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On top of the unrelenting stream of work, there are constant legislative changes, capacity issues due to problems attracting and retaining quality staff, new technology to navigate, new service lines to implement and finding the time to build capabilities to stay ahead of the competition. When combined these elements can become overwhelming, driving dysfunctions that hold a firm back.
With this market dynamic (regardless of whether a firm is under-performing or achieving solid results), often a there’s a pervasive malaise caused by a lack of leadership engagement in firms. One could blame the leftover shadow of the challenging COVID years, compounded by the subsequent rise in workload and pace of change.
But for many firms, these challenges were simmering years before the pandemic and some leaders are simply exhausted by change. They still want to achieve solid financial returns, but now question their level of life balance and future in the firm or industry. As many firms are consensus-driven this causes frustration for managing partners who also question their own future pathway.
Does any of this sound like you or your firm? If so, you are definitely not alone.
Below are 30 practical strategies to turn around a dysfunctional firm. If you’ve completed the ‘Ten Dysfunctions of a Professional Service Firm’ diagnostic look at your top three weak areas and match them with the ‘turn around’ strategies below. For example if ‘Ineffective Leadership’ as one of your areas of weakness review the strategies below and think about how you can apply them in your firm. Haven’t completed the diagnostic? Take five minutes to do so here.
1. Capacity Challenges
One of the key constraints for growth is capacity. Capacity can be increased through building capability, use of technology, outsourcing and exiting unprofitable clients & customers.
2. Leader & Team Burnout
People went into the pandemic tired and came out exhausted. Slowly there is a recovery but this needs to be fast tracked. Stress levels and mental health issues are impacting engagement and commitment levels.
Review if leaders and teams have the right work/life balance. Are they taking advantage of flexible working arrangements (working from home vs in the office) and engaging in social activities? Are they encouraged to regularly take annual leave and take advantage of well-being strategies (like nine-day fortnights or mental health days)? It’s important to ensure leaders and teams have time out and the right work/life balance.
Ensure there is clear role clarity aligned with the firm’s vision, with realistic performance metrics in place for each leader and team member. Performance should be formally reviewed each quarter with strategies put in place to assist under-performance or mitigate the pressures of over-performance.
Reduce stress levels by removing unnecessary or low-value responsibilities and encourage greater delegation. Keep removing elements until stress levels have settled for a clear period of time.
3. Low Leader & Team Engagement
The lack of engagement at all levels in a firm is the major symptom of low performance. In many cases teams have reached their limit of time and energy and are keeping busy rather than being productive.
4. Poor Productivity
All businesses are experiencing increased costs and more waste & inefficiency. With everyone already busy working ‘in the business’ there is little time to be working ‘on the business’. There needs to be significantly more investment in productivity improvement. This was the focus globally in the 80’s and now is the time to start investing in it again.
5. Ineffective Leadership
Leaders are facing new and more difficult problems and opportunities in the market. Many lack experience and confidence in dealing with these issues. They require quality training and support to convert their problems into opportunities.
6. Change Fatigue
Over the last few years there has been a need to make significant changes to the structure and operation of firms. The probability of being successful with these change initiatives is known to be low, around 30%. The ‘trial and error’ approach adopted by most has created change fatigue resulting in a reluctance to try any more new things.
7. Poor Time & Priority Management
Most people are still wasting significant amount of time and energy working on urgent but unimportant things that have little strategic impact on the firm. They have bad habits that need to be changed. To do this most need vastly improved time and priority management skills.
8. Lack of Strategy, Vision & Innovation
Market demands are continuously changing, digital disruption is creating a wealth of opportunities and new entrants to each market are challenging the status quo. Understanding the strategy and innovation needed to compete successfully in this environment has become a key requirement for leaders.
9. Substandard Training & Development
Many leaders and team members in firms are satisfied with their current levels of capability however the most successful are lifelong learners. They aim to increase their capability continuously, a 20% compound growth in capability will double the capability in a person in less than five years. Strong training and development to build capability positively impacts other key areas such as attraction and retention of staff and clients.
10. Lack of Leader Support Structure
Most successful leaders in firms have a strong support structure around them. This includes peer networking groups, coaching and mentoring, industry events, quality team, great resources and access to quality best practice insights. This ensures they are able to achieve peak performance.
To overcome the dysfunction in your firms we suggest you engage just a third of the leaders or rising stars who are willing and able to drive change. This third, combined with the managing partner or CEO can champion fundamental initiatives, whatever form they take: a merger, the removal of poor performers, implementation of new systems, processes, technologies or launching service lines.
The managing partner’s job is to protect the ‘willing’ from the ‘naysayers’. Once the changes take effect and are reflected on the bottom line and with growth, another third of the leaders will become converts.
With two thirds on side, you are safe. React to the remaining third with counselling only if someone is an vocal blocker of change. If they continue blocking, they are asked to leave. Any of this group quietly going about their business, maybe even retiring in a few years, let them be. Managing partners uncertain of how to deal with blockers are questioning their own competency and may regret taking on the role. Many are talking to others achieving success, discussing mergers (really acquisitions) so high performing firms now provide an alternative to selling to private equity , a merger or what is seen as a negative move.
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