This week’s issue of BusinessWeek features a great article on organizational network analyis (ONA) called The Office Chart That Really Counts, showing that the discipline is really beginning to hit the mainstream (following BusinessWeek’s piece last October on related work). The article focuses on the work being done by organizations such as IBM, Accenture, Merck, Lehman Brothers, Capital One, Procter & Gamble, and others such as Goldman Sachs, McKinsey & Co., and Microsoft of the 53 companies that are members of the Network Roundtable. Rob Cross of the McIntire School of Commerce at the University of Virginia set up the Network Roundtable 18 months ago so that leading organizations could share what they are learning in applying network analysis to enhance performance, and thus accelerate the development of this immensely valuable discipline. Some of the key areas being addressed by roundtable members include developing talent and leadership, enhancing innovation, facilitating mergers and major reorganizations, and building superior client, supplier and partner relationships. I am the research leader for this last category of external connectivity work at the Network Roundtable, though I apply ONA across a broader range of areas with my clients.
Social network analysis is not new – it has been done since the 1930s to understand communication and relationship patterns in society. Organizational network analysis has developed over the last ten years to apply these early ideas to enhancing organizational performance. Many managers have been intrigued by the ideas, however found it difficult to get buy-in in their organizations to pursue what is perceived to be highly conceptual, to get to the highly pragmatic results. Cross has been instrumental in taking the discipline through this challenging stage, to where the tangible and immensely powerful outcomes of well-executed ONA are evident. The discipline is just starting to go beyond the pioneers into the mainstream. From here, expect to see the hype pick up, the vendors to jump on board, for possibly much ONA work to be done poorly which will impact on the discipline’s reputation, and so on in the usual management trend cycle. However that is only because this is indeed one of the most powerful – and relevant in the current economy – management interventions available today, and it is very much in a state of emergence.
I am currently working through the analysis of a network study I’m doing of the communication among the top 100 executives of a $3 billion diversified professional firm. The insights from the study into the company’s drivers of success are extraordinary, and when we workshop this with the top executive team, there is no question that it will significantly influence what action the company takes to move to the next level of success. The same issue of BusinessWeek also features an interview with Kate Ehrlich of IBM, who has been at the center of IBM’s work in applying ONA across the organization, including in innovation and sales effectiveness. Ehrlich, Cross, and I are currently working on a journal article that brings together some of our work and perspectives. More on this and other very tangible outcomes from the ONA work being done globally coming soon on this blog. This is an enormouly exciting space to be involved in.
Seven MegaTrends of Professional Services – Developing and implementing robust strategies
By Ross DawsonDownload the complete White Paper: The Seven MegaTrends of Professional Services
Continued from Responding to Mega Trends – Evolve your business models. Full table of contents below.
Developing and implementing robust strategies
Professionals tend to focus on their domain of expertise rather than developing and implementing strategies for their firms. Yet in the face of powerful driving trends, it is clear that traditional approaches to providing professional services are under threat. Professionals need to become effective strategists, by setting and implementing strategies that go beyond simply their selection of practice areas and office locations.
One of the key issues for professionals is their positioning. There are four core professional services models, as illustrated in Figure 1. This is created by examining two key aspects to how firms create value for clients. On the one hand, firms can deliver their services either as a black-box, or using knowledge-based approaches, as described in the previous section. The other dimension is that of the firm’s domain of expertise, which can either be content, or the actual process of creating knowledge. Mapping these two dimensions against each other yields four core professional services models:
Read more →
Keeping on blogging and serialization
By Ross DawsonApologies for the lack of posts over the last week. I’d like to intersperse the serialization of the Seven MegaTrends of Professional Services paper with more current and informal musings, but it’s not always easy to do. This week entails 30 hours of flying time (a chunk of which later today), with pretty much all the rest of my waking hours spent with clients at an executive retreat and then an in-house conference. Blogging is a top priority for me, but ultimately top of the list is doing my client work to the best of my abilities. Now that the most intense week of the year (so far!) is out of the way, I’m sure I’ll dig out a bit of time to blog. I’ll never compete on frequency with the most prominent bloggers, however I’ll do what I can to keep it reasonably consistent.
The serialization of the white paper has been an experiment, prompted by the suggestion by leading blogging expert Billl Ives when we last caught up for lunch in Boston last year. It makes a lot of sense, in that it keeps a steady flow of content in the bite-size chunks that people look for in blogs, it enables people to focus or link to specific ideas or information rather than the whole paper, and it’s certainly search-engine friendly. Yet during the period that the article has been serialized, I’ve felt that it’s dominated my blog, and possibly given it too much of a formal feel rather than the more casual commentary that characterizes blogs. I’d love to hear back any thoughts on whether it’s been good or not to serialize the paper in this way. I will definitely do it again, with an article on The Six Facets of the Future of PR up next, though I think I’ll stick to smaller series rather than the 12 or so that the MegaTrends paper has been sliced into, and I’ll consider further how to incorporate chunky content into the blog.
Any blog is an experiment which evolves over time. There’s plenty more I want to try, but for now I’ll just endeavor to keep the flow reasonably regular. A lot of what drives me is that there are so many interesting things I see that I’d like to share with others. Doing my bit to help get the best things to float to the surface…
Seven MegaTrends of Professional Services – Evolve your business models
By Ross DawsonDownload the complete White Paper: The Seven MegaTrends of Professional Services
Continued from Responding to Mega Trends – Create a highly networked firm. Full table of contents below.
Evolve your business models
In 1748 Benjamin Franklin first wrote the credo that seems to have become the foundation of modern society: “Time is money.” In 1865 Karl Marx supported that, proposing the “labor theory of value,” stating that value is proportional to the labor used. Contemporary professionals, by charging clients based on the time they spend working for them, are in effect modern-day Marxists. Hourly billing, the strategic foundation of many professional services firms, is a major constraint on success in a world driven by the seven MegaTrends. In order to create more value for clients and to lock them in, professionals need to find ways of charging that are more clearly related to the value created for the client.
An excellent example is providing risk services to clients. The MegaTrend of Governance means that companies have an entire array of new risks to manage, in addition to the usual strategic and operational risks. CEOs and CFOs who watch their peers regularly head off to the penitentiary are pointedly reminded of the personal risks involved. Yet assisting organizations to manage risk is not best done by the hour. Ernst & Young has introduced a suite of online services to help their clients manage risk effectively, including a board governance tool that clients can use first to identify and analyze risks, and then to generate action plans to mitigate those risks. The world’s largest law firm, Clifford Chance, has introduced a similar range of tools and systems to help clients manage their compliance risk.
Read more →
Seven MegaTrends of Professional Services – Create a highly networked firm
By Ross DawsonDownload the complete White Paper: The Seven MegaTrends of Professional Services
Continued from Responding to Mega Trends – Build strategic transparency. Full table of contents below.
Create a highly networked firm
Many professional services organizations are not really firms, they are a set of individual professionals working under the one banner. If, however, firms can bring together deep specialist expertise across their organizations, and integrate and apply it in ways designed specifically for their clients, they can create a uniquely relevant offering that no other firm can match. The value firms can create in this way both transcends and takes advantage of the seven MegaTrends of professional services.
Cross-selling is a hot topic in most professional services firms. In order to cross-sell services to existing clients, four conditions must be met. The first is that the relationship leader must be aware of the expertise of his or her colleagues. The second is a broad understanding of that person’s or department’s expertise, and how it can be applied to create value for clients. The third is confidence in the capabilities of the colleague. The fourth is personal trust that the colleague will do the right thing and effectively fulfil their role as a team member in working with the client. The reality is that in larger firms, spanning a variety of practices, locations, major clients, and even countries, these four conditions are met in only a fraction of cases. The perfectly networked firm, where all professionals are able and willing to draw in any other professional in the firm, is a pipe dream. Yet even slightly improving the internal networks in the firm along these four key dimensions will result in significantly better performance.
A rapidly emerging domain of management science, social network analysis, helps professional services leaders to gain deep insights into the essence of their structure and how their resources are combined to work with clients. These kinds of tools can assist greatly, by identifying blockages and opportunities, and providing a template for building truly networked organizations.
Read more →
Seven MegaTrends of Professional Services – Build strategic transparency
By Ross DawsonDownload the complete White Paper: The Seven MegaTrends of Professional Services
Continued from Responding to Mega Trends – Lead your clients into knowledge-based relationships. Full table of contents below.
Build strategic transparency
Don’t fight the trend—you’ll only end up getting run over. The MegaTrend of Transparency can be your friend, if you take a thoughtful, strategic approach. Rather than waiting until clients demand transparency, if you provide it proactively on your own terms, you can make it work for you, and in the process create real differentiation from your competitors. The first step is to create greater visibility of work-in-progress. This is a challenge for most professional services firms, both in implementing supporting processes, and in shifting culture. Professionals are used to providing clients with a clean end-product. However there is massive value in getting clients involved along the way. They gain comfort from being able to see what is going on, the understand the value being created, they feel they are participating in what is created, you gain deeper knowledge of the client and what they want, you build stronger relationships, and you demonstrate how you are different from competitors, all of which begin to create client lock-in.
It is now relatively straightforward to give clients access to everyday information on the projects and matters you are undertaking for them. However your relationship leaders need to understand the benefits of working in this way. Internal education is required in order to show professionals how and why to use these tools. Client education is required to show them how to get value from seeing and getting involved in the professional process. The intention is not to be absolutely open to clients about everything, at least not in the early stages of the relationship. The issue is how to use the MegaTrend of Transparency to build deeper, more embedded client relationships. Done the right way, that’s exactly what it can do.
Read more →
Seven MegaTrends of Professional Services – Responding to the MegaTrends
By Ross DawsonDownload the complete White Paper: The Seven MegaTrends of Professional Services
Continued from Commoditization. Full table of contents below.
Responding to the MegaTrends
The first imperative for any professional and professional services firm leader is to recognize the reality of the MegaTrends. Denial does not help. The days of working towards becoming an equity partner of a professional services firm, and then cozily tapping that sinecure until retirement, are well gone. However the changing environment, for those that work with it rather than fight it, offers the promise of intense stimulation and challenge, and even greater rewards.
There are four key action steps that professional services firms must take to respond to the seven MegaTrends.
Read more →
Work culture in China
By Ross DawsonSome extraordinary statistics in the March issue of Harvard Business Review, in an article by Gallup executives on what’s happening in China:
% of urban Chinese workers who strongly agree:
– I know what is expected of me at work….34%
– At work I have the opportunity to do what I do best every day…26%
– My supervisor, or someone at work, seems to care about me as a person….26%
– Someone at work encourages my development…23%
– This last year, I have had opportunities at work to learn and grow…23%
– At work, my opinions seem to count….20%
– In the last six months, someone at work has talked to me about my progress….19%
The human resource practices these statistics imply hardly bode well for the development of the Chinese economy. On the other hand, my assistant Myfanwy, who was a temp for several years, says she isn’t surprised by these figures at all, and that you may see similar responses by large segments of the Western workforce. Certainly it is enormously sad, and a great lost opportunity, whenever people feel this way.
Google buys into online office apps
By Ross DawsonBig news: Google has just bought Upstartle, the owner of Writely. Writely is basically an online word processor that looks and feels pretty much like Microsoft Word. You can create, edit, and format documents, as well as upload and download documents from your PC. The biggest single advantage is that anyone you choose can also edit the document, instantly creating a simple, powerful collaborative spaces. For a while now, when people have talked to me about wikis, I’ve pointed them to Writely as the next step beyond. Wikis were the original collaborative documents, allowing multiple people to make changes online. Writely and its peers take it to the next level in allowing the same level of collaboration, with in addition all the interfaces and functionality you expect from a normal desktop application.
Google’s move – once the beta software is developed further, scaled, and integrated into some of Google’s other product offerings – is to confront Microsoft head on. If you want word processing software, you will be able to buy a shrink-wrap product from Microsoft, or get a very-likely free (advertising-supported) version from Google that has the same functionality, with full collaborative features and anywhere-anytime access as well. However, people have not paid a lot of attention to date on Microsoft’s (also beta) Live suite of products, which represents their initial efforts to get into exactly the same space. Dean Collins thinks that this means Microsoft will trample Google. Rather than calling winners, we can certainly say that office applications will gradually become significantly – and eventually primarily – an online space. The potential for collaboration will be unleashed as these applications become broadly available and easy to use, and some will look back on the old days of desktop applications as antiquated. The game is under way.
Seven MegaTrends of Professional Services – #7 Commoditization
By Ross DawsonDownload the complete White Paper: The Seven MegaTrends of Professional Services
Continued from Globalization. Full table of contents below.
MegaTrend Seven: Commoditization
A commodity is quite simply a product or service for which the customer sees only one significant difference between what’s on offer: the price. The drive towards commoditization is perhaps the most powerful force in business today. The reality is that we live in a desperate “me-too” economy, in which most companies, apparently entirely deficient in any creative instinct, look at what other companies are offering, and imitate them. The true innovators are in the minority. Today, the MegaTrend of Transparency means that their innovations are seen by and copied by competitors almost as soon as they get to market, or even before. Unfortunately, the imitators find no way to differentiate their offering other than price. The MegaTrend of Globalization means those competitors can emerge from anywhere.
Read more →
Organizational network analysis goes mainstream
By Ross DawsonThis week’s issue of BusinessWeek features a great article on organizational network analyis (ONA) called The Office Chart That Really Counts, showing that the discipline is really beginning to hit the mainstream (following BusinessWeek’s piece last October on related work). The article focuses on the work being done by organizations such as IBM, Accenture, Merck, Lehman Brothers, Capital One, Procter & Gamble, and others such as Goldman Sachs, McKinsey & Co., and Microsoft of the 53 companies that are members of the Network Roundtable. Rob Cross of the McIntire School of Commerce at the University of Virginia set up the Network Roundtable 18 months ago so that leading organizations could share what they are learning in applying network analysis to enhance performance, and thus accelerate the development of this immensely valuable discipline. Some of the key areas being addressed by roundtable members include developing talent and leadership, enhancing innovation, facilitating mergers and major reorganizations, and building superior client, supplier and partner relationships. I am the research leader for this last category of external connectivity work at the Network Roundtable, though I apply ONA across a broader range of areas with my clients.
Social network analysis is not new – it has been done since the 1930s to understand communication and relationship patterns in society. Organizational network analysis has developed over the last ten years to apply these early ideas to enhancing organizational performance. Many managers have been intrigued by the ideas, however found it difficult to get buy-in in their organizations to pursue what is perceived to be highly conceptual, to get to the highly pragmatic results. Cross has been instrumental in taking the discipline through this challenging stage, to where the tangible and immensely powerful outcomes of well-executed ONA are evident. The discipline is just starting to go beyond the pioneers into the mainstream. From here, expect to see the hype pick up, the vendors to jump on board, for possibly much ONA work to be done poorly which will impact on the discipline’s reputation, and so on in the usual management trend cycle. However that is only because this is indeed one of the most powerful – and relevant in the current economy – management interventions available today, and it is very much in a state of emergence.
I am currently working through the analysis of a network study I’m doing of the communication among the top 100 executives of a $3 billion diversified professional firm. The insights from the study into the company’s drivers of success are extraordinary, and when we workshop this with the top executive team, there is no question that it will significantly influence what action the company takes to move to the next level of success. The same issue of BusinessWeek also features an interview with Kate Ehrlich of IBM, who has been at the center of IBM’s work in applying ONA across the organization, including in innovation and sales effectiveness. Ehrlich, Cross, and I are currently working on a journal article that brings together some of our work and perspectives. More on this and other very tangible outcomes from the ONA work being done globally coming soon on this blog. This is an enormouly exciting space to be involved in.