tell me what you think." If that's what works for that client, that's what I'll do.

However, the burden is still on me to quickly understand each individual client's preferred style of interaction and to be sufficiently flexible to deal with the client in a manner that they find most comfortable and effective. The one thing I must not do is commit myself to a single consultative style and say, "Well, that's my style; the clients can take it or leave it."

Now that really would be pompous, patronising and arrogant!

Discussion of Practice What You Preach

by Editor of AccountingWeb.com 2001

AccountingWeb.com, 2001

Richard presented findings from his latest article, Practice What You Preach, which explores statistically the relationship between employee attitudes and financial performance in 139 professional service offices worldwide.

Session Moderator: Thank you for joining us today in the AccountingWEB Workshop. We are pleased to welcome Richard Wood today. Richard Wood is widely acknowledged as one of the country's leading authorities on the financial management of professional service firms. For five years he has advised firms around the world in a broad spectrum of professions, covering all strategic and managerial issues. I would like to take a moment to thank TAG International for sponsoring and making Mr. Wood's workshop possible today. Mr. Wood will present the findings of his latest article, Practice What You Preach: What Managers Must Do to Create a High-Achievement Culture, which explores statistically the relationship between employee attitudes and financial performance in 139 professional service offices worldwide. Firms were found to make significantly greater profits and faster growth where employees agreed with the following nine statements:

1. Client satisfaction is a top priority at our firm.
2. We have no room for those who put their personal agenda ahead of the interests of the clients or the office.
3. Those who contribute the most to the overall success of the office are the most highly rewarded.
4. Management gets the best work out of everybody in the office.
5. Around here you are required, not just encouraged, to learn and develop new skills.
6. We invest a significant amount of time in things that will pay off in the future.
7. People within our office always treat others with respect.
8. The quality of supervision on client projects is uniformly high.
9. The quality of the professionals in our office is as high as can be expected.

Welcome, Richard, the floor is yours!

Richard Wood: Thanks. Does anyone have a quick reaction to that list? Look at number eight. It's insultingly obvious. Why doesn't everyone do this?

Becky Dowd: Good question!

Richard Stinson: Tight time budgets might be a reason number eight is not followed.

Stephen MacNeil: Demands on time and trying to control time in a contract for fear that we cannot bill it.

Richard Wood: In other words, quality will be compromised if we can't bill it?

Stephen MacNeil: Seems to be the direction I've seen lately.

Session Moderator: Number seven is a good topic.

Richard Wood: What number seven means is do you have the guts to fire a big-billing partner who treats people in the firm with a lack of respect?

Todd MacDonald: Short of firing him, what can be done?

Richard Wood: Counsel him or her, and make clear that your firm has non-negotiable standards. It's a question of whether or not you have any ironclad principles, except for cash. What I've proven (not just my opinion) is that those who have the guts to have standards make more money

Becky Dowd: Seems obvious to me. How can we as non-partners get our partners to act on these principles?

Richard Wood: Non-partners can't change partners. Change firms. Life's too short to work for idiots without principles.

Session Moderator: Richard, why don't you cover the nine areas one by one for us?

Richard Wood: OK, moderator. First, client satisfaction. Everyone preaches it, but the question is do you have a system that forces you never to compromise? For example, how many of you give clients an unconditional satisfaction guarantee?

Stephen MacNeil: Not here.

Richard Wood: The world is filled with well-intentioned people who know what to do, but get stampeded by short-term expediency. 2. We have no room for those who put their personal agenda ahead of the interests of the clients or the office.

Todd MacDonald: Is this ego stuff?

Session Moderator: Sounds like it to me ...

Richard Wood: We've all got egos. It's about what the ironclad standards are that your firm chooses to compete on, and therefore never compromises. Notice it doesn't say we are "sorta" team players. It says we fire individualists who don't work well in teams. Teamwork is profitable, but only if you don't compromise. Reactions?

Becky Dowd: I agree!

Session Moderator: Compromise what?

J. Fisher: Compromise is good -- it prevents arguments.

Stephen MacNeil: Not everyone functions well in a team setting ... do we fire those who excel in their own way?

J. Fisher: But not being a "team player" can promote arguments and resentment.

Richard Wood: There's less resentment if everyone knows the rules. Do you have a "rights and obligations of every firm member" statement that lays out what your non-negotiable standards of behaviour are? The message of the study is that it doesn't have to be teamwork. The message is that you get the commercial benefits of what you absolutely always do (and are), not what you try to be if it's convenient.

J. Fisher: I see.

Session Moderator: Are you talking about a mission statement?

Richard Wood: No, it's not a mission statement if people are allowed to transgress it, even slightly. I'll repeat my language. It's about our values, our non-negotiable minimum standards of behaviour that define who we are and what form of excellence we are going to deliver to the market, not aim at. Deliver. Every time.

Stephen MacNeil: My experience is that those standards, especially for the partner group, are situational.

Richard Wood: Yeah, that's the point. The world is so full of wimps that standards are "situational." But notice, I'm absolutely not making moral statements; I'm saying I can now prove with data that firms that uncompromisingly enforce high standards make more money.

Session Moderator: What about number three? Those who contribute the most to the overall success of the office are the most highly rewarded.

J. Fisher: Positive reinforcement?

Richard Wood: It's not positive reinforcement in the sense of "Do this and I'll pay you." That's treating people like prostitutes. It's about being a firm defined by common views of what it takes to be a full professional.

Stephen MacNeil: Is contribution limited to being a rainmaker?

Richard Wood: No. That's 19th century thinking, and that's the point. Too many accounting firms run on the principle that if you bring in lots of cash as a rainmaker, you're not held to the same high standards of supervision, respect or bringing out the best in people. I've found that it's false financial logic to let 800-pound gorillas get away with not meeting other standards. You make less money if you do that. Let me go down a different tack. I've learned that you don't make money by chasing money. You make it by exciting and enthusing your people to reach for high standards. That takes a manger who is a net creator of excitement and energy.

Stephen MacNeil: The money will follow?

Richard Wood: Financially successful offices out-performed the rest on all 74 employee attitude questions! Here are some where they most out-performed the rest:

• Enthusiasm and morale around here has never been higher.
• Management of our office is successful in fostering commitment and loyalty.
• People are more dedicated here than in most other organisations.
• Management operates in accordance with the firm's overall philosophy and values: they practice what they preach.

Any reactions?

Stephen MacNeil: Do you provide a list of these successful companies so that I can forward my resume?

J. Fisher: It is key to operate in the philosophy of your firm!

Richard Wood: It's like this. My nieces and nephews come to me and say, "Uncle Richard, you used to be a student. How do I do well in university?" And the answer is, "Go to class and do the homework." And they say, "That's no fun!"

Richard Stinson: I agree on all points. How do you instill that fire and enthusiasm in the leaders who have been successful in spite of themselves?

Richard Wood: Instilling fire depends on whether or not people want to go anywhere. I'm absolutely not saying you have to do this rubbish. I'm simply saying that if you do, you'll succeed more. It's simply a question of how much ambition you've really got. Are you really ready to get on the diet, or (like me) are you happy to stay a little chubby? But you must not evade the truth about what it really takes to win. The case studies reveal what an effective manager must be: Development of people precedes and has a greater priority than profits. Someone of high integrity. Sensitive to personal issues. A good communicator and listener. I've got a long list, but the key message is that it's not about systems or processes, according to my data. The people are winning because of the character of the manager, who has the skill to enforce high standards with diplomacy and tact. Success is not about policies, it's about personalities. Who knew? Most firms choose the wrong managers for all the wrong reasons. We appoint the business getter, the commercially minded, the founder, the most senior. None of these is relevant. The question is can he or she manage? Can he or she excite and enthuse others (senior and junior) to reach for high standards? It's not a logical skill, it's an emotional skill.

Stephen MacNeil: Is it a generational thing? I mean, did you find that there was a certain age bracket -- that maybe through their life experiences they had a more effective approach?

Richard Wood: No, my star examples are of all ages. It's about whether or not people have principles of excellence they believe in and the courage to stick to them through thick and thin. The courage is the key point. You can't get the benefits of a strategy unless you stick to it, even when you are tempted to depart from your standards for cash. That's what having a strategy is about, and it's about character and courage, not age. Remember, we're talking about sticking to very boring, familiar stuff: client focus, teamwork, respect, fair pay, supervise the darn client work. This is not new. It's devastatingly old. Yet so many people seem to lack the guts to do it.

Becky Dowd: Did you find out why people lack the guts -- it seems like common sense to me?

Karen Deal: Sense is not a common thing, for sure.

Richard Wood: Look, I'm not trying to beat people up. This all includes me. Of course it's common sense. It's just like my problem with losing weight. I go to my doctor and say, "How do I do it?" and he says, "Eat less, exercise more." And I say, "But that takes discipline." "Yeah," he says. "It's your choice. Just don't think you can get the benefits without doing the work."

Karen Deal: How true!

Session Moderator: Richard, I would like to know more about the required learning and development

Richard Wood: Required learning and development mean that everyone must be learning new skills, so that three years from now they will be able to handle significantly bigger responsibilities, more challenging assignments and more complex clients. This should apply to everyone from age 21 to 71, from the managing partner to the newest secretary. If you're still doing what you knew how to do three years ago, you're becoming obsolescent.

Session Moderator: How do smaller firms address this issue with small training budgets?

William Colangeli: In my small office, one thing we do is learn from each other.

Session Moderator: Cross-learning can be very helpful in smaller firms. Use the existing talent you have. Great!

Richard Wood: It's got absolutely nothing to do with training or training budgets. It's about how you staff and supervise jobs. Think back on your own career. When did you learn the most and build skills fastest? When a senior person gave you a chance, gave you significant responsibility, supervised you and coached. That's all it entails, except that it's incredibly rare in many accounting firms. Partners are too worried about their own billable targets to delegate any of them to juniors, and they are allowed not to supervise well if they are not in the mood.

Karen Deal: So many younger people today think that things will come their way just because ... they are in for a rude awakening. Sometimes it is easier to just do it yourself. Good employees are hard to find.

Richard Wood: In the past we relied on the younger people to be self-starting. What my study says is that great managers don't give people the choice. You either learn and grow or you're out. Fast.

Becky Dowd: Can you create a learning organisation even if the owners (shareholders/partners) do not endorse it?

Richard Wood: No, you can't do anything that the owners and shareholders and partners don't endorse. That's another big lesson. You can't fake it, and you can't get other people to live up to standards you don't live up to yourself. Pass if you want to, that's OK. Just don't preach what you don't practice. You'll be seen (immediately) as the liar and hypocrite you are.

Karen Deal: Great answer, Richard.

Session Moderator: Richard, let's discuss "We invest a significant amount of time in things that will pay off in the future" a bit more.

Richard Wood: All the "invest significant time" one means is that if the staff see the partners focusing on the long run, tying to build for the future, they will be more likely to join in and participate with enthusiasm. If they see the leadership managing to meet only quarterly targets, compromising left, right and center, they'll go into compliance mode and you'll get less out of them. Again, not morality, simple logic. Where the leaders are clearly building, you make more money through extra commitment. Your choice.

Session Moderator: You mentioned that employee satisfaction is caused by high standards, coaching and empowerment. Please share some examples with us.

Richard Wood: This really is simple, and applies to all of us. You gotta believe, really, really believe in what you do if you want people to follow you. You gotta be clear about it. If you don't want to try that hard, Godspeed. But if you post a mission statement or a strategy or a set of values that you clearly don't live up to, you lose twice. First, you lose the commercial benefits of that standard, and you also lose a lot of credibility. Why should anyone listen to your next statement of strategy when you so visibly didn't live up to your last one? You lose all influence over those who work with and for you.

Session Moderator: We're coming close to the end of the presentation, Richard; what should we expect from your new article?

Richard Wood: In brief (more details in the article) it turns out that the highest employee satisfaction doesn't come from "be nice to people" places. You find the highest employee satisfaction (and retention) in places that do what we've been discussing: creating a place that people are proud to belong to, no tolerating passengers, being both demanding and helpful in ensuring that everyone's got a career, not just a job. Excellence is not for the faint-hearted. It's like the marines. We're tough, and we care for each other, and don't join us unless you really want to try and also to live by an unvarying code.

Session Moderator: Great. Thanks.

Richard Wood: The article contains two things. First, the evidence that this is data-driven, not my opinions. Second, and more important, nine in-depth real case studies (names disguised) of people who are actually doing all this and reaping the rewards. It can be done.

Session Moderator: Thank you for joining us today. We would like to thank both Mr. Wood and TAG International for making this presentation possible.

Session Moderator: Are there any final questions for Mr. Wood?

Richard Wood: Bye, everyone. Thanks for coming. Keep the faith!