Is failing to make growth decisions causing your firm to fail?

 Who owns growth decisions in your firm?

Confusion often reigns in professional firms about who makes decisions that affect a firm's growth. Is it the leadership team, practices, geographies, individual partners, BD, or marketing? Not knowing creates sub-optimal growth, organizational confusion and needless emotional upheaval.

Several years ago, there was a popular Harvard Business Review article making its way around offices entitled, Who Has the D? How Clear Decision Roles Enhance Organizational Performance” by Paul Rogers and Marcia W. Blenko. The excellent post focused on decision-making, the “D,” within healthy organizations. It posited that every success, mishap, opportunity seized or missed was the result of a decision that someone made or failed to make.


After 20 years in consulting, accounting and IT leadership roles, I can attest to the confusion of the “D” in making growth-related decisions. For example,

  • Who owns the client relationship?
  • Who owns the voice of the client: practice, business development or marketing?
  • Who makes the decision when a product or service has met its apogee and needs to be retired or cut from marketing and sales emphasis?
  • Who makes the decision about which people serve a key account: account owner or practice leader or?
  • Who owns a client's data?

In most firms, leaders whole-heartedly believe that the decision is so obviously theirs or has absolutely nothing to do with their role.

Of course, this is normally a function of ego, revenue potential, client relationships, or political risk. In many respects, it could be described as a poker game or game of chicken. And, of course, there is a strong element of retroactivity to any decision. If it has a good outcome, one is willing to own it and bask in the halo of its successful glow. If it has a bad outcome, the response is akin to, “Whatcha talkin’ about Willis?!”

As a young marketer, I learned to never remove the “Draft” header from any consequential strategy document or product launch, etc. It was best to maintain “strategic flexibility” as they say. What I discovered as I moved into leadership was that most people either lack the capacity to lead and/or the courage to make decisions, even if they owned the “D.” The result was dysfunctional decision-making through “pocket veto” (e.g. “forgetting” about it, not returning email, avoiding related meetings) or denial of accountability due to “client service demands” (e.g. the appearance of busyness and utilization demands). No matter the reason, the cause is clear and the result the same. The cause is firm culture and the result is sub-optimal firm performance.

RELATED: Prudent Decision Making

I have found that there are three reasons dysfunctional behavior and lower performance are allowed to foster.

1. The firm has a culture of “optionality.”

Every firm has one or two REAL behavior drivers. More often than not, it is a utilization or a revenue number. If you hit the number, all manner of sins are forgiven. Treat your people horribly, but hit your number: OK Don’t show up to “D” meetings, but hit your number: OK. Play golf all day, but hit your number: OK .

RELATED: How Much is Organizational Dysfunction Impacting Your Growth

2. The firm has a culture of feigned accountability.

Accountability is a popular “value” on posters, recruiting materials and client presentations in firms. It indicates that the firm is serious about taking personal responsibility for serving clients and managing people in a professional manner. If you want to see if the value is real, ask someone (anyone) in the firm who, when and why the last person was let go for violating a firm value. If they can tell you a name (any name), then the firm made an example of unacceptable behavior. If they can’t tell you, then accountability is a platitude.

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3. The firm has a culture that punishes risk taking.

The reason most firms refuse to make decisions around growth choices is because there is no safety net. Make a big bet and it goes south or takes too long to come to fruition, and the firm cuts you off at the knees through a demotion or termination. This is a recipe for a culture of “learned helplessness.” Slowly day-by-day, initiative puts its head down and the firm spirals downward, because the best, most ambitious talent goes elsewhere.

RELATED: Shocking the Soul Out of Your Firm's Culture

Healthy, high performing and prudent firms take a much different approach to making growth decisions.

Prudent firms focus on a few performance indicators like other firms, but they don’t just measure the quantitative result.

They evaluate the qualitative aspect of how the objective was achieved. The means and end are weighed together because together they create the resultant culture. Decision makers are held accountable for means and ends. Violate the values and you are gone in a public way. BEHAVIOR + REWARD = CULTURE

Prudent firms don’t punish failure; they reward learning.

It is fine to fail in healthy firms. As a matter of fact, failing indicates that people are searching for answers, trying new approaches, and looking for new ways of creating value for the firm. It could be new revenue opportunities, productivity gains or cost cutting. It can big or small as long and it makes the firm stronger in terms of its core values and value. Healthy firms develop prudent processes that anticipate downside risk and set decision points and evaluation milestones to invest in measured ways, redirect or terminate based on LEARNING.

Prudent firms set CLEAR expectations for culture and roles.

Matrix organizations have built-in confusion. The inherent conflicts must be addressed with clear objectives, authority and processes. Smaller firms often finesse their way through complexity via astute interpersonal skills or leader strength. Without clarity and support, medium and larger firms will eventually meet a point of unsustainability. Firms must outline who has the “D” at the matrix intersections.

To be successful, prudence requires us to choose a path greater than individual ambition and bottom-line profit for our firms. Prudence has nothing to do with playing it safe—quite the contrary. Prudence often demands that we make bolder choices than conventional wisdom would suggest or that today’s business mindsets might lead us to take.

Growth opportunities come and go. Brand relevance ebbs and flow. Competencies grow and die. Culture remains.

RELATED: Pope Francis' Message for Leaders of Professional Services Firms

Takeaway

If I asked someone in your firm what values are inviolable, what answers would I receive? If I asked who owns the “D” to enter a new market, pursue a proposal or end a client relationship, what answer would I get?

The precursors to healthy growth are steadfast values, role clarity and ownership of making a “D.” There is no optionality, no failure without learning-- and no passing the buck. Letting hard decisions languish because of risk or confusion leads to chaos and sub-optimal performance. As managing partner, you and your leaders are stewards of your culture. Your organizational structure outlines the roles. Time to decide who has the “D.”

Be prudent.

 

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