David Maister - Professional Business, Professional Life

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David Maister - Professional Business, Professional Life

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Why Happy Staff Are Key to Success

by Des Dearlove 2001

from The Times (UK), 2001

Seated in the boardroom of the Churchill Intercontinental Hotel in Portman Square, London, David Maister looks like a cross between an academic and a consultant—which is precisely what he is. But there is more to Mr. Maister than meets the eye.

Among management gurus, he is something of an oddity. What sets him apart from his peers is an aversion to fancy ideas. What Mr. Maister advocates is a combination of hard work and attention to doing the basics well. “If I’m a guru of anything it is common sense,” he says. Most companies know what they should do, he argues, but are distracted by short-term temptations.

“It is not that companies are dumb. It’s about the human condition. I’m overweight and I smoke. If I go to a doctor he can tell me what I should do about that—stop smoking and start exercising. I know how to do it. It’s not that I don’t understand the benefits. But human beings don’t always do what they know they should.”

He is also one of the few English-born business thinkers to make it in the United States. Originally from Swiss Cottage, North London, he studied at the University of Birmingham and the London School of Economics before leaving Britain for Canada and then Harvard Business School, where he was a professor for seven years. Mr. Maister is now based in Boston, Massachusetts.

But what distinguishes him most is his focus. He has devoted much of his career, and energy, to the issues faced by one particular corporate grouping—professional services firms. For the past 20 years he has ploughed a lonely furrow, carving out a niche among the army of professional advisors. He has been described as “the professionals’ professional.”

It was while he was a young faculty member at Harvard that he became interested in the area. His original work centered on consultants, lawyers and accountants, but expanded to include advertising and PR agencies, financial services, architects, engineers and headhunters. At the time, the sector was largely unexplored. But, as Mr. Maister soon realized, these firms live and die by the quality of their people.

“Most professional services firms have nothing to sell except their people,” he says. “I was very lucky to pick this sector when I did. It wasn’t brilliance or analysis. I stumbled into this area and then discovered to my delight that no one else was writing about it.”

He promised a magazine editor that he’d write an article a month for three years. “Then I slapped a hard cover on it and it became my first book,” he says. “Suddenly I was the guru of professional services.”

At times, he has also been its conscience. A collection of his articles, Managing the Professional Services Firm, was published in 1993. In 1997, he followed it up with True Professionalism, which suggested that the commitment to excellence, self-improvement and service dedication that many professionals espouse was not always the reality.

In 2000, with Charles Green and Robert Galford, he coauthored The Trusted Advisor. In it he asserted that the basis of the advisor-client relationship does not rest solely on technical proficiency, but relies on the trust that exists between the two parties.

In his new book, Practice What You Preach, Mr. Maister turns his attention to what managers must do to create a high-achievement culture. Although it is again directed at professional services firms, the book’s message has resonance for managers everywhere. For the first time, Maister backs up his assertions with hard data. He studied the correlation between employee attitudes and financial performance in 139 professional services firms—covering 5,500 people in 15 countries.

He found that financial performance—evaluated by margins, profit per employee, revenue growth and profit growth over a two-year period—is directly linked to employee satisfaction. In other words, happy staff make the company more money.

“This is the first attempt to use hard data to prove the link between employee satisfaction and performance. I set out to test what I’ve been advocating for years. The bad news is I still believe in it. The even worse news is that now I’ve got proof.”

Proof is, perhaps, a strong word for what Maister has uncovered. Such a causal linkage is almost impossible to demonstrate. But his data does support his assertions. “What I have proved is a strict sequence for making money, which goes like this. If you want to make money you’ve got to serve the marketplace to incredibly high standards. To do that you have to energize, excite and enthuse your people. If you can do that you will make more money. The bit I’ve got proof of is only with a marketing communications business. But I’m bold enough to say that this finding is applicable not just to professional services firms but to business in general.” He calculates that by raising employee satisfaction by 20 percent a company would raise its financial performance by more than 42 percent. The linkage, he suggests, is straightforward: for professional services firms, financial success is directly attributable to good client relationships, which in turn are caused by high quality of customer service, this being largely the result of employee satisfaction.

Differences in performance, he says, are predominantly due to the attributes of individual managers rather than the systems of the firm. “It is not about systems, processes or management fads,” he says. “It comes down to a simple question: Do you have the managers in place who know how to manage? Do you have managers who are creators of passion, drive and ambition in others? But managers who can do that turn out to be a scarce resource.”

Most fascinating of all is his assertion that the performance of successful managers is mostly due to their characters and their personal belief systems, rather than the tactics they employ. The employees at the most successful companies shared the following beliefs: management practices what it preaches; management is trusted by those they manage; individual managers act in the interests of the group rather than pursuing personal success; people’s personal potential is being fulfilled and realized; compensation systems are equitably managed; and firms do not compromise their standards in hiring.

To improve performance, Mr. Maister says, companies should focus not on their quarterly financial targets but on motivating staff to provide excellent service. “You make more money by doing the basics very well. Nothing in what I’m advocating is saying that money is not the goal—that’s not the message. What I’m saying is that if you’re interested in money then the best way to achieve that is not by focusing on the money but getting excellent at something that people will reward you for.”

Putting this into action in the real world, however, is not easy, he acknowledges. It requires managers to take a long-term perspective rather than focus on short-term gratification.

“Take another example. My nephews and nieces used to say to me, ‘How can I do well in school?’ I say, ‘Go to the classes and do the homework.’ They say, ‘There must be a secret shortcut.’ I say, ‘Not that I’m aware of.’ I’m not a moralist. If you don’t want to put in the work, that’s fine. But if you ask me, ‘Is there a magic pill?’ my answer is, ‘Maybe, but not one that works as well.’”