Maturity of Great Service Leaders
At the recent OpenAir Leadership Summit, I had the pleasure of speaking with a number of service industry professionals. I also got to share speaking responsibilities with service industry experts David Maister (of “Strategy and the Fat Smoker” and other books) and Thomas Lah of TPSA.
During the speaker’s interactive sessions, we heard a clear division in the attendees. Specifically, we heard one group of executives make the case that short-term earnings, margin and utilization numbers must be met or their jobs are in jeopardy. Short-term, these executives will do whatever it takes to make their numbers. They will: - cancel scheduled training - postpone vacations - sell unnecessary, redundant or low/no-value added services - etc.
In the other corner were service executives who understood that the tradeoffs one makes to achieve short-term revenue gains come at the expense of long-term profitability. More to the point, we saw that short-term optimizers worked a lot of hours to achieve their transitive and unsustainable results while the long-term leaders did a better job of growing their team and talent to be self-sustaining and More to the point, we saw that short-term optimizers worked a lot of hours to achieve their transitive and unsustainable results while the long-term leaders did a better job of growing their team and talent to be self-sustaining, profitable and quite professional.
My view: this was an example of both a generational and maturation (experienced vs. less experienced) gap in services leadership.
Recently, a colleague, Dr. Katherine Jones, and I conducted a number of interviews with service executives. One of those interviews really stood out for me as it was with a contrite service executive who has realized that her prior management style was highly effective in delivering short-term results but was definitely wrong for building a practice.
Building a practice is what service leaders do well. Delivering short-term results is what anyone who went to the Attila the Hun School of Service Management can do. When you build a practice, you: - Create experts and stars not just staff people on projects - Create an environment where people stay years longer than they would have otherwise. The costs to replace a service worker can be huge. Besides the recruiting costs, there are substantial training costs, too. And, don’t forget the fee write-downs you’ll make to get these newbies some initial on-the-job experience. - Take the time to mentor and groom subordinates. When you succeed here, you don’t have to sell as much or as hard as your team now possesses the ability to sell add-on as well as new work. - Create unique intellectual property that helps sell new work. Moreover, when your services group possesses this proof of your special abilities, then you can charge more for your services, achieve higher margins and spend less on sales efforts.
In a tough economy, it’s easy to fall into bad managerial habits like treating people like disposable, interchangeable expense items. Practice builders don’t fall into that mode.
Great service leaders build a team of professionals and they keep improving the performance and skills of those within it. These leaders won’t settle for letting their team ‘maintain’. They and their employer need people who will continue to progress and not atrophy.
When you meet with your team, ask them to develop a personal balance sheet. On the Asset side of the balance sheet, have them list out the training they’ve completed and then depreciate it based on the time that’s passed since it was acquired. Old skills are a dime a dozen while the newest, hottest skills are what clients will pay big bucks for now.
Likewise, ask your team to describe the soft side skills they’ve developed and put this on the personal balance sheet. These skills include selling skills, coaching skills, empathy skills, manners, etc. If your team lacks these critical emotional IQ skills, they can’t sell more work or delight clients. They also won’t know if their own project is in trouble.
Other assets include solid business skills, vertical industry knowledge, knowledge of specific geographies and governments. I particularly like service pros who possess outstanding writing and public speaking skills.
Service personnel who want to maintain are not doing themselves or their employers any favors. Implicitly, these people are saying that they’ve learned all they need to know or that their soft skills are more than adequate. They’re wrong. What they’re becoming is an ever more expensive resource that is becoming increasingly less relevant to clients. You don’t want these people as they consume too much of your payroll and worse, they block the advancement of more aggressive, trainable and relevant personnel.
Great service leaders clearly have some important financial bogeys to hit these days but care should be undertaken to make both the numbers now and going forward. It’s time to get practice builders in charge of service organizations.