Leading Professional Service Firms
Course Number 1770
Professor of Management Practice Robert G. Eccles
Winter; Q3Q4; 3 credits
In this course, students discover what it takes to be an effective and successful professional, leading up to crafting a personal plan to kick-start your career. This year the course is focused on a topic that most people have relatively little exposure to in their professional career: business development. Firms typically have little information on how well a person will do in business development when they are promoted to partner (or the equivalent level). Yet managing the firm's largest and most important clients and, even more challenging, developing new ones is one of the primary things partners are expected to do. Having the requisite technical skills to deliver high quality work is a necessary but not sufficient condition for success at this stage of a person's career. This course will introduce students to some of the key success factors for successful business development at the level of both the firm itself and the individual professional. While the focus will be from the perspective of the professional service firm, we will also do so from the client's perspective as well. This course covers most professional service businesses that hire HBS students, including management consulting, law, investment banking, private equity, accounting, public relations, asset management/hedge funds, and executive recruiting. Designed primarily for those who want either to join a professional firm or to work as an in-house professional for a corporate or non-profit organization, this course will also benefit entrepreneurs who consider starting up a professional firm and managers in the client role who expect to hire professionals. The course will be a combination of cases, lectures, outside guests (from both professional service firms and companies who hire them), and a major project on business development.
Professional service firms continue to play an increasingly important role in the world economy, yet today are facing unprecedented strategic, operational, and leadership challenges. Clients are becoming more sophisticated buyers of professional services based on years of experience in doing so. Most large companies have also hired people from their professional service providers, like law and consulting firms. They know what activities create value for money and which ones do not. A further challenge is new "alternative business models," such as network-based firms leveraging information technology. All of these trends are putting pressure on the traditional pyramid of rates and hours business model used by most professional service firms today. As a result, truly understanding and meeting a client's needs on favorable economic terms to both the firm and the client is becoming more challenging. Business development skills, including marketing and selling (a term professional service firms are loathe to use) are becoming increasingly important. At the same time, professionals need to maintain their objectivity, independence, and ability to become a "trusted advisor" to the client. This course will explore current trends in the professional services environment, how firms are responding to them from a business development perspective, and what are the skills and how to develop them for being an effective professional at business development.
Course Content and Organization
This course is divided into four modules. The first covers basic concepts for managing professional service firms and some important current trends: setting strategy, alignment, building capabilities, and alternative business models. The second module examines business development issues from the perspective of the individual professional including developing a new client relationship, managing large and complex clients, balancing client's expressed wants with what a professional thinks the client really needs. The third module is focused on the structural features of business development including client segmentation, client and project selection, client relationship management programs. The fourth and final module looks at enabling features for business development such as branding, knowledge management, innovation, and collaboration.
The project will be based on a field study, which can be done in person or through telephone interviews, in a professional service firm where the student identifies a major business development challenge faced by the firm and how it addressed this challenge or one currently facing the firm where the student will make recommendations on what should be done. For students who have already chosen their job, this will be an excellent opportunity to learn more about their employer and to signal their interest in a topic that is vitally important to their long-term career prospects at the firm. The instructor also has a number of relationships with professional service firms to help students find project sites if necessary. Learning more about business development early in one's career will also enable the student to be more effective in the early stages so that they largely technical work they are doing will be put in a broader context and made more meaningful to the client.