Advantages

Staff specialized in sales/business development more efficient in identifying and qualifying new business opportunities

Single point of contact with customer account for sale across all practices- allows for maximum control of customer activity

Staff specialized in sales/ business development

Sales staff focused on particular practice facilitates closer linkage to delivery

Increased credibility with customer/ differentiation

Better pricing and performance management

True experts involved in selling makes most compelling value statement-best positioned model for growth

Better pricing and performance management due to continuity through sale and delivery

Disadvantages

Generalist sales people have less depth of expertise in customers business needs or potential solutions Sales bring less insight needed to identify need and provide differentiated custom solution

Need to support higher cost structure of dedicated business development and product management

More complex customer interface,if practices do not align with customers/ segments

Senior team needs to carefully balance use of time;can lead to higher cost structure

More complex customer interface,if practices do not align with customers/ segments

Key Success Factors

Sales and B&P process needs to ensure delivery team involvement throughout-particu-larly in scoping Clear interface and smooth hand-off between sales/ BD teams and delivery teams

Senior delivery team members paired with customer-aligned business development

Tools to track allocation of time and resources among delivery,business development and capability development

Senior delivery staff team members must have strong business development competency Senior delivery team members play multiple roles along service/function and customer matrix Tools to track allocation of resources among delivery, business development and capability development

Exhibit 9.2 Pros and Cons of Each Organization

Model

Firm administrators are also heavily involved in recruiting, training, and career development mechanisms for support staff. They should play a critical role in the career development of employees and should have the ability to ensure that support staff is exposed to much-needed project variation.

Because they make contributions to deliverables across a range of functions and roles, it is critical to ensure that compensation and performance metrics for support staff are accurately set and defined.

Setting Responsibility for Pricing, Marketing, New Service Development, and the Budgeting Process

Professional services firms tend to place significant decision-making authority for pricing, marketing, new service development, and the budgeting process on their practice teams.

Firms most often set pricing policy globally, including target margins or billing rates, allowing local variations depending on organization structure (particularly the geographic model). Ultimately, pricing authority lies with the delivery team, although partner or higher authorization is most often required for discounts. It is important to include mechanisms for timely and accurate view of revenues, gross margins, average billing rates, utilization, investments, accounts receivable, and overhead costs; to be able to track margin realization versus target; and to ensure compliance with discounting and pricing policies.

Most organizations have a specialized marketing function providing support to individual practices. The role of the marketing function typically includes marketing communications, market research, sales support, and branding. Customer-facing staff is central to the marketing process, however, both through adherence to the firms overall marketing and branding strategies and through activities such as writing white papers and articles and presenting at conferences.

Although firms may place responsibility for new service development with delivery teams, the marketing function, or a separate development group, initial development of new services usually comes about when services that are already done on an ad-hoc basis for one or some clients are turned into products or service offerings for use across multiple clients. Regardless of where responsibility for development lies, the marketing support function is generally involved throughout the process.

Generally, hard investment decisions are made through a centralized budgeting process with practice leaders accountable for their targets. However, firms often fund new service development and capability-building activities through allocation of delivery staff time. Chapter 6 discusses the process for determining investment priorities for new service lines.

Career Progression

At most firms, progression occurs along an established continuum from entry-level (associate) to stakeholder (partner); some models also support a nonpartner track. As in other aspects of firm organization, the expectations and responsibilities for progression within the firm need to be clear, explicit, and well defined.

As an individual ascends the firm hierarchy, responsibilities shift from a tight focus on delivery toward business development and other institution-building activities. A recent study3 found the division of labor at typical consulting firms is as follows:

Division of Labor between Partners and Project Managers at Consulting Firms

Percentage of Time Spent on Responsibility

The apprentice model, with fixed leverage ratios for junior to senior staff, is dominant. It is important to make it clear to all new candidates in an up or out policy that only a select few will travel the entire path to partner. Other firms have a nonpartner track that provides long-term career options for individuals with specialized knowledge or training. Regardless of which model a firm chooses, training mentoring, work allocation, and feedback and evaluation are critical to ensure the professional development and preparation of junior staff. Firm training and development, both formal and on the job, are critical parts of preparing individuals to assume the increased business development and administrative responsibilities that accrue over time.

Typically, professional services firms use specific competency models as a part of their organization model, with those moving on a partner track needing the following:

Project delivery: This competency follows an hourglass model where entry-level generalists develop specialized functional or industry