Enrollment: Limited to 45 students per section

EDUCATIONAL OBJECTIVES

Professionals employ judgment to offer valued services to their clients. Professional Service Firms (PSFs) include strategy consulting, investment banking, asset management, legal services, IT consulting, and communications firms, as well as architectural practices, academic institutions, and public service organizations.

This course focuses on success drivers for PSFs and the professionals working in them. Owing to their distinguishing characteristics—their outputs are valued services that draw upon expertise, and their strategic assets are their professionals and their clients—PSFs’ success drivers differ from those in typical commercial and industrial firms. Because of their shared characteristics, PSF success drivers are similar across professions. Thus, understanding of a particular PSF is deepened by studying PSFs across professions.

Through studying the elements essential for organizational and personal success, the course will help you understand what it takes to be member of a thriving PSF and an effective professional. It is meant to be particularly useful if you are contemplating (a) working in an established PSF (along with roughly one-third of the graduating class); (b) setting up or joining a start-up or an early-stage firm that has features of professional service; or (c) working as a professional in a commercial firm, public enterprise, or the government.

COURSE CONTENT AND ORGANIZATION

Course Structure

The course is organized in seven modules: (1) service market strategy; (2) capital market strategy; (3) corporate and organizational strategy; (4) talent strategy; (5) strategy implementation, leadership, and culture; (6) professionalism; and (7) strategy for professional and personal success.

In the first module on service market strategy, we discuss the segmentation of professional practices, the drivers of economic success in a professional practice, and the importance of aligning the organization with the practice’s positioning. We also study some of the keys to delivering excellent client service. We also study the prospects and challenges of establishing an entrepreneurial PSF—identifying and leveraging market opportunity, building momentum, leveraging technology, and managing growth. Representative cases: entrepreneurial start-up Moksha; global edtech firm Emeritus; hernia hospital Shouldice; and consulting firm International Profit Associates.

The second module on capital market strategy focuses on aligning ownership goals with service market objectives. We discuss the pros and cons of private versus public ownership, how to value targets when considering PSF acquisitions, post-merger integration considerations in PSFs, and transactions that can potentially unlock value within the context of PSFs. Representative cases: Goldman Sachs IPO; Cap Gemini’s acquisition of EY Consulting; and the Finsbury Glover Hering merger transaction.

In the third module on corporate strategy, we examine the tradeoffs in expanding the scope of a PSF—by introducing a new service line, or through geographic expansion, or by introducing products. We also explore the challenge of managing a multi-practice PSF. Representative cases: Egon Zehnder’s expansion beyond executive search; Zinnov’s employing its consulting practice to spin off product businesses; and the internal tensions within Arthur Andersen that led to an arbitration between its divisions.

The fourth module on talent strategy emphasizes the centrality of aligning a PSF’s talent strategy with its service market strategy. In this module, we focus on two processes critical to how PSFs manage their talent: partner promotion and partner compensation. Besides, we discuss what leads professionals to excel, suggesting ways in which PSFs can motivate and develop their professionals. We also study how PSFs leverage their star professionals. Representative cases: partner promotion at Bain & Company; partner compensation in Brainard Bennis Farrell; and leveraging stars in Ecolab.

The fifth module on strategy implementation emphasizes the role of leadership and culture in ensuring that a PSF effects its desired strategy. The module focuses on nurturing a high-performance PS team, leading change in a PSF, collaborating effectively, as well as ensuring organizational resilience in the face of external challenges. Representative cases: Lehman Brothers Equity Research; Linklater’s Clear Blue Water initiative; and video cases on a friendly fire incident in the U.S. military, and response to terror attack by staff of the Taj Mahal Hotel.

The sixth module on professionalism identifies the distinguishing characteristics of professional service, and the consequent responsibilities and rights of professionals and PSFs. We discuss why professionals are held to specific standards of conduct, and the implications of these standards on competition and industry structure in the professions, as well as the role of professional associations. Representative cases: KPMG’s dispute with Prince Jefri of Brunei; the challenge faced by Hewlett Packard’s general counsel and board in relation to an issue with their CEO; and opportunities and challenges facing the International Chamber of Commerce Court of Arbitration.

The seventh module on strategy for professional and personal success takes the individual as the unit of analysis. We discuss starting out with positive momentum in PSFs. We also explore considerations that lead professionals over the arc of their careers to experience a sense of professional success and personal fulfilment. Representative sessions: panel discussion with professionals; demands faced by a young professional David Lee; and considerations in the minds of MBA graduates on how to approach their first few months in a PSF.

The course follows an outside-in and broad-to-narrow learning trajectory. We begin by studying how a PSF can succeed within the context of its service environment.

Next, we focus on capital market considerations of ownership and governance. Thereafter, we study the scope of the firm and its internal organization. We proceed to study how to develop and leverage professionals effectively. We investigate the sources of professional responsibilities and how professionals and their firms and associations address societal expectations. Finally, we ask how individuals can succeed as professionals.

Approach of the Course

The course employs a combination of: inductive learning through PSF case studies; deepening the learning by comparing and contrasting across multiple PSF cases, adding insights gleaned from reflections of case protagonists and experts; and relating the case-based observations to research findings and concepts related to professional services.

Our primary learning tool is the case study method. We will discuss a mix of cases—some examining the current challenges facing PSFs, others focusing on landmark events that have influenced particular professions significantly, and yet others that look at classic themes that have stood the test of time. Many of the case studies take a longitudinal perspective, following professionals and their enterprises over extended periods of time. Thus, we have the opportunity not only to determine the sources of performance at any given time, but also to identify the capabilities and processes that sustain success over time and to learn how PSFs respond to change.

The cases are situated in different professional service settings: management consulting, financial services, accounting, law, medicine, academics, and government. We will study established industry leaders as well as entrepreneurial PSFs. Case protagonists will attend several of the class sessions and engage in the discussion and reflection process.

We will also utilize other learning tools besides printed cases. In one of the sessions, we will have a panel discussion in which professionals will share their experiences and perspectives. Some sessions will include lectures on concepts of relevance to PSFs and professionals. In some sessions, we will employ video cases to discuss topics of relevance and importance.

Our class size affords us the opportunity to conduct the sessions more as seminars and workshops than as traditional large case-based classes. Thus, we will discuss salient aspects of case studies, but will also go beyond the specifics of the focal cases to discuss concepts as well as similarities and counterpoints with other examples.

Course Administration
Course grades are determined by two elements: class participation (50%) and a final paper (50%). The paper can be developed together by a team of two or three students (although, a student writing the paper by themselves on a topic of specific interest to them would also be welcome).

Writing the paper will help you practice a valued skill in a PSF: how to develop a persuasive and cogent written analysis on a particular topic. It also offers you an opportunity to understand in-depth a particular profession or PSF, or explore intensively an entrepreneurial idea in professional services, or contribute meaningfully to course development.

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