By Mark Gibbison, Head of Strategic Motions for New Business, Unit4
Professional services organizations (PSOs) can often struggle for competitive differentiation, leading to a temptation to compete on price and thus instigate a race to the bottom involving unsustainable business practices. Organizations need clear strategies, forensically targeted audiences, KPIs and other measurements aligned with overall goals, and a unique point of view but, more than anything, they require strong leadership.
What is leadership? In the snappy words of John C Maxwell, a leader “knows the way, goes the way and shows the way”. Or take Warren Bennis on the subject: “Leadership is the capacity to translate vision into reality.” But we also know that leadership is not fixed in cement: skills and management styles need to adapt and mature. Culture can’t be created overnight: it requires leaders to set an example and for the right actions to be reiterated over time so they become habitual and predictable.
SPI Research’s 2022 Benchmark report on PSOs provides valuable indicators of what it takes to be a successful PSO leader and what is most notable is that good leaders (and bad leaders for that matter) affect everything. So, what can we learn?
Are you experienced?
First, executives of outperforming PSOs aren’t beginners toting a fancy vision: they typically have a proven track record of founding and scaling multiple consulting organizations. They are open to opportunities naturally, but they also resist being distracted by fashionable new areas or activities that won’t materially impact on success or failure. Eschewing dramatic strategic shifts, they balance investments for a rapid ROI and for likely future recurring revenues.
Top leaders also nurture a work environment that is fair and equitable, offering great employee rewards and career progression options. And, because employees understand their mission and can share in success, the resulting corporate atmosphere is one of collaboration, mutual trust and loyalty to the employer. In this sense, they are part of a broader trend that sees capitalism move away from a macho, no-holds-barred culture towards a “no jerks allowed” environment where egos are checked at the door and people can rightly expect tolerance, humility and understanding. Tellingly, top-performing PSOs have a lower tolerance for abusive bosses.
Leadership is today being especially tested as the lingering effects of the pandemic together with acceptance of the importance of hybrid working mean we have become accustomed to seeing our colleagues less often. The best leaders are responding by ensuring staff enjoy their work and feel confident that employee personal growth is taken seriously. In a world of talent mobility for knowledge workers, promoting from within and making systemic investments in upskilling are needed to maintain staff enthusiasm and loyalty.
Make it clear
The best PSOs offer clarity of vision, mission and strategy, amplified and repeated through regular communication, so their people know the direction of travel and their place in the team. But they also focus on innovation, catching emerging technologies and market opportunities early rather than carrying on repeating rote tasks and business-as-usual, bread-and-butter projects. Furthermore, top PSOs cultivate flat organizations with minimal hierarchy and encourage a spirit of egalitarianism.
SPI’s research into PSO leadership over 15 years has shown a direct correlation between financial success and confidence in leadership. But strong leaders also manage growth and complexity with formal policies to build communication, collaboration and real-time global visibility into operations. This helps to reduce the risk of cliques, politics or regions or departments feeling neglected or undervalued.
There is some variance in the field of embedded PSOs where the mission is mostly about supporting the deployment, optimization and servicing of products. These organizations have restricted freedom in terms of building productivity and profitability but leaders need to excel in forging cross-functional relationships. These include those between sales and support to serve customers better via a holistic view of their challenges and experiences.
Improvements in performance at PSOs will have far-reaching positive effects from a motivated and productive workforce to higher client satisfaction, business growth and profitability. In simple terms, SPI found that the best leaders achieved the highest profits and as confidence in leadership grows, all other organization facets improve too.
Companies with great leaders enjoy a trickle-down effect where there is higher revenue per person, greater billable resource utilization, more winning proposals, greater project margins, more on-target completion times and happier clients. Where the mission and goals are clear, people find ways to get things down and serve themselves. Poor leadership, on the other hand, impacts everything negatively. Bad bosses sabotage cross-functional alignment, leading to staff disaffection, the rise of silos and, generally, chaos.
Such was the way its report resonated with participants; SPI stated that some members of their audience panel asked to give the questions to their companies for them to gain a better understanding of what was happening.
Examples of getting it wrong include the below:
- Unclear strategies with no strong sense of target markets or clients, or why they won and lost business.
- Lack of employee engagement with no drive to repeat sales.
- Limited competitive differentiation.
- Poor sales, marketing and service delivery execution.
- Lack of alignment between departments with disconnected processes, lack of demarcation on roles and responsibilities and skills imbalances and silos emerging.
- Being reactive, not proactive, due to lacking real-time visibility across operations.
- Inconsistent project methods with low repeatability and tools reuse.
- Low customer satisfaction due to failed projects, cost overruns and difficulty securing references.
It has always made logical sense, but SPI’s survey provides meat on the bone: bad leaders lead directly to failing PSOs. Does any of this sound worryingly familiar? If your company is failing in any sense, look at the survey, share findings, note where you’re doing well and badly, and work to see what you can do to make things better through effective bi-directional communication and a clearer vision from the top.
About Mark Gibbison
Mark Gibbison is the Head of Strategic Motions for New Business at Unit4 and is responsible for setting the go to market strategy across all areas of our key vertical. He is passionate about helping organisations deliver improved services at a lower cost using modern enterprise technology. He has previously held senior positions with Enterprise technology vendors such as SAP and Objective Corporation where he was Head of UK Enterprise Sales.
Unit4’s next-generation enterprise solutions power many of the world’s most people-centric mid-market organizations. Our state-of-the-art cloud platform, ERPx, brings together the capabilities of Financials, Procurement, Project Management, HR and FP&A onto a unified cloud platform that shares real-time information and is designed with a powerful, people-centric approach, so employees can benefit from better insight and become more effective and increasingly engaged. It supports rapid and continuous change while delivering individualized fit for customers at scale, delivering the right tools to unify the processes across their organization, and connect their people. Unit4 serves more than 6,000 customers globally including, Bravida, Havas, Migros Aare, Americares, Save the Children International, Action against Hunger, Metro Vancouver, Forest Research, Southampton City Council, Habitat for Humanity, Selkirk College, FTI Consulting, and Surrey County Council.