If each of your practice groups is primed to win, then there’s a pretty good chance your firm will win as well.
With this in mind, there’s much benefit to be derived by assessing all of your practice groups on two dimensions:
- A winning strategy – from strong to weak, and
- Execution capability – from strong to weak.
If most of your practice groups are in the weak-weak quadrant, perhaps it’s time to take that call from the headhunter. If all the groups are strong-strong, don’t change a thing! If you have a mix of everything, it’s time to get to work…
A winning strategy
There is a range of factors to take into consideration to assess whether a practice group has a winning strategy for the next three years:
- Does the practice have clear aspirations to win? Is there a stretch intent?
- Are they competing in sizeable, growing and profitable market segments?
- Does the practice have a compelling value proposition, that is, clear reasons why clients should choose them over others?
- Does the practice have a profitable and sustainable business model? Bonus points if the model is scalable.
- Is there a Plan B if non-traditional competitors strengthen?
- Are there pilots and experiments in place creating options for future growth?
- Is there a clear implementation roadmap with accountabilities, measures and timing?
- Is it clear what they say ‘no’ to, and why?
On paper, the practice group might have a world-beating strategy but it may not have the skills, resources and systems to implement it.
The first, and most important, the question is whether you have the right practice group leader. Is she a true leader or merely a convenor? Does she lead or just manage? While she might seek to lead, does she have loyal followers? Does she have the ability to inspire and support team members to be their best? Is she strong enough to stand up to the recalcitrants?
Other questions to ask around execution capability:
- Is the team a real team or just a loose coalition of colleagues?
- Does the team generally follow-through on their commitments?
- Does the team own its strategy and take accountability for it?
- Does the team have the right talent necessary to win, now and in three years time?
- Does the group have access to the right technology, processes and systems to underpin its business model?
- Is there sufficient open-mindedness to adapt to new inventions and work methods?
- Are there mechanisms in place to regularly review progress and tweak their plans?
While it’s important to assess the competitiveness of each practice, there’s also a lot of value in assessing the inter-dependencies, synergies and gaps across the portfolio. Another portfolio overlay is the amount of partner equity allocated to each group and expected ROE (return on equity).
A review of the portfolio should indicate which practices require investment, divestment or just be maintained. Handling the politics of these decisions is a topic for another post, or three.
While a firm is more than just the sum of its parts, the parts play a critical role in sustaining success. Your firm’s strategy needs to reflect firm-wide themes like overall market positioning, culture, brand, strategic clients, talent, R&D, infrastructure and support. It also needs to deep dive into the practice portfolio, making sure each plays its part and leverages the strengths of the whole.