Talent Development
In part 5 of this series, I illustrated some of the levers that leadership teams can pull to increase profit as they tackle the ‘wicked problem’ of continued success. This instalment explores how firms can more holistically develop talent as part of that same approach, highlighting some key areas for consideration.
Establish a clear roadmap for continuously developing talent
Until recently, talent development at professional service firms was rather ad hoc. The majority of firms, as Des Woods notes in his article ‘Identifying talent in professional services firms’, have relied upon the ‘up or out’ model to talent – broadly, hire people from good universities with strong academics and some will swim while others will sink.
Many firm leaders have historically embraced this ‘survival of the fittest’ approach to their people, but it may surprise some to learn that Charles Darwin himself was a proponent of teamwork. He surmised that ‘…in the long history of humankind (and animal kind, too) those who learned to collaborate and improvise most effectively prevailed.’ In this lies the truth for better talent development at firms.
Rather than simply hiring academically bright people and seeing who manages to stay afloat, the firms that are continuously successful have a 3-stage approach to talent. They make sure to:
- Set their people up for success
- Build the best possible teams over time
- Optimise the way their people work.
Each of these areas is a book in its own right, but below I set forth one or two thoughts on how I have seen the best firms empower their talent to be successful over time.
Setting your people up for success = ‘failing to prepare is preparing to fail’
An old adage to be sure, but it has stood the test of time for a reason – if you don’t invest the time to think things through before acting, the results are usually haphazard at best. So it has run for talent development at firms for decades. That’s not to say that firms aren’t stocked with talent; they most certainly are. However, only a handful of firms have consistently managed to develop (and retain) the best talent. There are a number of reasons for this success, but at a high level it is because these firms have put a structure in place that enables their talent to thrive.
There are of course multiple elements to such a structure, but at the core is a deep understanding of how each firm will approach, measure and support performance. Many models for performance measurement have been developed over time, with most firms settling on some variant of the ‘balance scorecard’ approach. In the context of talent at professional service firms, this approach is based on the principle that every person in the business should be able to contribute across the major areas of the business – usually some variant of financial goals, client satisfaction, good citizenship and professional development.
This generally provides a sound starting base, but the best firms have long since realised that not every person is the same and that there is advantage in flexibility. Overlaying a persona-based approach on the standard balanced scorecard can help firms build a structure from which all sorts of different skills and competencies can be developed. For example, in the context of partners, one could do much worse than look at some form of ‘finder, minder, grinder’ approach, each role with base level elements of all sections of your balance scorecard, but overall weighting more towards specific outcomes. With such an approach, as Keenan Beasley mentions in his Forbes article, ‘the good news is, when the balance is right, your business grows top line and bottom line. You also start to benefit from efficiency.’
Equally important to how a firm measures and supports performance, is how your talent is rewarded for hard work. There is a decades-old debate around the potentially stifling effect that linking compensation to performance may have on development. However, the resulting situation of compensation being seen as a mystical ‘black box’, divorced from any visible metric beyond billable hours, has led to no end of challenges for leadership teams. The answer is clear, albeit not simple: compensation must ultimately relate to performance, but development must be protected and supported by any remuneration model. If leadership teams can create a culture where development needs can be openly addressed and supported without fear of compensation impact, performance will thrive.
The best teams are diverse and constantly learning
In addition to a clearly defined, supportive performance and compensation structure, leading firms have a very purposeful approach when acquiring and retaining talent. I spent many years helping law firms attract new partner level talent, and I was often surprised by how great a role serendipity played. There was, and I believe still is, a huge gap between the firms winning the war for talent and the rest of the market. It’s not about deltas in compensation levels, but more about how those leading firms systemically approach recruitment needs: detailed skills and experience gap analysis, in-depth market mapping for talent, rigorous lateral hire processes. With so many options available these days, waiting for the best talent to simply walk through your door because of the name above it is no longer a viable strategy.
Diversity in your talent pool is critical, and not just because your clients are now demanding evidence of inclusion for panel eligibility. Almost every problem that a client of a firm encounters is complex with multiple possible answers, some of which are better than others. A ‘cookie-cutter’ team of similar backgrounds and experiences will normally generate roughly the same ideas, thereby almost always missing options derived from a more diversely comprised team. Make no mistake, as Andrea Hak notes in her article ‘Why diverse teams make better decisions’, this may well lead to more internally challenging conversations (due to the multitude of differing viewpoints), but whoever said that better was easy?
Just as importantly, firms enjoying continued success are not the ones that created a culture of being 100% correct all the time. Instead, the ones that support development thrive on learning and encourage new thinking that always prevail. When asked to list one of her most important learnings, J. K. Rowling said ‘Failure is so important. We speak about success all the time. It is the ability to resist failure or use failure that often leads to greater success. I’ve met people who don’t want to try for fear of failing.’
Work optimisation: The (not-so-)secret sauce for talent development
Although nuances are discussed above, most firms have smart people and an ever-increasing focus on diversity and development. While the ingredients are vitally important, any good chef will tell you that how you use those ingredients is just as critical. I have seen great advancements by leading firms in two specific areas (particularly during the challenging times in which I am writing): work allocation and agile working.
Capacity has long been the criteria on which most of the work in a firm is allocated. However, even that was often ignored in the past as partners would regularly give work to their ‘favourites’ regardless of how busy that person may be. Nowadays, with the help of technology, work can be allocated based on a number of factors:
- Availability – who has capacity
- Suitability – who has relevant experience
- Compatibility – who already has relationships at the client
- Diversity – who adds value to the team
- Need – who needs this type of experience to develop
Efficient work allocation shouldn’t just be defined by driving profitability, but also around better developing (and retaining) talent and delivering an improved client experience. Used properly, this is one of the most effective weapons in the war for talent – it isn’t about the money, it’s about doing the best work.
Born somewhat out of necessity rather than choice, all firms have realised in these present times that work doesn’t have to be conducted exclusively in the office. However, what has been most interesting for me is the number of managing partners with whom I have spoken who report significant productivity uplifts from remote working. Not only is productivity up, but on the whole professionals are also enjoying the different working environment.
Many leading firms had already started moving towards flexible working before the current lockdown; reducing office space, hotdesking and, in one case, allowing some associates to rotate across their global offices in 6-9 month stints. I expect to see all of this and more as we come out of this period, and it could well be the silver lining to this experience – work is defined by what we do, not where we do it.
Talent strategy: A virtuous, not a vicious, cycle
None of the elements discussed here exist in isolation. Some leadership teams see this complex interdependency as an excuse for inaction; ‘we will waste far too many hours trying to work this out, better to let the cream rise to the top of their own accord and replace those who struggle’.
The best leaders, on the other hand, realise that there is no better use of their time than investing in their people. While perfection will always remain just the other side of the wicked problem, genuine effort in each of the above areas will give rise to an increasingly virtuous cycle:
great structure and reward > attract the best people > win the best clients > more money to invest in developing talent
Perhaps, Richard Branson summarised this the best when he said: ‘Clients do not come first. Employees come first. If you take care of your employees, they will take care of your clients’.
In the next part of my series, I consider how firms should consistently review their approach to managing risk. In the meantime, you can explore more inspiration and resources for leaders & professionals, including our latest COVID-19 law firm research findings.