Rewarding Behaviour

Motivating people at work can be a difficult thing. Not everyone is as driven and committed as you are and so an entire industry has developed which aims to help organisations get the most from their "most important resource".

Sadly, as difficult as it is to do it well, it's very easy to do it badly. Accidentally rewarding the wrong behaviour happens all the time. Consider the item posted by "Roll On Friday" about Morton Fraser(see here). They have, apparently, abolished the annual fee targets for their associates. This step is a very good one, given the poor value gained from using hours worked, or turnover, as a measurement of success. Sadly this is not their only change. Morton Fraser have also chosen to adopt what they call "Peer Benchmarking" whereby "...a league table is created for each level of fee earner, and the aim of the game is to get to the top of it."

Let's just look at the behaviour that this system will encourage and reward:

1. Reduced communication. There is no benefit, now, in associates helping each other or in discussing the matters that each is working on. In fact, the more secretive they are, the better, since each associate is in direct competition with every other associate
2. Reduced cross-selling. As mentioned above, there is no benefit for an associate to sell the services of another person if there is a chance that he or she is simply bumping up the hours of a competitor.
3. Slower work. More hours = more turnover, unless the client is on a fixed fee. Not only that, but there is actually a disincentive for associates to do a handover of going away on holiday. If the associate working on a matter is going away for a long weekend, it is in their benefit to lock the files away so that no one else can work on them.
4. More focus on turnover. As any regular readers will know, I detest the obsession with turnover that is displayed by most law firms. This system simple enforces a belief that more hours and more turnover is a good thing. No wonder the "long hours culture" remains.
5. No focus on profit. Associates are being rewarded for earning more for the firm. It doesn't matter if the work produced a net profit of 1% (or even a loss), the associate will still be rewarded for doing more work. This could be fatal for the firm.

So what should they do? 

Well, removing the annual fee target is a good start. Why not have a "Contribution Target" instead - based on the profitability that they have added to the firm? Why not have a "Client Satisfaction" target and a "Partner Satisfaction" target for the associates they have worked with (and while on that subject, why not have a "Partner Satisfaction" target where the associates have some input).

Focus on cashflow and profit (in that order) and then, and only then, turnover.

Succession Planning - Thinking Ahead

I have been talking with a number of clients over the last few weeks on the subject of succession planning. It's the art of making sure that you know what you will do as positions become free in your organisation - and the actions you will take to make sure that the right people are ready in the right place with the right skills to do the job. Simple!

I'm no longer surprised at the number of people I speak with who are not making plans for the future - whether that it succession planning, strategic planning or anything. Working mostly with law firms and now schools, I regularly hear "Oh I'm far too busy to have time to deal with all that". Sadly I don't think you have time not to.

Worryingly, some other bloggers seem to have what I think are slightly relaxed ideas about this too. I was reading "What Makes a Great Managing Partner" on the Adam Smith Esq blog and found myself muttering in disagreement from time to time. The blog argues that having a formal succession plan cand invite "jockying for position, ...concomitant gossip, innuendo and navel-gaxing, and distractions for the incumbent...". The blog goes on to suggest that without a formal succession plan you invite "chaos...when the Managing Partner does step down, intergenerational conflicts and a divided electorate".

All of this is, of course, possible - but only if you try to put a succession plan in place in isolation. If it is executed as part of a strategic plan and if the succession plan is talked about, and if everyone in the firm has a proper development plan, then there should be few problems - and certainly many fewer than by not having a plan in place at all.

To be fair, I think that 'Adam Smith' and I mean the same. His final paragraph (in that section) says "Don't put a formal process in place..." but then describes what I would think of as one type of formal succession plan.

Perhaps I'm just not that formal a person.

The point is that you must think about the future - your firm or school will depend on it. Think about where you want your organisation to be, have a plan, think about the succession and develop your people to the point that they can do the jobs you need them to do. Yes - you will develop some of your best people out of the door as they are headhunted into bigger (and better?) places. This is, however, a good thing. You gain a network of people you have helped into positions of success, your current staff see that you want to help them, and you will have the right people when you need them.

Succession planning really is one of those few "win/win" situations.

Communicating

I've been looking at definitions of communication (I've had that sort of weekend). For once I almost agreed with a Wikipedia entry. In its entry for communications, it includes "Communication requires that all parties have an area of communicative commonality". It's that "...communicative commonality." that I think is interesting.

It take  to mean that everyone involved needs to understand and agree what they are trying to do. In my experience of dealing with people in organisations, this is usually a problem. It is also usually a step that is either ignored or simply not done.

When was the last time that you sat with colleagues and said "what are we trying to do - are we all sure?". Perhaps you work in an enlightened organisation, but it's rare, I think. Equally - how often have you left a meeting and thought "what was that about?" or "what was agreed?" or even "did we agree anything?".

I'd love to say that I always sorted communications for everything that I do. I do, however, try to focus on the problem as often as possible and have noticed that - surprise, surprise - projects where I take the time to sort out the communications in advance (and as we go along) tend to work that bit better. I remember a story about Jack Nicklaus (a stunning golfer, for those of you depressingly younger than me) who was complemented on his luck on a golf course. "Yup" he said, "and the more I practise, the luckier I get."

My point (yes, I did have one) is that we should all try to ensure open communications. 

More on this subject in future posts.