On Becoming Extraordinary: Star Professional Service Firms

Few researchers have studied professional service firms (PSFs). But there are fascinating questions that call for an answer. Why do some PSFs prosper in extraordinary fashion, while others fail to do so? What do these firms do that makes them excellent? On Becoming Extraordinary - Star Professional Service Firms unlocks the secrets of leading PSFs. It describes the ways whereby some of the best-known PSFs succeed in winning. The practices of the elite are streets ahead of other firms. So what can those 'other firms' learn from the best-of-the-best? Challengers need to be successful in the following areas of competence in order to reach the 'peak of the pyramid':1. People development: attracting, developing, and retaining the right people. There is no substitute for the best-of-the-best professionals. 2. Client development: building and deepening in-depth client relationships.3. Practice development: great PSFs create, enrich, and leverage knowledge - the lifeblood of the PSF - through effective practices or 'centers of excellence', i.e., a high-quality knowledge support infrastructure.4. Office management: managing professional intellect, core principles and values, and key stakeholders - think of alumni - effectively and efficiently through local and/or global offices.5. Reputation management: reputation is a vital strategic asset for conveying information about the firm's capabilities to existing and new clients and the community at large. 6. Information logistics management: effective management of the flow of information to, through, and from the PSF. Getting the right information to the right people at the right time is key to a firm's competitive edge.7. Innovation management: the ability to generate and commercialize new and unique value to clients systematically and on a continuing basis. 8. Continuous performance improvement management: a relentless focus on improvement means constantly searching for a better or best practice, implementing that practice, and then searching for another better or best practice. Without the emphasis on 'continuous' improvement, one-time gains are unlikely to lead to further improvements. The following research process was used: - Phase 1: 338 interviews with senior managers, directors, and partners of PSFs. Interviewing these people provided invaluable insights into the voice, character, and personality of the world's best PSFs. - Phase 2: 366 client executive interviews, i.e., senior officials of client organizations, primarily members of management boards, supervisory boards, and advisory boards. Client interviewees represented a wide range of public companies, as well as state-owned enterprises and private (family) companies, in terms of geography, size, positions, nationalities, professional backgrounds, and sectors.- Phase 3: secondary research and archiving material.- Phase 4: interviews and telephone conversations with 51 'knowledgeable outsiders', such as industry experts, professors, academic subject matter experts, and experienced journalists. The strengths of star PSFs and the quality of their people development and client relationships have created a virtual 'wheel of fortune'. Star PSFs capture a disproportionate share of the business of the most interesting clients in the most attractive markets. Since 2010, the 116 star PSFs from nine sectors (accounting, advertising, executive search, management consulting, investment banking, private equity, law, HR advisory services, and IT) have as a group more than tripled in overall profitability, outperforming most manufacturing and other service firms in everything that truly counts: reputation and presence, profits and total fee level, status and influence. Pieter Klaas Jagersma, Ph. D., is an independent researcher, business professor and supervisory board member. His writings have been widely published. Earlier in his career, he worked at McKinsey & Company.