Tag Archives: business leadership

Billable hours, the not so Holy Grail of professional service firms

When monthly billable hours are up everyone is happy, especially the partners. Managers and staff who are billable high performers are the ones that get ahead; they are the firm’s high potentials. Over many years and in several countries we have seen this across numerous firms. When this focus on billable hours becomes dominant we have also seen the following problems that have resulted in poor financial performance and even the demise of a firm.

  1. Who does the work? Partners, and senior associates, in order to meet their own billable hours targets, are doing work that is below them, they are doing work that should be performed by more junior staff. This is detrimental to staff development and even more crucially firm profitability.
  2. Short term client focus.       There is more concern for next month’s billable hours than next years. This can lead to customer relationships being more transactional and transient in nature, in todays more competitive landscape this is a flashing red light for many firms.
  3. Siloed mentality. Partners and managers have little practical or intellectual concern for the firm as a whole instead focussing solely on their own division. In this case the firm exists only to provide some administrative economies of scale for its divisions that then operate as independent business units.

There is no dispute that billable hours are important, however billable hours will only ever be a lag measure. The most successful firms are the ones that focus on next years clients and how best to meet their needs. There are two keys actions they take to do this.

Talent and succession management. They develop and promote partners who can think strategically, work collaboratively and inspire their key stakeholder to achieve great things together. One firm we have worked with to achieve this went from being a top 20 English firm to a top five global firm over a 10 year period.

Client focus. They develop a real value for clients and all things relating to client needs in the immediate to mid and long term. Managers and staff are empowered to make decisions that benefit their clients. Client’s needs are anticipated so solutions thinking is pro rather than reactive.

In todays environment firms that focus on having the best client focused leadership will succeed ahead of their competitors. Firms in the mid tier that are large enough to have critical mass but smaller enough to be flexible are in the best position to do this. All too often it is also these mid tier firms that are most likely to fall into the short term billable hours trap.

By Simon Tedstone

Director – Leading Change Consulting

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Talent Management – the fun side

Talent Management is very serious stuff; when managers and HR discuss talent they always have their extra serious faces on. They are, after all, considering the future of both individuals and the organisation as a whole, so it is worth taking seriously. They pour over work based information and high potential assessment reports (way too many of which are on-line self assessments, but that’s a story for another time) and try to draw conclusions about who is and is not talent.

There is a fun, fascinating and incredibly rewarding side to talent management, it is the reason I work in talent management. Talent management is all about unlocking the potential of people and as a result their organisation. Only a very small minority of employees have nothing more to offer. The trick to the best talent management is how to work with employees to find out what their talent is and how best to grow and leverage it. Talent management is about “win win” relationships between employers and employees.

Talent Management is viewed too simply; it is not about who is good, i.e. high potential and who is not. Neither is it about simply viewing talent against role seniority.

Talent management is about employees understanding their preferences and motivations (something on line self assessments are excellent for) as well as their strengths and weaknesses (no one is perfect). This information is then used to inform the relationship between employer and employee so both can progress in a mutually beneficial direction. This may mean, for example, they consider moving sideways rather than up or becoming a technical expert rather than a general manager. At times, it may also mean employees realise it is time to move on to a new organisation. Some may consider this a risk but it is far better for an employer and employee relationship to end through talent management than performance management.

Talent management is fun, interesting and exciting because it is about unlocking potential and creating a mutually beneficial relationship for all.

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