Many - if not all - professional services firms have made some tough management decisions over the last couple of years. Staff cut backs, a tighter management approach, pay freezes, and so on. And, much to the consternation of perhaps superficial observers, partner profitability has, in some cases at least, actually increased despite the downturn.
Firms have, in reality, been doing during a recession exactly what they should have been doing during the boom times as well. It is all too easy during periods of growth to overlook the failings of 'only average' performers. The philosophy that such people are 'better than nothing' is woefully inadequate.
Similarly, when the profits are there, management tend to overlook those things that can be a real drain on firms - unfocused marketing; turning a blind eye to failing partner performance; excessive entertaining of the 'wrong' people. In a recession, such practices get managed more closely.
But this 'recession management culture' comes at a price. Some would prefer to be a little less profitable and enjoy a more 'comfortable' working environment without the constant pressure to focus on the bottom line.
Amongst MSI Global Alliance (www.msiglobal.org) member firms, I have heard both views expressed. Some partners would prefer to work hard with minimal 'frills' in the office, maximise their earnings, and then decide at a personal level how they are going to spend their money when they get home. Others feel that, spending as much time as they do working, they want that time to be at least reasonably comfortable. And if that means a good level of support within the office, sensible working hours, some entertaining and other 'fun' activities - but with reduced income, that is a price they are prepared to pay.
I am not saying that either approach is right or wrong. Indeed, there are many scenarios between the two extremes. My point is a very simple one. Within most firms, there are partners with different ideas and different expectations. The challenge for firms moving forward is to have the debate about the route they want to take, to manage themselves effectively to achieve that route, and to bring all the partners with them on the journey.
James Mendelssohn (jmendelssohn@msiglobal.org)
CEO, MSI Global Alliance
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