Промышленный лизинг Промышленный лизинг  Методички 

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Because professional services are knowledge businesses, training is a critical piece of the organizational structure that requires ongoing commitment and investment. Most firms give inadequate attention to staff training, and training can easily be viewed as an expense rather than a necessary organizational investment. This is a mistake because good training across the firm and from new level employees through senior partners reinforces and supports the firms organization. It introduces the corporate culture and customer-facing approach to new employees. It develops intellectual capital among senior professionals. And it keeps the firm competitive by helping members keep current with new technologies, industry trends, and client issues. Chapter 11 discusses both career tracks and professional development in detail.

Another consideration when determining a firms organization is that ownership and governance decisions, which determine the incentive structure and set the organizations cultural tone, have a significant impact on the firms ability to recruit and retain talent. Chapter 3 discusses the concepts of partnership structures and governance in detail.

There are four main organization models common to professional services firms: practice, functional, hybrid, and geographic. Each has its strengths and weaknesses, and choosing between them requires trade-offs primarily between economies of scale and degree of delivery staff involvement in customer relationships. On top of those four models, there are two types of ownership structure. Partnerships are the most common, although some professional services firms are publicly owned.

Ownership and Governance

Partnership, where firm management is the responsibility of senior partners and practice leaders, is the dominant ownership model in the professional services arena. This model has numerous benefits. For one, potential partnership is a big incentive for junior employees. This ensures employee buy-in regarding firm development, as they will reap the rewards of a strong, successful firm when they earn a partnership stake. In addition, in partnerships, managerial decisions are made by customer-facing staff, which facilitates more rapid decision making and engenders less bureaucracy. These are all good reasons for the dominance of the partnership model.

However, partnerships have some significant challenges. Whenever owners are also managers, whether in a family-owned business, a start-up, or a professional services firm, there is the risk that leadership wont have the skill set or knowledge to maximize the firms potential. In partnerships, each new partner generally moves up through the ranks and has their own ideas about how things have been done and should be done. It can be difficult to step outside preconceived notions about the firm to remain flexible. Another



challenge for partnerships is that partners feel they have a proprietary stake in the firm, which can hamper their ability to be efficient and equitable managers. In addition, partners report to, and are appraised by, other partners, which clashes with the underlying concept of equal ownership by peers.

To overcome these risks requires a conscious effort to incorporate effective checks and balances into the organization model. One place to start is to look at some of the good lessons learned from corporations about governance. For example, partnerships often have outside boards that can help by playing the role that shareholders would play in a publicly owned company. A good outside board can help keep a firm on track, keep it from becoming too insular and provide objective, third-party advice that is in the best interests of the entity. It is a good idea to include members of the firms leadership team on the board. Booz Allen has an outside board that includes internal members from across the company. The internal leadership team, which meets regularly on operational matters, also has membership on the board. The external board helps to keep individuals or small groups from wielding disproportionate power over critical firm decisions, and provides invaluable outside guidance and direction setting.

In most partnerships, it is also the case that there are differing levels of partner rank. For example, Booz Allen has established three levels of partnership: entry level, lead partners, and senior partners. Partners progress based on how they perform against a set of pre-defined, agreed-upon partnership characteristics, as well as how much business they develop or facilitate for the firm. Senior-level partners have a higher equity stake than junior partners. That provides a further series of checks and balances and provides an increasing level of reward for seniority and performance, even within the partnership.

If a partnership has concerns about having equal partners appraising each other, it can overcome those concerns by making sure that the appraisals are based on wide input. The best kind of feedback for such evaluations is 360-degree feedback, with seniors, peers, and juniors who have interacted with the subject over time. Chapter 11 discusses the topic of appraisals as part of an overall professional development program.

Another challenge is that partners must devote intensive, nonbillable hours to management activities including mentoring, training, and business development, as well as leading client engagements. At the most junior staff levels, the goal is for each person to be 100 percent billable. At the senior partner level, however, a partners billable time may represent 50 percent or less of total hours because the need to focus on business activities-including marketing and sales-becomes more imperative than delivering on specific engagements. Some partnerships put excessive pressure on their uppermost levels of management for billable hours. That quickly becomes an issue for that firm, leading to a vicious cycle of engagements followed by troughs between projects while partners try to generate new work for their firm. It is



critical to put metrics in place that do not penalize partners for spending time on business development and sales activities. Rather, senior staff needs to be free to be only partially billable on assignments, using other time to feed the engagement pipeline. At Booz Allen, this is accomplished by assigning the lowest billability targets to the most senior people. While clients demand that senior people be involved with their projects, it is generally not a full-time requirement and has a fair amount of flexibility in arrangement. They understand very well that there is a team structure, with the most senior (and most expensive in terms of hourly rate) leveraged as counselors around specific issues, while actual delivery of services is performed by an expert working team that is thinking about the clients issues full time. Generally, clients demand a senior person on the case full time only if they are not comfortable with the underlying team. If that is the case, the firm has already damaged its relationship with the client, possibly irreparably and there are a variety of other issues that must be addressed.

While most professional services firms are structured as partnerships, some are publicly owned, and may be organized like a typical corporation. The benefits of this model include having a CEO and a COO to oversee operations, strategy, and other corporate functions so senior staff can focus exclusively on delivery and business development. In addition, a publicly owned firm can leverage capital markets to finance growth. Also, because the employees are not necessarily owners (except through stock purchases), systems and processes may be more efficiently managed, and there can be a perception that they are more objective. With public ownership, there is also a ready-made mechanism for checks and balances because of the more rigid structure, the reporting requirements, legal mandates for certain disclosures and shareholder pressure.

All of the benefits of public ownership can also be drawbacks. Public ownership can lead to increased bureaucracy, which hampers a firms ability to respond with agility to changes in the market or business environment. Lack of partnership as an incentive can make it more difficult to attract and retain top employees. Employees may even feel less committed to developing the firm because they cannot aspire to ownership. Given that people are its most valuable resource and that a professional services firm grows by adding people, publicly owned firms need to be very careful that their ownership model doesnt hamper necessary staff growth because shareholders are too focused on revenues and profits. During the late 1990s dot-com craze, for example, Sapient and Scient Corp. could drive growth by adding people-an expensive but necessary proposition-but their shareholders were applying increasing pressure for profits. It put them in a difficult dilemma. A privately owned company can be more insulated from the roller coaster of public markets and the accompanying outside pressures. Partners tend to be much more tolerant and understanding of business cycles than distant shareholders, who are focused primarily on financial returns.



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