Until recently, professionals running their own firm -- architects, lawyers, consultants, public-relations specialists -- wouldn't admit to dirtying their hands with business. They lived a clubby life, protected from the vulgarities of commerce by laws and customers that took a dim view of crass competition. No more. You want to grow your little architectural firm? Be prepared to market and -- ouch! -- to sell. You want to perk up your PR agency's profitability? What do you know about capacity planning and billing multiples?
If you don't know anything, well, don't despair. Remember it was scarcely a generation ago that Peter F. Drucker, that self-proclaimed Columbus, began mapping the science of industrial management. Other explorers are now blazing trails in the management of professional service concerns, and have even come out with a few good books. Take, for example, the following four, preferably in the order suggested. Together they amount to a nice course in the theory and practice of professional service firm (PSF) management.
Start with Professional Excellence, by CPA and consultant Peter H. Burgher. Spend a Saturday afternoon with the book, and you'll get a quick tour of the PSF management landscape. What are professionals? Burgher asks. What motivates them? Why should you have to worry about the structure of PSFs? The problem underlying much PSF mismanagement, Burgher reminds us, is that the typical professional doesn't like to think of himself or herself as being in business at all.
Next, send $20 to David H. Maister (see box, left, for address) for a copy of Professional Service Firm Management, a paperbound collection of the former Harvard Business School professor's articles. If there's a Drucker of PSF management, it may be Maister. His work sharpens the issues confronting people who manage professionals, articulate the principles involved, and suggest pragmatic approaches to PSF problems. How, for instance, do you split profits among partners? Specifically, how do you satisfy the young superstar and the declining senior partner and those who volunteer to take on the firm's unbillable chores? Maister offers answers. His writing, moreover, is to the point and engaging. "Because many customers are unable to distinguish between outstanding technical work and the merely competent, they pay more attention to the quality of service they receive than the quality of work performed -- which, of course, is not the same thing. . . ."
Third, take out a small bank loan and buy Marketing Professional Services, by Philip Kotler and Paul N. Bloom. You can't absorb this book in a weekend; instead, keep it on a shelf in your office and consult it often. Kotler and Bloom turn theory into detailed practice. Want a job description for your new director of marketing services? You'll find one on page 29. Don't let the authors' academic tone put you off; their theory is sound, their coverage is comprehensive, and their suggestions make sense. And never mind that they seem to write with the larger firm in mind. Heed this advice, and yours may become a larger firm.
But don't finish this tutorial before you buy one last volume. It's cheap ($4.95 in paperback) -- and if Kotler and Bloom's earnestness makes you nervous, Sydney Biddle Barrows's guideless innocence will be reassuring. Barrows's Mayflower Madam is as entertaining a case history as you're likely to find of simple-but-sound management principles applied to a growing professional service firm -- in this case, a high-class call-girl service based in New York City. It's all there: burnout (". . . As we entered our fifth year, I realized that I couldn't spent the rest of my life in the escort business"); sales ("Ours was strictly a soft-sell operation, and I didn't want anybody to be too pushy"); market segmentation (". . . If all those men were really so eager to pay us more money, then what the hell, I was going to charge them more"); and so forth.
"As I saw it," write Barrows and coauthor William (Iacocca) Novak, "this was a sector of the economy that was crying out for the application of good management skills -- not to mention a little common sense and decency." Sound like any other profession you know?
-- Tom Richman
* Professional Excellence, by Peter H. Burgher (HC, Agnes Press, 1985, $21.95)
Professional Service Firm Management, by David H. Maister (B, 1987, Maister Associates, 545 Boylston St., Boston, MA 02116; $20)
* Marketing Professional Services, by Philip Kotler and Paul N. Bloom (HC, Prentice-Hall, 1984, $39.50)
* Mayflower Madam, by Sydney Biddle Barrows with William Novak (PB, Ballantine, 1987, $4.95; HC, Arbor House, 1986, $17.95)