Marshall School of Business

MARSHALL SCHOOL OF BUSINESS

MANAGEMENT AND ORGANIZATION

MOR556

LEADING PROFESSIONAL SERVICE FIRMS

Summer 2009

Professor Alexandra Michel

Office: 619 Hoffman Hall

E-mail:

This course is designed to help graduate students understand the unique attributes of professional service firms (PSFs). It is meant to assist you in becoming an effective contributor to a thriving PSF by studying the dynamic management practices, structures, and strategies of these firms. It is most relevant for students who want to work in a PSF, such as an investment bank, hedge fund, private equity firm, consulting firm, accounting firm, or law firm. Because these firms have designed management practices that are suited for turbulent environments, many other organizations are currently adopting these practices as they respond to globalization, rapid technological change, and unstable political environments. Therefore, this course is also relevant for students with an interest in learning about cutting-edge management practices.

COURSE CONTENT

This course examines the three interrelated levels of the new knowledge economy in which PSFs participate: (1) a high-velocity business environment, which requires (2) innovations in organizational strategies and processes to make firms more adaptable and innovative, which, in turn, (3) demands a different kind of skill set in professionals and shapes professional psychology in new ways. The dynamic and complex business environment in which PSFs operate will be the backdrop to all of our discussions of the other elements. The course discusses how traditional management topics—such as ethics, leadership, strategy, organizational design and teamwork—operate differently in these new types of organizations. You will be in a leadership position once you enter a professional service firm. As an associate, for example, you will supervise and mentor analysts and also contribute to strategic initiatives. The course therefore treats the topics outlined below at an advanced level.

1. The New Psychology of Professionals: This module discusses the special skills and psychological attributes that professionals need to operate in a high-velocity business environment. For example, instead of the analytic decision-making procedures of traditional companies, professionals use “real-time intelligence,” which is a faster and more improvisational decision-making style. Professionals also need to cultivate a distinct emotional profile, including an unusually high resilience to stress. They achieve this not through traditional stress management techniques in which stressors are eliminated to induce relaxation but through the opposite approach: exposure to extremely stressful situation with the goal to “inoculate” themselves against stress. We talk about how organizations select individuals who are likely to exhibit these skills, how they cultivate these skills through mentorship and development, and how they evaluate and reinforce these skills. We also practice some of these skills in class through debates, business solicitations (“pitches”), mock interviews (including client interviews), and role plays of “tough conversations,” such as feedback to colleagues.

1. Innovations in Organizational Strategy and Processes: This module discusses innovations in organizational design that allow PSFs to be highly adaptable and innovative. It contrasts these choices to traditional organizational designs. For example, in traditional companies, a top executive or top management team frequently devises long-term strategic plans, communicating them down the hierarchy. In contrast, PSFs often devise strategies in a “bottom-up” manner, based on information from client interactions of lower-level individuals. We discuss (1) what these design choices concretely look like in the form of key work processes such as recruiting, training, compensation, project staffing, review and feedback processes, and outplacement, (3) which types of choices are more and less effective, and (3) the extent to which such design choices can be adopted by other organizations.

There is one type of organizational process that we discuss in particular detail: leadership.

1. Novel Forms of Leadership: Innovations in organizational design and a new type of work force require novel forms of leadership. Leaders do not articulate and champion strategies but help design processes that let strategies emerge from the “bottom” of the organization. Leadership is also relatively more distributed throughout the organization as each professional—from the most junior to the most senior—is at the same time producer and manager. This module articulates what specific behaviors this new leadership model encompasses, how it is different from traditional theories, how organizations develop it in their participants, and how and why leaders succeed and fail.

SPECIFIC COURSE OBJECTIVES

The primary course objectives are for you to

1) understand the three dimensions of the new knowledge economy (i.e., high velocity business environment, innovations in organizational strategy and processes, new professional psychology) and how they are interrelated at a level that is both deep and broad enough to spearhead organizational changes, and

2) gain practice in the key skills needed to contribute as a senior professional, including continuously monitor high-velocity business environments to rapidly adjust organizational structures and individual behaviors.

GUEST LECTURERS

Guest lectures will be given by practicing professionals.

REQUIRED TEXTS

Course reader.

I suggest that you buy the following books on-line, where you are more likely to get them at a discount.

Michel and Wortham (2009). Bullish on uncertainty: How organizational cultures transform participants. Cambridge, NY: Cambridge University Press.

Langer, E. (1989): Mindfulness. Reading, MA: Perseus.

DELIVERABLES

Final grades will be determined by the following components and weighting:

REPORTS AND IN-CLASS PRESENTATIONS

For the report, you will (1) research the strategies and management practices of one PSF in depth, (2) critically evaluate them in light of the principles we learn in class, and (3) make recommendations for improvement. The report requires both secondary materials (newsruns, company materials) and primary research (e-mail-, phone-, or personal interviews with existing or former employees of the focal PSF). The project serves three purposes. First, you will come to understand the innovative organizational practices of PSFs in more detail than case studies and lectures can convey. This is critical for your ability to implement such practices in an organization. Secondly, you will practice an important skill that professionals need to be successful, namely “real-time intelligence.” Real-time intelligence encompasses going out into the “real world” of your client (here: the PSF you are studying), rapidly gathering a large amount of complex information, and analyzing it with the help of general principles. This is precisely the kind of work you’ll be doing as a junior consultant or investment banker. The third purpose is practical and involves giving you a “leg-up” in the recruiting process. Completing your own research and listening to the research of other teams about leading PSFs will provide you with high-quality information that can inform your approach to recruiting. Also, the interviews you conduct will generate exposure to and, hopefully, relationships with decision-makers. The detailed project requirements and grading criteria will be discussed in class.

PARTICIPATION

Participation consists of any behavior that reflects the acceptance of personal responsibility for your learning as well as contributions that make the course a valuable learning experience for your classmates. This includes class attendance, punctuality, contributions to class discussions and activities, as well as overall commitment and involvement. Class discussions provide the opportunity to practice speaking and persuasive skills, as well as the ability to listen. Effective class comments may address questions raised by others, integrate material from this and other courses, draw on real-world experiences and observations, or pose new questions to the class. High-quality participation involves knowing when to speak and when to listen and allow others to speak. Comments that are repetitive, unrelated to the current topic, disrespectful of others, or without sufficient foundation are discouraged and will be evaluated negatively. Appendix A consists of a behavioral anchor rating scale that lists the behaviors I will evaluate to determine your participation grade. You will evaluate your participation with this scale at the mid-point and the end of the course. In addition, you will identify those individuals who have made the strongest contributions to class discussion. The grade for participation will reflect my evaluation as well as peer evaluations.

COURSE SCHEDULE

APPENDIX A: BEHAVIORAL ANCHOR RATING SCALE

CLASSROOM PARTICIPATION

OUTSTANDING PERFORMANCE

• Repeatedly brings new, relevant, and interesting material to the class (e.g., on the firm that the team covers)
• Supports assertions with evidence
• Distinguishes between opinions and facts
• Demonstrates ability to apply, analyze, and synthesize course material
• Brings up questions that need to be explored further
• Clarifies points that others might not understand
• Offers relevant and succinct input to class
• Demonstrates excellent listening, as evidenced by follow-up comments/questions
• Demonstrates willingness to take risk in attempting to answer unpopular questions
• Is always punctual

VERY GOOD PERFORMANCE

• Regularly participates in class discussions
• Shares relevant feedback
• Consistently demonstrates knowledge of reading assignments
• Demonstrates ability to analyze and apply the course material
• Demonstrates willingness to attempt to answer questions
• Is always punctual

GOOD/AVERAGE PERFORMANCE

• Participates in group discussion when solicited
• Offers clear, concise, “good” information relative to class assignments
• Offers input in class or group, but tends to reiterate the intuitive
• Attends class regularly and is always punctual

LOW PERFORMANCE

• Confounds opinions and facts
• Fails to support assertions with evidence
• Occasional input, often irrelevant, unrelated to topic
• Reluctant to share information
• Does not follow flow of ideas
• Drains energy from class goals
• Is occasionally unpunctual

UNACCEPTABLE PERFORMANCE

• Fails to participate, even when solicited (in small or large groups)
• Shows up to class; does nothing
• Distracts the group or classroom discussion
• Is repeatedly unpunctual

1. Your name:
2. Please circle the section that best reflects your participation.
3. Please write the names of 5 students who you think consistently demonstrate “outstanding” level participation.

APPENDIX B: TEAM MEMBER EVALUATION FORM

Class:

Your name:

Team name:

Names of team members (include yourself):

Evaluation for: [name of team member to be evaluated]

Directions: Please evaluate yourself and each of your team members on their contributions to the team using the rating categories below. Submit one copy for each team member to me at the dates listed above. Submit another copy to each of your team members on those dates.

1 = outstanding performance, far exceeds expectations

2 = strong performance, consistently exceeds expectations

3 = competent performance, meets expectations

4 = low performance, falls short of expectations in some areas

5 = unacceptable performance, fails to meet expectations

Please summarize the person’s greatest strengths:

Please summarize areas for improvement: