Empson: Who is in charge here?
Senior Partner: (Pause) Well I suppose I am, I mean in a way,
I mean I think, but it's difficult to answer that question.
Empson: Who is in charge here?
Managing Partner: Hmmm. You want one name or you want…?
Empson: I just want your view of what the truth is.
Managing Partner: (Pause) I think it's the two of us actually.
We rarely disagree. It's instinctive.
Leaders, by definition, must have followers. At least, that is the
conventional assumption. But in an organisation filled with highly educated,
independent thinkers, who don't much like being told what to do, finding people
who are happy to identify themselves as "followers" is not going to be easy.
What, then, does leadership actually mean in this context and how is it
possible to lead effectively?
Cass Business School's Professor Laura Empson has been looking at this issue in
an innovative research study, funded by the Economic and Social Research
Council of Great Britain, on leadership dynamics in professional service firms.
She argues that, while leadership in the conventional sense may not be
immediately apparent within a professional service firm, it does in fact
permeate all aspects of professional work and all levels of the firm. However,
it needs to be thought about rather differently from leadership in conventional
Professional service firms (such as consulting, law and accounting firms) are
traditionally structured as partnerships, or as corporations that mimic many of
the characteristics of partnerships. Their distinctive leadership challenges
are based on two, interrelated organisational features: firstly extensive
individual autonomy, and secondly contingent managerial authority.
Leading by consensus
Experienced professionals require, or at least expect, extensive individual
autonomy. This autonomy is justified by the requirement for professionals to
make choices about how best to apply their expertise as part of a customised
professional service. The core value-creating resources of a professional
service firm - the technical knowledge and client relationships - are often
proprietary to specific professionals. This emphasis on individual autonomy is
associated with contingent managerial authority. Professional service firms are
often privately owned by the senior professionals who work within them.
Professionals elect their peers to the most senior leadership positions and can
depose any leaders who fail to retain their support. As a result the formal
authority of senior executives in professional service firms is limited; they
can only lead by consensus. A particular irony of professional firms is that
accepting a leadership position potentially entails losing power. In
organisations, power comes from controlling access to key resources. In a
professional service firm the most valuable resources are specialist
professional expertise and lucrative client relationships.
An individual who takes on a major leadership role in a professional firm
necessarily reduces their fee-earning work. By reducing their front line client
work, they will struggle to maintain cutting-edge professional expertise. They
risk exchanging their valuable assets for a title which brings with it very
little formal authority and a great deal of responsibility.
Process of interaction
According to Professor Empson, this means that leadership in a professional
service firm needs to be conceptualised differently from conventional
organisations. It needs to be understood as both processual and plural. In a
professional service firm leadership is not necessarily something that an
individual does or a quality that an individual possesses, but is a process of
interaction among organisational members seeking to influence each other. This
can be understood in terms of the concept of the Leadership
Constellation (click link for image).
Professor Empson argues that, in the context of a professional service firm,
the members of the Leadership Constellation are:
Senior Executive Dyad - typically a managing partner and
senior partner, or chairman and chief executive.
Heads of Businesses - leaders of major fee-earning areas such
as specific practices, offices, and market-sector groupings.
Heads of Business Services - responsible for support functions
such as Finance and Human Resource Management.
Key Influencers - have power derived from control of key
client relationships, valuable expertise or a strong internal and external
Leadership is represented by the arrows that connect the members of the
Leadership Constellation (i.e. the processes of influencing) as much as by the
circles representing the leaders themselves.
The research study is based on detailed empirical analysis, including more than
100 interviews, into the leadership dynamics in three elite professional
service firms. The case study firms were drawn from the consulting, accounting,
and legal sectors, and each firm was ranked in the top four within its
respective sector. Data collection and analysis is ongoing but already some
intriguing insights are emerging.
"What I found is complex, subtle and fascinating," said Professor Empson. "It
is about the hidden power dynamics, about interpersonal processes, about
longstanding loyalties and rivalries, the things that people never like to talk
about or acknowledge to each other within a professional service firm."
Focusing here on just one of the firms, the study identified a highly ambiguous
authority structure, which is manifested in four ways.
First, the roles of the Senior and Managing Partner are not defined. Second,
the Board officially has oversight of the executive, but some of its members
also perform executive roles. Third, each of the four major practice areas has
two or three joint heads. Fourth, while the Partnership Agreement includes
provision for an Executive Committee, this has never been established formally.
Instead an informal 'management team' exists whose composition and role is
fluid and ambiguous.
As one senior business services staff member explains: "I think why we have
this confusion around the management team, who's in it and who's really
important, is because we can't quite bring ourselves to say, 'actually you're
small fry in the general scheme of things', because he's my partner, he is my
equal, and so that's where we fudge things and we have lots of distribution
lists and then things go wrong and there's an embarrassment and everybody gets
a bit cross."
The professionals can function effectively with this profoundly ambiguous
authority structure because many have worked together for years and built up
close working and personal relationships. As one interviewee explained: "There
is a sort of gentlemanly approach to resolving conflict. There is a bit of
'let's not go there, we'll gradually sort it out and it will gradually get
But what happens when there is no time to gradually sort things out or wait for
things to get better?
The study found that, confronted with the fall-out of the global banking
crisis, the Senior and Managing Partner at one of the firms realised that the
partnership would need to shrink. However, they did not have any authority to
ask partners to leave without a full vote of the partnership.
The Senior and Managing Partner, together with six of their closest colleagues,
decided to proceed with a partnership restructuring but to keep deliberations
confined to a select group of senior executives within the firm. In the process
a hidden hierarchy was revealed within the ambiguous authority structure - and
the leadership constellation became manifest.
Selected Practice Heads began the process of identifying which partners should
be asked to leave or accept a reduction in their equity. Over a five-month
period they repeatedly cycled through a process of analysing, challenging,
recommending and rejecting each other's recommendations. The number of people
involved in these discussions progressively expanded, with the Senior and
Managing Partner co-opting an ever-increasing number of partners and management
professionals into this secret process.
After five months of repeated cycling and progressive co-option, the small
group of eight who had originally embarked on the restructuring process had
expanded to 50. Fifteen per cent of the partners were asked to leave or accept
a reduction in their equity and all accepted the terms offered to them. The
remaining 85 per cent of partners accepted that this decision had been made
without any recourse to the partnership as a whole.
As Professor Empson observed, "This suggests that it is possible for a leader
with no constitutional authority to wield considerable power under the 'cloak
of ambiguity'. It is perhaps not surprising that individual leaders may
actively construct and celebrate this ambiguity if they are particularly
skilled at navigating it effectively."
She also pointed out that, "somewhat ironically", a plural model of leadership
depends ultimately for its successful functioning on individual leaders. Though
the individuals in the study would adamantly eschew the rhetoric of 'heroic'
leadership, their colleagues are clear that the skills of these individuals
were fundamental to the success of the initiative.
As one Board Member reflected: "[The Senior Partner] managed to bring a tricky
group of people to unity over the course of two months. The way he executed the
delivery was exemplary. It was his finest hour."
What makes an effective leader in a professional service
So what sort of leader can effectively negotiate their way through the
ambiguities and social structures of a professional service firm? During the
course of the research, Professor Empson has identified ten qualities that the
most effective leaders share.
- Highly respected for his or her skills as a professional
- Does not appear to be seeking power
- Able to inspire loyalty and commitment
- Strong personal vision - able to communicate it
- Able to build consensus and act decisively
- Transfers responsibility but intervenes selectively
- Comfortable with ambiguity and conflict
- Spends a lot of time massaging egos
- But does not expect to have his or her own ego massaged
- And above all, the ability to identify and navigate the Leadership
Caroline Scotter Mainprize is a writer on management issues. She can be
contacted at email@example.com