Answer the following questions 2) Select one HBR article(attached) from the reading list. Please do the following: Summarize the article in about a paragraphexplain key takeawaysplease explain
Photographs by GJON MILI Collectively, dynamically—and very carefully How to Lead Your Fellow Laura EmpsonProfessor, Cass Business School, London 114 Harvard Business Review March–April 2019 LEADERSHIP Rain makers hen Daniel was elected managing part- ner of his consulting firm, his colleagues reacted enthusiastically. Relatively young and hugely energetic, he had quickly risen to prominence in his firm. He’d garnered widespread support among his peers, espe- cially the younger partners, who felt that some of their older colleagues were “free riding” as they neared retirement. Clients had noticed a decline in the quality of the firm’s work and were threatening to defect. During his leadership campaign, Daniel had outlined ambitious plans for reinvigorating the firm and restoring it to the number one position in the market. Flattered by his confidence in them and drawn to his vision for the firm, the partners elected Daniel by a substantial majority. But 18 months later, the partners rejected Daniel’s proposals outright and called for his resignation. What had gone wrong? w 116 Harvard Business Review March–April 2019 LEADERSHIP Idea in Brief THE PROBLEM Conventional leadership wisdom seems to fail in the professional service context. Trying to energize followers around a vision simply isn’t enough. WHY IT HAPPENS The key asset of professional service firms is their highly expert and opinionated partners, who cherish their autonomy. As a result, a leader’s authority is contingent on their consent, which may be quickly withdrawn. THE SOLUTION Recognize that leadership in professional service contexts is really a collective process, in which the designated leader must master three interactive dynamics: establishing legitimacy, maneuvering politically, and negotiating perpetually. At the heart of each lies a tension that the leader must constantly work to keep in balance. 117 In conventional corporate settings, leaders are expected to inspire and direct their employees—leading is something they do to followers. But in professional service firms, the leadership dynamics are different, because the power relationships are different. Consulting, accounting, and law firms and investment banks tend to be full of highly opinionated rainmakers, who don’t easily accept the role of follower—and may be just as unwilling to act as leaders. In this context, leadership is a collective, not an individual, endeavor, created through interactions among powerful peers. Power in organizations belongs to people who control access to key resources. In professional service firms those resources are specialized expertise, major client relation- ships, and reputation in the market. Firms may try to codify and capitalize on them, but they cannot exist independently of the people who possess them. In partnerships, which many professional service firms are, this is recognized in the firm’s legal structure, because senior professionals own the business. As a result, power is widely dispersed in professional service firms—autonomy is extensive, and authority is contingent. Senior professionals need considerable autonomy to customize services for their clients. And while they elect or appoint their peers to leadership positions, they cede authority to them only on a conditional basis, reserving the right to challenge, ignore, and even depose them. That places severe constraints on professional service firm leaders, who are entirely dependent on the continued support of their peers to get anything done. As a partner in a Big Four accounting firm told me, among colleagues at his level, “frankly, nobody has to follow anyone.” One senior partner of a law firm described the way he works with his fellow partners like this: “It’s not telling them what to do; it’s just coming up with the prompts and ideas. So leadership sort of happens.” If you’ve recently taken on a leadership role at a profes- sional service firm, all this may sound daunting. How can you actually get anything done? I’ve been studying and advising the leaders of such firms for the past 25 years. My research includes two major UK government-funded studies of leadership and governance in professional service firms, involving interviews with more than 500 senior professionals from a variety of sectors in 16 countries. Through this research, and with the help of my colleague Johan Alvehus at Lund University, I’ve identified three dis- tinct yet interconnected dynamics—establishing legitimacy, maneuvering politically, and negotiating perpetually—that explain how collective leadership actually happens among professionals. At the heart of each lies a tension between the actions of people in leadership positions and how colleagues respond to and interpret their actions. These tensions create an inherently unstable equilibrium. To maintain a balance, firm leaders must work constantly with their colleagues to manage these tensions. In the following pages, I’ll explain how they can best meet that challenge. Establishing Legitimacy In conventional organizations rising stars are often advised to demonstrate their potential by seeking out leadership responsibilities. But in a professional service firm, it’s wise to be wary. When a boss invites you to take on a “leadership” role, he or she may simply be trying to off-load burdensome administrative responsibilities. You risk getting sidetracked from income-generating client work and being seen by your peers as a glorified administrator. Another mistake that professionals often make is to believe they can rise up in their firms just by doing techni- cally brilliant work—by being respected and recognized by colleagues as an expert. That’s essential to surviving the progressive culls of staff in the early stages of your career, but the game changes as you approach the rank of partner. It’s rare for technical specialists to move into senior leader- ship roles; the largest law and accounting firms are almost never led by the head of the tax practice, for example. Among professionals, legitimacy as a leader ultimately depends on your ability to generate revenue—in other words, to be a good rainmaker. My research has found that the people who reach the top of professional service firms are outstanding at winning new business and at managing the most demanding and lucrative clients; they also work harder and longer at earning fees than their peers do (in an environment where extended hours are the norm). Because LEADERSHIP 118 Harvard Business Review March–April 2019 While senior professionals elect or appoint their peers to leadership positions, they cede authority to them only on a conditional basis, reserving the right to challenge, ignore, and even depose them. colleagues see them as role models, they’re willing to cede authority to them. The irony is that many of these role models have very little interest in becoming leaders. They want to focus on the thing they love best—their client work—and are reluctant to put themselves forward as potential leaders of their practice or their firm. Christine is a classic example. One of the top rainmakers in her accounting firm, she sold the biggest projects to the best clients. But she was frustrated by the head of her prac- tice area, who had introduced too many controls that got in the way of her client work. In the past Christine had deliber- ately avoided taking on leadership roles, but her colleagues now asked her to step forward and challenge the practice head—to dismantle his unpopular controls and restore their cherished autonomy. Christine was reluctant, but when she realized the practice head was planning to seek another term, she let it be known she was interested in the position. That was all the encouragement her fellow partners needed. They lobbied the firm’s senior partner, saying they had lost confidence in their practice head but were willing to work with Christine. As Christine explained: “People were drawn to me. I had followers before I went into a leadership role because I was the lead partner for a big client. So I created opportunities for people, I was successful, and they enjoyed working with me and my clients.” In other words she was seen by her peers as a potential leader because she was suc- cessful in the market and because she was willing to share her success with them. Yet, while this gave her the legitimacy to lead, it did not guarantee that Christine would be good at leadership, as she would soon discover. To run their firms effectively, profes- sionals need to understand two other leadership dynamics. Maneuvering Politically Although I never asked interviewees specifically about office politics, they were often keen to tell me how much they abhorred political behavior. The chair of one con- sulting firm in my study declared: “To me, politics smacks of alliance building in the corridors, in offices behind the scenes, of people engineering agendas, which deliver a fait accompli. I would like to think we don’t have those behaviors in this firm.” That chair may have been in denial or simply not telling the truth. In fact, political behaviors were rife in his organization—as they are in most professional service firms I’ve studied. This isn’t necessarily pernicious. In an environment characterized by extensive autonomy and contingent authority, political maneuvering is simply how leadership happens. Leaders need to create and sustain consensus among peers and offer them incentives in private to persuade them to lend their support in public. To carry this off and maintain their authority, leaders need four core political skills: networking ability, interpersonal influ- ence, social astuteness, and apparent sincerity. And many firms enshrine politics within their governance systems, holding elections for senior leadership positions in which candidates issue manifestos, run campaigns, and partici- pate in debates. Professionals distrust colleagues who seem to want power over them. It’s OK to be ambitious for the firm, but you should not seem ambitious for yourself. So as a leader you need to convince colleagues that you’re employing your political skills for their benefit rather than your own. If you can do that, then they will not judge you as political but will perceive that you have integrity. One way to persuade your peers of your integrity is to develop and communicate a compelling vision for the firm. Consider Antonio, who was a partner at a large law firm. Although he led a relatively small practice, he had big ambi- tions and decided to run for senior partner. He campaigned against eight other candidates and worked hard to win support outside his practice. He met several hundred of his fellow partners, individually and in small groups, listening to their concerns and explaining how his vision would deliver what they most wanted. At the candidates’ debate, he gave a compelling speech, explaining his desire to unleash what he described as the partners’ entrepreneurial potential by “giving the partner- ship back to the partners” and introducing an ambitious investment program to fund new partner-led initiatives. Impressed by what they saw as his passionate commitment to the firm and his belief in their ability, his peers elected him by a large majority. The integrity they perceived in Harvard Business Review March–April 2019 119 Antonio was evident in this description from one colleague: “He is not a player. His own motivations in this world are very genuine and clean.” There is a clear link between being a good rainmaker and being a good campaigner. Someone who has the networking ability, interpersonal influence, social astuteness, and appar- ent sincerity to manage powerful clients can also use those skills to manage powerful partners. But there’s much more to leadership in a professional service firm than just that. Negotiating Perpetually Striking a balance between exercising autonomy and assert – ing control is far from straightforward. It involves perpetual negotiating—the third core dynamic of collective leadership in professional service firms. Knowing what actions to take is only part of the challenge. You need to understand when to take them, with whom, and how to persuade your colleagues that you’re working in their best interests rather than your own. For example, at the start of the financial year your colleagues may view your attempts to assert control as an unacceptable infringement on their autonomy. But if you wait for financial difficulties to become obvious, they may complain about a “leadership vacuum.” If you challenge the inappropriate behavior of a popular and “colorful” partner, your colleagues may protest. But if you fail to reprimand a less likable, more marginalized partner for exactly the same behavior, they may raise questions about your moral leader- ship. One senior partner in my study explained the problem this way: “Partners say, ‘You’re too tight, get looser.’ So you get looser, and they say, ‘It’s chaotic, get tighter.’” One chairman compared the process to “walking a tight – rope—helping my partners feel like owners, feel involved, and be engaged, but not dominating them, not getting out in front, and not having a huge ego, which makes them feel like the chairman’s kind of off on his own trip. At the same time being strong and providing them with a sense of confidence that we’re going somewhere.” Let’s return to Daniel, the managing partner who strug- gled to fulfill his mandate and lost his peers’ support. After winning the election, he hired a COO from the corporate sec- tor to undertake a root-and-branch overhaul of his firm’s cost base, with a focus on partner spending. Daniel personally led the task force that was redesigning the partner appraisal system, tightening up metrics, clarifying consequences of underperformance, and enhancing rewards for success. In other words he did exactly what his partners had elected him Guiding Principles for Leading in a Professional Service Firm Focus first on the fundamentals. Your peers will accept you as a leader only if they recognize that you’re at least as good at their job as they are. You need to establish a reputation for doing and winning outstanding work early on in your career. Once you’re in a senior leadership role, don’t become so immersed in it that you neglect to keep bringing in new business. Hone your political skills. Understand the subtleties of organizational politics—don’t assume that colleagues who do it well are not to be trusted. Think about the last time someone changed your mind about an important issue. What did that person say and do? Then think about what you did and didn’t do the last time you failed to get something you wanted. Strategically influencing others doesn’t make you insincere; it’s just common sense. Take time to build consensus, but be ready to assert control. If you have a strong vision, you may be in a hurry to implement it. Don’t be. You’ll need to win over competing interests, listen respectfully to objections, and give way to some demands (to prove that you’re listening). Remain patiently on the sidelines while your colleagues exercise their prerogative to “mess things up,” because they’ll ultimately do better if they learn things for themselves. But you also have to take control at the right time, or colleagues will complain of a leadership vacuum. Be ambitious for your firm (and for yourself ). Your enthusiasm and concern for the firm must be perceived as genuine, regardless of the extent of your personal ambition. Make your peers believe that you care as much about their interests as your own. Know when to be a good “follower.” There will never come a time when you can safely stop stroking your colleagues’ egos. The higher you rise, the harder you will have to work to convince people you haven’t got “above” yourself. As a leader of a professional service firm you should aspire to be a few steps ahead of your fellow partners but also be able to judge when to step back and show you are prepared to follow the will of the partnership. 120 Harvard Business Review March–April 2019 to do: assert control by introducing more performance- oriented financial rigor. During the election he had talked about making the “free riders” more accountable but had been vague on the details. Once he was in office, his colleagues started to wonder: Which partners did he think were free riders? How many were there? And what exactly did “more account – able” mean? Disaffected partners started whispering that Daniel seemed to be enjoying his new power a little too much and was not showing his peers enough respect. They encouraged colleagues to believe they might be the free riders Daniel was referring to. This whispering campaign was effective. When Daniel introduced the new partner appraisal system, his colleagues rebelled, and he was forced to abandon his plans. Daniel had failed to understand that when his partners had asked him to assert control, they meant control over their colleagues but not over them personally. They were prepared to cede some autonomy but not to have it taken away from them. By rejecting his proposals, they were trying to teach Daniel a lesson—that as their elected leader he ulti- mately worked for them, not the other way around. But hav – ing positioned himself as the firm’s savior, he had become convinced by his own rhetoric and thought he could do it on his own. He failed to understand that he needed to bring the partners along with him—that leading professional service firms is a collective endeavor, and the mandate to lead your peers must be continually renegotiated and renewed. An Unstable Equilibrium In addition to perpetually negotiating, the leader of a professional service firm must keep a constant eye on the other two dynamics, which are always in flux. To retain your legitimacy, you need to continue to be successful in the market, despite the fact that you can no longer devote yourself full-time to fee-earning work. You must constantly maneuver politically, as alliances shift among partners and their relative power waxes and wanes. And, remember, it’s not just about what you do as an individual leader but how your colleagues interpret and respond to what you are doing (inferring you have leadership ability, perceiving you have integrity, and feeling free to exercise autonomy). The instability is amplified by the fact that the three lead- ership dynamics are interconnected. If they discover your political maneuvering, your peers will quickly question your legitimacy. That will undermine your ability to negotiate the balance between control and autonomy, as will the fail- ure to convince people you’re acting in their interests rather than your own. Remember Christine? Her colleagues wanted her to take over as leader of their practice because she’d been so successful at winning business. But she was quickly overwhelmed by the complexity of the new role and came to see why the previous practice head had seemed so controlling: There was a lot that needed to be controlled. She lacked the time and patience to manage the egos of the partners who had supported her and now expected her to support them in their pet projects and peeves. She became distracted from her client work, her core strength. And after she failed to land a couple of major new projects, her colleagues began to see her in a different light. They no longer inferred that she had leadership ability. As her peers withdrew their cooperation, Christine lost her authority and, with it, her ability to get things done. The equilibrium had become destabilized. And what about Antonio? Fulfilling his election promise, he initiated ambitious spending plans. Profits plummeted, and as the clients became aware of the firm’s difficulties, Antonio was unable to win new business. He lost his legitimacy as a leader and so was unable to negotiate effectively. But his political skills, which had helped him win his election against tough opposition, enabled him to save face. When a small group of influential partners called a meeting to demand his resignation, Antonio suggested a deal: He would complete his term as senior partner on the condition that one of them take over as COO to run the firm on his behalf. Rather late in the day, Antonio had come to understand the dynamics of collective leadership. Collective Leadership in Action What does collective leadership look like when it works well? Peter and Paul, the senior partner and managing partner of a global law firm, displayed an intuitive understanding of LEADERSHIP Harvard Business Review March–April 2019 121 the partnership to announce the departures. Relieved they hadn’t been selected, the remaining partners didn’t insist on their right to call a vote about the restructuring. Peter and Paul were successful because they had worked with an ever-expanding subset of the partner group, ensuring that powerful potential critics were co-opted into the process of making a profoundly difficult decision. Their own track record of market success gave them the legitimacy they needed to persuade colleagues to cooper- ate. Their political skills enabled them to maneuver their way around the competing views of their peers. And their sense of when to assert control and when to let col- leagues exercise autonomy helped them negotiate their way toward consensus. Although the story of Peter and Paul concerns a one-off crisis, it’s important to remember that collective leadership is continuous. Leadership dynamics are constantly in flux as the equilibrium is destabilized and restabilized. Sometimes one individual may step forward and assume leadership, and colleagues will allow him or her to do so. At other times that individual may step back and become a good follower, even if he or she is nominally in charge. So collective leadership is not something that is done to followers but is a process done with colleagues. The leadership team of a professional service firm in effect includes all the partners; in some firms collective leadership requires input and support from many hundreds of individuals. When you’re a managing or senior partner, your peers may look to you to be their heroic leader, and you may be tempted to take up that mantle. But you need to keep reflecting the leadership challenge back onto them— to keep reminding them and yourself that leadership is a collective activity. If it feels lonely at the top, that’s probably because you’re not doing it right. HBR Reprint R1902J LAURA EMPSON is the Professor in the Management of Professional Service Firms at Cass Business School, London, and the director of the Cass Centre for Professional Service Firms. She is also a senior research fellow at Harvard Law School’s Center on the Legal Profession. Her most recent book is Leading Professionals: Power, Politics, and Prima Donnas (Oxford University Press, 2017). collective leadership when they steered their firm through the greatest crisis in its 70-year history. After the 2008 financial crash, they realized that their firm had to undergo a major restructuring and that a substantial number of its 500 partners would need to be asked to leave. Nothing like that had been done before in the firm, and its rules of gover- nance required that the entire partnership vote on a decision of that magnitude. Peter and Paul had been among the firm’s top rainmakers and were highly respected by their colleagues. Nonetheless, they realized that if they misjudged the mood of their part – ners and mismanaged the process, they would quickly lose their legitimacy to lead. The two convened a small group of the firm’s most pow – erful partners and asked them to work together to decide who among their colleagues should be asked to go. Over the next few months, working in secret, this group analyzed performance data and debated at length the list of candi- dates for departure. Many partners had worked together for more than 20 years, and some in the group resisted putting the names of longtime friends and colleagues on the list. But gradually, Peter and Paul drew more and more partners into the decision-making process, until eventually 50 of the 500 were involved in the secret deliberations. Key to the process was the way Peter and Paul intervened selectively, allowing the extended group of partners the autonomy to lead the work but asserting control when they felt its members were not making sufficient progress. Peter and Paul divided up their roles. As one colleague explained, “Peter worked behind the scenes, speaking to each of us privately and putting pressure on us individually as to whether we had gone far enough.” This approach didn’t always work, at which point Paul intervened directly. He said, “I really had to push to ensure there were enough names on the list. But as soon as we had an agreement, within a couple of days the list got shorter. I had to go back to them several times and say, ‘This is not enough.’” Finally, five months after the financial crisis began, Peter and Paul were ready to speak to the partners as a whole. During several hours of one-to-one calls and meetings around the world, they asked 15% of the partners—75 people in total—to leave or accept a reduction in equity. Later that afternoon, Peter and Paul called an emergency meeting of LEADERSHIP Harvard Business Review March–April 2019 123 The leadership team of a professional service firm in effect includes all the partners; in some firms collective leadership requires input and support from many hundreds of individuals. Copyright 2019Harvard Business Publishing. AllRights Reserved. Additional restrictions may apply including theuse ofthis content asassigned coursematerial. Pleaseconsult your institution’s librarianaboutanyrestrictions thatmight applyunder thelicense withyour institution. 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