b. At most, you probably have three or four levels in your organization. If you have only one or two, you need to be building and planning for three or four to allow your firm to gain leverage as it grows by moving more mundane and routine tasks to less experienced, less expensive resources.

c. A multilayer organization will help you develop career paths for employees as well, improving employee retention and attracting new candidates to the firm.

d. Make sure each direct report is strong and that you have good lieutenants, which will greatly free up more executive time for important activities.

e. Determine appropriate standard bill rates for each level of your organization. This step will help keep you profitable and make you more disciplined in negotiating with customers when they ask for pricing or price breaks.

f. Ensure that the variable incentive compensation is set at each level of the organization and that the incentives are aligned to the major goals of the organization.

g. Write down the principles and doctrine that define the firms culture and communicate these regularly to employees.

3. Develop simple, straightforward processes for recurring activities.

a. Like any company, you will die the death of a thousand cuts if the professional staff is always reacting to the latest business issue.

b. The only way to avoid reacting is to develop standard processes and checklists for your top issues.

c. The typical processes that can be standardized include recruiting, HR, on-boarding employees, training, cash flow management, accounting, quality assurance, customer satisfaction surveys, weekly progress reports, and so on. Anything that is repetitious and managed by routine is a candidate for standard operating procedures.

d. Take the firms top 20 standard activities and make sure there is a repeatable process written down with job responsibilities for each one.

e. Through this process, the next time the firm encounters the activity, it will be handled with an automatic response from an administrative employee versus a decision or activity that you or, worse, multiple professionals in your organization are reacting to.

f. Add rigor and objectivity into hiring plans such as cognitive or other testing and other non-interview data points.

g. Make sure the organization routinely counsels underperforming employees and eventually eliminates them from the firm if their performance does not improve.

h. Set hiring triggers by quarter or annually based on revenue or incoming business. This schedule will help the firm proactively recruit instead of reacting to the next project on an ad-hoc basis.

4. Eliminate any non-core service lines and focus on what you do best.

a. Ask the question: How many service lines do you have? Service lines are services that your firm performs for customers. Service lines generally include a concept, a set of offerings, a methodology, a process, standard pricing, standard work plans, and standard resources.

b. If you have no service lines, you probably view your firm as gener-alists, and you may have too few differentiators.

c. On the other hand, 10 service lines are likely too many for the mid-size professional services company. It is difficult to be expert at a wide range of activities with limited resources. A large number of service lines will hurt delivery quality and confuse your customers to the point where they wont know what your firm does well.

d. Determine what you are good at; determine what you can be the best at. Develop that into a service line and focus on it. The marketplace rewards focus, particularly for small and mid-size services firms.

e. The firm must develop intellectual capital, build qualifications, and train employees on how to sell and deliver if they are to provide differentiation in the marketplace.

5. Improve your relationship with customers.

a. Each piece of business you have should be profitable and reference-able. If it is not, then it either needs to be cleaned up or the customer may need to be given up.

b. Make sure you are staying in front of your customers. A quick litmus test for ensuring external focus is this question: Have you met with your top five customers in the past month?

c. Ensure that the firm is engaged in good business. Produce a spreadsheet with each customer listed in the left column and the profitability of the customer along the y-axis. Any customer that does not generate the gross margin that is your goal should be dealt with in one of two ways. First, attempt to set up a meeting to discuss rates. If rate discussions are not successful, try to reduce your cost to serve the customer. As a last resort, stop providing services to the customer.

d. It is easier to have these discussions with customers when you know them well. Make an effort to visit your clients or take them out for nonbusiness lunches and dinners to solidify the relationship. Remember: Your services help them.

e. Additionally, while with customers, ask for feedback on your services. You will be surprised what you hear and the suggestions that they have for you. Often, important new services will emerge from direct customer feedback.

6. Ensure that your sales and marketing plan is leveraged.

a. What are the sales steps from finding a prospect to completing a deal?

b. Outline and define these steps clearly.

c. Determine how much time is involved and by whom in the organization.

d. Develop standardized proposals, qualifications, and reference sheets.

e. Train professional staff on how to sell your services.

f. Track metrics on each step outlined. You will begin to understand better how your marketing and business development efforts translate into work for the firm.

7. Improve fiscal management/budgeting.

a. Based on your leverage model, there should be an assumed utilization rate for all staff. What is the actual utilization rate for your staff?

b. Crack down on frivolous spending by tightening expense policies and holding up capital expenditure requests that are not important. This step will alleviate cash flow pressures and ensure that all employees are carefully monitoring expenditures.

c. Plan major capital expenditures so they are spaced out appropriately and allow adequate preparation time.

d. Watch cash daily. Develop a one-page scorecard that shows incoming and outgoing cash on a daily basis.

e. Always have a plan B for handling firm expenses (e.g., payroll) in case cash does not materialize. Have you established a line of credit at the bank? Have you adequately planned for receivables and payables?

These steps should put you well on your way to building the scalable firm. Always think strategy, system, process, and people-if youre constantly thinking about the next client sales call or delivering another document to a customer, chances are no one is thinking about how to grow the firm.

With the right leadership in place and enthusiastic engagement from the senior management team, you can lead your company to the next level. As evidence that you can lead your entire firm toward growth and success, we share a note received from the CEO of a client for whom we had previously completed an extensive effectiveness engagement: