Are your partners motivated by individual or collective ambition?

Several interesting pieces of research were published over the first quarter of this year that give some fresh perspectives on how to thrive in competitive markets.

The American Lawyer reported that the lateral hire market has continued unabated, with 2,691 partners joining or leaving Am Law 200 firms in 2012. That is a lot of investment, but it doesn’t always pay off. Back in the UK, Motive Legal reported that a third of the 2,763 London lateral partner hires made by law firms between 2005 and 2012 were no longer with the same firm.

Financial difficulties aside, partners move because: they seek greener (or perhaps better paying) pastures; their values have been negated, for example they feel they have been unfairly treated in a compensation review; or because the fit is no longer seen as working and they are being managed out.

Given that there is evidently a large amount of management time being consumed with lateral hires, but with uncertain success rates, what can you do to increase overall internal performance levels and retain good performers instead?

Organisational culture

Research by Professor Boris Groysberg of Harvard Business School suggests that organisational behaviour is driven by four things:

1. a well-defined and clearly communicated strategy;
2. a culture of high performance and high values;
3. a structure that simplifies working in and with the organisation; and
4. execution that consistently meets customer expectations.

It also suggests that you need excellence in any two of the following:

1. leadership;
2. talent at all levels;
3. driving innovation in your industry; and
4. developing a stronger mergers and partnerships capability.

This feels like familiar territory. Yet, familiarity has never equated to success. If you were to score your firm between one and ten on how well it was performing against, rather than just being aware of, each of those eight attributes, you are likely to have at least some uncomfortable scores.

A key step forward, Groysberg suggests in other research, is to increase face-to-face conversations to make organisational culture “more intimate, more interactive, more inclusive and more intentional”. This must be right – we have all seen that management by memo is not effective in driving desired behaviours.

A parallel idea comes from a recent report by McKinsey & Co. This suggests that high levels of supportive behaviour improve financial performance and quality. Again, that sounds logical, but is worthy of further thought, because recessionary periods may drive people to focus on protecting their own positions.

McKinsey contrasted comments by Cornell economist Robert Franks that many organisations are essentially winner-take-all markets, dominated by zero-sum competitions for rewards and promotions, with comments by Professor Podsakoff of Indiana University, whose interest is behavioural, power and social influence processes in organisations.

Podsakoff’s research demonstrates that the frequency with which employees help one another can be used to predict sales revenue in a surprisingly wide range of industries, a quite thought-provoking idea. The reason is that supportive cultures enhance team cohesion, improve the sharing of expertise with less experienced colleagues and therefore enable people to solve problems and get work done faster.

So how do we build high levels of ambition and performance and at the same time maintain collegiality?

Colleagues or rivals?

Studies into the level of team cooperation by Michael Johnson at the University of Washington suggest that rewarding the highest performing person in a team encourages a ‘taker’ culture. In such cultures, there is less willingness to share information, because it dilutes your power. This is clearly not in the wider firm’s interests, but how might you identify such people, both in development discussions and lateral recruitment?

Johnson advises that ‘takers’ are more likely to claim personal credit for success, referring mostly to ‘I’ and ‘me’. Not ‘we’. However, recruitment often seeks those who show that they can personally ‘deliver’, rather than someone who seems to rely on others, so we may need to increase skills in questioning and listening to candidates.

There is much change and much advice. At heart, however, what is required is to make the required behaviours part of normal daily client work and office life. If you don’t, you will struggle greatly to deliver your business plans and strategies.