Last week, I covered people, customer and quality issues in
professional-service firm management. This week, I conlude with a
discussion of innovation, technology, organization and leadership.
Innovation. As I see it, there are two, competing positions on
innovation in professional-service firms:
- The professional service firm as conservative and
professional to a fault in providing client service.
- The professional-service firm as an agent provocateur, a
challenger of cherished beliefs.
Most professional-service providers do useful work. But all too
few manage to stir the pot. Worse yet, any number fail even to try
to stir it.
The Boston Consulting Group (BCG) got the drop on McKinsey & Co.
in the 1970s by having a sharp point of view about successful and
unsuccessful business strategy. McKinsey, by contrast, was
The Boston Consulting Group regularly took important sales from
McKinsey for a time - and was considered by recruits to be far more
interesting. McKinsey's service fanaticism prevailed in the long
haul but only after it fought back by somewhat sharpening its
research skills. (Boston Consulting Group, after stumbling in the
early 1980s, is emphasizing a new, vital perspective on business
strategy - and I expect it to once again give McKinsey fits.)
Ogilvy & Mather of old was both ideologue and master of
customer-service excellence. But now, young ad agencies arguably
are more creative and interesting, amid market conditions that cry
out for more creativity.
Even accountants can be provocateurs. Arthur Andersen was. But
today, top software houses such as Lotus have shined in accounting
innovation. Among other things, I repeatedly chide Big Eight firms
for surrendering spreadsheet innovation to software nerds.
Likewise, upstart Drexel Burnham, not Brown Brothers Harriman, for
better or worse, created the junk-bond renaissance, igniting the
most significant capital-market revolution this century.
There is a trade-off between creative needling and emphasizing
client-service excellence at all costs. It's analogous to the
battle between Apple and IBM. At issue: to be mainly interesting or
Obviously, a successful outfit in any industry must be quite a
bit of both. Nonetheless, many of the old, big professional-service
firms have gotten as stodgy as their old, big clients.
Success may accrue for a while to those who side-step this
trade-off. But irrelevance and decline await firms that
over-emphasize client-service excellence at the expense of having
something interesting to say.
Technology. Professional-service firms are not just advisors.
In our information-intense world, they are full-scale partners in
information-collection and -manipulation networks that are coming to
dominate both the service and manufacturing sectors. …