One of the most compelling speakers at the 2013 LMA Annual Conference in Las Vegas this April was David Wilkins, Lester Kissel Professor of Law, at Harvard Law School. Professor Wilkins delivered an impressively compelling keynote presentation on the first full day of the conference.
I was fortunate enough to also witness Professor Wilkins in action through the entire second half of the pre-conference CMO Summit. Deploying the standard Harvard case study approach, he took a large group of pensive heads of marketing through two examples of powerful revenue and profit engines: Wachtell Lipton, which for years has maintained a strong lead in terms of profit per equity partner in the Am Law 100 (even though it isn’t part of the Am Law 100 itself); and International Profit Associates (“IPA”), a consulting firm based in Buffalo Grove, which enjoyed a meteoric rise – and a fantastic collapse – over a short period of years.
The lesson Professor Wilkins wanted us to learn: The best way to achieve superior performance is attain alignment among your strategy and your organization, your people and your culture. In fact, he stated it very clearly when he explained, “The more tightly aligned an organization, the better its performance, if its strategy is appropriate, given its competitive environment and marketplace position.”
It’s a chiropractor’s dream. If managing partners across the country accepted Professor Wilkins’ advice, they’d all be seeking therapy for their various subluxations!
But, coming back to practical reality, Professor Wilkins’ exhortation plainly raises three important questions: What is a strategy, and how do you know if it is a “good” one? How do you know if your organization is successfully aligned with it? Fortunately, he was kind enough to address those questions.
“A strategy,” explained Professor Wilkins, “defines how the enterprise will occupy a unique place in the market to achieve sustained business success.” And I consider the following statement to be particularly apposite to the management of law firms: “Strategy is about making hard choices: you must decide what to do, and what not to do.” And finally, channeling Peter Drucker, famous management guru of yore, he stated: “Strategy is about doing the right things, not doing things right.”
I think that, way too often, enterprises of many sorts – not just law firms – forget the fact that strategy involves tradeoffs. This is a plague that affects so many companies and firms, because they want to be all things to all people and capture any revenue dollar, no matter where it comes from. And so, the most important role that a well-defined strategy can play is to provide clarity about the organization’s identity.
A clear strategy helps customers understand the firm’s special capabilities. For Wachtell, it is “We do really sophisticated, ‘bet-the-farm’ corporate work – and we don’t do litigation. Our clients pay us huge fees that are not backed up by itemized bills, because we are the absolute best at what we do.”
A clear strategy helps competitors see where the firm has staked out its territory. Again, in the case of Wachtell, it allowed other firms to refer work safe in the knowledge that Wachtell was highly unlikely to poach their client for more run‑of‑the‑mill activities.
And finally, a clear strategy is imperative for a firm’s employees, because it tells them what is expected of them, and therefore they have a strong fit with the firm, or if they are better off elsewhere. In the case of new recruits to Wachtell, the strategy told them very clearly: “You will work for us day or night, rain or shine, come hell or high water. If there’s work to be done, you will be in the office to do it.”
So, how do you know if strategy is a good one? While his answer was somewhat semantic and possibly even evasive, Professor Wilkins explained: “A good strategy is as simple as possible and no simpler; the more complex the organization, the simpler the strategy should be.”
A strategy is an ongoing commitment to what the firm will do and won’t do. Brilliance in management and operations can be overrated, but persistence in pursuit of a strategy pays off handsomely; consistency lends credibility and momentum to the fulfillment of the strategy’s goals.
Let’s assume we can reach the point of developing a good strategy. How will you ensure that your organization can put it into action effectively over a long period? Here, Professor Wilkins drew a stalwart approach: McKinsey’s 7S Framework. (To learn more, I suggest searching on MindTools.com). This way of modeling an organization draws on three “hard” elements: strategy, structure and systems. (In this instance, “hard” means easy to define and readily influenced by management). It also draws on four “soft” elements: shared values, skills, style and staff. (Such “soft” characteristics are far less tangible). Each of these items must be designed in a way that supports the realization of an organization’s strategy.
It would be impossible for me to review the extensive exercise that Professor Wilkins led in describing all 7S’s for Wachtell and IPA. Suffice it to say that in spite of hugely different strategies, the one thread that appeared to tie the two companies together was a fundamental alignment between the many different “S-elements” with their strategies.
I have highlighted several points of Wachtell’s organization above, particularly in terms of staff selection, which emphasized la crème de la crème, extensive mentoring and a rapid path to partnership. By contrast, IPA relied on a multi‑tiered sales organization, driving its prospects and clients through a complex business development pipeline: it didn’t care where its salespeople came from; it threw them into the deep end and let them either sink or swim; and it measured them ruthlessly on their daily – even hourly – on their sales production, with many quitting within weeks, if not days.
Sadly, Professor Wilkins conceded, developing and then implementing a good strategy is much harder to attain in professional services firms. Often, the performance metrics by which the attainment of the strategy is to be measured are not tangible. Traditional sources of competitive advantage, such as access to fixed assets or unique ownership of intellectual property, don’t work well. The complexities of multiple practice groups across multiple geographies and market conditions make settling a single statement of strategy quite confounding.
Thankfully, however, Professor Wilkins did leave us with one piece of advice, all the better to drive change in our organizations. “Change,” he explained, “does not occur unless there is dissatisfaction.” So, if we want to see change in our organizations, we must:
- Raise the level of dissatisfaction by highlighting the ways in which the organization is falling short
- Present a compelling vision of what the future could be, and particularly emphasizing its benefits
- Explain a clear process by which that vision could be realized
- Acknowledge the cost that might be incurred by any individual within the firm (and hopefully more than offset by the benefits)
So, if a firm wants superlative performance, in truth, no chiropractors are required. It just takes someone who can see the future clearly and express the case for change clearly and succinctly – that sounds like the perfect role for a legal marketer. Go make it happen!