Puzzles are always a challenge. Most people have a strategy for figuring out where each piece goes, starting with the pieces that frame the puzzle and then working inward, hopefully with a picture to guide them. It's the same with how many firms think about improving performance.
When firms think about strategies to improve their financial performance, for many it is a puzzle where there is no picture to guide how to put the pieces together. Like many individuals who can't see the puzzle without the picture, firms can't seem to clearly see a future much different than the present, and their only picture for their performance puzzle is allowing the past to drive their future.
Why is it so difficult to move from the middle of the performance pack to being one of the leaders? Why do certain firms continue to achieve results that keep them within the top tier when the annual Top 100 Firm survey results are published?
When I facilitate partner retreats and spend time with partners pre-retreat to talk about issues affecting the firm's performance, for many I could write the script without even talking to a single partner. The more common excuses are, "We can't seem to execute what we agree on"; "Clients are not willing to pay higher fees"; "Competition is intense" and finally, what I hear most is, "There is no accountability for results."
Every firm's performance puzzle shares the same six drivers. Those six major drivers will draw the picture of the puzzle to create a standout, high-performing firm:
- Leadership.
- Vision.
- Strategy.
- Talent.
- Client experience.
- PRACE (for performance, results, accountability, compensation, and enlightenment). The etymology of the word PRACE comes from the old Polish word "praca," meaning sustained effort to overcome obstacles and achieve a result.
1. Leadership. It is impossible to become a standout, high-performing firm unless the leadership team from the CEO/managing partner on down are all standout leaders. Leaders "lead the way" and if a leader is not a standout leader, "the way" will never lead to standout performance, but simply one that sees the past as the way to a stronger future. The bottom line is that achieving standout performance without standout leaders is like trying to make ice without water — just can't do it.
2. Vision. To drive performance, there needs to be a clear picture of the completed puzzle — the five-year vision of what the firm is striving to become. Just as it is so difficult to solve a 1,000-piece puzzle without the picture on the box, it is equally impossible to achieve standout performance if there is no picture of what that looks like. "If you don't have a vision, you're going to be stuck in what you know. And the only thing you know is what you've already seen," says inspiration speaker Iyanla Vanzant.
3. Strategy. A vision without the strategy to achieve that vision will simply end up being a wall poster that will allow everyone to imagine but never achieve. Simon Sinek says it well: "Vision is a destination — a fixed point to which we focus all effort. Strategy is a route — an adaptable path to get us where we want to go."
How many hours at how many firms are spent creating a vision, but how little time is spent on developing the strategies that will give life to that vision?
A great Japanese proverb states, "Vision without action is a daydream. Action without vision is a nightmare." Another way of saying this is that creating a strong vision statement that defines what the firm wants to become without a clear strategic roadmap that defines the actions to achieve that vision simply creates confusion, lack of commitment, lack of any unified effort — simply chaos.
4. Talent. To successfully achieve your vision and execute your strategic roadmap, you need talent that understands and believes in the vision and the strategy. Every level of talent needs to act as one coordinated orchestra with the CEO as the conductor. Every team needs to expertly play their part in the symphony.
Talent needs to align with what is needed to achieve the vision, possessing the skills necessary to successfully deliver on each strategy. Once everyone is striving to actualize the shared vision and executing the strategic roadmap as one team, your path to becoming a standout, high-performing firm is clear and achievable.
5. Client experience. Clients have a choice of what firm is best suited to meet their needs. Each client has a continuing choice to remain with a firm or to change firms. Clients provide firms with the privilege of being part of their team and will continue to provide that privilege — if you are providing value that enables their business to be more successful.
Every interaction a client has with the firm — from how their phone call is answered through how the firm delivers value in every service it provides — needs to reflect a client experience that will create a strong bond of loyalty, not only optimizing your clients' lifetime value but also creating a true differentiator that will win more clients. Clients do not owe you their business; you need to win it, deliver it, and improve on it every single day.
6. Finally, PRACE. There is a level of daily performance in many firms that reflects average financial results. Driving performance to achieve outstanding results happens when there is a clear, understood linkage between performance goals, actual results, and compensation.
Without clear accountability, setting annual goals becomes an exercise that no one believes in or is committed to. One primary factor affecting how accountability drives performance is the source of the accountability. The reality is that until accountability becomes a personal choice, the change in behavior and therefore results will be minimal. As Catherine Pulsifer stated, "You are accountable for your actions, your decisions, your life; no one else but you."
When each individual from the partner on down accepts personal responsibility for their results and understands how their performance directly affects both their compensation and their career, "enlightenment" occurs that will move each individual to a level of standout performance, and the firm wins, the individual wins, the partners win, and the clients win.
Becoming a standout, high-performing organization can be more transformative if the performance puzzle picture is clear and reflects the six key drivers. Jack Welch understood the performance puzzle when he said, "No company, small or large, can win over the long run without energized employees who believe in the mission and understand how to achieve it."
