The Power of choice architecture to influence change in professional services firms

Exploring ways to affect sustainable change

Change is challenging and even more formidable in professional services firms. It takes two willing and able participants: professionals and organizations. In my last post, I zeroed in on the fast and inevitable pace of change and the individuals' struggles, especially in the professional services domain. I also offered a few tips on accepting and embracing change individually. I received several positive comments from professionals who related to the struggles and the recommended approach. In this post, I'll focus on the responsibility of organizations to enable an appealing and successful change journey by leveraging choice architects.

Choice architecture, as you may know, is a term coined by Richard Thaler and Cass Sunstein in their widely regarded book, "Nudge." The premise is that we all make decisions influenced by the environment, and those who create the background, also known as choice architects, can influence decision-making without forcing pre-defined outcomes. I am a big fan of the concept. It can be compelling in professional services firms, where highly educated and knowledgeable professionals may push back on mandates and change initiatives. They, however, may embrace the opportunity to make their own decisions and follow a change roadmap on their terms. This framework can also be equally valuable in designing client acquisition journeys where clients make choices to fit their requirements and priorities.

The good news is that organizations have a ton of choice architects (we all are!). Inviting professionals to technical training makes you a choice architect. You are a choice architect when you create a feedback form for clients and employees to complete. I suspect you don't fully appreciate the power and responsibility of being a choice architect or leveraging such functions and the choice architecture framework to influence change. I know I need to remember at times!  

The other good news is that the choice architecture frameworks are very effective, even if simplified, as illustrated below. They enable architects to consider how to influence behavior by presenting choices simply and attractively and encourage them to think about how to package options and when and where to offer them. The process takes time and design thinking to map the specific behavior journey. They call for feedback mechanisms to provide real-time views, analysis, opportunities for potential modifications of the various choices, and an incentive system aligned with the journey and the key stakeholders. Technology can enable that process further. More on that in the next post.

For now, please reflect on some of your change priorities, who are your choice architects, and how can you and they embrace the choice architecture framework to influence change in a palatable way. The opportunity is too big to ignore.

So, you think you can't change? Think again.

This one goes to all professionals avoiding and struggling with change.

Let me let you in on a secret – things are not going back the way they used to be! It's time to accept it. I'd recommend that you own it and even embrace it because change as you see it will not stop today or tomorrow. Driven by factors outside of our control, the unprecedented volume and velocity of change we've been experiencing will only continue at an accelerated pace. Your employees are not going back to the office – you need to learn how to manage, grow and develop them in a new setting. Your clients will no longer settle for the legacy approach of transactional services exchange. They are looking for a trustworthy advisor who will proactively offer ideas, advocate for them, and look for ways to create value even when the client doesn't think there are ways to create value. Waiting for things to return to "normal" is no longer an option, so please do yourself a favor and move on. 

For the past 20 + years, I've been working with professional services firms to design and implement a culture of growth, which has meant driving change at all levels. My kindle is stacked with books like "Change or Die," "The Catalyst," "Flying without a net," and many others authored by some of the best and brightest minds. They offer a ton of tested frameworks. I love Alan Deutschman's three step process of a "relate, reframe and repeat," and I have used it successfully many times, for example. I live change. My eight-year-old reminds me that things will not pause for me to prepare for change. The proverbial train keeps going, with or without me. And, same for everyone else, so why not get on it?! 

I also know how difficult change can be for people. And I don't blame them. In his book Alan Deutschman's references how extremely challenging change can be and offers an example that often even when people have the option to change and prevent death, they still struggle. We are talking about change or die – it’s that difficult. Talk about professionals with multiple advanced degrees, especially if they've been successful in the past. Why would they consider change? I can see that, can you? Past success, however, is in no way an indicator of future one, specifically when facts and circumstances change. The universal law of survival is more prevalent today than ever – the human who can adapt, evolve, upskill the fastest are the ones who will grow and succeed. 

So, what do you do about it? To get unstuck, I'd think of it as a long-distance run, not a sprint, and approach it accordingly. Start with your responsibility. Accept that things are going to change and what's today will be different tomorrow, and you need to reframe your thinking. Please acknowledge that you may need help managing this process. Like I suggest above, there’s a ton of great thought leadership to challenge and support you. Carol Dweck’s “Mindset” is a great way to start the process. Other help may come in different shapes and sizes: a team to discuss and support one another, a mentor that's there to listen and provide feedback – find what works for you. All of this calls for reskilling. Some may be technical skills, and some may be soft ones like communication, collaboration, etc. Set goals, and work on them, taking small steps. Focus on learning. Don't get discouraged. There will be a time you fall back on the "old ways of thinking." Recognize that, and consider how else you can approach things. Challenge your assumptions constantly. Celebrate wins and the confidence that comes with them. Bring your team along. Model it for them and work through it together. Change is fun when we drive it as a team. If I can do it, you can too. As we launch into 2022, in place of new resolutions, invest in the one thing that will make you successful in both the short and long-term – develop capacity to change. 

In the next post of this series, I’ll talk about how organizations can support this endeavor.

When the trust is nearly gone, it’s time to change the game

Running a few months behind I finally had a chance to catch up on the 2017 Edelman annual Trust report. Given the current geo-political environment, it’s not a surprise that the 2017 Edelman Trust Barometer reports the lowest trust levels in all four market segments: Business, Government, NGO and Media, since the survey’s inception. This time I paid more attention to the trust earning prescriptions provided by Edelman, because like I said, the results are to be expected. Here are a couple of them.

- Put people in the core of everything. “Adopt inside out approach” and focus on the relationships with employees and clients.

- “Peers are now as credible as experts.” Keep that in mind when selecting spokesmen to relate messages to employees, clients and stakeholders.

- Listen, communicate with context and engage.

I encourage you to read the full report (click here) and consider what the results mean to you and your organization.

YEARN TO LEARN...AND GROW

Adopt a new state of mind to succeed next year, and in the long run

Because I am intrigued by the success stories behind some of the most acclaimed individuals, earlier this year I picked up the highly talked about "Grit: The Power of Passion and Perseverance.” Among the numerous insightful points, the book brought up the importance of never-ending desire to experiment, learn and develop – do / be better. It turns out, these are some of the key traits of highly successful individuals. Sure enough – I see it with the professionals I know. The most accomplished ones are the embodiment of perpetual learning. They avoid complacency at all cost and look forward to understanding or better yet, creating, the next best thing. There’s much more to success of course, but the notion of learning as its cornerstone has come across my reading and work in the past.

Awhile back I wrote a blog post that alongside articles, personal observations and the book: “The Fifth Discipline: The Art And Practice Of The Learning Organization” developed the premise that in order for professional service organizations to evolve they should become learning organizations. In other words, if service firms could figure out how to inspire and scale behavior that applauds inquiry, open-mindedness, challenges existing norms and rewards learning, they would outperform competitors and thrive. As we are about to close the year and embark on a journey of personal and professional resolutions, I thought it’s only fitting to repost this article.

###

SYSTEMATIC APPROACH TO BUSINESS GROWTH

I like to challenge my own thinking and so, after writing my last articles, “Creating a Culture of Business Growth” and “For the Greater Good Or Eat What You Kill?” I questioned whether it is necessary to address the full business growth system – strategy, support tools, and skills - in order to make sustainable business growth progress. After all, many firms claim to be successful by focusing on only a select few of those business growth related segments. Or, are they? And how have they defined “success” and more importantly, how will they define it going forward?

The ultimate question comes down to the aspirations of firms and their stakeholders. Are you looking to build organizations for the long run? Or, do you only seek short term success with a measurable self-centered economic benefit? If the latter represents shareholders’ objectives, then the non-systematic, “band-aid” approach - as I call it - might be considered success. However, if the professional services firm leaders are focusing on long term gains, then I am afraid the long and systematic approach to building or enhancing business growth platform is the way to go.

A selective segment approach to business growth might have worked in the past for some firms due to extraordinary external market conditions. Those, blended with the young and entrepreneurial spirit of newly formed organizations often lead to quick success, but is ultimately unsustainable I am afraid. That opportunistic viewpoint takes a linear approach without seeing the full picture, and focuses on a sliver of information and limited events. This approach tends to address symptoms instead of curing problems, identifying trends, and thinking long term. It employs reactive tactics and doesn’t provide fundamental and sustainable systems support to track and measure performance and return on business growth investments. There is no investment in developing skills and sufficient support tools to allow the executioners to utilize the tools that fit them most (“one size fits none” when it comes to business growth tactics) and ultimately, to execute on strategy.

If that’s how you are running your organization, and you consider the last paragraph to be the “right approach” and you do not have strategic long term aspirations then stop reading here. This will be the top of the bell shaped curve for you. Don’t waste your time learning how to develop a systems-based approach to help you build sustainable business growth platform and move your organization up the S - curve.

When I went back to research, looking to rebuff my own systems theory and to find a quick and easy way to help professional services organizations increase the velocity of their business development, one of the sources I reviewed was an old favorite business read: "The Fifth Discipline: The Art And Practice Of The Learning Organization." Reading it was yet again an eye opening experience. Instead of rejecting my theory, the book helped me reaffirm that a systematic way of approaching sustainable business growth is necessary. It provided me with answers of why some of the short term linear approach business development projects work briefly, but not in the long term. More than that, the book gave me possible answers for some of the narcissistic behavior I observed in “For the Greater Good or Eat What You Kill?”, which I determined limits change in professional services firms, and I have been so desperately looking to decipher. Most importantly, the book illustrated that a comprehensive approach to business growth spreads beyond the segments allocated to Marketing, Business Development and Sales. To make a significant and sustainable business growth impact, leaders should employ multidisciplinary approach.

In his book, the accomplished Peter M. Senge, draws on extensive management research and experience to argue that the traditional management approach is not optimal and in order for organizations to survive, continuously adapt, innovate products and services, and overall develop, they should strive to become learning organizations. According to the author, the process of building and running learning organizations rests upon five pillars: systems thinking (the cornerstone), personal mastery, mental models, shared vision, and team learning. And while the majority of examples he uses do not come from professional services firms, I am convinced that applying some or all of the principles from the learning organization model will help firms manage many of the challenges they face, and especially the ones related to business growth.

“Systems thinking is both more challenging and more promising than our normal ways of dealing with problems,” says Senge. I agree. It is about seeing the whole, interrelationships and processes. It helps executives absorb increased amount of information, manage complexity and accelerate change. In business growth terms, it clarifies why when marketing is creating powerful lead generation campaigns, there will be limited if any business growth results if the professionals (or the sales force) are not equipped with the necessary advisory skills, sufficient tools and the system to turn those leads into actual business; why when the professionals bring in new clients, these clients will consider such work commodity and as soon as another service provider comes along with a better value offer they’ll be ready to jump ship, if the organization is not ready to commit the resources to support the new clients beyond technical solutions to build strong relationships and loyalty.

Here is another example of the importance of systems thinking, which will resonate with most leaders of professional services organizations. If a firm doesn’t pursue business growth and provide opportunities for growth for its junior professionals (directors, associates, etc.), after a period of time it faces high chances of losing its talent, which it has invested in developing over the years. The question often asked is: do we invest in attracting, developing and retaining new talent (HR), or do we invest in building a solid business growth engine (Marketing / BD) to provide for business continuity. I’d argue that the real questions here are how to balance those two processes, and what are the forces that increase or decrease their progression.

To adopt a systems thinking method, the author recommends that executives start to approach problems by identifying the source of the issues: what’s the core, not the symptom; the forces that support accelerating or decline growth processes, and the sources that would bring stability and resistance, as well as identifying organizational behavior patterns limiting growth, shifting the burden of blame, and others. I would recommend that firm leaders do the same to build and manage sustainable business development platform.

Mind that, as the name of this principle implies, this is not a one-time event. A comprehensive and systematic approach to organizational development and business growth today must be constantly monitored and calibrated, as a slight adjustment of one segment might skew another. To use an already mentioned example, a series of successful marketing campaigns might generate extraordinary amount of sales leads, which the organization, this time manages to convert in new projects, albeit scarce capacity of execution resources. If the capacity issue is not addressed, in the long run professionals will resist further marketing initiatives of fear of overload. I’ve witnessed a multitude of such vicious circles and how liner approach might bring a short term relief, but not long term solutions. As you see, employing such systems thinking is critical for firms.

The rest of the disciplines of learning organizations outlined in the book are easily discarded by most firms because they are considered soft and hard to measure, and often threaten the established order. Each of them however offers important supplement to the systems thinking principal and are critical for building learning organizations. Before dismissing them, I'd encourage professional services leaders to read on and consider application to their firms, especially the ones of mental models, which among other things, explains why change management exercises and introduction to new business growth systems and programs might fall short of success, and the team learning one, which gives a glimpse of what lays behind the limited success of professional development programs.

Mental Models are generalizations, assumptions, perceptions, patterns of reasoning that influence professionals’ behavior and actions. Mental models can impede and bring to halt important change management exercises. The real challenge is that mental models exist below professionals’ consciousness and as such remain unexamined, hence unchanged. Keeping mental models unchallenged is less risky and comfortable. The opportunity rests with the process of acknowledging and bringing up the current mental models to the surface, testing them and building new ones. For professional services firms that means promoting a culture that calls for collaborative challenging thinking, openness and merit, and skills of reflection and inquiry…a culture that eliminates the “this is how we’ve always got things done” mentality, and asks how well that’s worked in the past and promote “how else” considerations. To create such environment, organizations should discourage reactive and mechanical thinking, accept that there is more than one way to look at complex issues and that different cultures, backgrounds and experiences will influence how professionals see and interpret facts. They should aim to shift professionals’ thinking from winning arguments to finding the best solution and to build safe climate to where professionals feel comfortable to acknowledge reasoning flaws, lack of knowledge or proper factual support. This open-minded approach is especially important to business growth and the rate of success of adopting the processes and tactical tools to support it. Such thinking needs to be encouraged beyond a two day seminar; it needs to be built-in the regular management practices.

The process of aligning and developing the capacity of a team to create the results the team truly desire is defined as Team Learning. It introduces the need to think about complex issues and innovate, the role of other team members, and mastering the process of dialogue and discussion. It brings out the reasoning behind defensive behavior and shifting blame. “Systems thinking is especially prone to evoking defensiveness because its central message that our actions create our reality,” states Senge and again, I agree. Professional services firms are staffed with professionals with multiple advanced degrees, considered experts. They exhibit confidence and believe that they know everything or are expected to know everything, and to protect these beliefs they reject alternative solutions, remain rigid and obscure their ignorance. Such organizations often nurture a culture where to have incomplete or faulty understanding is a sign of weakness, or worse, incompetence. However, it is such defensiveness that is holding professionals back from testing the validity of their reasoning and openness to exploring new solutions for their clients or organizations. This behavior is in the core of “narcissistic behavior,” which as I’ve stated in the past, limits professional services firms’ growth. To break the mold, firms should consider developing a process that calls for reflection, inquiry and dialogue.

Personal Mastery encourages curiosity and continuous yearning to development. It provides the ultimate employee drive and satisfaction, and in turn, it offers organizations the employees’ continuous organizational contribution and commitment. Professional services firms are knowledge based ones, and continual education is not only encouraged, but required in the form of CLE, CPE, and other courses to retain professional accreditation. Yet, what I find interesting is their general disregard of professionals' personal development. Firms might consider offering alternatives to the traditional career development paths and allowing their professionals to self select what they deem might suit them best. This calls for HR services above and beyond currently employed by firms. Grow people – grow business - grow organizations.

The last principle, Shared Vision, provides a sense of coherence and answers what type of organizations professionals aspire to build. While considered “soft” and often disregarded, it provides focus and energy for learning. Visions are often imposed rather than inspired and aligned with professionals personal visions (hence the issue with compliance vs commitment). They die quickly due to the lack of clarity and communication, or due to shift of focus, driven by the demands of the current reality. They focus on today’s problems rather than tomorrow’s opportunities. If long term organizational growth and development is an objective, encourage building personal visions and weaving them into a common shared vision. LISTEN. Let professionals choose for themselves.

Pressured by economic forces and the evolving model of the professional services industry, firms’ leadership should consider innovative management frameworks. A systematic way of approaching professional services organizations is necessary for their survival, it is critical for their business growth, and inevitable as we live in environment moving towards sharing - open source, social networks, etc. To develop a long term sustainable business growth platforms, firms should learn to utilize such comprehensive approach. They should avoid the temptation to employ quick, short term solutions, addressing individual segments (strategy – systems – skills) of the business growth platform and think how specific changes will impact the entire platform and organization.

Special thanks to the author of “The Fifth Discipline: The Art And Practice Of The Learning Organization” for his extensive research, insight and clearly articulated management frameworks. I would encourage the leaders of professional service firms to pick up a copy of the book and think about applying the principles of the learning organization, beyond the points outlined above.

© 2010-2013 Copyright Mira Ilieva Leonard / iStile All rights reserved

SHARE | Change and risk management tips for law firms from Managing Partner magazine

"SHARE" is the new format I've selected to post articles, tips, insights, videos, etc. of interest, authored by others

To succeed in a continuously evolving environment, law firms must accept risk management as a business growth enabler, appoint experienced business advisors to their leadership ranks, embrace change management training & establish a culture of readiness for change. See Managing Partner for details: https://lnkd.in/b9pAgQ5

COLLABORATE TO INCREASE BUSINESS GROWTH: PART III

Practical tips for unlocking the potential of collaboration

In Part I of the series on collaboration I made the argument that professional services organizations should strive to encourage collaboration, because it leads to business growth. In Part II, I discussed the major obstacles to collaboration, and hinted on how to overcome them. In this last segment, I will take a prescriptive approach, and outline specific measures to unlocking the potential of collaboration. As in the past, I’ll also refer to the Harvard Business Review (HBR) article and study, titled “When senior managers won’t collaborate”, and some of my past writing on the subject.

A collaborative culture must originate with the leadership team. Leaders should consider and explore a firm development strategy with collaboration as a core attribute, or even as a sustainable competitive advantage. Take an all-encompassing approach: from recruiting and retaining talent, to growing the firm and boasting team performance. Demonstrate and communicate the importance of collaborating and growing the organization and the danger of not doing so to the business; become vocal in celebrating client development accomplishments and equally so to learn from failures; and nurture an environment where experimenting with innovative ideas is welcomed.

Leaders should define an organizational structure and compensation models that foster sharing and cooperation, again spreading throughout the firm: back office operations, technical and client facing practitioners. Employ tools and systems that encourage communication, knowledge sharing and transparency, which are some of the key components of collaboration. Establish functions and recruit / develop professionals who not only understand the value of collaboration, but have the necessary skills to build and cultivate collaborative culture. Focus on the system not the individual superstar performance. Set firm-based, common goals, which benefit the firm as a whole rather than the individual performer. For the greater good.

Leadership must adopt a “systems thinking” way to managing professional services organizations. To do so, approach problems by identifying the source of the issues: what’s the core, not the symptom. Employ all disciplines of the systems thinking theory (refer to my past article, "Systematic approach to business growth"), especially the ones of “mental models”, which among other things, explains why change management exercises and introduction to new business growth systems and programs might fail; and the “team learning” one, which casts light on what's behind the “narcissistic behavior” of professional services organizations, ultimately holding back collaboration and limiting business growth.

To my delight, the HBR survey offers professional services organizations tips similar to my prescriptions. It encourages leaders to walk the talk and show first hand by collaborating with others. Create opportunities for the team to connect and build trust. Resist the temptation to bring in rainmakers, but look for individuals with demonstrated collaborative experience. Celebrate team wins. Re-consider the compensation scheme of the firm and question how much weigh is attributed to collaboration, if any. I’ve seen some of this already take place in a few progressive organizations, where collaboration has become a factor in the compensation formula. Build a collaborative culture by tracking and rewarding non-billable collaborative initiatives such as mentoring. Enhance the knowledge sharing culture. Encourage regular workshops and secondment programs, and utilize communication technology and tools to share best practices. Develop teams to lead the way. Build collaboration in the firms’ development strategies.

The HBR survey takes a segmented approach, and in addition to the above-mentioned recommendations geared towards organizations and their leaders, it also speaks directly to individual practitioners. It recommends to professionals to be persistent. Select to collaborate with a firm influencer / rainmaker. Be fair to teammates. Communicate often and openly, and deliver on promises.

Organizational development research, as also confirmed by the HBR study, shows that organizations which build and nurture a collaborative environment manage to turn knowledge into action, share best practices and drive growth at a sustainable and fast pace. So, when examining what’s inhibiting organizational development and growth, reflect on the factors outlined above and most importantly, take immediate actions to close the know-do gaps and create collaborative culture.

For a copy of the HBR article visit: https://hbr.org/2015/03/when-senior-managers-wont-collaborate?utm_content=buffer98a13&utm_medium=social&utm_source=linkedin.com&utm_campaign=buffer

© 2010-2015 Copyright Mira Ilieva Leonard / iStile All rights reserved

By Mira Ilieva-Leonard | Mira.ilieva-leonard@istile.com

THE PROFESSIONAL NETWORKS MODEL: EVOLVING TO STAY RELEVANT?

A series of questions and recommendations from the leading minds in the field

Professional networks have become the norm when it comes to connecting independent professional services firms in order for them to better serve clients and offer global solutions. As I indicated in my article “Making Professional Networks Work” when both the member firms and the network have shared objectives, long-term commitments, and clear expectations, that formula can be extremely powerful. However, that’s easier said than done! Many member firms I’ve worked with are struggling to justify their network involvement and investment, and are increasingly questioning the validity of the network model.

During my extensive experience with networks and their member firms, I’ve had the privilege to collaborate with a number of forward thinking network leaders. James Mendelssohn is certainly one of them. James is a Chairman of one such network, MSI Global Alliance (MSI) and a highly sought-after consultant focused on network management and leadership issues with Firm Management Associates. I was thrilled when James recently agreed to share some of the content he’s developing - alongside Quentin Vaile, former head of the international network at the UK law firm Berwin Leighton Paisner - on the future model of professional networks. Below, please find the first several articles of the series. I hope that you will find their thoughts and recommendations of interest and will follow their writings, as this blog will.

“PROFESSIONAL SERVICES NETWORKS – A VIABLE BUSINESS MODEL FOR THE FUTURE?”

This is the first in a series of blogs that will look at the world of professional services networks; their future; different business models that can be followed to ensure their success; and what member firms need to do to capitalise on their membership of such networks.

There are some strong networks out there, and others that are struggling. There are some good member firms of networks, and others that are members for entirely the wrong reasons or with totally unrealistic expectations. We’ll be looking at all of this, and we won’t be pulling our punches. Some may find our comments uncomfortable and will undoubtedly stick their heads (even further) into the sand. Others, I hope, will accept them in the spirit with which they are offered and consider changes that may lead to the long-term sustainability of their organisations.

For the full article, click HERE.

“DO PROFESSIONAL SERVICES NETWORKS HAVE A FUTURE?”

The professional services world is changing – and probably faster today than at any time in the past. The principal reasons for this are twofold; and these converging pressures create the perfect storm for change. First, client needs are changing. One in five SMEs in the UK now trades overseas. And if you discount the high number of very small traders who are never going to look beyond these shores, then the proportion is clearly much higher amongst those businesses that many professional services firms would consider to be prime targets. Demand from clients for their advisers to be able to respond to an international enquiry has never been higher. Secondly, the professions are changing. Of course, the professions are always changing, but the pace of change within the professions at a local and national level is now having a very marked impact on the way in which firms are able to service their clients overseas.

If you take these two factors within the context of many people, in both their personal and business lives, believing that big is not always best (just look at the shift in retailing patterns over recent years), then the need both for networks to look critically at themselves, and also for those firms that either within a network or considering joining one, to review their motivation, and see whether their objectives are being met, has never been stronger.

For the full article, click HERE.

“CHANGING THE MODEL OF PROFESSIONAL SERVICES NETWORKS – ONE FIRM, ONE VOTE”

‘Partnership is not a great management approach at a single office level. And when you translate that into the international arena, it is a disaster. Democracy within the typical network business model is all very well in theory, but in practice …’ That comment from my previous blog certainly struck a chord, and so for the next few blogs, I plan to focus on various aspects of network governance where democracy sometimes emerges … but not always with the desired results.

With many networks set up as membership organisations, the concept of member participation in the governance process is often embodied in the constitution. Indeed, I know of one network where each member firm, whatever their size, gets one vote on each important decision. And, if the network wishes to appoint a new member firm, then 75% of the membership has to vote in favour. Very democratic, perhaps, but a complete nightmare. Not just because of the administrative problem of trying to get that number of firms to actually vote, but it totally undermines the position of the team whose task it is to appoint new members. What do people from the other side of the world know about a particular firm that someone who has visited and reviewed that firm do not?

For the full article, click HERE.

CHANGING THE MODEL OF PROFESSIONAL SERVICES NETWORKS – WHO SITS ON YOUR BOARD?

The ‘one firm, one vote’ concept, still adopted by many groups (largely because of their inability to change rather than a belief that this is a good model for any other than the smallest firms), may appear to be democratic, but in reality it simply hinders the logical decision-making process. Some groups have managed to vest the management of the group to a small Board of Directors, and they will normally have significant powers, with only key issues being put to the membership as a whole. And therein lies the problem. Or, in fact, two problems.

First, while day-to-day management becomes more efficient, fundamental issues of change remain within the domain of the membership as a whole, with all their diverse interests. Turkeys don’t vote for Christmas, and member firms in membership organisations are primarily driven by the interests of their particular firm, rather than the organisation as a whole. That’s fine if votes on key issues are decided by a simple majority, but I know of at least one large network that requires a 75% majority on any decision of substance.

Secondly, it is fine to vest management in a Board of Directors, but who sits on that Board? Well, almost without exception, the Board comprises senior partners from a number of the larger member firms, together with the senior employee, normally the Chief Executive or Executive Director. Whilst these are normally, I am sure, worthy men and women, there is absolutely no doubt that the most important thing in their business lives will be their own firm, and not the membership organisation of which their firm is a member. So unless the situation is well managed, there is an inevitable conflict of interests.
…
The more ‘corporate’ the structure can become, with directors who really distinguish between their different roles, the more likely it is that the network will succeed and flourish.

For the complete article, click HERE.

© 2010-2015 Copyright Mira Ilieva Leonard / iStile All rights reserved

By Mira Ilieva-Leonard | Mira.ilieva-leonard@istile.com

Clients changing the business of law

How are firms dealing with it and what it all means in practice?

I was recently invited to moderate a panel of law firm CFO’s for the Southeastern Chapter of the Legal Marketing Association, titled “The Evolution of Law Firm Finance and Its Impact on Business Development.” The panel considered the following circumstances and how they have impacted the business of law. As a result of the recent recession law firms are undergoing overwhelming change. Many of them are retooling their financial strategies by adopting alternative pricing methods, shifting operational financing, improving vendor management, and most importantly, how they go about attracting, serving, and retaining top clients. In other words, firms are modifying their way of doing business to better align with the demands of corporate America. So what does that mean for the industry in practice?

Below please find some of the key takeaways from the conversation along with my personal observations. A side note: in my experience this trend is not limited to law firms and is evident across the professional services industries. Many of the points brought up during the conversation are applicable to professionals offering consulting, accounting, and other business services.

The fact that clients today are expecting the same high quality services for lower cost worries some professionals, but hasn’t persuaded them to change their pricing model. Some cling to the notion that this is only a fad and “the good old days” of buyers’ flexible budgets will return. If neither are willing to change their thinking, both groups will soon become industry laggards.

This shift from a revenue- to a cost- based law firm business, where “profit” is the name of the game is clear. It presents many opportunities for firms ready to improve performance and leverage efficiency. However, the transition is not easy, which makes the hesitation of the above-mentioned laggards understandable. It necessitates a “one size fits none” mentality, where firms must take a segmented positioning attitude for various practices and partners, and learn both the consultative and commodity approaches of selling legal services. It requires applying new staffing and project management models, such as “the pyramid” staffing model for consulting and other deep expertise services, and / or “the diamond” model for highly leveraged, packaged services. It also calls for new skill sets: project management, financial understanding, change management, collaborative skills; and new tools: financial dashboards, collaborative index, etc.

Marketers and Billable Professionals: CFOs are your new best friends. In order to succeed in this environment, marketers and billable professionals will need to understand the business of the firm and the various individual practices. In addition to joining forces on addressing RFP’s, they will need to work with CFO’s to package services: define how to sell and deliver them in order to keep healthy profit margins, and create business models to stay competitive and win business. They will need to communicate often to identify where the systems and processes can be improved to serve clients better. They will need to track Marketing/BD spending and measure ROI, to better evaluate business growth initiatives and create more accurate budgets. Ultimately, they need to align their agendas to champion change to create and employ the supporting systems, skills and processes.

The CFO’s sitting next to me for this session might be some of the most progressive ones I’ve encountered. I was delighted to hear them speak about changing behavior, collaboration, and building a different type of organizational culture. They understood what it would take to make the transition: to meet their clients’ expectations and remain relevant.

The bottom line: change is upon us and instead of wasting time and energy fighting it, embrace it. Accept that with the new business model new compensation structures are afoot and necessary to change behavior and overall firm culture. Adopt new KPI’s (key performing indicators) such as team profitability, cross selling, and collaboration. Understand that "not all clients are created equal;” approach them and structure delivery accordingly.

It is indeed a transformative period for the legal and other business services industries. Progressive firms that will act upon this shift quickly, and put the wheels of change in motion, will stand out. Will you join them? At iStile, we work with firms to help them take advantage of such opportunities by structuring and implementing the necessary systems and equipping the management team and professionals with the necessary skills.

By Mira Ilieva-Leonard Mira.ilieva-leonard@istile.com

© 2010-2014 Copyright Mira Ilieva Leonard / iStile All rights reserved

GOT CHANGE?

Practical tips on introducing and successfully implementing new ideas, processes, etc…

For the past several years I’ve spent the majority of my time in Europe, which I discovered uses an extraordinary amount of change (coins). “Change” –whether used to mean “coins” or “transition” - is not popular nor convenient (it is heavy and bulky); it is necessary (from the most trivial to the most unexpected activities), and it is everywhere, and ultimately becomes part of one’s normal life. In many respects, Europeans pride themselves on their resistance to change through preservation of culture and traditions – and they continue to use coins for most transactions. Yet, Europe is also a symbol of political and economic change as it seeks to break down national borders and create a single currency. . . Notwithstanding the images of 1000 year old castles, and clinging to traditions, in many respects they are much more advanced than the “innovators” on this side of the Atlantic Ocean. I can’t help but think that if Europeans can resist change, and at the same time embrace it as political and economic borders begin to erode, then we need to carefully identify why some change can take hold, while other is impossible to implement.

Why is it so difficult for some kinds of behavior change to take hold? How do we reduce the amount of time fighting change and ensure high adoption rates?

In my function I often act as a change agent (I have mixed feelings about the term) and while I personally enjoy change (I thrive on it really), I am puzzled by how others behave when they are exposed to it. Because of that I’ve spent a good bit of time reading and studying change: behavioral change, change management, how to present change to increase its adoption rate, why it’s hard to change people, how to reset your brain, the latter two coming from articles and books such as: “Change or Die”, Alan Deutschman (#changeordie) and “Driving Change”, Mike Brewster (#drivingchange). They all explain that change and the perceived discomfort and the uncertainty it brings are scary for most people.

“Sixty percent of change initiatives result in failure. Change is always very hard, so choose your battles and focus your efforts…lawyers are typically more resistant to change than most,” claims a recent article in Managing Partner, a UK based publication catering to the legal industry, June 2014. I am not surprised with this number. In fact, my anecdotal research would claim that the number of failed change activities is even higher and closer to seventy-five percent across professional services organizations (law, accounting, advisory, etc.), my field of expertise.

Is it necessary to change? And, why are we trying so hard and over and over again to change people? For organizations to evolve, do we need to change? Should we just adopt the Darwin’s model and let organizations prone to change survive and let others become obsolete? Change is good and necessary. Placidity is stifling and brings conformity. The real question in my opinion is what are we really changing when we talk about altering organizations: people or their behavior? An article in the June, 2014 issue of Scientific American, titled “Good Habits, Bad Habits” talks about the complex process of building and re-programming habitual behavior. It turns out, what it appears to be a simple act of automatic behavior is not as simple after all. Multiple parts of the human brain are involved when building habits and almost as many once the habit is imprinted and is processed. Given that the majority of our daily existence is a series of habitual acts, which once laid down employ chunks of neural activity, it’s no surprise it’s so difficult to change human behavior.

All of the materials I’ve come across on the subject also talk about how to go about managing change –the traditional model of denial, the one of co-creation...There are some great frameworks to assist you in the process. Before you evaluate them and select which ones to employ I would suggest you gauge the adaptability of the organization / people. You can do so by looking at past performance, use structured assessment tests, etc. From my practical experience, openness to change equals desire to learn, so that’s usually my first clue. The organizations and professionals I’ve worked with and have had the highest rate of change management success are ones with obvious and exemplary attitude towards learning. I am referring to general curiosity and aptitude to absorb knowledge: industry and technically related, or even just generic (including pop culture, sports, etc.).

Once you have a sense of how challenging your change management task might be, multiply it by two as well as the project time and resources, and the chances are that you’ll still underestimate its complexity. Here are a few practical pointers to keep in mind through the process:

- Break the project down to small, digestible work streams.

- Articulate benefits – overall and individual (mind you that those might vary for different audiences).

- Provide a support system and tools.

- Let people process it at their own rate.

- Celebrate small wins.

- Have a failsafe plan (or a few).

- Provide constant cues and rewards in effort to build new habits.

- Equip yourself and the change management team with patience.

Progress and change are inevitable. For a sustainable change to take hold it takes time and perseverance – it’s a marathon, not a sprint. And for our European friends and their paradox – well, how it all plays out with the EU and euro in the long term will be the ultimate test of their ability to deal with change. Good luck!

© 2010-2014 Copyright Mira Ilieva Leonard / iStile All rights reserved

Got Growth: how to position your organization for strategic growth and business model renewal?

A PaperJam Business Club Workshop | January 15th, 2013 | Luxembourg

Per request, please find the framework of the workshop presentation.

Got Growth: How to position your organization for Strategic Growth and Business Model Renewal? from Mira Ilieva Leonard

Like most organizations today, you are probably experiencing increased pressure from your clients, demanding high service at lower prices. That, coupled with the global downfall and near future economic uncertainty, incrementally impacts your organization’s profit margins. In addition to these factors, requiring immediate attention, your organization also faces a more fundamental problem: the need for radical business model renewal driven by the changing regulatory environment and the diminishing value of the “Lux Factor”.

So, how do you go about turning these challenges into opportunities? Join the session and learn how to focus and become strategic and efficient in growing your organization’s business, re-energize and enhance your executive team, and prepare to transform your business into less dependent on the “Lux factor”.

During this workshop you and your fellow peer executives will receive a process for developing and executing your growth strategy, frameworks to find and seize growth opportunities for new markets, prospects and business models, an overview of the necessary internal organization and capabilities to support your growth strategy, a checklist for evaluating your organization’s existing growth strategy and related capabilities and a ”no frills attached” ½ day follow-up growth readiness assessment.

For additional details and to join me and my colleague +Marc Sniukas (Doujak Corporate Development), visit: PaperJam Business Club

© 2010-2013 Copyright Mira Ilieva Leonard / iStile All rights reserved

Where In The World Is The Next Generation Of PSF Partners?

Now that I've committed to make time for thought leadership, I am launching a special series: "Oldies but Goodies". It brings back some of my favorite pieces I've written throughout the years that are still relevant today. Enjoy!

March 2010 USA

You know how there are some people that you just can’t help but notice when they walk in a room? They tend to carry a certain air of gravitas, walk taller, speak louder (not shouting) with confidence and command immediate respect – present themselves as a proper executive. Where are these people now? I see fewer and fewer of them in the professional circles these days and most tend to be of what I’d call “old school”. Is the notion of “executive presence” extinct? And if that’s the case, what will the next generation of leadership look like?

Executive presence has always been an unwritten requirement for advancement in a professional services firm. But, now it may be unwritten, unspoken and unnoticed altogether. Living in a quick service society, especially in the US, the younger professionals we work with today appear to approach their professional life and how they present themselves in an extremely casual way. It starts with the way they dress, their preferred methods of communication and language, and most importantly, their pride-in-presentation and confidence (or the lack of both). Is this a function of the Millennium, Gen X, Y, Z (can’t keep track of them anymore) overall breeding or something else? Does this mean that the next wave of Managing Directors will text message their teams and clients instead of writing letters or meeting in-person, change the dress code to “no jacket required” at all times, and…?

Call me old fashioned, but I believe we should bring “executive presence”- and the professionalism it implies - back. We need to groom the next generation of leadership so that they are not only a generation of competent technicians but also advisors that capture their clients’ and colleagues’ confidence. I am glad to report that I am not the only one who has noticed this disturbing trend. Managing Partners and Directors are increasingly bringing the matter up during our conversations on how to elevate their professional force and make them better advisors, client cultivators and leaders. And, it all starts with executive presence. So, what do we do about it? In my experience it takes work on both sides of the equation – current and future leadership – to make a real impact. Here’s what I’ve seen work and might stimulate thinking:

Confidence comes with knowing what one stands for and having the internal strength (ego) to defend that position. Managing partners need to encourage their fresh workforce to start identifying specializations and define their professional claim to fame early in their careers. Professionals who know what they are or aspire to be “famous for” tend to carry themselves with a higher degree of confidence. Up and coming partners need to find the balance between improving their technical skills while serving senior partners and navigating internal politics. A lot of this has to do with the ability to establish and maintain peer-to-peer rapport – both with clients and colleagues – and to assert ones’ point of view with conviction yet patience and poise. Be mindful of each interaction and prepare ahead of time. I often hear from our younger clients that they tend to step back and let the senior professionals run meetings. While that’s most natural because the senior professionals most likely have the experience and perhaps the client relationship, I always encourage them to step up. It starts with a brief conversation with the rest of the colleagues ahead of time defining each one’s role during the meeting. Senior partners need to allow the junior partners equal “airtime”, encourage them to participate if not lead the meeting, become mentors and think of how this sharing of airtime supports the succession of the firm’s leadership and sustenance of its value.

Professional service providers are hired by clients for their advisory and leadership skills. Clients look for outside help, a comprehensive view of the situation and direction on how to go about solving a problem, hence leadership influence. And, in order to get a full view of the situation, professionals ought to understand it first and even before that earn the trust of their colleagues and clients so as to gain a better understanding. The latter takes time and patience which is not something junior professionals have in abundance. Yet, there are ways to get there – put oneself in place of the person across the table from you, listen actively and genuinely, demonstrate emotional intelligence. Remember the person I mentioned earlier in this article? The one that everyone notices when he or she walks in the room? That person can be either a completely arrogant jerk or someone that everyone’s attracted to because of the friendly and reasonable nature of his or her personality. Be the latter one! Radiate positive charisma and you’ll be able to lead both colleagues and clients.

So far, I’ve spoken only of what takes place between the ears of young professionals. How a professional’s thinking manifests in verbal and physical presence is equally important. I was recently in Europe for client visits and was reminded of all the small, external items that add up to make an impact. Most of the professionals I met had excellent command of their tone and language (mind you, they spoke at least three languages each), were always dressed a level up (even in casual situations) and seemed genuinely interested in conversations (made eye contact and smiled). It certainly made me feel I was working with an extremely high caliber of professionals – I am sure their colleagues and clients feel the same way as well. So, dear junior professionals, pay close attention to how you dress and carry yourself. If you’d like to move up to the next level in your career, distance yourself from the current casual fad. Communicate in a crisp and concise manner – sometimes, even, face to face rather than by Twitter - dress up (even on casual Friday’s) and build up the internal confidence to embrace stillness and eye contact.

Is there something to this or do we need not worry about executive presence? Is the power of a quick serve cultural trend too strong to overcome? Even if that’s the case, perhaps that allows you more opportunity - dear future leadership – to dramatically stand above your casual crowd of competitors – with a level of professionalism in thought, words and appearance that allows you to claim impact and influence.

© 2010-2013 Copyright Mira Ilieva Leonard / iStile All rights reserved

For the greater good or eat what you kill?

My reflection on what's influencing human behavior in professional services firms...

I love professional services organizations. I’ve dedicated my professional career to working IN or ON professional services organizations. They employ highly educated and accomplished professionals: some of the brightest people I’ve ever encountered, whom I look up to and learn from… that’s the reason I am fascinated by them.

The recent collapse of Dewey & LeBoeuf brought up a question I’ve been struggling throughout the years: why is it that smart organizations fail or can’t seem to advance beyond a certain point or at a faster pace?

Timing is an interesting thing. I was rereading some of Malcolm Gladwell’s articles for the New Yorker magazine, when I ran into the “Talent Myth,” which contains his observations on talent and organizations. I need to open a bracket here and thank Gladwell for his brilliant research and writing. I can only aspire one day to be half as articulate and elegant in presenting my thoughts as he is. In his piece, Gladwell talks about “narcissistic organization” and among many other sources draws upon an essay, written by Robert Hogan, Robert Raskin, and Dan Fazzini called "The Dark Side of Charisma.” Both the essay and Gladwell’s article talk about three types of managers, whom on the surface seem like the perfect leaders but when studied closer represent real danger to organizations. The authors refer to them as the “High Likability Floater”, the “Homme de Ressentiment” and the “Narcissist.” The latter one grabbed my attention. The authors define narcissists as ones who “resist accepting suggestions, thinking it will make them appear weak, and they don't believe that others have anything useful to tell them.” “Narcissists are biased to take more credit for success than is legitimate and are biased to avoid acknowledging responsibility for their failures and shortcomings for the same reasons that they claim more success than is their due." If organizations and management profiling is of interest, I’d highly recommend that you look up the sources of my inspiration and read more.

Is this narcissistic behavior self-confidence gone bad? After all, confidence is expected from professional service provides, who are hired for their breath and depth of expertise and experience and a level of certitude to comfort clients is natural. I am afraid it’s much more, as narcissistic managers are not only limiting themselves and ignoring new ideas and better ways of doing business, but also fuel negative performance across the firm, especially with the impressionable next generation of leaders and encourages more of the same…a vicious circle. In business development terms, as that's my domain, narcissist managers are the ones who go to market alone, have it all figured out, don’t need the firm’s support with content or connections, and would never admit that a failure might be due to some of their actions. Sound familiar?

Is this my answer? Would such narcissistic behavior be so powerful to lead professional services organizations to ignore toxic conduct and spiral downwards? In the past, I’ve always argued that the compensation model of professional services organizations was feeding the constant pull towards “eat what you kill” mentality instead of fostering a spirit of “for the greater good” – this is what often holds back firms. It now appears that might not be the only reason. The narcissist factor, let’s call it that, would also explain why the business growth skills programs so many professional services firms run have limited and short spanned success. If my answer to why intelligent organizations such as professional services firms fail or get stuck is a combination of the typical compensation model and narcissistic behavior, then what’s the solution?

In full disclosure, I am an admirer of Adam Smith and believe that society and organizations should encourage and compensate those who are willing to take on higher risks, work harder and come up with and implement extraordinary ideas. At the same time, I recognize that when encouraged, or rather when unharnessed by a positive common goal, such actions can lead to destruction. This in essence is the fundamental issue at hand here. Professional services organizations are complex networks of brilliant people, many of whom display narcissistic behavior which is often magnified by the firm’s compensation models. When these organizations are disconnected due to the lack of common strategic goals and systems, they crumble.

When talking about growing professional services firms I emphasize the importance of strategy, systems and skills. It now appears those are vital beyond business growth – their alignment is not only necessary for the development of organizations, but for the organizations’ survival. Firms who strive to endure and moreover, move forward at a significant velocity, should focus on the system not the individual superstar performance. One size fits none. Goals and systems are diverse and vary from one professional services organization to another. However, in the long term, none of this will work if the organization is not working towards a firm-based, common goal which benefits the firm as a whole rather than the individual performer. And, this culture must originate with the leadership team. When it comes to business growth, organizations should encourage and reward collaborative approach, which provides for learning, best practice sharing, better solutions design and a team client approach…for the greater good.

I will elaborate on the merits of collaborative business growth approach in my next post…”one for all - all for one.”

© 2010-2013 Copyright Mira Ilieva Leonard / iStile All rights reserved

"Creating a culture of business growth" for PSMG

After taking unnecessary time off from writing about my experience and expertise in growing professing services firms, here is a preview of my upcoming piece for the publication of the Professional Service Marketing Group (PSMG).

May/June 2012 PSMG 33

In times of tight budgets, scarce human resources and market uncertainty one might argue that it is difficult to talk about building a culture of growth. Many professional services firms claim that it is time to think of survival; growth will follow as soon as clients regain their market stability and begin to grow. I would argue the opposite. It is time now, more than ever,to think about building or re-building the firm culture of growth to ensure progression and successful positioning in the professional services market landscape in the future.

A growth strategy which is dependent on the firm’s clients’ growth will result in no growth at all when clients aren’t growing themselves. Thus, the firm risks being left behind by its competitors. Most clients are currently not growing or growing at a very slow rate. That, coupled with the abnormal client churn rate – clients are struggling to a point they are willing to forgo advisory services for low cost, commodity solutions – leads to a net negative client growth rate.

“Old school” marketing is no longer enough. Clients expect more – it is no longer sufficient that the firm tells them how great it is, what services it provides and how well it goes about doing that. That’s a given. Clients expect that the firm and its practitioners understand the relevant-to them business and functional issues, as well as industry and market trends. This calls for a high level of intelligence and constant education – technical and advisory.

Professional services firms are getting smarter and more aggressive. They are looking for better ways to engage with prospects and are willing to reduce their overall economic benefit just to launch an engagement. Beware of the threats and opportunities that come with such behavior. Loyalty is constantly tested. Client relationships are always up for grabs.

A new generation of professionals and clients expect to engage with progressive organizations. Such firms are defined as transparent, and are engaged in multiple ways of communication with clients and employees, welcoming constant feedback. The new generation of professionals expects to live the brand, meaning that they demand social corporate responsibility, active community involvement and leading edge social media engagement.

The current state of the market offers a multitude of opportunities. The cost cutting trends are opening white spaces in terms of service quality, new service offerings, and improved ways to deliver existing services. That, along with the greater availability of billable professionals to employ new projects,further supports that indeed now is a good time to dedicate to building a culture of growth.

In my professional experience, in order to successfully build a culture of growth one must ensure that the business growth strategy, systems, support tools and skills are aligned and closely connected. Addressing one without the others is as if you are to place a band-aid on a knee cut, without caring for a broken leg or a serious heart problem.

STRATEGY
Start with the business strategy of the firm. Work with the executive team to define clear short and long term strategies, taking into consideration clients needs, market forces and current and future service offerings. Have a clear understanding of what clients and markets are most important for the firm (near and long term), and then define how,when and at what cost will the firm work to attract and retain them. Marketing and business development leaders often struggle at this level due to the gap between them and the executive teams. In mature professional services markets (like the US) that gap is closing as firm management increasingly understands the value of those functions being aligned with them and is open to include them in strategic development discussions. In other markets,such as mainland Europe, where the business growth functions are still narrowly defined as general branding, communication and internal marketing, the disconnect between the business strategy of the firm and the marketing and business development tactics is often clearly evident. Bigger yet is the gap in particular markets, where up to recently marketing and business development functions were ‘nice to have’ but not ‘a must have’.

SYSTEMS / SUPPORT TOOLS
Once a clear business growth strategy is outlined,one must ensure that the support systems, processes, and tools are in place and running smoothly. If not, a fundamental exercise of design or re-design and implementation of such processes is necessary. Systems like Enterprise Resource Planning (ERP), which connect across functions – marketing, accounting, and IT– guarantee that the business growth tactics support the business growth strategy. Such systems also track and measure business growth performance, allowing for timely tactical adjustments, when needed. Additional processes that should also be considered are those that connect and run through the entire client engagement process: from the identification of a prospect through the education, sale, and client retention. Mature professional services markets widely utilize Customer Relationship Management (CRM) to support their strategic development. Newly exposed to marketing of professionals services markets and professional services firms alike are still early adopters of such tools and are often building them in-house. A secondary benefit to such systems is that they often help break organizational silos and increase communication flow within practice areas and departments. Building and living a culture of growth is a firmwide exercise. It includes back and front office functions.

SKILLS
Even if all of the above are in line, if professionals are not aware of the support available to them and equipped for business growth, the project of building a culture of growth will have limited buy in and success. I recommend that firms provide professionals and their support staff with the proper skills by investing in training programs and dedicated in-house professionals. Again, having observed mature professional service markets, I notice that most firms there have already invested in professional staff, expected solely to guide, monitor and act as coaches to professionals. Other markets and firms are still experimenting with the idea by bringing in third party providers. In most cases, that’s executed in an inconsistent manner leading to limited success.

Building a sustainable culture of growth is a necessity for any progressive professional services firm and can be accomplished by following a practical formula: Business Growth = [(Strategy + Systems + Skills) Resources] over Time. To ensure success, I would add focus, patience and firmwide understanding of the importance of the project for the overall health and longevity of the firm.

At the time of the writing of this article, Mira Ilieva-Leonard lead Marketing and Business Development at ATOZ Luxembourg, a high-end tax advisory services firm. Prior to joining ATOZ, Mira was a Partner with a US based consultancy working exclusively with professional services firms to help them grow in a sustainable and predictable way.

© 2010-2013 Copyright Mira Ilieva Leonard / iStile All rights reserved