Leadership: in depth

**The core leadership pillar includes processes around setting strategy, business planning, goal setting, and management.**

Strategic decisions set the direction and tone for any professional services company. They affect all functions because strategy and vision from leadership determine everything from goals to objectives, the types of clients your firm will pursue, the types of services you offer, and even the types of employees who will thrive within the business.

Without optimization, poor leadership can hamstring cross-functional alignment. Leading to organizational alienation, the emergence of functional silos, and chaos in the form of infighting, workflow mismanagement that leads to a firefighting mentality, and ultimately staff burnout.

The effects of good leadership are visible in every aspect of organizational performance

Even a well understood mission, vision, and strategy can have a huge effect on billable utilization, project delivery, and annual revenue per head.

Confidence in leadership shows a similar gap between the least and most mature businesses – with an 11.4% difference in project margin between top and bottom performers.

And the effect on “ease of getting things done” speaks for itself.

8 leadership issues that stand in the way of performance

1. Unclear strategy compromises a firm’s ability to capitalize on opportunities due to lack of alignment or engagement. It also diminishes the drive toward repeat sales and leads to limited differentiation, poor sales and marketing, and delivery.

2. Lack of alignment creates conflict between driving revenue and margins and helping the company achieve its objectives of growth and client wins.

3. Silos exist in all companies, but their most obvious damage in professional services comes in the form of poor handoffs and disconnected processes that breed inefficiency.

4. Reactive thinking and management-by-spreadsheet caused by a lack of real-time visibility into all business functions limits your ability to capitalize on future opportunities by forcing you to rely on past performance as the basis of the future.

5. Skills imbalances create issues with sub-par utilization, further deepens silo divides, and causes difficulty in recruiting and retaining staff and easily staffing projects.

6. Immature processes based around poor systems and tools and inconsistent workflows lead to low repeatability and an inability to be efficient.

7. Poor quality and customer satisfaction resulting from failed projects, cost overruns, and leading to difficulty securing references.

8. Poor financial performance occurs as a result of the above factors – all of which start from the top.

Bad financial performance stems from poor leadership, and itself causes a vicious cycle of high attrition, low morale, and poor engagement. These in turn lead to low levels of client satisfaction, and poor financial results.

Overcoming the challenges with technology

Profitability can be improved by boosting utilization, reducing nonbillable time, increasing hourly rates, and evolving your marketing effectiveness and solution portfolio.

All of which can be done by improving your leadership effectiveness. Fortunately, technology can help you to do this.

By leveraging modern management tools like cloud-based ERP systems, your leadership can plan continuously, updating your forecasts, expectations, and strategies around up-to-the minute reporting and analytics. With the addition of other tools like PSA software, this will provide a solid foundation for operations that accounts for every part of your business’s process from prospecting to billing.

These tools can also help create policies that ensure communication, collaboration and alignment. And design systems and processes around real-time visibility and management control, giving you the ability to create a virtual office environment that supports consultants wherever they are without the emergence of silos.

These systems can also help you to achieve a greater level of people management. Leaders at the best firms work to create a culture and work environment that’s fair, well-managed, and carries ample rewards and career progression opportunities.

Technology can help you to achieve this by making it easier to nurture your talent, track their skills and development, and present them with growth opportunities by assigning them to projects that will challenge and stimulate them. Giving you a head start on developing both the skills your people will need for the future, and developing your firm’s future leaders. This also serves to lower attrition, as people are kept happier and can feel a sense of continual improvement.