Crisis-driven change

The opening quote of Francesco Guerrera’s Analysis article in this morning’s FT caught the eye, “A crisis is a terrible thing to waste” (but then I don’t work at Citigroup, so hadn’t heard it before).

What struck me, however, and what is applicable to law firms as much as any other business was this,

Experts argue that although most companies see the need to reform in a crisis, many embark on the wrong kind of change. A common mistake is to go for across-the-board job and cost cuts that weaken the company without sharpening its core businesses. “The first thing you have to do is to protect and strengthen the core,” says Bain’s Mr Rigby. “In the same way our bodies allocate blood flow away from expendable extremities in favour of vital organs during a crisis, companies must make sure their best markets and consumers are protected.”

Driving change may be easier in times like these, but, as Guerrera notes,

In the middle of the worst economic downturn since the Great Depression, companies face a daunting choice. Do they exploit the tough times to lose the ballast accumulated during the boom years and make risky strategic changes in the hope of emerging as lighter but stronger organisations? Or do they adopt a defensive stance, trying to weather the storm without rocking the boat until their markets and the economy rebound?

A different S word

Read Stefan Stern’s latest column in the FT, Time to get your strategy right. It has been a pretty grizzly year, and it is not getting easier fast, but we will come out of this recession: and professional service firms, like any other business, need to be ready. So, as Stern opens, “We need to talk about strategy” – but, and this is where it starts,

. . . business leaders ought to recognise, as they catch their breath after months of turbulence, that the strategy they were pursuing until recently is unlikely to be right for today.

It’s not just that markets have changed. Your organisation has changed. You may have all been through a near-death experience. Even if you avoided calamity, it is unlikely that colleagues are the same carefree people you remember from a year or two ago. Most businesses have been making serious cutbacks. Co-workers may be doing their best to look calm and positive. But they can see unemployment rising and know that sustained recovery is a long way off.

Neglecting strategy

An excellent email in my in box this morning from Edge International, with their Law Firm Strategy Newsletter. The topic? The Strategy Executioner (or, to paraphrase the opening, 10 easy ways to ensure that your law firm’s strategy never sees the light of day). You will need to subscribe to the Newsletter and visit Edge International’s website for more (their RSS feed is not great) but good reading, and a very telling conclusion,

The sad truth, though, is that much strategy fails because of simple neglect rather than active sabotage.

Cultivating the habit of optimism

Holiday (a week reminding myself why living in the South West is so much better than simply visiting it, although narrow lanes south of Padstow when the lifeboat is on a shout make for interesting driving) and transactions (yes, they are still happening – just) have left little to time to post; a late summer lull and a transaction gone away are prompts to return.

A phrase I read recently, and have been shameless in using since, is “the habit of optimism”. In the current position a lot of us find ourselves in, it is useful to remember things may not be bad as they seem, and even if they are, it doesn’t always do to say so (and it is not just about talking ourselves into recession: a concept that I do not subscribe to).

In my post Spending time wisely in early July, I picked up on some of the steps that we can take in our practices to see us through the slowdown, whether it be long or short, and in particular to those identified by Nick Jarrett-Kerr of Kerma Partners, in his article in Kerma Partners Quarterly 2/08.

Nick, when looking at ‘where partners should be spending their time during a market turndown’ sees motivating and developing people as a critical task. I could not agree more. For most lawyers, this is their first experience of a down turn in the legal services market. There are few days when the legal press doesn’t carry a story about lay offs and redundancies, and ‘on the floor’ it is obvious that there is less work around. Inevitably this may have a demoralising impact on people; even if they are not directly affected, they will know people who are. The old certainties are longer be there.

Optimism is important: one of the panel at a recent Exeter Business Leaders Forum, having first reminded us that the current economic turbulence was the fourth time down turn he had experienced, told us that one of the main lessons he had learned  is that, even in a down turn, when you get up in the morning, the sun is still shining, people are still going to work, things are still being built, goods are still being sold. Certainly times are harder, and life is more difficult, but this is what happens.

Optimism is not blind hope that everything will be all right; rather it is knowing not just that there is a way forward, but what it is and what it will take to get there. This is a message that needs to be got across to the people who work for us.