How to make it rain: Six leadership lessons from the professional services sector

The transition to enterprise leader – the shift from leading a team or function to taking organisation-wide perspective and accountability – is one of the most challenging moves that Executives will make in their career. This move can be even more complex for leaders in professional services, a sector that has some unique characteristics. And while this has always been a key transition, the current business climate in Australia has made getting this right even more important.  

SMG has spent years researching and working with leading professional services firms to support this activity. In this article we look at the six key shifts effective leaders make, how these are applicable to leaders in all industries – and why you should be thinking about what makes you unique, developmental difficulty, and the who as well as the what. 

The transition to trusted advisor: doing good work is no longer enough

Whatever they are called – “Rainmakers”, “Doer-sellers”, “Originators”, “Partners” – professional services leaders have end-to-end accountability for the entire business development process, from initial relationship-building through to winning and delivery of work, a breadth of role that is almost unique to this sector. 

While most firms have a solid process in place to support this leadership transition, the current economic climate has highlighted that many current practices are insufficient. Recent research shows that 59% of professional services firms are expecting downward pressure on pricing or lower demand, reflected in the widespread redundancies across the sector here in Australia. There is also a big shift in client behaviour, with only 53% preferring to buy from previous advisors. This is down from 76% only a few years ago and is expected to drop further to 37%. 

The old view that if we do good work our clients will come back will no longer work; leaders and their firms need to shift their focus and behaviours. Alarmingly, almost four out of five professional services companies believe their leaders don’t display the required attributes to make this happen.  

But this also presents an opportunity; get this right and your leaders will be better placed than 78% of the market to support your clients and differentiate your organisation from the competition. 

How to make it rain: six leadership transitions

Our experience and work have helped us identify six key transitions professional services leaders need to make: 

From Specialist to Strategist 

Being known for your technical or functional expertise got you here but it won’t get you there.  Moving beyond being an expert in one area to understanding industry-wide trends and connecting your solution to the client’s strategy requires big shifts in perspective and different capabilities. 

From short-term project to long-term relationship 

When the focus in your work to date has often been delivering on a project or transaction, shifting to thinking beyond this to building a long-term partnership can be challenging. As the CEO of one of our clients stressed, this can even mean turning down work or recommending other alternatives to your client. It certainly requires a very different set of skills. 

From reactive to proactive 

How to go from reading the weather forecast to actually making it rain? Getting on the front foot with clients to anticipate their needs, spotting opportunities for you and them; this can be a difficult mindset shift for leaders, particularly those who view delivering great work as the best business development technique. 

From analytic to empathetic 

People buy people. And while your technical expertise might deliver world-class results, it will be your ability to understand your client’s needs and wants, and to build strong relationships built on trust, mutual benefit and value, that will define your future success. 

From individual to collaborator 

The best professional services leaders recognise that clients benefit most from a whole-of-firm approach, and this can mean introducing colleagues and solutions you might not be familiar or comfortable with. Collaboration requires both a mindset and a capability shift, and can often involve realigning organisational processes to reinforce and encourage this behaviour. 

From delivering to selling 

Yes, selling. “Selling” involves simply providing your client with a service that will benefit them and improve their business in return for fair compensation. It is valuable – vital – activity that drives commercial success, yet many professional services leaders balk at the idea they might be salespeople. However you describe the activity, getting comfortable with the concept can be the most difficult mindset shift that leaders need to make. 

The implications for leaders in all industries

While some of these shifts may appear very specific to professional services, our experience is that they are relevant to leaders in almost all industries and roles; client-facing executives in sectors such as financial services or in B2B roles will see some clear parallels, for example.  

But high-performing leaders everywhere should be conscious of these transitions. It shouldn’t require having a sales target to make leaders think about how your company can better service your customers, or to consider the long-term organisational value and impact of the day-to-day work their teams are currently doing. 

All leadership is contextual, and the professional services environment has some unique characteristics, but there are also some transitions that highly effective leaders in all organisations make as they move into enterprise-wide roles. 

Considerations and next steps

Defining the end state is the foundational first step. There are a range of factors to then be considered when putting in place activity to build and deploy the capabilities.  

Contextualise to your strategy and unique business need 

While the six transitions outlined above are universal, the relative emphasis and importance you place on these will depend on your firm’s priorities. In the last 12 months we have worked with a large global consultancy dealing with the ramifications of the Australian government inquiry into consulting services and also a rapidly growing challenger firm. While both operate in the same market and compete for the same clients, their definitions of what is expected from their leaders (as defined in the Success Profiles we created) are very different, reflecting the two firms’ strategies and competitive positions. 

Understand the developmental difficulty  

Extensive research has shown that some behavioural capabilities are easier to develop than others; collaboration and client-centricity are simpler to develop than strategic thinking or business development, for example. This has significant implications for how you build these capabilities; for example in recognition of the relative developmental difficulty, we have a range of custom leadership simulations designed specifically to build strategic thinking capability (with a focus on practical application and leader-led learning), and we leverage our Executive Mentor faculty to strengthen leaders’ business development capability. Our experience – and external research – has taught us that these tools are more effective in building these capabilities than cohort- or classroom-based learning.  

Measure the who as well as the what 

 Some of the defined transitions require a shift in perspective and mindset (who you are) while others focus on behavioural capabilities (what you do). Understanding your leaders’ personal drivers and preferences – where they are likely to be most engaged and productive – is key to helping build capability and prioritise your investment. Given the difficulty of reliably observing leaders’ mindsets and motivations, we recommend using a range of psychometric tools to support this activity. 

Summary

The professional services sector presents some unique challenges for leaders making the transition into senior roles, and the current operating environment in Australia has only heightened this issue. Given research shows that barely one in five professional services leaders have the necessary capabilities, this presents a huge opportunity; firms that recognise the six key shifts this transition requires can build the individual and organisational capability that will deliver a significant competitive advantage, both for the company and the clients they support.