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cuted with precision. Prioritize client needs and quantify and identify strate-
gic resources that fill service gaps in your organization that will offer more
services to your clients. Establish internal milestones of what you expect
from your strategic partner and your organization. Are your goals in line with
your overall business plan and company direction? Plan your strategic part-
nerships with customer growth in mind. Develop clear revenue targets and
goals for the partnership to reach.


2. Quantify Potential Cost Savings for New Services
Quantify potential cost savings where a strategic partner can round out client
service offerings and increase revenue opportunities in a cost-effective way.
There are many ways that you can work with your strategic partners. You will
find new ways to leverage the relationship and skill sets that they have to
offer. You may be able to cut your operating costs by letting your partner take
over areas of service that cost you too much time and money and do not con-
tribute to the balance sheet. Lock down significant discounts from your part-
ner for the products and services that you will be reselling and get them in
writing. Negotiate 30-day payment terms upon job completion and suspension
of pay if your partner is not performing to your satisfaction. If you have spe-
cial contractual payment terms with your client, get your partner to agree to
similar payment terms based on your cash f low.


3. Prioritize Opportunities
Prioritize service and revenue opportunities, and develop new service offer-
ings or intellectual property that you both can sell. Implement plans with
191
Strategic Partnering

your strategic partners that are executable and measurable over time. You
may go through some planning sessions with your partner where there are
seemingly too many opportunities and directions to go in. Narrow down your
prospects with razor-sharp focus on executable and marketable services. Pri-
oritize your opportunities with a shorter horizon in mind and test the waters.
Do not be an opportunity junkie and spread yourself too thin. Develop core
opportunities and then execute them with precision. One of the most fruitful
opportunity areas are with clients with common issues with which only one
of the partners is currently engaged.


4. Mitigate Risk Factors
Conduct appropriate due diligence and get client testimonials and references
from your new strategic partner. Make sure that they can deliver what they
are promising. Start off slowly with new strategic partners, and the trust will
build with each successful project you complete together. Other ways to mit-
igate risk factors are:

• Have clear and ongoing project communications.
• Properly evaluate and manage client expectations.
• Establish timelines that work to your client™s benefit.
• Set performance expectations for your partner.
• Manage your customer relationships.
• Project manage the process.
• Manage your strategic partner ™s progress and service offerings.
• Always communicate directly with your client.


5. Measure and Monitor Performance
Always be in close communication with your client and partner project
teams, and manage the project and the new services to the best of your abil-
ities. Do not take your eye off the ball. Choosing a great strategic partner
does not mean that you should not monitor their performance. A key chal-
lenge to managing partners is the ability to properly project manage the pro-
cess and your customer ™s expectations. Your strategic partner offers services
that your client needs, but the firm should not assume that they will be de-
livered in a timely manner or at the level of excellence that is expected.
Set performance expectations for your strategic partners and evaluate
their performance over time. Always make sure your client™s needs are met to
your clients satisfaction, as well as your own. Make adjustments when neces-
sary. Set service level expectations for your partners, and evaluate those ser-
vices in light of your partner ™s performance on projects.
192 The Front Office: Driving Sales and Growth

6. Reevaluate and Deploy Short- and Long-Term
Goals and Continuously Improve Processes
Develop short- and long-term goals and routinely reevaluate your progress.
Are your goals being met, and is this the right partner for you? Do not be
afraid to speak up. If things are not working to your expectations, communi-
cate your concerns clearly with your partner and make appropriate changes
as soon as possible. Good communication between partners will help to nur-
ture a win-win relationship and lead to service offerings of which you both
will be proud.
Continuously improve how you work with your strategic partners
through planning sessions after each project is completed successfully. Find
new ways to improve services that will successfully meet or exceed client
expectations.
Success will be determined by both parties putting in time, energy, and
resources. In evaluating short- and long-term goals, a strong commitment to
your partner will result in great services and satisfied clients.


Summary
Select strategic partners carefully and decide where they provide the most
value and where they will fill voids in your firm™s current service offerings.
Think of partners as specialized business units that provide select services.
Involve your management team in developing a plan, and then implement
that plan with energy, time, and capital. Look for partners with customers,
culture and services that are congruent with your own.
Develop solid contracts with your partners so that there will be minimal
opportunities for misunderstandings and common knowledge of the part-
nership™s goals. Develop a business plan with the partner so that both par-
ties understand the revenue milestones and expectations and are vested in
executing the plan. Find areas where you and your partner complement each
other and create broader service lines to offer to clients. Set performance
expectations for your strategic partners and evaluate their performance
over time.
Good partnerships will provide a clear and measurable financial return to
both parties. Make sure the partnership meets rate and cash f low needs. If
the marriage between you and your partner is not working, cut your losses and
look for new partners. Trust, complementary services, and team players are
the foundation of a successful partnership. Like Microsoft and IBM, a great
partnership can build a company overnight. Determining areas for partner-
ships, selecting partners, and actively managing them is critical for today™s
professional services firm.
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Strategic Partnering

RESOURCES
Strategic-alliances.orgAlliancedworld.com
John R. Harbison and Peter Pekar, Smart Alliances: A Practical Guide to Repeatable
Success (San Francisco, CA: Jossey-Bass, 1998).
Mitchell Lee Marks and Philip H. Marvis, Joining Forces: Making One Plus One
Equals Three in Mergers, Acquisitions and Alliances (San Francisco, CA: Jossey-
Bass, 1999).
Patricia Ward Biederman and Warren G. Bennis, Organizing Genius: The Secrets of
Creative Collaboration (Oxford England: Perseus Press, 1998).
James E. Austin and Frances Hesselbein, Collaboration Challenge (San Francisco,
CA: Jossey-Bass, 2000).
James F. Moore, The Death of Competition: Leadership and Strategy in the Age of
Business Ecosystems (New York: Harperbusiness, 1997).
Harvard Business Review on Strategic Alliances (Harvard Business School Press,
2002).
Larraine D. Segil, Intelligent Business Alliances: How to Profit Using Today™s Most
Important Strategic Tool (New York: Times Books, 1996).
Stephen M. Dent, Partnering Intelligence: Creating Value for Your Business by
Building Strong Alliances (Palo Alto, CA: Davies-Black Publishing, 1999).
Juli Betwee, William Berquist, and David Meuel, Building Strategic Relationships:
How to Extend Your Organization™s Reach Through Partnerships, Alliances, and
Joint Ventures (San Francisco, CA: Jossey-Bass, 1995).
John K. Conlon and Melissa Giovagnoli, The Power of Two: How Companies of All
Sizes Can Build Alliance Networks That Generate Business Opportunities (San
Francisco, CA: Jossey-Bass, 1998).
Smart Alliance Partners website, a top destination for information on strategic al-
liances found at http://www.smartalliancepartners.com.
The Association of Strategic Alliance Professionals”a membership organi-
zation dedicated to the topic of strategic alliances”online at http://www
.strategic-alliances.org.


NOTES
1. Widely attributed to Thomas A. Edison from a variety of sources including
www.brainyquote.com/quotes/ quotes/t /thomasaed131432.html.
2. Dr. Judith Kautz, Small Business Notes at http://www.smallbusinessnotes.com
/operating/leadership/strategicalliances.html.
3. Todd Jatras, Forbes Magazine, “Can India Retain Its Reign as Outsourcing
King?” (February 28, 2001).
SECTION III


The Organization:
Attracting and Retaining
the Best Professionals
9
Organization Structure
FRANK RIBEIRO


Quality is the result of a carefully constructed cultural environment.It has to be the fabric of the
organization, not part of the fabric.
”Philip Crosby1

The quality of an organization can never exceed the quality of the minds that make it up.
”Harold R. McAlindon2




This chapter identifies and defines the primary ways in which professional
services firms are organized and discusses how different types of organiza-
tional models can enhance or impede the success of the firm. Because the
most important asset of any professional services firm is its employees, it is
critical that its organizational design allow people the freedom to operate ef-
fectively while supplying needed structure as well as checks and balances to
keep the firm on track. This balance can be difficult to achieve.
Most professional services firms are made up of talented and intelligent
people who are eager to develop new ideas and methodologies and have little
patience for complex organizational structures that hamper their creativity.
Yet, for a firm to be successful as a business, it must have a mechanism that
forges the talent and intelligence of its professional staff into a cohesive
whole. The organizational model must create and reinforce the alignment
between the company™s external and internal strategies, support the firm™s
chosen image and branding strategy, and be f lexible enough to respond
quickly to changes in the business environment.


197
198 Attracting and Retaining the Best Professionals

Why This Topic Is Important
Employees are a professional firm™s most important asset. The firm™s product
is intangible. When clients buy professional services, they are, in essence, buy-
ing a firm™s people. Thus, a firm™s reputation and success depend exclusively
on the talent and intelligence of the people delivering it. To prosper, firms
must hire the best people, develop them, motivate them, and build in career
paths that keep them committed to the firm. Yet, the very people who make a
professional services firm stand out can be those who are most difficult to
manage. Regardless of specific industry, employees at successful professional
services firms have the same general set of personality characteristics. They
are energetic, strong-willed, opinionated, confident, and always in pursuit of
new challenges. They work best in a dynamic environment that allows them
the freedom to do what they do best.
Like any other business, however, a professional services firm needs to
have adequate structure to coordinate everyone™s efforts and offer one face
to clients. The question top management must constantly grapple with is how
to put in place an organizational structure that gives employees the freedom
to operate creatively within the context of a stable, functional firm. How can
the firm rein in employees appropriately without establishing so much bu-
reaucracy that they no longer feel they have any choices? For an organiza-
tional structure to work under these conditions, it must balance the need for
clear definition and explicit coordination of roles and responsibilities with
the need to preserve enough autonomy to engender creative, cross-functional
decision making and problem solving.
There are several different models for professional services firm organiza-
tion, but they all have the same key success factors:

• They align systems, structure, and governance to forge strong links
among employees, the firm, and clients.
• They manage and measure performance to establish firm priorities, ar-
ticulate firm culture and values, and ensure employee buy-in.
• Systems and processes are stable enough to facilitate effective manage-
ment, yet f lexible enough to ensure responsiveness to changes.


The overall purpose of the chapter is to examine how to build these key
success factors into the organization model for the professional services firm.
It does so by discussing:

• Common organizational components of professional services firms
• How to determine organizational goals in order to choose the best orga-
nization model
199
Organization Structure

• The three organizational models most professional services firms adopt,
including the strengths and challenges of each
• Why ownership and governance issues have special significance for
professional services firm organizations
• How an effective organization can support creativity while simultane-
ously facilitating the firm™s business success
• Key responsibilities and typical promotion paths
• The role of support staff within the organizational model
• The importance of building training and career development support
into the firm™s culture to strengthen and reinforce the organizational
structure
• How to create mechanisms that encourage knowledge sharing and elim-
inate as many boundaries and fiefdoms as possible, regardless of which
organization model is used


Professional Services Organization Overview
Professional services firms are first and foremost service businesses. By their
nature, they, and the professional staffs they employ, are customer facing.
The responsibility of any professional services organization is to identify the
specific nature of the customer ™s problem, define it in meaningful terms by
focusing on the business impact to the customer, and offer meaningful solu-
tions. As valuable as this is, the “product” being sold is intangible, the result
of processes that f low through the organization, from customer inquiries to
project delivery. Thus, the selling of professional services and the rendering
of those services can seldom be separated. The firm must present a consis-

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