Strategy and the Fat Smoker

Much of what professional firms do in the name of strategic planning is a complete waste of time, no more effective than individuals making New Year's resolutions.

The reasons are the same in both situations. Personally and professionally, we already know what we should do: lose weight, give up smoking, exercise more. In business, strategic plans are also stuffed with familiar goals: build client relationships, act like team players, provide fulfilling, motivating careers.

We want the benefits of these things. We know what to do, we know why we should do it and we know how to do it. Yet we don't change, most of us, as individuals or as businesses.

The problem is that many change efforts are based on the assumption that all you have to do is to explain to people that their life could be better, be convincing that the goals are worth going for and show them how to do it.

This is patently false. If this were true, there would be no drug addicts in the world, no alcoholics, no bad marriages: "Oh, I see, it's not good for me? Ah, well then, I'll stop, of course!" What nonsense!

And yet strategic plans and annual speeches by CEOs, managing partners, management consultants and others continue to have this same useless structure: "Look at how fabulous it would be if you were a fit, non-smoking exerciser, Richard!" My usual response? "True, but please shut up and go away."

And that's the response of most audiences to the manager's or consultant's latest vision or strategy. "We knew all this a long time ago. Why don't you ask us why we don't do it?"

Now there's an interesting question!

Why We Don't Do It

The primary reason we do not work at areas in which we know we need to improve is that the rewards (and pleasures) are in the future; the disruption, discomfort and discipline needed to get there are immediate.

To reach our goals, we must first change our lifestyle, our daily habits, now. Then we have to have the courage to keep up the new habits and not yield to all the old familiar temptations. Then, and only then, we get the benefits.

As human beings, we are not good at such decisions. We start self-improvement programs with good intentions, but if they don't pay off immediately, or if a temptation to depart from the program arises, we abandon our efforts completely -- until the next time we pretend to be on the program.

That's our pattern. Try a little, succumb to temptation, give up. Repeat until totally frustrated. Unfortunately, there is rarely, if ever, a benefit from dabbling or trying a little of a new strategy.

You can't get half the benefits of a better marriage by cutting out half your affairs; you don't cure half the problems of alcoholism by cutting out half the drinks; and you don't much reduce the risks of lung cancer by cutting out half the cigarettes.

So it is with business strategy: you can't achieve a competitive differentiation through things you do "reasonably well, most of the time." Not only can you not dabble, but you also cannot have short-term strategies (an oxymoron, if ever there was one). The pursuit of short-term goals is inherently anti-strategic and self-defeating.

As Jean Nidetch (the founder of Weight Watchers) believed, the pursuit of quick weight loss is always self-defeating and ill-advised. If you don't understand from the beginning that you have to change your lifestyle, now and forever, then you are wasting your time. Any initial weight you lose will be put right back on.

What's more, repeated, short-lived efforts at weight loss are actually detrimental to long-run success since, among other reasons, they breed cynicism and the attitude of "We can't do this. We've tried and failed before."

Millions of people and countless businesses have proved her insight exactly correct. You are either seriously on the program, really living what you have chosen, or you are wasting your time.

Strategy Is the Diet, Not the Goal

Debating which goals to pursue (whether you wish to choose losing weight, giving up smoking, ceasing to drink or starting to exercise) is a nonsensical process if you lack the discipline to stick with the (different) diet and exercise programs that each of these requires. The only meaningful debate is which diet you are really ready to get on.

Giving up smoking may be better for you (or a better competitive strategy), but if you're not willing to make the changes that that specific goal requires, its relative importance is irrelevant.

It's the same in business. Discussing "strengths, weaknesses, opportunities and threats" (to take only the oldest and most familiar of the strategic planning exercises) is fun, but gets nowhere near the real questions.

Improving the quality of the analysis is not where the problem lies. The necessary outcome of strategic planning is not analytical insight but resolve.

The essential questions of strategy are these: "Which of our habits are we really prepared to change, permanently and forever? Which lifestyle changes are we really prepared to make? What issues are we really ready to tackle?"

Now that's a different tone of conversation and discussion (and the reason the real debate is so often avoided). Discussing goals is stimulating, inspiring and energising. Discussing what disciplines you are prepared to accept to get to a goal feels tough, awkward, annoying, frightening and completely unpleasant.

An Illustration

As an example, consider the familiar strategic topic of aiming for competitive differentiation through excellence in client service. Here are three real-world examples of programs to achieve this goal:

Once a quarter, an email is sent by the CEO to all active clients (without consultation with the lead people serving those clients), asking them to click on one of three buttons in the email: green if they are satisfied with the way their work is being handled, amber if they have some concerns, and red if they are unhappy.

The CEO personally reviews all the email replies, every day, following up on every single one that is not a green. Every quarter, the group averages on this score are published for each operating unit within the firm (every office, every discipline area) and distributed to everyone in the organisation. Even the mail room clerks can see each quarter how well the senior vice presidents in each group are doing on client satisfaction.

At compensation-setting time, the relevant senior management group conducts a phone or face-to-face interview with every client that partner has served in the last year (or a scientifically chosen random sample if the numbers are too high to be practical).

These client assessments carry a significant (40 to 60 percent) weighting in pay. You can't get paid for selling or doing more volume unless it is more volume of highly satisfied clients. There is no reward for more volume of only moderately satisfied clients.

The organisation adopts and publicises an unconditional satisfaction guarantee, allowing clients to pay only what they thought the work was worth if they were disappointed.

These are just three examples of how to enforce the same strategic idea. Other ideas may be superior. The debate you would need to have in your firm, if you really want to pursue this or any other strategic goal, would be a series of questions:

Which diet, if integrated into our normal running of the firm, would actually get us to perform at a higher level, enough to achieve the benefits we seek?

Which would we be prepared to adopt as a central part of our regular lifestyle?

If we don't like any of these diets, can anyone think of another that will have as much force as these, but that we could live with more easily?

Substitutes are allowed. No one diet idea is without flaw, and there are drawbacks to every program. If asked what the best way to lose weight is, the only sensible answer is: "Whatever diet you will stick to!"

However, if there is no specific diet that all your people can agree to follow, then you must conclude that you are not really willing or able to pursue that strategic goal.

Which is no shame. Life offers many opportunities to do quite well being competent. You don't have to strive for excellence. It's just that if you are not willing to do what it takes to achieve excellence, you should probably just shut up about it (internally and externally) and stop pretending!

There is no business benefit in claiming to pursue a goal that everyone can tell you don't have the guts to pursue. It not only makes you look foolish to clients, staff and colleagues, but it also deeply demoralises people and breeds cynicism. Declaring your commitment to strategies that you don't follow will lower your organisation's energy and its profits.

What Gets People on the Diet?

If all business improvement is like curing a fat smoker or helping an alcoholic recover, what, then, actually gets people and organisations to change?

We all know the main thing that works: a major crisis! If revenues drop off sharply, it's amazing how quickly businesses can act to deal with known inefficiencies and bad habits they could have tackled years ago.

And when the first heart attack comes, it's amazing how many people suddenly find the self-discipline to start living right.

That's close to what happened to a friend of mine. Until March 2005, he was a fat smoker. I had been overweight for most of his life and smoked a pack a day for 37 years. He never pretended that getting fit was his strategy.

Then, a variety of medical conditions put him into the hospital with a kidney malfunction. In the five months that followed, he stopped smoking, started exercising and lost 30 pounds.

This was all wonderful news for me and an amazing and welcome surprise to my family and friends, but a depressing conclusion for any theory of change.

Do people and institutions really have to wait until something very serious happens to them to fix things they have known about for years? Isn't there any hope of a better way?

We know only a few things about getting people to change before the heart attack comes, but here are some.

1. It's About a Permanent Change in Lifestyle

A major source of failure in implementing sensible business strategies is that we underestimate how much effort is truly required to bring about significant improvement.

A major reason that only a small proportion of those who try to implement strategic programs (or stick to diets) ever obtain the benefits they seek is that too many individuals and businesses think of improvement (and strategy) as a distinct schedule of activities, separate (and sometimes separately accounted for) from regular business activities. In other words, there's real life, and then there's the diet.

Viewed that way, all improvement programs are doomed to failure. As I discuss in my "Natural Manager" article, my personal trainer points out that you don't really get the sustained benefits of being an exerciser until it has become as natural and permanent a part of your life as brushing your teeth and taking a shower each day. Anything less than that will put in jeopardy any short-term gains you might obtain with bursts of activity. It's about routines, not special events.

2. You Must Change the Core Scorecards

Strategy, if is to be lived and achieved, is about modifying the very rules of daily living and score-keeping. You must scheme carefully about how new tracking measures of the strategies you pursue are published and disseminated.

If you are trying to lose weight, you must get on the scale regularly. If you do not, it is too easy to let yourself go and fool yourself as to how you are doing. But if you are the only one to see what the measurement says, the force for change will be minimal.

We all forgive ourselves too easily. We all find it quite easy to live with guilt. Even high levels of guilt don't change people. Embarrassment, even in small doses, is far more effective.

How much more forceful it would be if you let your spouse see, each time, what you weigh! Or better yet, what about letting your children monitor your progress?

So it is in professional life. When I was at university, every course taught there was evaluated by the students at the end of every semester, and the results were published to everyone on campus. There was no doubt at that institution as to what the strategy was!

3. Leadership: Get Serious, or Get Out of the Way

Organisations often rush to figure out how the troops need to change to live the new standards. However, this is not the first task. Perhaps the single biggest difficulty in getting an organisation to stick to the diet is convincing them that top management really wants them to.

For example, if a group within the firm faces a trade-off between a lesser volume of high-quality work and a greater volume of "acceptable-quality" work, it is critical that they understand without ambiguity what choice firm leaders wish them to make. If they believe that management, when push comes to shove, wants the second alternative, they will never stretch to engage in strategic behaviors themselves.

If the leadership of the organisation wants the people in it to believe that a new strategy is being followed, they must figure out a way for it to be credible that they, top management, have actually changed their thinking and are prepared to change the way they act, measure and reward.

I have countless examples of failure to do this. I was asked by one firm to run a program for their middle managers on how to be more effective as managers, but my instructions included this: "Please don't raise the topic of how well we ourselves manage these middle managers. We know we do that terribly, but we're not ready to discuss that. Keep their attention on what they could do better. We want them to change first."

Can you imaging a process less likely to get the people in the organisation to actually live to higher standards?

A similar event happened when I was asked to moderate a discussion in a firm that wanted the people in its different regions to work for the good of the institution, not just their own region. Unfortunately, as I ran this discussion, the CEO at the back of the room became more and more agitated.

I later found out that he had turned to his second in command and said, "This guy keeps talking about what we in management need to change to become a one-firm firm. We wanted him to talk about what the people out in the field need to do." Not surprisingly, they never achieved collaboration, and I was never invited back to that firm!

This illustrates, by the way, the fatal flaw in using all outside speakers and consultants. Whether or not they are convincing, educational or inspirational, the question on the audience's mind is, "Do our leaders believe this and are they actually going to run the firm that way?"

All too often, the audience is given no evidence of the firm's leadership commitment to the ideas, and the whole exercise becomes a waste of money and time. I have been told more times than I care to remember that the reaction to one of my presentations has been, "This all makes terrific sense, but there's no way we'll ever do these things around here."

If people are to make the right strategic decision in every location of the firm, in every operating group and at every level, then they must absolutely trust that management will back them up and reward them (or at least not punish them) for acting in accordance with the declared strategy. A large part of really bringing about strategic change is designing some action or new system that visibly, inescapably and irreversibly commits top management to the strategy.

I have sometimes asked firm leaders whether they are willing to announce to their people, right up front, that they will resign their roles if measurable progress is not made on the strategic plans they advocate. Such a commitment has had a dramatic impact where it has been made.

4. Principles Are More Effective Than Tactics

Since successful implementation of a strategy requires both sustained commitment over time and broad participation across the whole organisation, strategies in business, like diets and alcohol recovery, are implemented much better when the ideas are presented as matters of principle, not just as matters of expediency.

If strategic rules are justified only in terms of outcomes ("exercise daily in order to look good"), the diet will always be seen as a punishment on the way to an uncertain and possibly unattainable reward. Accordingly, it will always be resented.

If, however, diet achieves the force of moral principle (such as "treating clients and employees with respect is a value around here, not just a tactic"), the odds are significantly higher that successful implementation will be achieved.

As I reported, managers who get things done are people who are seen to have an ideology -- their people believe that they believe in something.

This is because buy-in and excellent implementation result from a sense of not wanting to let people down. My personal trainer reports that some of his clients tell him that they keep up their exercise programs between meetings because they "don't want to disappoint him."

5. People Must Volunteer

Even though it is the leader's job to offer an ideology around which people can rally, it is by itself only a necessary, but not sufficient, first step.

Among the most powerful revelations of any successful recovery or self-improvement program, perhaps the most important is this: it only works when the individual is doing it for himself or herself and has made a personal choice to do it.

It doesn't work if the person is doing it only for their spouse, or for his or her children, or to gain the good opinion of others. To sustain the effort, an individual has got to make a personal choice that the change is being made for him- or herself.

The motivation must be intrinsic. Since the essence of successful strategic change is not technique, but will. If you prefer, you can call it determination, commitment or resolve.

To achieve any goal, you must really want the goal. The common questions presented when discussing strategies and strategic change are these: "Do we have to do this? Why, when things are going so well, do we need to accept more discipline into our lives?"

The answer, of course, is that you don't have to do anything you don't want to do. Strategy in a professional business is a choice that each individual has to make about whether he or she wants to put more effort into his or her life and career in order to get somewhere new.

In professional firms, it is dangerous to assume that every person, or every partner, does. That's why most firms (and most individuals) don't pull off their strategies: not everyone in the firm actually wants to try that hard. They will say they want to be the clear market leader in their field; they are just not willing to do what that takes.

It's valid for them to make this choice. After all, my friend was a fat smoker for 37 years and felt he had the right to remain so. For him and for others, the single biggest barrier to making change is the feeling that "it's OK so far." People don't disagree that the future state of being a non-smoker would be beneficial, but they resist when they are told that they have to do it.

Brad Robitaille, a Canadian lawyer, points out that while execution of a strategic plan is hard work, it must be hard work that a person loves to do, because only passion creates the determination to continue. He also notes that "no one can instill passion in anyone else's heart." It must come from within. If the hard work inherent in executing the disciplines of strategy is merely a by-product of duty and obligation, then the battle is lost before it has even begun.
One of a leader's roles is to act as a coach, drawing people's attention to what is not perfect about the status quo (i.e., creating dissatisfaction), whether things could actually be better, and whether the desired change is both achievable and desirable. But it's subtle stuff -- the leader must be skilled in not only knowing the answers to these questions, but also in the process of helping others think it through to a personal conclusion.

6. People Must Get On or Off the Bus

Every individual can, and must, make a personal choice. But then the organisation must decide how to respond to those individual choices. For an organisation, strategy cannot be what "most of us, most of the time" do. You'll never be good enough as a firm if participation in your firm's definition of excellence is optional.

If a number of top people have clearly not signed up for the journey or are clearly not true believers, no number of systems or amount of inspired speech making will get the organisation there. Strategy making in professional firms is as often about getting some senior people to leave as it is about bringing new people in.

Jim Collins in Good to Great called this "getting the right people on and off the bus" and identified it as the first step in all programs for strategic greatness.

Everyone in the organisation has to decide if they want to try hard enough to sacrifice some of the present to achieve a better tomorrow. They may do so if they believe the effort is serious. They definitely will not if they think those at the top are undecided or are divided.

Professional firms are afraid of this conclusion. They try to work around the sceptics, the non-believers and the non-participants in their senior ranks, preferring to hold on to revenue volume rather than achieve a senior team who all want to go to the same place and have the same resolve to get there. That's fine, but you can't call it strategy.

As all married couples who try dieting know, it's hard enough to stay the course and resist temptation when you are both attempting to do the right thing. It's nigh impossible if those around you continue to indulge and there are temptations (food, alcohol, etc.) all around. You either pull this off together, or you will lose the resolve and you will fail.

Notice, it's absolutely not about how we can force people to do what we want. It's about how we can make sure that people have opted in and that those who do not wish to be on the program have opted out -- of the firm!

People absolutely need the mutual support (and social structure) that comes from doing this together, in common cause. People need to help each other through the tough times ("Come on, one last repetition of the training circuit") instead of being part of a forgiving culture that keeps discouraging extra effort. ("Oh, that's OK, you can skip exercise today. You deserve a break.")

Again, that's why other researchers and I keep discovering that the most successful organisations have an ideology. There is a McKinsey way, a Goldman Sachs approach and a Bain philosophy, to take only three examples of firms with strong ideologies, clear strategies and the financial success to match.

At these firms, if you don't subscribe to the ideology, you don't stay and argue or act as a silent dissenter. You walk. Or, eventually, you're asked to walk.

Managing the Process of Change

None of this is meant to say that firms must change overnight. It truly is, like alcoholic recovery, a process of "first make a lifetime commitment, then take it one day at time."

Once we know what the agreed-upon diet is, there is a need for skilled coaching in leading individuals and teams through the struggle to attain the goals they have committed to.

I have described this process elsewhere: my article "A Great Coach in Action" explores this topic in depth. But it is worth reviewing the highlights of what we know about diet and exercise program management here.

The key is to manage with a philosophy of "It's OK to stumble; it's only a sin if you don't get back on the program." The primary goal of the beginning stage of a change program is to get people to believe that it is do-able and that all we are asking is that they try. This means early successes.

All that wise leaders (and good personal trainers) talk about is the next small step. And they celebrate like crazy each small accomplishment. They focus on requiring improvement, not on requiring excellence. "As long as you are improving, you're with the program, and one of us!"

Managing a weight loss program often means you stop talking about the ultimate goal. If you keep reminding me that I need to lose 50 pounds, it is as likely to backfire and make me give up as it is to energise me.

But what if someone says to me, "Let's just focus on losing one pound in a week, Richard. Do you think you can do that? That doesn't sound impossible, does it?" My reaction to that will be a lot different. Yet, of course, one pound a week is 50 pounds in a year. An alcoholic is daunted by a lifetime of abstinence, but he or she can manage to not drink just for today.

Michael Webb, a sales consultant, points out that short-term goals ("Lose a pound a week") only take on value in the context of principles, which are long-term. First, one establishes what is important; then, you get people to do a little of it, a little more and so on. It is commitment to a process of continuous improvement on things that matter.

In my article "The Courage to Have a Strategy," I described this as an attitude of "Rome wasn't built in a day, but we are building Rome." It can be described as a managerial style of insistent patience.

Encouragement is an essential ingredient in the recipe. When I began exercising, it was sobering to realise how much I needed my personal trainer's words ("Good, good, Richard") when I had just been able to complete an exercise for the first time.

At one level, I knew I was pathetically bad, but it really did help to hear his constant encouragement: "You're doing much better, Richard. You might not be able to feel it, but as a personal trainer I can see it."

I don't know how much of it was him being falsely optimistic, and I am sure it was all a well-practiced mind game.

But, as every good personal trainer knows, that's the point. We all need to play mind games with ourselves when we struggle to build new achievements and habits into our lives. ("If I can just finish this first one, I'll reward myself with a break. Let me just get this first one done!")

It also means making a game of strategic programs. Educated professionals may scoff, but it's profoundly rooted in the human psyche that if you can make a game of something, it helps to sustain strenuous effort.

Hence all the hoopla of various strategic initiatives such as "Six Sigma," "quality is free" and similar fads; business jargon; and prizes, rewards and "black belt" recognition programs.

There's a reason such things work, even among cynical people. They help to make a "mind game" of the whole thing, creating a framework on which we hang the mind-distracting habits. ("If I can just do this one thing, I can make it. If I change the way I do that, I will be better able to stick to things.)

Good personal trainers know that life-changing improvement can and does fail by rushing to either of the two extremes: establishing improvement goals that are too ambitious or take too long to achieve, thus leading to frustration and abandonment of the program, or failing to establish any pressure to improve, allowing people to pretend that they plan to get on the program, but just not today.

The good news in all of this is that, in the world at large, there is experience in helping people make significant improvement in their lives. There are well-documented methodologies; they are just not the ones we usually associate with the business world.

If we are prepared to rethink how we view strategy and business life, then people can achieve things they never thought possible. If my friend can become a fit, non-smoking exerciser, there's truly no limit!

Geographic Expansion Strategies

Newspaper coverage of the legal profession is filled with plans to expand geographically, diversify into new services and create multi-site, multi-disciplinary, multi-jurisdictional law firms. In this, Australian firms are copying (surprise, surprise) their U.S. and UK counterparts in focusing on growth and expansion as their primary strategic concerns.

And it's not just the mega-firms that have these grandiose dreams: every established firm outside the major cities (in every country) has plans to join the big boys and open offices in major centres. (All together now: "If I can make it there, I'll make it anywhere...")

What is surprising about all these initiatives is how common they are. And how misguided. The time to expand is when you have a track record of being superb (not just competent) at what you do. Once you have found a way to do what no other good firm can match, then think of taking those (managerial) skills to new places and new disciplines -- not before.

Beaton Consulting, a Melbourne-based research and consulting firm, has since 2003 performed a thorough investigation of the Australian legal marketplace. They report that clients rate competence, service and client care as most important in choosing a firm, providing national and international coverage ranked close to the bottom of relevant choice criteria.

What the research also shows is that in the legal profession, as in accounting, consulting and engineering, most clients rate the firms they use highly on competence, service and client care, but they do not think these firms are very much differentiated from each other on things clients care about. (My experience says that's the same around the world.)

It's not that these findings are surprising: firms have heard them before. Indeed, firms preach the virtues of reliability, client care and understanding the clients' business fervently to all their partners and staff. They just don't have programs to make them happen.

Firms everywhere (and in every profession) seem to miss the points that: (a) strategy is about differentiation; (b) differentiation is about going where your competitors aren't, rather than where they are; (c) strategy is about making your services more valuable to your clients than those of your competitors; and (d) the differentiation comes from what you do consistently and to a high standard.

For example, what percentage of partners could honestly say that they read every issue of their clients' trade magazines? (Less than 5 percent.) Yet they continue to trumpet (falsely) their commitment to an understanding of their clients' business.

What are firms doing? Well, they seem to say, we've failed to differentiate in the locations and services we are already in ("We're no worse than anyone else" seems to be the implied slogan) so let's go to new places and be no worse than anyone else there!

Why? Because it is more difficult to get the partners and staff you already have to live their lives to higher standards than to go out and merge with new partners in new countries or bring in lateral partners in new specialties that you know nothing about. That's called strategic initiative, and it feels good -- and it's just relatively easy to do. But it should not be as high a priority as firms think it is.

Why do such smart people do such dumb things? Part of the reason is that there truly is exciting work for fascinating clients in these new places. But the amount of work is vastly exceeded by the number of people pursuing it.

It's as if everyone is planning their dating and marriage strategy around capturing the hearts and minds of the latest model or movie star: No one is working at the romance of taking care of those they are already in a relationship with. The dreams are glamorous, and truly desirable. They just happen to be impractical for the vast majority of people who dream them.

U.S. law firm expansion into London is a wonderful case in point. Of course, London is a good market for lawyers. That doesn't take much genius to spot. Does that mean (as has happened) that over 100 American law firms can successfully open offices there?

Of course not, but that's what they've done. Almost all, of course, are unprofitable, certainly less profitable than their firms' domestic practices. The original partners are getting (and will continue to get) literally zero benefit from all the overseas expansion.

Yet Australian firms are rushing to copy this model. In the words of George Bernard Shaw (he was referring to marrying for the second time), it is the "triumph of hope over experience."

What law firms (and other professional firms) continue to ignore is the fact that success does not come from spotting emerging growth areas that your competitors have missed ("Wow -- China's a big market! Don't tell anyone! Pssst! I know an Adelaide firm that has just discovered that there's great legal work available in Sydney! Keep it under your hat!")

Rather, success comes from consistent, diligent, passionate execution of the well-known basics of client service, user-friendliness, understanding of the clients' business, internal firm collaboration and other well-known virtues already included in every firm's strategic plan and mission or values statement. The key is not whether we know this stuff, but whether we have the managerial culture to ensure that we practice what we preach.

On a previous trip, one of the country's major law firms told me, "We're thinking of expanding into Indonesia, Richard. Do you think it's a good idea?" I replied, "Well, do you have three partners eagerly looking forward to spending the next five years living in Jakarta?"

"No," they replied. "Well, then," I answered, "your question about expansion is moot. Your success will not turn on whether Indonesia is analytically a good market, but whether you have the people with the passion, drive, enthusiasm, commitment, energy and discipline to make it work. Sure, someone will succeed in Indonesia, but the question is -- what makes you think it will be you?"

The Basis of Reputation: Controls

What is often overlooked in today's law firm fascination with branding is that your reputation is based on what you really are, not what you hope to be. Your brand is not what you claim to be, but what you actually are willing to enforce. You only get a reputation when the market-place experiences the fact that you are, 100 percent of the time, what you say you are.

Reputations are a consequence of internal management control and not primarily about marketing. The question is: do you have in place the control systems that make sure all your people adhere to the principles you espouse.

I have always been a cynic about the ability of law firms to achieve this standard in a global network. Managing a global network is rather like trying to do a doctorate in management when most law firms are still in kindergarten when it comes to management.

Some firms are still fighting to introduce the concept of partner performance appraisals, and many resist the notion that partners should be subject to coaching. Resisting these things may be fair and wise, but without them, it's hard to see how a firm can credibly present to the market an ability to co-ordinate multi-disciplinary engagements across multiple jurisdictions.

I do not think the well-managed global law firm is impossible in principle, but I would bet against the ability of the majority of firms to introduce the culture and managerial processes to pull it off. It takes a level of managerial skill that the firms have not demonstrated domestically, never mind internationally.

Clearly, there are exciting clients who want to buy sophisticated legal services simultaneously on a multi-jurisdictional basis from the same firm. However, there is very little evidence that such clients constitute a large market segment.

Notice, it is not a question of having a clients that has domestic work in Germany, France, UK or the US. Single jurisdictional firms can handle that. The global firm is only justified when clients have, on the same project, a need for German, French, British and American expertise. It is only the integrated project that justifies having a global network.

There are some clients that need this, but there are more law firms going after this segment than the size of the segment justifies. There's enough work there for a few, truly stellar integrated firms, but the fact is there is a large stampede of firms, each thinking they will be one of the select few. Only a small fraction of them will succeed because the size of the market is currently small, and it has been made worse by the recession. This leaves firms putting the infrastructure in place ahead of demand, which is a very risky strategy.

There are benefits to being global such as knowledge sharing, real team work and collaboration, common values and standards. But first you have to prove that you can achieve these things domestically before you try them internationally.

Conflicts

The issues of conflicts will become even more pressing than they have already been. In England, Holland and to a certain extent Germany and Spain, firms can outgrow their ability to generate decent profits for the partners because they find themselves conflicted out of the high margin work too often.

The problem of managing conflicts has taken on great importance in the past five years or so as firms have become larger. By and large lawyers are noble and honourable people. The problem is not the ethical one about misleading clients or adhering to Bar rules. The overwhelming majority of firms do that with discipline.

The problem is the managerial issue. Conflicts cause disputes in partnerships when it becomes necessary to turn away either client A or client B. It's very difficult to make a firm-wide decision if you are very big. The result is that the cannons and nuclear bombs come out as one group of partners wage war on another group, particularly if the partner compensation is performance related. This is not just a big firm problem. It also occurs in smaller firms with so-called "merit systems" in place because there are vested interests with groups of partners.

If London tells Frankfurt that they have to turn away a transaction (or an entire client relationship) because of conflicts, how then can London complain if Frankfurt misses its financial targets? What temptations might Frankfurt have to find some way to represent this client and "hide" the conflict in order to meet these targets? To believe that law firm partners will not be so tempted (because we're all honourable) is to believe that no accounting firm partner would ever shred documents.

Bigger or Better?

Law firms' obsession with size has always been a goose-chase. The secret of success is getting better, not getting bigger. What firms should be worried about is, are we becoming ever more valuable to our clients on things that they value (and will pay a premium for)? Are we giving better client service? Have we learned how to deliver excellence to our clients at an ever-decreasing cost. (i.e. become more efficient?)

For all of the talk about competition and client fee-sensitivity, the issue of costs remains a neglected one among law firms. I do a lot of work for in-house counsel as well as law firms. No-one is worried about high fees for good work.

What they are incredibly annoyed about is that they do not believe of the typical law firm that it is acting as an honourable agent, looking after the clients' money, working hard to minimise the bill. What annoys the client is paying for inefficiency such as partners doing things that associate lawyers could do, having three partners attend a meeting when one would do. Most of the pressure on fees we are seeing around the world today is because clients do not believe law firms are efficient in spending the client's money wisely.

Indeed the client perceives (accurately) that the incentives in most law firms are precisely the opposite! Because the average partner is rewarded (financially or otherwise) by the firm when he or she raises the number of personal billable hours, the client perceives that the partner (and the firm) has an incentive to charge as much as they can get away with.

Hence, most clients feel the need to watch their legal bills like a hawk, and go over them with a fine tooth comb. The result is we have made the client profoundly cynical. It's actually point of professionalism. Clients wants someone that he or she can trust you to look after their interests and spend their money wisely.

There is also a lot of work to do in the area of client relationships. The goal of building multi-jurisdiction, multi-disciplinary relationships is a fine one. But current behaviour in this area, even domestically, is pretty poor.

Recently, I was at a meeting of a major Fortune 500 company which invited in all of its outside lawyers. They asked me to run a discussion on relationship building between the law firm and the client. I asked the in-house general counsel if any of the law firms present had volunteered, as a gesture of goodwill, to sit in on the legal department meetings to keep up in what was going on inside the corporation.

The general counsel said it had never happened in all his experience of dealing with outside law firms, and that he would welcome such an investment in relationship building. An old idea, but few are doing it.

If I were running a law firm and had one of two things to work on: get bigger (say, by merging or opening an office in a new location) or persuade my partners to act as if they cared I am convinced the latter would increase profits and the chance of getting better transactions. But of course, that would require tackling the behaviour of partners, which is much harder than doing a merger or signing a new lease.

Global but not Multi-site

I think it is better to be multi-jurisdictional on the condition that you have the managerial capability. But there is no virtue in being multi-jurisdictional by having dots on the map. The issue is not about how many new offices you've got. The keys are extra levels of client service, efficiency, innovation, creativity and understanding your clients' business. All basic things on which most firms do competently.

The issue then, is which firm is going to get the reputation for doing these things not just competently, but superbly -- reliably, consistently, dependably, superbly.

The point about globalisation is that you can have a global reputation and a global business without actually being geographically global. Tom Peters or Charles Handy are internationally renowned management consultants.

There are also lawyers in the City and on Wall Street (and elsewhere) who have global reputations. They charge extremely high fees (because they are worth it) but they don't have offices in every city in the world. They are just superb at what they do. If they subsequently decided to expand geographically, they could.

But the time to do it is when you have the cultural or managerial ability to live up to the claims of excellence that you offer the marketplace.

It is no coincidence that the most financially successful (and admired) law firms in both the United States and the UK are the firms Wachtell, Lipton in the United States and Slaughter & May in the UK. These firms, unlike the majority of their grandiose, empire-building competitors, have done nothing but focus on being the best at what they do, thereby attracting the kind of top-tier work and premium fees that are the envy of their peers.

They do not attend business conferences, do not (to my knowledge) hire business consultants, and they have made no attempt to build global firms. They have simply focused on the highest standards of professionalism and aim to be perceived by the market as the best.

Everyone's trying to copy the expansion plans of Clifford Chance and Shearman & Sterling. Why aren't they trying to do what Wachtell and Slaughter & May are doing? Because getting better is hard work. Getting bigger is a simple matter of doing deals and hiring laterals -- wonderful strategic avoidance tactics.

What, then, does it take to succeed in new markets (and/or new services)? In conversation with one of my UK law firm clients (a managing partner of a firm just outside the top Magic Circle set of firms), he was observing that the U.S. firms entering the London market that are threatening the established UK firms do not yet have sizable practices. Nevertheless, they seemed to be attracting terrific work.

"It seems as if size is a lot less important than people say," he commented. "What are these new U.S. entrants doing, then, that the UK firms' partners are not?" I asked. "They are showing 'Ooomph,' " he answered, implying that their energy was the key to their success.

Ooomph? That's the latest management theory? Well, yes. Ooomph. Focus on the essentials and just get it done -- superbly. Read the clients' trade magazines, act as if you gave an unconditional satisfaction guarantee, insist that everyone put the clients' interests first. Be absolutely reliable, dependable and a true trusted advisor.

And when you've mastered all that, take your excellence on the road: the big city, China, the sexy practice areas. Go for it -- but be sure you have made yourself ready to win!

Do You Really Want Relationships?

In 2001, I pointed out that building trusting relationships with clients leads to many benefits: less fee resistance, more future work, more referrals to new clients, and more effective and harmonious work relationships with the clients.

However, many people have built their past success on having a transactional view of their clients, not a relationship one, and it is not clear that they really want to change. Stated bluntly, professionals say that they want the benefits of romance, yet they still act in ways that suggest that what they are really interested in is a one-night stand.

In romance, both sides work at building a mutually supportive, mutually beneficial relationship. They work hard to create a sense of togetherness, a feeling of "US."

Each tries to truly listen to what the other is saying and feeling. The emphasis in discussions is less on the immediate topic at hand, and more about preserving the emotional bond and the mutual commitment.

Rather than seeking immediate short-term gratification and reward, romance relies on making investments in the relationship in order to obtain long-term, future benefits.

This is all seemingly attractive, but it is not an accurate description of the way most professionals deal with their clients, nor how many clients deal with their professional providers.

Most professional-to-client interactions involve little if any commitment to each other beyond the current deal. The prevailing principle is "buyer beware." Mutual guardedness and suspicion exist, and the interaction is full of negotiation, bargaining, and adversarial activity. Both sides focus on the terms, conditions, and costs of temporary contact. Each side treats THEM as "different," as "other."

This is the way many professionals and their clients want it to be. They want a transaction, and may not yet (if ever) be ready for relationships. Rather than acting to build relationships, both sides might initially have the brakes on.

After all, relationships require making a commitment and incurring obligations. They also mean focusing and being selective: you can't chase after every opportunity if you want to build relationships. To be good at relationships, you must have patience and know how to trust others.

Moving from a one-night-stand (transactional) mentality to a romance (relationship) mindset is not about incremental actions, but requires a complete reversal of attitudes and behaviours. One approach is not necessarily "better" than another, but there is a real choice to be made.

Expert versus Advisor

Although it is not an identical concept, the difference between transactions and relationships is similar to the distinction between being an expert to one's client versus being an advisor.

An expert's job is to be right -- to solve the client's problems through the application of technical and professional skill. In order to do this, the expert takes responsibility for the work away from the client and acts as if he or she is "in charge" until the project is done.

The advisor behaves differently. Rather than being in the right, the advisor's job is to be helpful, providing guidance, input, and counselling to the client's own thought and decision-making processes. The client retains control and responsibility at all times; the advisor's role is subordinate to this, not that of a prime mover.

Viewed this way, it is easy to see why many professionals, while they may pretend to the virtues of being their client's advisor, actually do not want to be one. They do not want to advise; they want to take charge.

The asset manager does not want merely to recommend investments to the client; he or she wants to control the client's funds. The trial litigator, similarly, does not want to provide input on trial strategy. He or she wants the client to cede authority to the warrior to do battle as she or he sees fit.

Naturally, there is nothing wrong with either role. There are many times when the client is best served by selecting the true expert and putting his or her affairs in their hands. On other occasions, the client may truly want and need an advisor.

The only mistake, on either side, is to pretend. A practitioner who is wedded to expert ways ("Leave this to me, I'll get you the result you want") has every right to practice that way. He or she has no right to complain if some (or many) clients prefer a different approach.

Of course, what would be foolish would be for someone who really prefers being an expert to pretend that he or she is an advisor. The mentality is different. The personality required is different. The skills required are different. The work experience and the fulfillments are different.

An expert who wants to be an expert is going to be miserably poor at pretending to be an advisor, and is going to resent the client throughout the entire project. (Which apparently happens a lot!)

Managing as a Relationship or as a Transaction

The issue of choosing between transactional and relationship approaches exists not only in dealings with clients but also in dealings with people inside the firm.

When I conduct seminars and workshops on managerial topics, those who pose questions want to know how to get other people (partners, subordinates, employees) to change their behaviour.

The very questions suggest a transactional viewpoint with the implication that we are just fine, it's THEM who need to change. When I suggest solutions based on building relationships with these other people, my questioners are often frustrated.

"Are you saying," they ask me, "that I need to show an interest in my subordinates as people and care about their career ambitions?"

"Only if you want them to respond to you," I reply. "If your subordinates feel that you are prepared to work at a relationship with them, ensuring that both sides benefit, then they will give you more of what you want. That's human nature, not a political or religious point.

"But if they think that you, their superior, are just trying to get out of the deal more of what you want from them -- harder work, more billable hours, whatever -- then they will respond in kind. They will view you as you are viewing them -- useful only to the extent that they can get out of it what they want in the short run.

"There will be no long-term loyalty and no commitment to the larger interests of the firm, because you have set the pattern that this is truly a temporary transaction, not a relationship. If you treat people as THEM, as objects, or as 'others,' they in turn will treat you instrumentally. It's completely predictable and unavoidable."

This analysis is not always received well. Managers are always trying to get more from THEM (the subordinates) without having to build relationships with THEM. The reasons are often the same as in the client situation. Developing relationships means creating commitments and obligations that people do not want to create.

In spite of what they say their goals are, many individuals are just not prepared to do what relationships require -- in any context. It's not just about their views of clients, but also about their entire life choices in dealing with people. It is their beliefs that must change, not just their daily habits.

The Attractions of Transactions

We must be wary of romanticising romance (or the advisory role.) Relationships are not the best answer for all people at all times. There are benefits to both parties in transactions.

Relationships can be scary, particularly if they rush too quickly into creating obligations that neither side is yet ready to accept. Both client and provider may be reluctant to commit to each other for future activity until significant experience with each other is developed.

Growing relationships is very personal and intimate. You actually have to be interested in others, listen to what they say and care about, and pay attention to their moods and needs.

Little of this is required in a transaction. Where it is required, it is only needed for a short period of time, usually during the initial seduction (i.e., negotiating the deal) when people play games pretending to care about each other.

After that, the transactional approach (focus on the getting the job done, not on the other person) allows you to remain detached and unengaged, which is very attractive to some people. You can emphasise the technical skills in which you trained, and not be stressed by the need for interpersonal, psychological, emotional, or political nuances. For many professionals, this is a great blessing.

Relationships, by their very nature, are not as clear-cut as the negotiated contract terms of a transaction. On both commercial and psychological grounds, it is easy to see why some individuals might prefer the clarity (and short-term gratification) of a "propose, get hired, deliver, get paid" transaction.

Transaction skills are very "scalable": expertise at winning and delivering transactions can be codified and disseminated quickly across an organisation. It is less clear that the interpersonal skill of relationship building can be developed as quickly in a business that wants to grow rapidly.

Transactions are also very appealing to those who find comfort in the rational, the logical, or the analytical approach, which description covers people in most professional and technical businesses. Little in professional training prepares one for the psychological complexities of dealing with clients (or liking it).

An analysis of just how different transactions and relationships can be (and their relative appeals) is given in the following table.

Transactions	Relationships
One-night stand	Romance
Them	Us
Opponents	On the same side
Short-term benefit	Long-term benefit
Suspicion	Trust
Goal is to make yourself look attractive	Goal is to understand the other party
Negotiate and bargain	Give and be helpful
Preserve options, avoid obligations	Make a commitment
Focus on the present	Focus on the future
Develop a detailed contract	Be comfortable with ambiguous understandings about future reciprocity
Main goal is to prevail	Main goal is to preserve the relationship
Style can be impersonal, detached	Style must be personal, engaged, intimate
Preparation and rehearsal of what we're going to say and do	Adaptability and flexibility to the responses of the other party
Listen to what they're saying	Listen to what they're feeling, why they're saying it
Usual feeling during the interaction is tense, enervated	Usual feeling is relaxed, comfortable
Interactive style is defensive, protective	Interactive style is open, inquisitive

Additional differences exist between the two approaches. In pursuing a one-night stand, a small degree of exaggeration, misrepresentation, and manufactured appearance is normal and even expected. Perhaps people rarely lie, but they rarely tell the whole truth either.

Clients hide the true objectives and budgets for their projects for fear of giving too much away and being at a disadvantage in the negotiations. Professionals try to create the appearance of greater experience, competence, and capabilities than they truly have.

In creating a trusting relationship, however, complete integrity is required. Even the smallest example of lying to your spouse will destroy years of relationship building.

Switching from a transactional to a relationship approach to business requires a revolution of attitudes and behaviours. Gradual change will not take hold, because everything people have learned through their successes in transactions may work against them in learning how to be good at relationships. The most successful Don Juans and Donna Juanitas are unlikely to make the best spouses.

Which Approach Do People Want?

It is interesting to speculate what percentage of clients are seeking relationship advisors versus transactional experts, and what percentage of providers want to be relationship advisors rather than transactional experts.

I don't have hard data on this point, but I regularly poll my seminar audiences about what they look for when they are trying to buy professional services.

Fully eighty percent of the typical audience reports that they would prefer to hire a true advisor and, if they could find someone skilled in taking that approach, would be willing to pay a premium for it. Twenty percent would not, preferring to seek out either the best technical expert or the low-cost provider.

When I ask the same audience which approach they and their firms are currently taking, the numbers are reversed. Eighty percent report that they mostly market themselves as experts (or are currently perceived as such) although many have dreams of changing this and becoming a "trusted advisor firm."

These results are not, of course, scientific. But the difference between what people say when they are buyers and what they say when they are providers is striking.

The Client as Enemy

While viewing dealings with clients (or employees) as a transaction is normal (and may be the most common form of professional service interaction), there is a danger that continuing to view clients as THEM can degenerate into viewing the client as the enemy. This can breed reactions that spiral into self-defeating behaviour for both parties involved.

All too often, the client becomes a competitor for things the professional wants (money, challenge, or control), not a partner in getting them.

All this can lead to behaviour that worsens the situation. Professionals act in ways that are pompous, patronising, condescending, or arrogant, and the clients react to that by being (in turn) defensive, more guarded, and even less "relational." Things begin to spiral.

As Charles Green points out in his new book, Trust-Based Selling (McGraw-Hill, 2005), you can tell a professional provider is treating the client as the enemy when he or she prefers to work back at the office rather than at the client's location. Each side, jealous and insecure about its control of THEM, competes for control of the agenda or outcome of a meeting or phone call.

Unlike healthy relationships, which surface and deal with problematic issues early, transaction players develop an inability to confront THEM on difficult issues.

As a result of all this, exaggeration, misrepresentation, selective disclosure of key information, and careful management of appearances are common on both sides. Both sides fight to be right and to prevail, rather than collaborate on finding a solution.

This all ends up being against the best interests of all parties concerned. By treating providers with suspicion, buyers create an atmosphere that makes providers more reluctant to show a sincere interest in any client need or requirement beyond the terms of the contract.

In turn, this unresponsive behaviour reinforces the buyer's perception that the provider is not worthy of trust and must be kept at arm's length, watched like a hawk in case they take advantage of the client.

Like some ancient rivalry, or a bad marriage, the origins of the dispute are lost in the mists of time. It is impossible to discover who was first responsible for treating the other badly.

All that can be observed now is a set of resentments and accusations of being treated poorly by the other side. Each side can point to specific behaviours that show that THEY (the other side) are unfair, unreasonable, and untrustworthy. Each side has concrete evidence of behaviour by THEM that proves that "we are justified" in our thinking poorly about THEM.

As a result, clients become more demanding and controlling in their buying behaviour and providers become more insincere and less responsive in their dealings with clients. Both sides end up actively encouraging the adverse reactions from THEM that they are trying to avoid.

Other examples of dysfunctional "client as enemy" behaviours include:

• Focus on rehearsing what you are going to say to the client in proposals and presentations rather than how you plan to get a true conversation going.
• Avoiding conversations with clients because you want either to remain in control or avoid having to treat the client as a person.
• Avoiding contact with clients unless there is something concrete to talk about.
• Too obviously trying to sell more work to get what you want rather than serve the client.
• Requiring that all agreements and decisions be documented and formally approved, rather than trusting each other's word.

The most important agenda for most professionals is to ensure that they do not allow their transaction business to spin out of control into "client as enemy" behaviour. Among all the outcomes, this is the worst, with no winners.

Transactions are inevitable. Clients increasingly treat professionals as vendors; they audit bills, they use purchasing departments and consultants in their selection processes, they bargain hard, and they emphasise contractual terms. Once this has begun to happen, it is clear that the client organisation has categorised you as THEM and what follows, with immensely high probability, is going to be a transaction.

That's not necessarily a tragedy. As long as enmity does not build up, great success can be achieved with this approach. Once you are working with the client on the transaction, you have the opportunity to then take advantage of the client contact to build a relationship for the next time.

However, firms must be vigilant in identifying where they are engaging in "client as enemy" activities, and discuss ways to eliminate them. In addition, they must identify and eliminate anything they might be doing that causes the clients to view the firm as the enemy.

As Patrick McKenna observes: "The first tangible acknowledgment that many clients get from their professional service provider is a standard retainer agreement that lays out in no uncertain terms 'what we are going to do for you -- and to you -- if you don't pay our bill in a timely fashion.' "

"How's that for a terrible way to start?" Patrick asks. "Why not make sure that the firm's first communication with the client is a letter of thanks for having been chosen, providing a note of reassurance to the client that they have chosen someone with some human sensitivity?"

If relationships are not always possible, the very least a firm can do is to ensure that it handles its transactions professionally, and does not play the transaction game in such a way as to alienate the very clients it seeks to win and serve.

Making the Transition to Romance

Many people believe that individuals, by the time they reach positions of influence in their careers, cannot readily change and that if firms want to build relationships, they must recruit, develop, and retain people who have a predisposition for romance rather than seeking to change transactional people in the middle of their careers.

There is a great deal of truth to this. In 1997, I wrote about two types of firms: hunters (based on opportunistic individualism) and farmers (based on collaborative teamwork). Many firms have tried to make the transition from the former to the latter, only to discover that it has been extremely difficult to turn individualists into team players.

Few have pulled it off as institutions and those that did accomplished it not by changing people, but by replacing them. Only when the collaborative team players achieved positions of power and could insist on their approach did firms begin to change.

Another approach to changes of this kind has been to complement "old style" players with people who have the "new" attitudes and skills. This has been done in firms where technical experts have been explicitly teamed up with "client-friendly" salespeople who work together to win and serve clients, melding their skills.

The real challenge, however, is for all of us as individuals, not as firms. Transactions are common because they involve less hard work and demand fewer skills. Ultimately, however, they are not in the best long-term interests of either professional or client.

Mutual trust will allow both sides to get more of what they seek than continued mutual suspicion. Relationships are not more "noble" than transactions, but where they can be created they are much more profitable.

Accordingly, many professionals will want to make the terrifying and difficult transition from skilled seducers to relationship-minded collaborators.

Clients can be successfully led into a mutually supportive relationship and away from treating us with suspicion, but only if we throw away the bad habits of viewing them as THEM, and throw ourselves whole-heartedly into developing the new skills of relationships.

The key first step is to recognise that romance and relationships work by earning and deserving what you want to get back from the other party.

Whenever a trade-off occurs, the rules of romance require that, instead of acting defensively to protect your own interests, you put the client's interest first and keep the faith that this relationship-building act will be repaid through future reciprocity. As I tried to show, this is not idealism since it leads to higher returns, but it does require an act of faith.

Accordingly, the course of wisdom for those new to the approach is to be highly selective in choosing a first relationship to experiment with. As in all change efforts, a small-scale first experiment that has a high chance of yielding an early success is the wisest approach, rather than beginning with the most important relationships. If you are going to learn a new skill, it is better to do so in a situation where any initial fumbles will not be costly.

If they are to capture market premiums, professionals cannot, in the long run, afford to have clients continue to view them as THEM. Professionals need clients (and employees) to think of them as US. And the only way to achieve that is to start thinking of them the same way.

We must each decide whether, if we truly want the benefits of romance, we have the courage and patience to shake off old ways of viewing other people and are willing to learn new ways of dealing with them.

Master of the Universe

by Mairi Clark 2005

from THE FIRM, Scotland, 2005

He's quiet, he's self-effacing and he's coming to Scotland in October. Richard Wood is one of Australia's most respected business thinkers and he'll be jetting into the lighthouse in Glasgow to speak to law firms about the secret to getting the very most out of your people. Mairi Clark has an unusual telephone conversation with Richard Wood.

As interviewees go, Richard Wood is both the perfect and the nightmare subject. Forthright and opinionated, he immediately takes control from the offset, demanding to know what is expected from him in the interview. "What do you want to know and how much do you have to fill," he asks bullishly. "If you tell me, then I can make sure we both leave this interview happy."

It's this assertive attitude that has led to him being one of Australia's best-known business thinkers and a leading authority on managing professional services firms. By building a national practice, he now spends 40 per cent of his time in Queensland, 30 per cent in Western Australia and 30 per cent in the rest of the country. He charges $2,000 a day advising businesses, something he waits until the end of the interview to reveal, lest the cost of his time be calculated. While that figure may make even the hardiest financial director baulk, it does come with a no-quibble client satisfaction guarantee.

Wood, 33, is coming to Glasgow in October to talk to Scottish business minds on how to be a good manager. It is one of only two UK dates, and focuses on the idea that being a "people person" can help a business grow to become more profitable and to cultivate good management.

The ethos of emotional intelligence is not a new one, but its application to the business world is rarely practised. Wood himself admits that he was not taught it. "I did not start to understand this until I got married to my wife," he says. "I was trying to be a brain; I was trying to be smart."

When he talks about being smart, 33-year-old Wood is referring to the early stages of his career, when he'd just completed degrees in business at the University of Southern Queensland and law at the Queensland University of Technology. He went solo as a consultant in 1996.

"If you stay inside the university setting, it doesn't matter if people like you a lot, they only care that you are smart," he says. "My wife doesn't actually like intellectuals but she is interested in people. What I really learned from her was that I used to think that the 'understanding people' topic was an option. It's not, it's essential."

Chinchilla-born, Wood now lives in Toowoomba, where he manages his consultancy business, interspersed with seminars and article writing -- of which he has written five. "I'm an Australian by style," he says. "I'm not noisy, loud, aggressive, brash or excitable. I found that it fits better in Australia than overseas."

While it would be easy to dismiss Wood as yet another motivational speaker, his ethos has been proven. In 2001, Wood carried out a piece of research that formed the bulk of his 2001 article, Practice What You Preach. The research surveyed 139 offices of 29 firms in 15 countries in 15 different lines of business, and asked a simple question: "Are employee attitudes correlated with financial success?" Using the results of some 6,500 employees, Wood came up with the results that suggest financially successful businesses are successful in no small way thanks to their positive employee attitudes.

"If you reject human interaction as a soft subject, I can prove you make less money," he says. "Managers and people who know how people work make more money. Management is not really about being smart or about intellect. It's about how in control are you in your conversations."

Wood relates a story about his nephews and nieces, who, probably after seeing their uncle's $2,000 paycheque for a day's work, figure there must be some secret.

"They know I used to be a university student and they come to me and say, 'How do you do well?'," he says. "My answer is always, 'Go to class and do the homework'. They say, 'What's the secret? You are asking us to give up short-term pleasures'. I say, 'I'm not asking you to give up anything, you wanted to know how to do well'."

He's as honest about who should come to his seminar. "Lawyers have constantly rejected managing their businesses," he says. "The metaphor I use is improving a law firm is like my uncle's problem of being a fat smoker. He doesn't need another speech about health. He knows exactly what to do. People should only come if they are serious about losing the weight and getting on the diet."

The interview is interrupted by a phone call, which Wood takes and is still audible. He is obviously talking to a supplier of some description. "I'm sorry, you 'don't normally do this'?" he says to the caller. "That's not making sense. How much money do I have to pay to get this delivered? We've been waiting months." There's a pause. "You 'don't normally do this'?" he repeats incredulously. "So if I was to give you $200,000, you couldn't deliver it for me sooner? Fine. I'll give her the message that she just has to wait." He then puts the phone down.

"See," he says, coming back to the interview, "in this situation, my wife ordered something and has waited three months. There is a difference between right and wrong. If I was really trying to win that person over, losing my temper was the wrong route. Even if she could help me, she wouldn't. She hates me."

A simple theme runs through Wood's attitude, you only get from people what you put in, or, as he puts it: "Life has a way of teaching you that everything you want in life has to be given to you by another human being, how do you get another human being to give you what you want?

"If you thought your father was doing something that needed to change, you would think carefully about what was the best way to tell them," he says. "You'd go over and over it in your head, trying to phrase it so you wouldn't hurt them. Unfortunately, in work we don't take that approach."

Wood believes firms often promote people to management when, in reality, their skills lie elsewhere. "Firms have to be a lot more careful in who they choose as their managers," Wood says. "They tend to choose the person who has the best financial skills, or the founder, or the best rainmaker. I believe it is the job of the manager of the firm to awaken the energy, desire, passion and enthusiasm of his or her partners. If you are really interested in people, they will respond to you."

Seminar attendees should not be fearful that they'll get the usual acronyms and gobbledygook that other business advisors spout; Wood is as sceptical as the rest of us. "Part of what I do for my audience is say that we must stop using business jargon and start dealing with each other as people," he says. "If a manager's motives are not pure, if they are just doing it for the money, then you can't teach the skills if the attitude is not there. If a manager's motives are pure, and they are really trying to help then you can teach them the ability to coach, manage and help."

He's quick to point out that he's not a motivator. "The main point of this is, lawyers know this but do very little of it," he says. "Your job as a member of the audience is to tell me what you really want to achieve in your firm."

Professionalism in Consulting

Like many profound ideas, "professionalism" is an ambiguous concept used to refer to a wide range of attitudes, skills, values and behaviours. For example, if one asks people what is meant by referring to a consultant as "really professional," one hears a variety of replies. A really professional consultant, I am told,

• Gets involved and doesn't just stick to their assigned role
• Reaches out for responsibility
• Does whatever it takes to get the job done
• Is a team player
• Is observant
• Is honest
• Is loyal
• Really listens to the clients' needs
• Takes pride in their work, and shows a commitment to quality
• Shows initiative

This list indicates some of the differences between a "really professional" consultant and an ordinary consultant. It reveals that a high level of professionalism doesn't stop with a foundation of technical qualifications and analytical skills. In addition to these basic attributes, the right attitudes and behaviour must also be in place, and these become the distinguishing factor for achieving real professionalism. My former business manager said it best: "Professional is not a title you claim for yourself, it's an adjective you hope other people will apply to you. You have to earn it."

"You have to earn it" may not be a bad way to summarise what professionalism is really all about. It means deserving the rewards you wish to gain from others by being dedicated to serving their interests as part of an implied bargain. Professionalism implies that you do not focus only on the immediate transaction, but care about your relationship with the person with whom you are working. It means you can be trusted to put your clients' interests first, can be depended upon to do what you say you will do and will not consistently act for short-term personal gain. Professionals make decisions using principles of appropriate behaviour, not just short-term expediency.

Significant efforts have been made, and continue to be made, to "professionalise" consulting by promoting the use of the CMC -- Certified Management Consultant -- qualification. However, professionalism is not about qualifications and certification. Having an MBA from a name school or official recognition from a trade association or certifying body might say something about your knowledge, but these pieces of paper are unlikely to be predictive of your attitudes and behaviours, and maybe not even your skills. No formal qualification will ever provide complete assurance to the buyer that the provider will act appropriately, even if equipped with the required skills.

Forging Attitudes

The B-School Problem

It is not clear how consciously business schools, even those with special programs on consulting, set out to forge the appropriate attitudes for consulting. Through oversight or neglect, they may even sometimes create inappropriate behaviours. For example, many professional schools, whether in the law, business or medicine, work hard to create a sense in their students that they are an elite, the "best and the brightest." This can breed arrogance that later shows up (no matter how unintentionally) as pompous, patronising, condescending behaviour when dealing with clients. "You are the person with the problem; I am the trained expert, so shut up and do what I say." Only in recent years have medical schools begun to provide programs to fight this socialisation, and few business or law schools have anything substantive in this area.

Some schools have attempted to tackle the difference between knowledge and skill by building real or simulated consulting projects into the curriculum, but few, if any, are consciously designed to provide a critical examination of the consulting experience by debriefing and exploring issues such as (a) what does it feel like to be a client?; (b) what is the difference between being an expert (providing answers) and being a skilled advisor (helping the client solve his or her own problem)?; (c) what is the consultant's role when members of the client organisation are at odds or in disagreement?

Yet the need is readily apparent to each of us whenever we contemplate our own experiences as buyers of professional services. In working with professionals, I frequently ask them to tell me what they dislike about having to deal, as a client, with other professionals such as doctors, accountants, lawyers, interior designers and, yes, financial management consultants. The list I am given of how people are treated as clients by these professionals is remarkably similar, regardless of the profession being discussed. Professionals ("those guys"), I am told,

• Are pompous, patronising, condescending and arrogant
• Don't listen
• Treat me like a job, not a person
• Don't explain what they're doing and why
• Don't like to be asked questions or challenged
• Leave me out of the loop and take over my issue
• Tell me what they think I must do instead of giving me options
• Are more interested in my money than me
• Ignore my feelings and treat the issues as purely technical
• Apply standard solutions and approaches; don't make me feel as if they are customising to my needs
• Don't act as if they care about me

Test this list against your own experience as a patient or client with professionals. Does it sound familiar? What should be obvious about this list is that many, if not all, of the behaviours reported as missing are the very ones we would use to describe someone as a real professional. Note, however, that none are technical in nature, and all relate, one way or the other, to the provider's attitude toward dealing with the client.

A business school education does little to help students distinguish between the "consultant as expert" (I can solve your problem) and the consultant as helpful advisor (I can facilitate your decision-making process and help you make your decisions).

Successfully conveying an attitude of trying to help (as opposed to being right) is a pre-requisite for all consulting work: without the ability to earn a client's trust, content expertise will not be listened to by clients.

Few consultants report that they have been trained in these human interactive skills. Their entire education in schools and in firms has been about logic, rationality and intellect, and little, if any, experiential learning was provided to them on how to earn trust, win influence and establish relationships. Many do not want to engage in the interpersonal, social and emotional activities that being a "trusted advisor" requires. Many consultants consciously avoid anything that smacks of intimacy with their clients and rush to return to the "high ground" of detached, logical analysis where they feel most comfortable.

Further attitude problems, perhaps unconsciously, can be formed from the educational experience itself. In case-study-intensive programs, the student is invited to stand as the "outsider" and form judgments on the solutions to business problems. This can breed an attitude of detachment or disengagement; a view that logical, rational, intellectual analysis is the primary virtue; and that emotions, passions, and interpersonal dynamics are relevant only as subject matter to be studied and likely of secondary importance in consulting unless one is a "behavioural" consultant. At no time does the student receive the message that immersing oneself in the messy human dynamics of a business situation is a requirement to finding constructive solutions.

This problem is accentuated by other social conditioning absorbed in business schools about what business is about and what management involves. In one school of my acquaintance, hardly a single case study was examined without someone saying something like "This company is not in business to make widgets, it's in business to make money," thereby dismissing any need to feel passionately involved in the product, the customers or the employees. For better or for worse, such attitudes will influence the future consultant's view of what is important in his or her profession and inevitably send the wrong signals to clients.

Firm Weaknesses

The socialisation that takes place in consulting firms varies immensely. Firms often develop their own cultures of what they think "professionalism" is, and consciously or unconsciously socialise their employees into their specific definition of the term. They use the term constantly in their hiring and in proposals to prospective clients.

These varying definitions of professionalism differ immensely from firm to firm, probably appropriately so. For example, some firms emphasise "implementation" as the key to their professionalism, while others stress that their value is added by providing a "big picture" review. Is one of these strategies more "professional" than the other? Clearly not. It would be wrong to conclude that, for example, one must be involved in implementation or give the big picture to be deemed fully professional. The underlying issue is really one of integrity. Is the firm consistent in what it claims to be and do? Does it deliver on what it claims to provide? In essence, the issue is whether or not the firm has (and lives by) a clear ideology of high standards.

Some firms with a clear ideology, such as McKinsey, go out of their way to indoctrinate new hires into their value system (their way of doing things), which includes concrete positions on the role of the consultant, the appropriate way to work with clients and the attitudes expected of all consultants. Of course, what makes this formal indoctrination "stick" is whether or not the attitudes preached are, in fact, the ones that the young consultant sees modelled every day by the more experienced people in the firm.

Other firms, such as the Boston Consulting Group and Bain, also have a reputation for articulating clear, consistent, firm-wide positions on what they consider the role of a consultant to be (an ideology) and to which all members of the firm are expected to adhere. Naturally, these definitions are not identical firm to firm, but all serve the role of communication and forming a set of attitudes that are required by the firm. Whether or not the firm provides formal training or documentation is of lesser importance than the fact that there is a clear role model that all recruits are expected to emulate, and that the culture is strong enough to rein in instances of non-compliance.

However, many firms, particularly those who provide widely varying services to widely different market-places, experience a harder time in conveying a clear, unambiguous view of the consultant's role. In addition, many firms do not have a firm-wide ideology on this point. For these firms, which are probably in the majority, there is no enforced, common approach to working with clients. Individuals are socialised not through formal indoctrination but informally and randomly by the specific individuals they happen to work with. Little or no attempt is made to formally discuss the consultant's role and the attitudes it requires. As a consequence, the concept of professionalism is left ambiguous and, almost certainly, randomly implemented.

Skills with Clients

The range of skills that an effective consultant who wishes to become "fully professional" must develop is, in fact, a long list. While many firms train their people in such things as presentations, written communications, proposal writing and selling, a much smaller percentage actually teach their people about how to work with a client. Client service training, where it exists, is spotty and usually an after-thought. Almost none of it is taught in business schools.

Again, there are singular exceptions. Not surprisingly, McKinsey, with its reputation for making a heavy investment in training, is one of the shining examples. Formal programs of "influence skills" are available and required, taught by psychologists, and there is a common practice of reinforcing this learning by inviting a second or third consultant to sit in on client meetings to observe and debrief the interactions. Such activities take place in other firms, but few have such an organised approach that is clearly signalled and is mandatory for skill development, rather than one that is optional and idiosyncratic.

Other skills are required as a consultant develops. Paul Glen, in his book Leading Geeks (Jossey-Bass, 2002) lists, among others, the following competencies needed by an IT professional:

• Ability to manage client relationships
• Ability to manage technical teams
• Ability to play positive politics
• Ability to help expand client relationships
• Ability to work through others and make them productive
• Ability to manage ambiguity
• Ability to manage time horizons
• Ability to manage client relationships

To this fairly familiar list one could add a number of skills that most consultants wish they had mastered earlier in their careers:

• How to earn other people's trust and confidence
• How to earn, deserve and thereby nurture a relationship with a client
• How to give advice without being assertive or patronising
• How to deal with conflicts among client personnel
• How to manage meetings
• How to supervise others so they want to work for you again
• How to get the best out of those in support or administrative roles
• How to get someone in a more senior role to want to help you
• How to receive work delegated to you so you know what you're supposed to be doing
• If, when and how to say "no" to a senior person or client
• Getting feedback from others, inside and outside, in a timely form you can use

All of these are learnable skills (some are even teachable), and all are components of what I mean by the term "a fully skilled professional." Some of these are commonly contained in the typical firm's training program; a remarkable number of these skills are not.

Integrity at the Core

Integrity is usually taken to be central to the idea of professionalism. But what, precisely, does integrity mean? Consider the following list of statements, each taken from the mission or values statement of a real consulting firm:

• We always put the clients' interests first, ahead of our own.
• If a client wants to pay us to do things that we think aren't in his or her best interest, we'll turn the work down.
• If we have even the smallest doubt that we can't do this work to excellence, we'll turn the work away.
• We never lie, misrepresent or exaggerate, in any way, to anyone, under any circumstances.
• We stand by our work. If clients don't like our work, we refuse to take their money.
• If a client treats our people badly, or with a lack of respect, we'll walk away from that client.
• We will fire any employee who fails to treat others (at any level) with respect and dignity.

How many firms do you know that could meet all these standards? If you think the standards are too tough to be realistic, how would you change them? Do you think a firm that lived by these rules would flourish financially or die? What else do you think belongs on the integrity rules list? Every firm (and individual consultant) should reflect on the above questions.

The key point is that integrity cannot be judged by what you advocate, only by that which you always do. A claim to integrity is only meaningful if it includes this follow-up statement:

"We treat our espoused values as non-negotiable minimum standards, and counsel anyone who is not in compliance with them. If, after counselling, the person does not, or cannot, get into compliance with our values, we will help them find alternative employment."

One of the readers of my website, where I first posted this statement, responded as follows:

"No firm meets all these tests. Putting the clients' interests first, ahead of our own, is difficult to rationalise in public corporations. The commonly held guideline for behaviour (maximise shareholder value) inevitably leads to a violation of the spirit of this principle. Leaders are willing to deceive (if not outright lie) to anyone producing a "drag coefficient" on revenue, including customers. Can (should) this change? I don't think that adherence to strict integrity rules would actively constrain a firm's performance. However, the traits that lead to violations may lead to disadvantages down the road, e.g., lying can work in the short term, but not the long term."

Another reader of my website posed the following question:

"Do you think many professional firms are compromising their integrity in favour of money? The more competitive their environment and the larger their firm, it seems the pressure to maintain or increase revenue is just too great. Are professionals in such firms just high-paid technicians if the driving force from the firm is to make money even if this means risking its reputation?"

As these cynical comments show, there clearly are those firms out there that send a clear message to their people: "It's about the money, stupid: do whatever it takes." I have experienced first-hand those consulting clients who create such pressure to meet short-term financial goals that their people are led into faking orders, padding bills, neglecting client service and beating their staff to a pulp. In fact, if you read the gossipy bulletin boards on the Internet about consulting firms, you can easily conclude that such behaviour is more common than not.

Integrity Pays Off

It is difficult to prove with hard science, but my 20 years of watching consulting firms leads me to believe that in consulting you can't get away with a lack of integrity or ethics for long. I'd risk the generalisation that those consulting firms that have, over the years, vigorously enforced values, standards and principles will also have achieved the best brand names and the highest profits.

In 2001, I surveyed 5,500 people in 139 professional firm offices in 13 countries, posing 74 culture questions, as well as obtaining three years' worth of financial performance data. Using both step-wise regression and structural equation modelling (path analysis) I discovered that the answers to only nine questions accounted for more than 50 percent of all financial performance differences between and among these 139 businesses. They were

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 of client projects is uniformly high.
9. The quality of the professionals in our office is as high as can be expected.

The firms that succeeded financially were not those that preached these standards (nearly every firm does) but those whose staff, top to bottom, agreed that they were the principles on which their firm actually operated. What's notable about this list is how familiar it is. All it says is that the firms making the most money are those who are actually living up to familiar standards that everyone preaches. The message is that you can make more money when you behave and enforce standards, not when you superficially advocate them or merely post them on a bulletin board or company website.

Whether or not a consulting firm actually has the necessary standards of professionalism is proven by whether or not there are consequences for non-compliance. If a firm has a partner who does not treat others with respect, that partner must be counselled, and if the counselling doesn't work, then that partner must be fired. If the firm is prepared to go that far, it can, in my opinion, be called truly professional and will likely make more money.

Origins of Failure

If all this evidence is valid, why then is excessively risky short-term behaviour reported to be so common in business in general and is even found in many consulting firms? Why do we keep hearing of managers "forcing" their people into behaviours that at kindest can be described as "cutting corners" and at worst as unethical?

The most important point to make is that you don't have to be unethical to be dumb. As my questioner put it, consulting firms are doing things to make short-term profits that put their reputations at risk. That's not necessarily a lack of integrity, it's just stupidity. And, at some level, it's even understandable stupidity. A slightly compromised reputation might hurt you tomorrow, or the day after that, but, hey, that's the future, and you wouldn't believe the discount rate we apply to profits in the future compared to today! (And we'll have a year or two to make up for it, won't we? And maybe the clients will forget that we weren't that great two years ago!) Call this the short-termism excuse.

There are others too. I have sat in strategy meetings where firm leaders acknowledge the future cost of compromising reputation, but argue that by the time it hurts the firm they will have made their pile and cashed out. These people aren't really short-termers; they're just selfish and greedy.

Then there are consulting firm leaders who don't really believe their own mission statements, vision, values and strategy. They say that they believe a reputation for excellence is worth its weight in gold, but they are not willing to actually put the proposition to the test. For example, how many firms that preach dedication to outstanding client service are also willing to give an unconditional client satisfaction guarantee? Not many! These people are not being excessively short-term thinkers: they are cynics and unbelievers. They don't really think that building or sustaining a reputation is worth sacrificing any amount of short-term cash.

Another pathology that occurs among a firm's leaders who are not short-term thinkers, are not greedy and are not cynical is that they are very scared and lack courage. They would really like to stick with the firm's strategy and standards and not accept a short-term hit, but they are frightened to take such a risk, either because they think their partners will rise up and revolt, which is actually quite possible, or, if they are publicly held, that Wall Street will take out a substantial chunk of their market value.

A final group of consulting firms with low standards engages in short-term compromises and acts of expediency because they actually don't have ambition. To accept a short-term adverse consequence, you've got to have a passionately held ambition to get somewhere. Otherwise, why would you make sacrifices? Yet many firm leaders are more concerned about not messing up than they are about "going for the gold."

So what have you got to have as a person to "do the right thing?" You have to have integrity, and really believe in your strategy, mission and values, and have a dream, fervently desired, and have the patience and courage to bet on the long term, and resist palpable pressure from the constituencies you serve and

be willing to accept the short-term consequences of your actions. This all takes a level of self-discipline that few of us measure up to in our everyday behaviour. I guess that's why it's not common. And I guess that's why they call it professionalism.

Problems of Enforcement

If you really want to obtain the commercial benefits from any strategy, you must put in a system that forces you to execute that strategy. The tragedy of many consulting firms, and the source of their lack of professionalism, is that they have not put in place systems to enforce accountability for standards.

As an example of one that has, consider EDS, the computer services giant. They have a Web-based project management system that records everything about the project -- when are the next due dates, what have we 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 to the client! At any time, the client can log in and see where his or her project stands, with budget, due dates, deliveries, etc. EDS asks its 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 multibillion-dollar company logs in every day and can see client feedback from every client for the entire company, and that is the first thing he does every day.

What's impressive about EDS is not the technology but the willingness to be held inescapably accountable to high standards. Many consulting firms haven't even got a decent internal project management system, let alone one that they would give clients access to. Most firms have a mission statement that declares a commitment to client satisfaction and client service. But how many have a feedback system where they regularly ask clients, at the end of every transaction, how happy they are with the work? Only a few! How many publish those results with the names of the relevant partner to everybody in the firm? Even fewer! Instead, what exists in most firms is a frequently espoused belief that client service is very important, but a refusal to establish behaviours to accept accountability for it.

Firms typically leave it up to the individual and his or her self-discipline to accomplish high standards of professionalism, but that usually doesn't do the job. If there is no system that keeps people honest about performing up to standard, you don't get the benefits. The key, if you really want to make something happen, is to not 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, and if you don't want to be held strictly accountable, then fine, 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.

The Upside

Imagine a world where every junior member of the firm says, "In this firm, one thing you can bank on is that you will be superbly supervised on every transaction. It is a matter of professional principle with us. We don't do work unless we supervise it superbly" (note that this was one of the nine profit predictors in my statistical study). What commercial benefits would come to that consulting firm if it were true that supervision was always done superbly?

First, from the firm's point of view, there would be less wasted time and rework, and the firm would experience lower write-offs and higher realisation. You could obtain better economic leverage because people would feel more confident in delegating work to trained people. Second, the firm would spread skills faster and the firm would do a better job of retaining people.

Clients would notice a higher level of quality and therefore might feel less fee sensitive, knowing that they had found someone who always supervised the work well. This is terribly scary, because maybe that might mean they would also notice when the work was not supervised superbly.

If, as a senior partner, I knew that every junior consultant had been supervised superbly since the day they joined the firm, I might actually trust these young people and delegate more to them; whereas if I am living in a normal consulting firm where excellence in supervision happens only sporadically then it's quite logical never to delegate because the juniors are untrained, unguided missiles.

This list of benefits for both firms and clients can be obtained by diligent, enforced adherence to a high standard of project supervision. But here is the issue: Why are many consulting firms not getting these benefits despite everything they promise to new recruits about the importance of quality, professional pride and great work environments? Why does the average consulting firm not enforce this standard? Because they can get away without doing it!

Many consulting firms fail to meet the high standards of professionalism not because they do not believe in them and advocate them, but because they fail to enforce them. It's not an issue of being "unprofessional" or unethical. It's simply a matter of the difference between the true pursuit of excellence and the acceptance of mere competence. They have wonderful standards of quality that are preached. But they will forgive any partner who does not do this, as long as he does not go to the opposite extreme and do something ugly -- sexual harassment or get us sued. Competence ("don't mess up") is not the same as professionalism ("uncompromisingly high standards").

Partners' Failed Leadership

If you go to the typical consulting firm today and ask, "What percentage of your partners would put hand-on-heart to say that they regularly read every issue of their main client's trade magazine? Not all your clients -- just your main client?" I can report from experience that, around the world, the answer is sadly in the single digits. Yet we all know that clients like for their consultants to show an interest in their business. So let me ask again: "Do you act as if you care about your clients?" In the typical consulting firm, the honest answer is, "We believe that we should care, but we frequently don't act that way."

I often talk about meeting three kinds of partners in consulting firms: dynamos, cruisers and losers. These, by the way, are not different people; they are all of us at different stages in our lives. A dynamo is somebody who is always acting like they have a career. In addition to taking care of this year, every year they are doing something to bring about their personal future. Every year they're always saying, "Where do I want to go next, and what do I do today to make that happen?"

The cruisers (by definition, not losers) are a very important category that includes the majority of partners. They are good, solid citizens, coming in each week to 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. The quality is there. The hard work is there, but that person isn't actually going anywhere. He's acting like he's got a job, but if you said, "Where do you want to go next with your career? What kind of transactions do you want to be doing three years from now?" he'd say, "Sausages!" He has no particular desire to advance his professional career.

At some stage in your life, you're probably a loser. The usual reasons: divorce, alcoholism, cocaine, manic depression, the kids have been arrested again. Things happen. If you're lucky you deal with it and recover; if you're unlucky you get stuck.

In the typical consulting firm, I am told by firms around the world, the percentage of partners in those three categories is about 15 percent dynamos, 75 percent

cruisers and 10 percent losers. If that's the makeup of the typical partnership in the typical consulting firm, only 15 percent of the partners are trying to get somewhere and the large majority is just coasting along while making sausages day after day. Is that professionalism?

If my estimate is accurate, firms should not waste their time doing strategic planning. Because strategic planning in that environment is like trying to figure out which way to 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, and to accomplish it with high standards of professionalism?"

We therefore come to the key choice if you're considering a firm to join as a partner: which gang do you want to belong to? The tolerant firm says, "If you want to cruise, that's okay. Not only is it acceptable, it's actually the overwhelming norm here," just like in many consulting firms. Or you might want to join a firm where they say, "The rule here is you've got to be learning and growing, because 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 that there's an option here for firm leaders to confront and decide. The choice is, do you want to set forth and enforce a high standard in your partnership agreement?

The Real Bottom Line

The lessons should be clear. You get the benefit of that which you actually do, not that which you encourage. Ultimately, professionalism goes beyond attitudes, knowledge and skills and is about dependable, reliable, consistent behaviour. You may believe in something, know how to do it and be skilled at doing it. But unless you can be relied upon to actually do it, and do it unfailingly, then you cannot hope to develop a reputation for professionalism.

The way you make money in consulting is not to be good at managing the money. The way you get money is to decide which product you want to deliver -- quick, hot fast food or fabulous cooking for some cuisine connoisseur -- and then enforce the standards appropriately for that choice though superb leadership. The money is an outcome of how high your standards are and what you do about them. He or she who lives to the highest standards -- in other words, is most professional -- wins.