The expert view: navigating uncertainty in Professional Services
Professional services organisations are in the people business, which means they must balance technological capabilities with relationship building, according to attendees at a recent seminar. In our recent breakfast roundtable in partnership with Business Reporter, we sat down with senior executives from a huge range of sectors. Here’s some of the highlights from the morning.
“Giving people more time to do meaningful work is a major challenge for professional services organizations (PSOs),” said Marc Selzer, of Unit 4, introducing a TEISS Breakfast Briefing at London’s Goring Hotel.
In times of uncertainty, solutions usually come back to people. And we’re not at all surprised that all participants in this discussion (C-level leaders or department heads across a breadth of different industries and sectors) reported that people were their primary concern.
Talent management and culture were strong themes in the discussion, as was the need to ensure that clients understand the value they are getting. Talent is no longer the concern purely of the HR department – it’s increasingly seen as a core concern for leadership at the strategic level.
Since PSOs are essentially selling the knowledge and expertise of their people, talent management is a crucial concern – for these firms, talent effectively constitutes their supply chain. If they can attract and retain talent in house, rather than being forced to rely on contractors, they can not only create a better experience for service buyers, but also create a more efficient and profitable operation.
But retaining talent is a challenge. Attendees said they are still feeling the effects of the talent that left businesses during the pandemic, some taking early retirement and others going freelance. Younger staff, who have replaced them, may undervalue face-to-face communication, though they are often more confident in making data-driven decisions.
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Don’t hide behind technology
Technology plays a vital role in the value of PSOs. That could be through helping PSO staff to work more efficiently or in working with the client to provide technology solutions.
But it is important not to hide behind technology. Several attendees suggested that much of the technology they use is commoditized, with the real value coming from the expertise of suppliers.
Meanwhile, there is uncertainty on the client side. Companies are finding it harder to forecast revenue streams even a year ahead, which makes it hard to know what they will need from PSOs. One attendee said that many businesses had been avoiding downsizing because of concerns that demand would suddenly return, and a tight labour market means they would not be able to recruit to meet it. However, that strategy is stretching their resources.
Attendees said that it is vital for PSOs to be able to demonstrate the value they are bringing. Too often, clients bring in PSOs without a clear idea of what they are buying or even what problem they are trying to solve. They are sometimes disappointed to find that junior staff are running their project day-to-day, with supervision from senior staff. They often expect more time from senior staff, a misunderstanding that could be avoided with clear communication from the beginning. The ability to benchmark and demonstrate service quality is becoming essential – but how to do this isn’t always obvious.
Balancing short and long-term needs
For PSOs, it is often hard to focus on delivering for clients because they are overwhelmed with other tasks. Modern communication technology is, as one attendee put it, more like interruption technology. People are always-on, but distracted by trivial tasks, with little time to deliver on what’s important. This is one area where technology can help but only if it’s the right technology, deployed with a clear purpose. For some attendees, productivity technology is part of the problem.
Uncertainty creeps into decision-making too. One attendee suggested that in times of uncertainty, layers of corporate governance mean decision making is routed through and distilled in committees. This tends to lead to watered-down decision-making and a lack of individual accountability.
The theme of balancing short and long-term concerns recurred throughout the briefing. Attendees warned that many companies cut costs, shedding expertise and then turn to PSOs to provide short-term support. Over the long term these firms are losing the institutional knowledge that keeps them competitive.
Relationships are everything
Cost concerns are also changing the financial outlook for PSOs, attendees said. Where it was once the norm for most clients to be paying a retainer, several attendees said they were now much more likely to be paid on a project basis. This too has long-term implications because PSOs that work with clients on retainer become much more attuned to the clients’ strategy. Involvement that is more piecemeal does not provide the same type of connection.
Relationships are everything, attendees emphasized. That means building trust, for example by being honest about failures. Attendees said they were more likely to win the respect of clients if they were open about times when things had gone wrong or if they admitted when they didn’t have an answer. Clients don’t respect consultants who act as if they know everything, but they will trust someone who admits when they don’t know and endeavours to find an answer.
Striking a balance between technology and relationships will be key for PSOs. Retaining talent, embracing face-to-face communication, and leveraging technology effectively are essential steps towards resilience in the face of uncertainty.
Ready to learn more?
To discover how you can address the challenges discussed in this session – and in this report – check out here.
