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Articles and Interviews

The professional service adviser's adviser

by Stefan Stern 2005

(Filed: 08/12/2005)

Management guru David Maister says bankers, lawyers and accountants have got it all wrong. He tells Stefan Stern what they should do better.

Professional service providers — lawyers, accountants, bankers, advertising and marketing whizzes — should be worried. Competition and pricing pressures are getting fiercer as procurement officers start getting stuck into the unbelievably high fees that some firms are charging.

David Maister: every business degree on the planet

Whether the business is a plc or a partnership (a model of ownership that is coming under increasing scrutiny), the days of easy money have gone. Not that anything in business can be that straightforward again after the Enron, Tyco and WorldCom scandals ushered in the era of Sarbanes-Oxley in America and ever more stringent corporate governance rules.

In these circumstances being a “trusted adviser” is more important than ever. So why has the management of professional service firms continued to be so rigid and lacklustre? David Maister, English-born management guru, knows the answer. “They never met a billable hour they didn’t like, and they never met a deal they wouldn’t do,” he says. “As a result it is impossible for them to develop strategy.”

This is not a gratuitous insult. Mr Maister has been writing and lecturing on these businesses for over two decades. An author of several books including Managing the Professional Services Firm and The Trusted Adviser, he was a professor at Harvard Business School for seven years before becoming a sole-trading consultant 20 years ago.

Based in Boston, his seminars and advisory work take him all over the world. He must know something about keeping clients happy because he is able to demand top dollar. His current daily rates are $20,000 (£11,000) for consultations and $25,000 for public performances. Three years ago he was named as one of the top 40 influences on contemporary business life in the management book Business Minds.

What basic principles do professional service firms need to grasp? It is a question of getting real, Mr Maister believes, and taking practical steps to make fine-sounding mission statements — about “faithfully serving our customers” — come true.

“Of course we all want to ‘provide superior service’ to clients,” he says. “But it has to be consistent. You do not get a market reward for being pretty good on a good day in the right office. So how do you become dependably terrific? The only way you can do that is to energise, excite and enthuse your people.”

Mr Maister speaks as someone with an armful of degrees and a Harvard professorship behind him, so his argument is striking. “One thing a lot of these firms have in common is that they all have over-educated brains,” he says.

He argues that professional service firms are often very good at the professional bit. It’s the service that suffers. In his view “Do unto others as you wish to be done by” remains a good rule. So in his work with clients Mr Maister asks them to forget about being the provider of services, and instead gets them to focus on their personal experience as a buyer.

Every profession’s self image, Mr Maister believes, is that they are essentially right. If a lawyer or a banker gets things right technically, why should they have to worry about the stupid client’s feelings when they should really just shut up and let the expert remain in charge? This is where the service firm gets it so badly wrong, Mr Maister says: “It doesn’t matter that you are right if you can’t get people to listen to you.”

In the end, long-term performance all comes down to the quality of management at the firm. High-fee earners get promoted, because that is the conventional career path, regardless of whether they are any good at managing people or have any desire to manage people.

This is plain stupid, Mr Maister says. He has a check-list of questions for any senior management team that asks him to work with their managers: