In this week’s blog, I tackle a recent request posed to me by a professional service firm leader: “Here is something I would like you to write about next: how do I best identify and develop my senior leadership team?”.
First to say, this is a great question to ask. The very act of asking it indicates a degree of business savvy – as it is perhaps one of the hardest aspects of scaling a professional service business and certainly one of the critical success determinants.
Identifying and developing your senior leadership team
I am going to answer it by talking to five buckets; that is five critical areas of competence required within each member of a professional service firm’s senior leadership team. These five buckets serve as an invaluable (mutually exclusive, collectively exhaustive) checklist with respect to identifying, developing, appraising and rewarding your senior colleagues. As such, I commend you to taking these five aspects to mental note. The five buckets are as illustrated below:
This essay will look at each in turn with accompanying steer as to how you best recruit and nurture such competences.
Before we dive in though, some general points to make.
As a general rule-of-thumb – backed up by some tough lessons learned personally – I would strongly encourage you to develop your seniors, as feasible, from within your company as opposed to hiring from outside. The risk of external hiring grows the more senior the position. If you have internal options – who are maybe not quite the complete technical article but whom you 100% trust to carry your team’s culture and values – then this risk is often far lower than that of the smooth-talking-at-interview external who doesn’t actually align to your values once in. Far better to nurture a less-experienced but trusted-values-stalwart colleague through a few trips and stumbles in their early promoted period than deal with the complete team-dynamic-altering mis-hire.
I would also strongly encourage you to start thinking about a board-type arrangement as soon as you have even one other senior peer in sight. As I talk about often (for example, see here), an effective board discipline (that gives you the space and construct to step back from your micro-operational firefighting at regular interval) is essential.
My final general point is to not lose focus on the senior team’s development needs. As a firm grows, the seniors often selflessly obsess with the development of their junior colleagues; there can almost be a sense of we have had all our career training – now time to pass it onto others. This mindset has to be corrected. Your senior team are your force multipliers and, as such, their professional development should be of continued, paramount importance also. You should consider appointing someone this overall senior-team-development responsibility – looking always for external courses, qualification and relevant development intervention.
With that all said, let’s look into each bucket in turn.
First and foremost, your search for senior colleagues has to fixate on professional technical excellence.
Seniors in any professional service business have, as a primary responsibility, the role of defining professional standards and monitoring the quality of this service delivery across the wider firm. The seniors in your firm have to be the best in this business at what you claim to do – able to mentor junior colleagues in what is expected with respect to the quality standards expected. Aside from being demonstrably expert in your technical domain, you should also expect such senior colleagues to be ever vigilant in calling out sub-par performance and leading on any corrective activity. This point is worth mentioning as expertise is not always correlate with the confidence to address variance in others. Fundamentally, in this aspect, you are seeking people with technical expertise who, also, really care about these standards being maintained across the firm.
The key point to make here with respect to identifying seniors is to never compromise on this aspect through the seduction of compensating strengths in other buckets. To build and scale a professional service firm your most prized asset is the consistency of your service delivery. Such consistency is only derived when you have a set of seniors who are universally respected – and followed – for their professional competence.
In terms of developing your senior team in this area, you should ensure that they continue to invest in their ongoing professional development – especially so as this can easily get lost at more senior career stages when their selfless focus on junior others becomes the norm. That said, there is no better way to cement professional expertise than in developing, and delivering, training – so this should be encouraged. You should certainly ensure your senior team have sufficient slack in their billable utilization target to stay abreast with the latest professional practices, to contribute to professional bodies of work, to attend relevant conferences etc.
It is also worth mentioning that proficiency is a combination of expertise and productivity. Agnostic of the technical domain you specialise in, professional service seniors should be exemplar in terms of their general productivity and intellectual horsepower. I was certainly blessed at my firm, Moorhouse; the senior team, to a person, were the kind of people able to deliver quality output at a pace and throughput way, way above the average. Such productivity is, in turn, a combination of many years of experience (picking up a raft of top tips) but also a state of mind. A state of mind that is constantly looking for new ideas as to how to improve general productivity as well as technical competence per se. You should seek for your senior leadership team to have an intellectual curiosity in this area also – see this blog on the habits of highly productive leaders as an example.
A very close second behind technical mastery comes business development prowess. Certainly in the early stages of a professional service firm’s growth, a critical selection criteria for entry into your senior leadership team is this: are they successful business developers? Technical mastery is for naught if you cannot sell future work – and the pointy end of this onerous responsibility lies with the firm’s leaders.
You are looking here for colleagues with a proven ability to sell work in the area you specialise in – with significant and ever-growing professional networks. This will invariably be coupled with deft interpersonal and communication skills (see blog).
A factor that is unique to professional service firms is that the best business developers are, typically, also the best at delivering the professional service in question. It is only such skilled practitioners (bucket one) – as opposed to a career-specialist sales person – who really understand the context and nuance of complex client situations and requirements. As such, a search for such seniors has to start with your mid-management colleagues who are showing natural aptitude and enthusiasm for this aspect of their career progression.
In a perfect world, you will have senior colleagues who are not only accomplished business developers in their own operational practice but who also understand what it takes to develop a wider sales capability across your firm. See the whole series of blogs on this topic starting here (building a firm wide sales capability).
In terms of developing your senior leadership team in this regard, asking them to oversee such a capability enhancement project (or a scoped workstream within it) will ensure a better understanding as to the components of selling – the science (80%) and the art (20%).
Of course, also, your seniors will need to have crystal-clear revenue targets that they are accountable for – with the expectation that this critical activity fills a component of their everyday cf. lurching from violent delivery-to-selling time blocks. It is this everyday habit which incrementally grows aptitude and BD confidence.
This is such a critical bucket that you may also seek to bring in sales experts (with demonstrable track record in professional services) to facilitate such a capability enhancement and/or to provide ongoing coaching of your senior leadership team in this skill.
Next up, is people-centric leadership. What do I mean by this?
I have written a lot about the PRIMARY determinant of success in professional service firms: the existence of a high-performing team. See this blog for a related piece of research into what motivates people to work – where you can download the white paper that describes in detail the makeup of a high-performing team.
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The most important equation a business leader need ever know
Or, what truly motivates people at work?
Such high-performing businesses are built by leaders who are professionally-motivated by, and intellectually-curious in, what makes people and teams work. As such, entry into your senior leadership team must also be filtered on these deft people leadership skills.
You are looking for senior leadership team colleagues who have a genuine (cf. career contrived) passion for teaching, motivating and developing others. This is as much about their natural proclivity towards this activity as it is to their managerial talents per se.
There are plenty of accidental managers out there who, whilst average in their ability, have no genuine enthusiasm for this aspect of their role. Such folk do not make good members of a senior leadership team. Conversely, you can take someone with low skills but a genuine passion for staff development and really help them nurture this competence bucket. For example, they can be encouraged to pursue a professionally-recognised coaching qualification.
Further development in this area can come from practice at the coal face – with overarching supervision. That is – all senior leadership team members of a professional service firm should expect to have a people leadership dimension to their role. This will include mentoring, guiding and professionally-developing an allocated cohort of the firm – essentially overseeing the performance objective-setting and review cycle for such colleagues but also their career counselling in the round. Further such leaders should lead in respect of events and interventions that bring your team together, galvanise energies onto current strategies, celebrate successes and recognise company values well lived. Fundamentally, your senior colleagues should be the walking exemplars of such values.
To reinforce this real-world team-development experience, you should expect for such colleagues to have a hearty appetite for this topic: searching out professional reading, podcasts and blogs on the topic of high-performing teams. This is important as the task of improving a people-and-values-centric enterprise is a never-ending endeavour.
For a small-medium professional service business, your senior leadership team is, typically, analogous to your board. See this blog for what constitutes an effective board and why having one is another critical success factor for high-growth professional service firms.
As such, the fourth critical competence bucket for assessing and developing professional service firm seniors is the strategic contribution they can make to your firm’s future.
Firms fail most typically as a result of mis-direction cf. mis-management per se. To avoid such directional failure and to stay constantly abreast of strategic risk (and opportunity!) you need to build a board that regularly steps out of the business to work on it: to asses external dynamics, to set (and reset) your growth strategies and to manage performance in respect of this.
A fundamental expectation, therefore, of your senior leadership team colleagues is that they contribute to this strategic assessment and target setting. What you seek in this regard are critical, independent, open-minded thinkers able to contribute to energetic debate in the pursuit of fact-based conclusions. What you do not seek are yes-men colleagues; as they say: acquiescence is something only to be admired in sheep. Rather, you seek that, per one of my favourite quotes (Colin Powell; former US Secretary of State):
When we are debating an issue, loyalty means giving me your honest opinion, whether you think I’ll like it or not. Disagreement, at this stage, stimulates me. But once a decision has been made, the debate ends. From that point on, loyalty means executing the decision as if it were your own.
That summarises perfectly the style of contribution you seek. But if that is the style of contribution, what is the substance?
Per the tactical-operational-strategic continuum, you are looking for colleagues who enjoy intellectually grappling with the macro picture of professional service firm development, those who are able to step up out of the weeds of local, day-to-day delivery and muse upon the downstream external trends that will change the very nature of the services you offer today. You seek colleagues who can sensibly analyse market, competitive, political, economic, social, technological, legal and environmental predictions and deduce cogent “so what?” answers for your firm. Where do you make sensible future investment, what new capabilities to build, what markets and services do you offer next, in what order etc?
Truth be told, some peoples’ brains just do not operate that way – or – they just have no interest in giving much thought to such perspectives. Normally, however, strategic thinkers are easy to identify: they enjoy the more abstract conversation, the look-forward and, above all, they are obsessed with a search for data in the pursuit of justifying any hypothesis they have.
Strategic thinking in the context of business can certainly be further developed with professional study (MBAs and the like) and reading. As a business leader you can oil this conversation – and lifelong learning – by ensuring your seniors are actively involved in your business plan refreshes (external market and competitor analysis especially) and through the commissioning of specific strategic studies. By example, I used to regularly commission Explore Teams, led by senior colleagues, to answer extant questions: should we invest in this geography, what new service offering should we add, what industry sector do we next seek to grow into, how will new technologies disrupt our services? The expectation was that such teams would play back a clear recommendation to the board backed up by primary and secondary research in justification. Over time, the expectation as to the quality and depth of such exploration raised – our collective ability raised as more examples of excellent analysis and structured reasoning were demonstrated.
This bucket is also about constant horizon scanning – taking a real interest in your profession’s current debates and the challenges inherent in your operating sectors. So development in this area is all about relevant professional memberships, readings and participation in discussion fora also.
The fifth and final bucket I want to draw to your attention is that of operational excellence.
This is of special significance in the early years/stages of your growth; certainly from, say, a singleton firm to, say, 150 plus staff. What you need to successfully traverse this trajectory (and the point still stands in part at later stages) are seniors who really understand the operational infrastructure and capabilities of a professional service firm: from financial control and the production of relevant management information through to marketing, HR, quality, knowledge and estates management.
In terms of identifying such seniors you are looking for people who have demonstrably been there, seen it and done it with respect to building out such functions in fledgling, early-stage businesses. By direct contrast, many seniors from big, global firms have scant knowledge or understanding of these dynamics – especially so if a groomed graduate-to-senior journeyman. Rather, such men and women have just relied on operational services being always in place to serve them – with outputs just appearing from organizational black boxes within their behemoth companies.
You will seek seniors ready and able to constantly develop and embellish these enabling dimensions and this can only happen if they have the requisite knowledge as to what excellent looks like in each regard and an understanding of how such functions are built ground up.
Developing these skills is, again, a two-fold exercise.
Firstly, you should provide members of your senior leadership team with the space-for – and – encouragement-to further develop this competence bucket. By example, I was hugely encouraging of my co-directors (partners) at Moorhouse undertaking the UK’s Institute of Directors (IoD) Chartered Director programme – as aside from supporting bucket four (strategic analysis) it also improved their awareness of these operational dimensions: HR, financial awareness, marketing etc.
Secondly, you should provide opportunity for your senior leadership team colleagues to keep their saws sharp in this regard. In the early stages of firm build, this will likely be via the oversight of a related capability-build project. See this blog for the role such capability-build projects play in growing the value of your business. Such projects will invariably involve a look outwards: what are the best companies doing with regards to area X – asking what tools do they employ, what principles do they work to, what processes are embedded? Before bringing such identified best practice home; for example, embedding key enterprise tools (such as Method Grid), hiring new skills, developing new processes.
So, there you have it. The five buckets you need to have at the forefront whenever the subject of identifying, and developing, your senior leadership team comes to mind.
The summary diagram below contains a final element.
Whilst all these buckets are critically important – and come with the expectation that people continue to grow in each – they are not necessarily equal at the point of appointing a senior to your top team. Let me provide a subjective guide to this.
On a scale of ten, let’s say that one is zero-competence and ten is a fully-formed, respected-expert in your firm/sector/geography. On that approximate continuum, I would set the minimum entry criteria as follows: bucket one is a no-compromise 8/10, buckets two and three are solid 7/10, bucket four can be a 6/10 (you are looking for an inherent mental aptitude – exposure to more strategic debate can develop) and a 5/10 for bucket five (at least a working understanding of such functions coupled with an appetite to progress on this).
Figure: Identifying and developing your senior leaders | The five buckets
So, what’s next?
Next week, I plan to take a wide tangential detour and spin you a yarn. The yarn whilst completely unrelated to business will – hopefully – come with a reflective muse on the nature of the entrepreneurial challenge. Even if the concluding point is abstract, it should hopefully – at least – make for a refreshing editorial (and reader) change.
Hopefully, you’ll join us on this journey. It’s totally free, and you don’t have to be a Method Grid customer (though you’re more than welcome to sign up for a free trial here).
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