Professional Services Firm

“Create a strategy and supporting organisational structure and operations to enable our growth. Define, design and codify our proposition and service offering.”

Approach

  1. Define north star for the organisation, review past work and articulate a company vision

  2. Review financial health and prototype operating models to improve leverage

  3. Build the strategy to pave the way towards the desired future state (north star), define enablers and strategic priorities

  4. Shape the value proposition and services

  5. Design and implement organisational structure and operations with the existing workforce in mind

  6. Roll out new value proposition, create communications content for re-brand and website launch

Value Proposition and Strategy

To arrive at a meaningful value proposition, I reviewed past projects to understand what the core capabilities of the consultancy were. I thereby identified common characteristics that became the red thread that tied together the services provided in the past. The resulting north star was enriched by presenting a stretch goal – a tacit capability not yet exploited.

With the north star in place I then began to work on hypothesis propositions. They would leverage existing capabilities and inform strategic objectives to pave a path towards building new ones. Meanwhile current operations needed to be maintained and embedded in the strategy.

The enablers mainly consisted of increasing productivity, improving cash-flow and build talent. A professional services form’s assets are it's people, their time and the knowledge they possess. So, the focus for enablers was to make the most of these assets.

Operations, Service and Product Portfolio

Having identified key assets and capabilities, I created a service and product portfolio. The key difference being that services required people to provide support to their clients (time and knowledge), products on the other hand would pass on that effort to clients by codifying a process and the knowledge required to successfully reach the goal. The services were underpinned by the consultancy’s capabilities (existing and future) and allowed for processes to be standardised and therefore made more efficient, while allowing for better budgeting and time management. I introduced a new work management system to embed these in the company and created templates to make for example business development conversations and project kick-offs more streamlined. The products I designed tied into the services and presented low-entry-barrier offerings for clients, expediting lead generation for services.

Structure and Financial Forecasting

Thus far the consultancy had no view on organisational structure, nor control over its cash-flow and overheads. I introduced a system to maintain transparency and control of finances. The business remunerated consultants based on their own initiative, leading to salary discrepancies with performance. I brought those discrepancies to the surface and created a progression and performance path, setting clear expectations and metrics for consultants. This allowed for increased accuracy in financial planning and budgeting, while providing clarity for the team with clear progression and transparency on how they’re being assessed. I also complemented the progression path with time allocation for coaching and mentoring, annual and bi-annual reviews, and a knowledge library for consultants to engage in self-development.

Keywords: change, transformation, professional services, strategy, business design, ecosystem, capability development, profitability, finance, service design, product design, proposition design

Professional Services and Scale

Professional services face an inherently difficult challenge: scalability. How do you scale when your assets are time and knowledge? The former can’t be multiplied and the latter is perishable. So, what are you to do? Firstly, maintain knowledge, secondly manage your time. Productivity is key, standardising processes and automatising administrative tasks. However, none of this matters unless you maintain a healthy pipeline, and this is where you can scale: are you using the right amount of resources to maintain your pipeline? How long is your turnaround of a project from initial contact to hand-over? Is your team contributing to your pipeline and do they have the capabilities and knowledge to generate leads?

American management professor David Maister lays out the principles and and activities to manage a professional services firm successfully. However, the book was initially written in 2003. A very different economic climate. Today we face new challenges in the workforce, new expectations and an increased pressure on overheads, rates and margins. Nonetheless, David Maister’s book Managing the Professional Service Firm is a handbook every manager and leader in professional services should have on their desk.

Development Paths for the Consultant

In designing the development path, job descriptions, expectations, targets and metrics I have heavily drawn on the book FYI For Your Improvement, a guide for development and coaching. I used it not only to pin-point the professional capabilities the team would need, but also to inform the performance assessment and consequent remuneration. The book was conceived predominantly with corporate contexts in mind, the framework therefore lacks a few capabilities needed in professional services. David Maister wrote another book The Trusted Advisor, in which these capabilities are outlined.

Managing Knowledge

As discussed, knowledge management and maintenance is business critical in professional services. Roger Burlton talks about Knowledge Management today. In a talk I attended and in his book Business Architecture, Collecting Connecting and Correcting the Dots he draws attention to the different states of knowledge: tacit and explicit. For professional services firms it is important to make explicit which can be made explicit and leverage tacit knowledge embedded within people if it adds value to the client’s goals.

A word on the female perspective…

While I would recommend reading The Trusted Advisor and Managing the Professional Service Firm, both are a product of their time (early 2000). Meaning, in my copies ‘she’ was only ever mentioned when referring to a junior colleague, secretary or wife. Also the practices and skills mentioned in the books are tailored towards full-time workers. The skills and practices described especially in The Trusted Advisor also don’t always directly translate to females using them (e.g. likability vs. competence dichotomy, the double-bind). I hope that in future we will have more representative and nuanced perspectives. In the meantime I also recommend listening to the HBR Women at Work Podcast to help female leaders and professionals with their specific challenges.

Is your professional services business stagnant? Are you struggling to implement a shift in behaviours and build capabilities to service your proposition?

Get in touch to get your handbook Fit for Purpose Organisation and make your business more productive.

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