The Future of Professional Service Firms

You recently revamped the curriculum for Leading Professional Service Firms. Is it still geared toward the same audience?

Thomas J. DeLong (TD): The majority of participants will be from professional service firms, but we have expanded the audience from accountants and lawyers to include any organizations that have governing and organizing bodies around partnerships, such as hospitals and universities. We're targeting small firms as well as big organizations.

David G. Fubini (DF): Yes, we want the focus to be more global, more personal, and more expansive. You'll see and sense that broader perspective with the updated curriculum.

How has the focus of the program evolved over the years?

TD: The majority of people who go into professional service firms are high achievers who are addicted to getting things done. What are the implications for managing them? How do you get folks who are individual contributors to work in teams? We're going to talk more about how to leverage your time and your energy more efficiently, which is the very essence of a professional service firm.

DF: I come at this through the consultant's lens of having worked at McKinsey for so long. Research arms of existing corporations actually have professional service firms embedded in their operations. These R&D centers are run like professional service firms, even though they're a part of a larger corporation. Even the court system across the United States and across the globe turns out to be a huge professional service management problem. And so the issues that firms are dealing with are twofold: First, their hierarchy doesn't work well anymore; and second, there's no longer a barrier to entry in this arena.

How does this onslaught of new competition affect existing companies?

DF: That's a big challenge. How do you deal with the fact that there is an ever-evolving set of new competitors? This is why we want to bring an expansive view to the classroom that's enhanced by lots of different opinions and a diversity of experiences. We don't want to apply the traditional definition of what it means to be in a professional service firm.

TD: For some people, it's like rocket science. But what worries us, and what they need to be concerned about, is that when push comes to shove, we tend to focus on our numbers and forget about human capital and talent management. We actually think that we can shortcut relationships and slide by. What are the implications of that for the individual, the firm, and the client?

How has managing evolved recently?

TD: Many people complain that millennials don't want to work hard, but they want the same thing that others wanted when they were young associates. They want to know somebody cared about them. The research is very clear. We're finding that overwhelmed partners are saying things like, "Well, you know this new generation." But doing that just justifies their behavior, so they keep doing whatever they want to do. So part of coming to the program, in many respects, is to learn how to hold people accountable in a positive way. What are you going to do moving forward to differentiate your talent and keep the organization in alignment?

In what other significant ways has the curriculum changed?

TD: One really interesting study on organizational change in China focuses on how to be more efficient in teams and also have a life outside—finding work-life balance. So we're also trying to make sure the curriculum has a more global perspective. Another area that we'll cover in the program is marketing in professional service firms. We're going to spend a half-day with the group talking about the needs of clients.

You mentioned that the program is more integrated. In what ways?

DF: We think it's important to work together as a group, so it's going to be a much more integrated offering. We're going to expand the faculty team in terms of offering a way for small groups to talk about the new research being done by our colleagues—for example, the difference between visible and hidden teams or the legal aspect of collaboration within professional service firms. This will give participants a real taste of the academic underpinning of this thinking. Then we'll link whatever we're presenting that day to the topic of the day.

What are some of the new challenges facing professional service firms?

TD: One big challenge is that these firms are often about 30 years behind in their appreciation of human capital and talent management. Now they're starting to see how important it is. We're going to ask: Where are you going? What's your strategy? Not just the client focus, but how are you going to organize the work to leverage the talent you have? And from there, we'll examine structure, systems compensation, and performance evaluation. The world of performance evaluation has been flipped on its ear as of late. Organizations are fleeing from evaluations. Leaders are desperately asking, How will I judge people? How will I know whom to pay?

DF: Another challenge is how they look at their people. Why do you have 30 percent attrition? Is that okay? Why are your engagement scores so bad? Your numbers seem to still be okay. Is that all right? How can we connect really smart people, who aren't necessarily inclined to be honest with other people or to have tough conversations? What's the research on the implications of relationships when you keep avoiding having the conversations that you need to have? There's new research about how smart, achievement-driven folks are starting to live their lives based on the conversations they're not having—I'm going to avoid that one and that one. We can spend a whole day just talking about how to start getting real traction on that issue.

TD: Finally, we'll move into the more personal—their impact as leaders on other people. Suppose all your subordinates were here tonight but you weren't. If we asked them: If you had any other choice, would you choose your current boss or someone else? Why would you choose that individual? Why wouldn't you choose that person? Throughout the week, we want participants to be thinking about how they're going to make a difference with other people—and how that will impact their leadership and the firm.