Professional Practice Change Management
 
 
Change cannot be imposed on a partnership because of its very nature as a federal body of autonomous equals.  This shows that a subtle approach is necessary in order to gain support for change from all quarters. 

The achievable rate of strategic change varies greatly from firm to firm, depending on the general preparedness of each organisation and on the power concentration that can be brought to bear on the change process.  That power concentration, in turn, depends on the way in which the senior personnel have reached the top and the kind of organisation it is. 

In partnerships the organisation is less a power structure and more a collegial, federal body of autonomous equals who can be persuaded but not instructed to change.  This is typical of professional service practices.  They are much closer to the academic world of quasi-voluntary organisations in which people buy in if it suits them and where there are few immediate personal costs if they don't.  Influence is important in a group of peers, for who can exercise position power or resource power in a group of equals?  Expert power is not readily available to the leader, for there is a perception of intellectual parity by other professionals:  it has to rest on greater experience and performance track record. 

Yet the differences compared to commercial firms should not be exaggerated.  In a large business, with quasi-autonomous divisions, those seeking backing for particular policies still have to deal with senior executives who have a range of options from which they must select for their concentrated attention.  Equally, most professional organisations have some hierarchy, some pecking order of senior partners, with junior staff undoubtedly lower in the power and autonomy stakes.  There will almost certainly be a ruling coalition of managing partners and important section heads. 

In professional practice, the problem for the leader who seeks to make significant changes is how to obtain agreement; how to satisfy enough of the firm's factions that the changes can be implemented.  The organisational dynamic which the leader has to address can be called "multiple minorities".  The problem for the leader of the leading faction is how to stitch together a durable amalgam of discordant interests. 

As fast as the leader offers one wing of the coalition further favours to keep it from bailing out, the opposite wing is likely to resent such offers -even to the point of departing from the coalition. 

In professional organisations, the more key factions there are, the more any policy alterations will have to be negotiated.  Even if there is a leading speciality profession which generally decides the strategy, there will be a need to entreat with the other factions which, should their support be withheld, could cripple the strategy because of their vital role in its execution. 

When there is no dominant hierarchy, each needed faction has veto power.  Any single group can blackball a proposal and, without its support, implementation will be risky, if not doomed. 

In a partnership organisation the aggregation of power which helps a business leader to lead is absent.  The consequence is that relationships, negotiations and favour-trading are far more important in professional firms, coupled to the likelihood of the organisation being structured in a looser way so that the tensions of coming together are reduced by having cushions of quasi-independence between what might otherwise be warring factions. 

This makes the issues of strategic change in professional service organisations significantly different to those of straightforward commercial enterprises because, not only is power more evenly distributed than in the typical business power structure, but it may be further fragmented if there are many, scattered, autonomous offices. 

Professionals tend to regard aggregations of power as a potential threat and are duly suspicious.  Quite a proportion of professional firms are more like federations than centrally managed enterprises.  This may well be good for local motivation (and reward) but it does make the problem of concerted change rather difficult.  Indeed, professionals tend to see "good" decisions as those that give them more autonomy and more money to do the things they want to do without much supervision or accountability.  Thus the organisation's style has to be highly consensual in both decision-making and decision implementation. 

In partnership organisations, it is more difficult to disentangle strategy formulation from strategy implementation since they coalesce.  Strategy emerges from gradual agreement, through the winning over of doubting personnel, from the emerging example of an idea working in practice.  Endorsement of a strategy comes not from acceptance of a detailed plan installed by a powerful top management, but from the gradual absorption of a list of options offered delicately in the hope that some will find favour.  That delicacy also avoids the risk that the managing coterie will be rebuffed since, in proffering the choices, they have not put their own chosen plan on the line.  If the partners choose a particular strategic change, they are demonstrating some commitment to that course of action.  The process of strategy agreement has a profound effect on the case of implementation as it focuses attention on important matters and accrues support.  The gradual consolidation of a desire for specific changes is the process of endorsement at its most delicate. 

But endorsement by whom?  Subtlety in making changes is the hallmark of effective leaders in professional, partnership organisations.  In terms of multiple minorities, the issue is whether the support of a recalcitrant minority can be captured or whether the objectors can be faced down.  The objectors have a problem too.  It may be that they have a prospective veto, a blackball to throw.  Yet they have to be careful.  There have been numerous instances of the members of a tightly-knit group overplaying their hand in the fond belief that they were vital to the organisation. 

A sane partnership organisation would hope to avoid such damaging confrontations.  One subtle way is to find a vehicle or topic or issue which evidently requires action of a kind that all can agree within their existing mind-set and where the evidence which supports action can be made obvious to one an all through a process of exposure to it.  One such device is for the managing partner to claim to be asking for help and to set up task forces to address the issues.  Each group should contain a reputable member of all relevant factional interests; this will help the group to be recognised as valid.  This minimises the risk of any working party being condemned as unrepresentative.  The use of several groups prevents the process and recommendations from being captured by one faction.  The managing partner's power rests on the ability to specify the tasks, the personnel and the deadline in order to influence the outcome and reduce prevarication. 

If such initiatives are accepted by the key personnel, then the facts and their inferences will lead on inevitably to better understanding of the pressures facing the organisation and on to alterations in approach, habit and attitude of the kind required as the respected task force members act as ambassadors for change.  In particular, the collection and analysis of data - about costs and revenues - will alert task force members to the strategic context without the managing partner having to load his or her values onto their interpretation.  Nevertheless, to sustain the task forces' "ownership" of their proposals in order to gain their commitment, the senior partner needs to be open to a variety of suggestions about the methods of achieving results.  He or she will hope that the inferences will become obvious and that the members will become sensitised to the logic of the need for change. 

The central subtlety is that of starting by persuading reluctant people to accept an innocuous-looking initiative which, in reality, is the first step on an irreversible journey.  A harmless-looking staff attitude survey can be the first step to questioning the management style of the heads of the various offices and departments.  Letting people discover the facts for themselves and argue out the inferences may be the only sane way forward in a partnership organisation. 

It is important to get the vital factions to accept the process.  If those who are to be involved in the consequences of the change are not sufficiently part of the generation of the change plan, they may, out of politeness and a wish to avoid conflict, give misleading signals to the champions of the change.  If they agree radical proposals without much contention, then be prepared for limited commitment to what has been accepted.  It may have been accepted, but not agreed.  The proposers of the changes should encourage them to speak out so that their reservations can be taken into account.  Failing that, the suppressed objections will tend to seep out, contaminating other apparently uncontentious matters and so undermining changes that would otherwise have been acceptable. 

Most partnership organisations try to build on involvement and positive encouragement and, when the trading situation becomes threatening, they have an advantage over firms with long lead times, big order books or lengthy contracts.  Market signals reach the partnership organisation relatively quickly.  If clients are still coming in, change may not occur - but, in that case, how necessary is it?  On the other hand, if new client work becomes less plentiful or more difficult to win, those signals reach the partnership personnel very quickly.  The signals that are more difficult to spot are the structural shifts in the market: when the compartmentalised specialists cannot spot a change in the way services are being affected and so do not respond to new forms of market demand for their skills. 

While it is not sensible to use "hard" managers when managing professionals, because the professionals just melt away - withdrawing psychologically if not materially - it would be wrong to delineate partnership change as a maverick condition, outside the range of factors which permeate successful changes in the other change circumstances.  What have to be considered are the social inclusiveness and the ties that bind people together in the partnership organisation. 

The professional firm cannot operate while those below are mutinous, but the blunt fact is that the need for consensus is largely restricted to the partners.  They are the equity holders and risk takers and, apart from their attachment to the quality and integrity of their work, they become concerned about two core matters: the profit-allocation system and the risks attached to changes and developments in the practice. 

The big dilemma then is what is to happen to that office's profits.  Is the whole practice "one firm", like Arthur Andersen, in which all revenues are pooled and then disbursed to partners on a universalistic basis throughout the firm, with limited regard to local performance?  Or is it a federal structure in which each office, perhaps each identifiable element in each office, is responsible for managing its own affairs, including its financial risk and reward?  The "one firm" practice has a much higher chance of cross-selling, personnel transfer, team assembly for given projects and mutual co-operation - including the transferring of knowledge, skills and experiences.  The "one firm" system does not halt feelings of inequitable rewards, but these are muted when the firm does well as a result of its close co-operation.  In order to absorb the stresses of compensating poorer-performing offices by better-performing offices, there needs to be a high level of mutual regard and trust.  The federal structure, on the other hand, encourages parochial thinking and actions. 

Even in federal structures, change is possible.  If partnerships were thoroughly flat and democratic, with every faction staffed by individuals who could withhold their commitment to change, very little could occur in the way of strategic moves except at the lowest common denominator of consensual agreement - this often happens in worker co-operatives.  But partnership enterprises solve this problem by introducing hierarchy.  There will be senior partners, partners, junior partners and so on; there will also be administrative staff and executives. 

The hierarchy works by stratifying the organisation and introducing a promotion route which suppresses dissent.  The aspiring professionals enter an apprenticeship of articled training where they have to work hard, prove themselves, gain qualifications and keep fairly quiet to avoid upsetting their mentors (who are the partners) who will determine when and whether they will be allowed to join their ranks. 

Typically, partnership firms change their thrust via selective recruitment and termination in order to switch the emphasis into a growth area.  Selective termination may not mean firing many people, given the significant labour turnover.  It is more problematic if the surplus people are partners.  Then the ease of making changes depends on exit arrangements.  Do new partners have to buy their shares or do they accumulate them through taking subnormal remuneration until they build up their equity stake?  Then, do they get capital appreciation back when they leave, or is that a legacy to those remaining and to future partners? 

The consequence of these singular features is that some of the normal corporate management tools are not practicable in a partnership and, even when the partnership votes for and installs a board of management, scepticism and concern about loss of partner power continue.  The task of administration is often thought to be inferior to the exercising of professional skill on behalf of the partnership.   It helps when highly respected partners are put onto that management board because, reassured, the other partners' resistance to board proposals dwindles and the managing partner will be given more backing for changes.  Yet it all remains a delicate balancing act of influence and leadership by example, needing subtlety and sensitivity to move the firm along.  Running a partnership firm is not as gruelling as herding cats, but the very intelligence, professional autonomy and self-esteem of its inhabitants lead to a situation where a common structure has little hope of working.  The professionals delight in finding loopholes and ways to undermine unwanted change.  The managing group has to block some loopholes and enlarge and utilise others. 

The chosen path is almost inevitably co-operative rather than coercive and only in high-stress, high perceived threat circumstances would even a charismatic partnership leader be allowed his or her head without enfolding colleagues in the decision process and in the acceptance of the strategic change.  Without that stress and urgency, change will be incremental as well as collaborative as partners are persuaded of the need to adapt.  The style will be one of participative evolution. 

Typically, the positive appeal will be based on what are hoped to be commonly held motives.  The top group would claim that, by making the changes, we could be more productive; make more money; ;be happier in our work and so on.  These form the basis on which a partnership leader can hope to persuade colleagues that a strategic change would be fruitful.

 

 

The contents of this site are Copyright © 2007 Allery Scotts Limited and may not be used without express permission.