Being a member of the HR team in a professional service firm can be a soul-destroying activity. In too many firms, HR is seen as having little to offer and adding little value (it was once called ‘burden’ in one of the firms I’ve worked with). Sometimes the lack of value is because the firm’s partners, including the firm’s executive have little, or no, idea what HR should do; sometimes it’s because the HR team, themselves, don’t know and so accept the role that’s given to them, and sometimes it is a because a former fee earner has been moved into the role and has little understanding of anything other than the basics.
That role, no matter who originates it, is more often than not the manager of the transactional services that are seen to constitute the relationship between the firm and its people: recruitment, remuneration, employment contracts, disciplinary and grievance procedures. All of them important and needing to be done well – but none of them what HR’s main focus should be.
To understand what that focus should be, we need to step back and think about the market for professional services and how one firm differentiates itself from another in order to gain a competitive advantage. Or, put simply, how it can win more business and be more profitable than its competitors.
It’s over twenty years since I first heard Jack Gabarro, one of my co-authors of When Professionals Have To Lead, say that professional services is an execution game; he was right then and he’s just as right now. Success in professional services is down to what a firm’s partners and staff actually do. It’s always what the people do and how they do it. Whether that’s a simple piece of tax advice or guidance on how to avoid a hostile takeover, the expertise (capability) of the individual(s) providing the advice is paramount.
Which makes the question of how a firm differentiates itself from its competitors extremely easy to answer. Its people must be able to relate to its clients and deliver its services more effectively than its competitors’ people.
Also, therefore, extremely easy to answer is what HR’s prime function should be. It has to help the firm develop the capability of its people, from its new entrants through to its partners. And, as assignments are rarely won or delivered by one individual, that capability must include operating effectively within a team and collaborative context, whether that’s across functions, offices or, as firms grow in scale, states and countries.
So, what should a firm expect from its Head of HR?
Let’s start with the obvious: a set of ideas that take the firm forward and that get implemented. To be implemented successfully, the ideas must be contexted in the firm’s operating reality and be completely aligned with its strategy. So, the HR head needs both a clear strategic understanding of what professional service firms (psfs) need to do to be successful in their different markets and an holistic understanding of how firms ‘work.’
The markets for different types of professional services operate differently and the matrix below indicates how the markets segment. With this knowledge, it is easy to determine the capabilities firms need to operate successfully in the different segments. The operating reality of most firms is that they compete in two or three segments. Only with a clear understanding of which segments the firm competes in, as well as an equally clear understanding of the firm’s position relative to its competitors in each of its markets, is it possible to develop a world-leading strategy to develop the capabilities of all the people in the firm. But, developing is the easy part; implementation is always much harder.
Successful implementation needs more than knowledge of markets and best practice learning systems. It needs something much more personal – the ability to make the case and win an argument with the partners about why developing capability is critical to the firm’s success and the ability to convince the partners you are on their side. That you are ‘one of us.’
Partners, by nature, tend to be sceptical and non-strategic, so it’s absolutely key that the HR head ‘works’ the partner constituency and persuades them that they, personally, can make a difference. That they can become even more effective and that they must be the people, who lead the firm to the next level. After all, change only occurs where the work gets done – and that puts the partners front and centre.
Although this note has concentrated on the need for the head of HR to primarily focus on developing capability, they must also know what best practice is in all of the constituent parts of the HR function, and be able to put people in place to lead those parts effectively and make the function valued within the firm. And, naturally, they, like all of the firm’s leaders, need to be a skilled team leader.
And, finally, the head of HR must be able to make a contribution to the ‘top table’ debate about the firm’s future. The head of HR that firms need will never be able to do an audit or provide legal advice (other than in employment law), but they must be able to bring their strategic knowledge of how to achieve market success and their holistic understanding of how firms ‘work’ to bear in any debate.
And, what should the head of HR expect from the firm
The first thing here is also obvious – the resources to do the job. It’s pointless having someone with the ability to help the firm make a difference if you don’t give them the resources to make it a reality. And, ‘resources’ does not mean simply cash and people, it includes the freedom to operate.
The second, also obvious, is support and inclusion. Real support and inclusion – not lip service. There will always be some partners, who don’t see the value of paying ‘top dollar’ to someone, who doesn’t bring in fees. When that happens, the firm needs all of the top team to actively support their HR colleague and persuade the partners that he or she will make a difference to what the firm does. Active signalling and support is critical.
A final comment on soul-destroying
There is another soul-destroying reality that can occur even when the head of HR has all of the capability necessary to help change the firm for the better, and that’s asking the HR head to report to a partner, whose knowledge and capability are inferior. While there are some great examples of heads of HR working for partners, who truly understand the value of the function and who actively champion it and its people, there are still too many examples where the opposite is true.
The ‘the partners only have confidence in a partner’ argument that usually goes with it is both spurious and demeaning. The real argument should always be about capability, about having the right people around the top table, regardless of their backgrounds. It’s an absolute waste of time and money recruiting top HR professionals if they don’t get the status and recognition they should have. It sends a clear signal about what and who is important, and it’s why some firms fail to hold on to the very people who can help make them even more successful. And, in an execution game, that’s madness.
By Rob Lees and Mike Mister – © Rob Lees and Mike Mister, September 2016
Rob Lees is a co-author of the best selling When Professionals Have To Lead and, until retiring last year, a consultant to the leaders of professional service firms worldwide. He can be reached at firstname.lastname@example.org.
Mike Mister is the head of the leadership practice at Moller Professional Service Firms Group, one of the leading psf consulting firms. Mike helps firm leaders across the globe improve their firm’s strategic and leadership capabilities. He can be contacted at email@example.com.