By: David H Maister
Client "satisfaction equals perception minus expectation" – Maister.
David Maister's book "Managing the Professional Service Firm" offers an insightful, if dated, perspective into the consulting world. In this blog, I wanted to capture some of the insights I find useful in my work with professional service firms, focused on leverage structures, getting client feedback, marketing, and building the organisation.
Maister explained that a professional services firm's leverage structure is built around client projects, business costs and charges, and career opportunities for staff. Any firm's challenge is figuring out where it sits within this model. To achieve this, Maister expands on the idea that a firm needs to understand the type of projects purchased in the market and how these can be delivered most effectively while maintaining quality and credibility, where client expectations and delivery determine the latter (there is no point in providing a Porsche to someone who asked for a Volvo). The project type determines the team composition, which drives costs and the charge out. Do your typical projects need an experience in the team, or is it a repeatable task that a more junior team can do?
"Go to the horse's mouth and ask the client" (p.61).
In Maister's analysis, client feedback and marketing are linked. The value of gathering client feedback is not only to improve service delivery but to understand the market and, ideally, be ahead of the market trends. Maister proposes several methods of gathering feedback, including user groups, reverse seminars, attending client industry meetings, market research, senior partner visits, engagement team debriefings, and systematic client feedback.
Marketing is the inverse of client feedback.
Outreach to clients leads to a deeper understanding of the market and the key trends companies are interested in. As the table below highlights, the most effective professional service firms can demonstrate awareness of a new need and use that to engage with clients on the most relevant issues. Central to this approach is that marketing has to prove – not assert (p.121) – an understanding of the market and industry challenges. The more face-to-face discussions you have, the more successful and valuable your marketing will be.
Building the organisation is what Maister calls "asset building".
Asset building is the value of investing in skills, knowledge, and relationships for long-term career success. What matters is that a firm can invest in its people, developing their careers through targeted training, coaching, and a rotation through different assignments. While this sounds straightforward, the challenge is for firms to make the time to think about who is doing what work, how they are doing it, and coaching them to do it better. The career opportunities for staff play an important role in how a professional firm develops. Only some people can go up in a leverage structure. Yet, individuals must remain engaged - this requires focusing on skill development and creating opportunities for horizontal career progression.
Maister suggests a simple framework for self-assessment that can both challenge and focus an individual in a professional service firm. The questions are (p.153):
In what way are you personally more valuable in the marketplace than last year?
What are your plans to make yourself more valuable in the market than in the past?
What new skills do you plan to acquire or enhance next year?
What's your personal; strategic plan for your career over, say, the next three years?
What can you do to make yourself (even more special) on the market in the near future?
What, precisely, is it that you want to be famous for?
Six lessons for how professional service firms can manage growth
Maister concludes with six lessons for how professional service firms can manage their growth. Building a professional service firm is challenging, and it requires understanding the market, clients, marketing and how organisations development. The six lessons are:
What you know now and can do now, what your current success is built on, will only depreciate if you actively work on learning new things and building new skills.
The health of your career depends not so much on the volume of business you do but on the type of work, you do.
No matter how busy you are, you still owe it to yourself and your career to get involved with and take charge of your practice development activities.
Since asset building is about managing your affairs for the long-term health of your career, you'd better take charge of it yourself.
You cannot automatically assume that what your firm "asks you to do "will always be the right thing to build your asset.
Among the worst mistakes a professional can make is underinvesting in marketing to existing clients.
Let’s connect. If you found this blog interesting, have questions about ordinary leadership or want to chat about leadership in general, it would be great to connect. I set aside two hours every week to make new connections and renew old ones. We have half an hour to talk about whatever you want - how we could work together, your projects and ideas, or something else. It's space for connection. You can book a slot here, and there is more background here.