Excerpts from: WHAT DRIVES PROFIT?

by David H. Maister

(From the book Practice What You Preach by David H. Maister: Copyright 2001 by David H. Maister. The Free Press, a division of Simon & Schuster; Inc., New York.)

Businesses covered by Maister's study included advertising, public relations, brand-identity consulting, health care consulting, direct mail, Internet marketing, promotion, public affairs consulting, and employee communications. He used the word "employee" to cover everyone working in the firm, from top to bottom, from high-level executives to mail room clerks. No distinction was made between partners and nonpartners, owners and employees, managers and staff. Similarly, employees in all roles were surveyed, including both fee-earning staff and those in support roles.

This study did not include law firms (or a host of other types of businesses and professions).

The nine key statements respondents reacted to are:

  • Client satisfaction is a top priority at our firm.
  • We have no room for those who put individual interests ahead of those of the clients or the office.
  • Those who contribute the most to the overall success of the office are the most highly rewarded.
  • Management gets the best work out of everybody in the office.
  • Around here you are required, not just encouraged, to learn and develop new skills.
  • We invest a significant amount of time in things that will pay off in the future.
  • Within our office, people always treat others with respect.
  • The quality of supervison on client projects is uniformly high.
  • The quality of professionals in our office is as high as can be expected.

These nine items are a package. It's not enough to have agreement on some of them. It is the interactive combination of all nine that explains differences in profitability.

The study differentiated between what you believe in ("please try") and what you actually execute ("we enforce this".) When it comes to making money, it's disciplined execution that counts. It turns out that the major explanation for differences in growth and profitability is how well firms execute the basics.

If you didn't have client focus, good work, supervision, and high standards, then respect might not do much for you. But if you have those things, adding a culture of respect makes a signficiant difference to your bottom-line profitability.



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