Management Decisions We Make: Sensible or Questionable?

Reflecting on situations I have experienced with dozens of firms throughout my consulting career –  described below –  got me thinking about the management choices we make. 

Case #1: A very profitable 1^st generation firm brought me in to help fashion a succession plan. But when we talked about how little the senior partners were doing to mentor the staff and prepare them for leadership, this was their stance:  “Before we start mentoring the staff to become future partners, they have to come to us first and tell us they want to be a partner.”

My comment to them:  It’s the old nature or nurture debate:  Is ambition innate or can it be taught/inspired?  Most firms find that by not broaching the topic of future partnership with promising staff, they won’t stick around until you do.

Case #2.   A firm with a partner comp system based almost totally on partner charge hours (believe it or not!) convened a vote on the MP’s recommendation to reduce the weight of billable hours and increase the reward for bringing in business and mentoring staff.  Both of these initiatives, aimed at succession planning and partner accountability, were roundly rejected.

My comment to them:  Partners should be evaluated and compensated more on how well they spend their non-billable time (managing the firm, mentoring staff, drumming up business, teamwork, etc) than their billable hours, the latter of which can be mostly performed by staff.  Not delegating billable work diverts partners’ attention from the things that matter the most – growing the firm and developing people.

COMMON THREAD?  Avoid the temptation to maximize short term profitability at the expense of long-term success or reward partners’ individual interests rather than the firm’s. Adopt a firm-centric focus: Nurture growth, develop talent, take fantastic care of clients and put a management structure in place that ensures that these things get done…well!

ACTION ITEM:  The issues described above are easy to write about, but usually very difficult to do something about.   As such, most firms need to get away from the office in a retreat-like setting to properly address these challenges.