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Evidence as a stimulus for change in professional services firms

May 20th, 2012 |

Firms, like people, are creatures of habit. From the time we wake to when we go to sleep, most of our daily activities are repetitive and not conscious. We travel to work, eat meals and do all manner of things without much deliberate thought. We engage in patterns of behaviour–popularly known as habits. Ndubuisi Ekekwe engagingly builds on this mundane observation in the HBR Blog Network to describe how firms are also an 'amalgam of habits' and depending on the dominant habits, firms will either fail or succeed. Firms, he argues, must change their habits in order to survive and prosper in a changing environment. The big question, as we all know, is how to change habits of lifetime? 

Professional services firms have evolved their organisational habits in flat structures with cultures bred over generations of partners. Change is very hard to bring about in this type of environment. The cultural web of custom and practice, structure, promotion and compensation policies and, in most firms, the aura and reality of success holds everyone tightly in its grip. And, save for crises, there are seldom any effective burning platforms to stimulate change.

Ironically though, leaders of most PSFs acknowledge the need to change current habits ranging from how work is done (need for much greater efficiency), how client service is delivered (need for more value to maintain fee levels), how ownership is structured (need to accommodate Gens X and Y and enable succession) to how the firm is funded (need for product development and investment in technology). Yet the owners, particularly in partnerships, say "But look how successful we are!" And they resist change in serving clients, investment for the long term, and redistribution of power. As David Maister despairingly once put it "Try telling a bunch of millionaires they are wrong".

Over the last 10 years Beaton has enjoyed the privilege of serving some firms in the Maister's "millionaires" category who have had the courage to make changes based on evidence we independently put before them. I am referring to the unique insights that can be derived from the service now known as the Beaton Benchmarks. From client service models to client relationship management strategies to pricing to branding to employee value propositions and employer brand strategy, the list goes on. Yes, some firms are making deep changes using market-, client- and people-based evidence as their stimulus.

In realigning their habits, these firms are innovating. In our humble opinion, it's these firms who will survive and grow. Is it time to ask, what habits is your firm reshaping? And how are you creating the impetus for the change, while others aren't?

By George Beatonis a director of Beaton Capital and Beaton Research + Consulting. You can find George on Google+ at +George Beaton.

Posted in beaton news, beatonbenchmarks, Professional Services, Strategy | Comments Off on Evidence as a stimulus for change in professional services firms

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