well good afternoon and welcome back again for being so prompt and coming back apparently we’ve been trying to round people up from downstairs to fill a couple of seats that were vacated but there seems to be a lovely cabal and a party goin down down below so hello all of you downstairs we understand you’re having a great time down there you can’t actually relax and kind of just hang out and listen to great great talks but those of you up here on the other hand you have work to do now this afternoon we have two presentations Richard Chaplin is going to be chatting first and I’m afraid that I have an apology to make there was a little snippet that Richard had provided and somehow in the various twos and froze it was excised from your agenda so the only reason that firms exist is to serve clients which is followed by David maesters insight that the essence of professionalism is to look after your clients even if that means recommending a competitor the biggest peril and professionalism is allowing a narrow regulatory standards and ethics based definition to supplant a client-focused definition and why aren’t particularly interested in having Richard here not just that I know him and like him but richard has conducted a lot of deep research into this and I think it’s important that from time to time you can get yourself a little bit buried and you know is it all about ethics and morals and values but real people have to manage real firms full of real professionals how do they go about it and what makes them successful and what makes them fail you know on the days when they’re not attending an ethics lecture aggression so over to Richard Richard I’m going to start with giving you two definitions of professionalism and I think to be honest all i really wanted the message i really want to leave with you is definitions are absolutely critical because a lot of what we’ve been talking about i believe this morning is the same word being used slightly differently by different people to mean broadly the same thing so i’m going to talk a little bit about what I might call a narrow definition and also a client-facing definition so the first word is through it ethical and I explore this a bit later and the word I’m looking at is more around inclusive I’m also doing the same between opaque and transparency between expertise and collaborative and I don’t know where the arrows went hey that’s all good let’s talk a little bit by inclusive institutions there’s a great book which i would thoroughly recommend everybody here it’s called why nations fail now if you called it why organizations succeed you would have sold a million copies as it was it’s still a top 10 best seller in the Washington Post and it’s written by a Harvard professor and what do you think she went back to the Americas about 500 years ago and he said no what any observer looking at the Americas 500 years ago would have said was that there are the bit in the middle which has got no need for central heating had an established civilization had roads welfare state human sacrifice not so good was likely to be more successful economically than the bit above which was essentially prairies with nomads and a bit below which was after bear jungle some pompous now it didn’t quite pan out that way as many of you know now what actually happened he said there’s certain characteristics that there’s a lot of power sharing which takes place in the US of A which you don’t see in the bit of the middle there’s a lot of creative tension in other words that people always competing but the same time they don’t actually chop the tree down they all shelter under it’s a very entrepreneurial culture and as a strong legal framework and what do you can trust he said it was quite interesting so what happened was that when the Spanish went in and I’m married to a lady from South America so i betray my interests you but when the Spanish went in they use the word conquistador you don’t need to be Spanish to able to understand what that word means and the basic rule was right rule one find the King rule to kidnap them rule 3 ransom them Ruth for put the native down the mine rule 5 wave bye-bye to the treasure ships going back to Spain drinking a pina colada and rule 6 hope you’re on the next ship with your wealth already is established ok now that leads to the frontier in Brazil being how many politicians do I need to grease the palm in order to exploit the rainforest whereas America is a bit different because when the Virginia Company went in the set list and they called settlers not conquistadors subtle difference key words again they actually spent the whole summer looking for the king didn’t find one nomads don’t have kings so it

happens two-thirds of the set the die of starvation first winter because they hadn’t planted anything not good they’ve tried this man they tried the Spanish approach level whatever it was right shoot the settlers if you fraternize gender-balanced didn’t help and it didn’t actually encourage new settlers so what the only that was then Heaven’s Gate the 50 acres of the mule everything you read about the American frontier now what’s interesting to me is that I’ve talked about it to James Robinson who’s the author is the extent to which those characteristics reflect the successful professional phone constantly vol got the regional barons have all got the partners who want to do whatever they want to do they compete like hell against each other they actually tend not they do salute the flag they tend not to exploit really want to destroy a few G birth for those you know the sector very entrepreneurial and they have a framework except in their world the framework is one of ethics and I would argue quite strongly that the primary role of ethics is to bind the partners together in a context of trust as a result of which the professions are let’s not forget the largest most successful most profitable and fastest growing sector in this country in America and a lot of other places and it’s about the only sector in which China we’ve had a bit today India Australia Germany are nowhere bigfork rule the roost big accounts big law firms the same big engineers so the anglo-saxon those characteristics I think what drive it and that’s around the word inclusiveness use of the word that James used okay so that’s one thought let’s look here now a little bit about what’s coming out of the financial services industry this is kind of what people have been seeing the pagan fearful culture you can read the rest it’s just not been this for the last five six years been not a good place what could have happened if you’ve been a transparent and confident culture greater integration long-term return that would resurrect those things that this is I’m involved in a group that’s trying to actually bring some changes there so that takes you back to the value of transparency and then collaboration which is the third one I productive you recall and and this is kind of the way I see professional firms working i’m really talking as Michael mentioned around the people who are running the major professional firms you start off in an uncertain world you’ve got to be commercial you’ve got to add value you’ve got to be a consistent client and the clients know that that can only happen with management intervention otherwise you get spiky things you’ve got some great things and you’ve got some ones you’d rather not talk about which is the thing that you remember in the day when things go wrong you got it the one that went wrong not the 99 that went right the paving stone you stood on that went like that not the 5000 you spoke on it didn’t so you’ve got that situation what if that lead you to well that leads you to instructions which quite frankly takes you to the thought the only reason the professional firms exist is to serve clients now that may be what we heard that I think is quite strong top-line growth is the key to prosperity what Martin Sorrell has to say I love this one the best way to improve collaboration is still in two very clever lawyers that without a client they have nothing that came from the global CEO of a big law firm so I’m going to take you quite quickly through a way that the management might go about addressing these really quite difficult pressures that are on the managing these organizations of multiple sizes and I think there are some parallels with the health sector and others which employ professional people as overheads not that you ever call a professional person overhead that’s the way they see and I think often internally within those organizations the first thing is if you’re trying to any strategy in life you’ve got to have some sort of insight some sort of diagnosis something that drives you to be different and the one that we’ve found is that when selecting the visor most clients view the impression of being a well-managed firm as an essential precondition anybody working in a professional formal notice the word partner is absent from that sentence so either partners don’t like it but we’ve got some quite interesting evidence to suggest that there are good reasons why it’s true because when we work with natural time to talk to several hundred clients topline saying to an extent is this true essential precondition answer fifty two percent or so yes and the advisors CEOs thought it’s a bit less than that so they came in about 40 s a bit of a gap there we also need a guiding policy and again I think this the way we see it is that unless your people believe they’re working for a while managed firm nothing changes for that beliefs comes from here if they think that it’s all something the management’s come up with and those take any notice off you get nowhere so you’ve risked you’ve got it how do you inspire that belief okay well this is the sort of challenge that our members are up to and this is some research we did with Harvard and AMD we look we talked to for 500 people and we said it came without being asked to what extent would you speak highly about your firm’s leadership collaboration and long-term strategy and the bit in the middle called c-suite members they aren’t responsible for it so only about a third of the Marines tuition you posted about what they’re doing to be positive and when it comes to the next level down

directors then the numbers are getting really quite low that’s not a good place to be because you can’t in my mind expect people to believe in what you’re doing if only that percentage of people that positive in terms of going out without being asked described powerful test so what we did we thought okay let’s talk to it about circles today let’s go around a circle let’s try and understand the challenges facing the management the people who are trying to organize his organization so what’s the role of the board well they’re other boards basically as I see it find out what the hell’s going on it’s against the French what’s happening in the future most strategic plans seem to go back three years out and then stop and think about what strategy and agenda might you be seen to be a well-managed firm well let’s see how they’re doing on that one so here’s some ft research this one we ask the clients to say okay this clan CEOs to what extent do you believe that the managing partners the bosses if you like at the firm’s that you’re instructing are doing the right thing and how do you do it and how well they’re doing it well the first set such kind of indicates that they’re not necessarily priorities not set in the same place now what what the situation that merged those as we saw it these are things for which management is primarily responsible okay on the left of the rose and we would hope that the blues and the Greens line up because that means that the managing partners the ones are responsible and the clients who are having it the delivery done to them or in the same place they’re not what they really saying is management don’t spend quite so much time on brand reputation and mystique and do spend a bit more time on the bits you find boring the operational stuff like measuring performance client satisfaction investing in tech and systems and on top of that move over to the right excellence that’s about the only criteria that’s worth going with these days in the current climate to what extent do the managing partners think they’re doing a good job on those things well two of them shaping internal attitudes and defining the vision they’re up in the you know once I think they’re brilliant when you ask the client CEO for their main advisor to what extent of these is the boss doing a good job sorry very very low numbers and in fact our tech guru love it because they come in at second than when as a CEO ever listen to a tech director never so let’s talk that’s the board’s role so they’ve got to think about research in the position and set the agenda and strategy that’s going to be distilled you then going to say okay how does the leader distill that strategy into a set of vision and values that actually resonate with the key audiences and given that most of them are probably elected thanks to having excellent time which came out a few days ago that leadership capabilities are probably a bit limited so they better improve on those so again this is a this was I think the Harvard researcher we looked here about okay how effective are these people as leaders we did self-assessment so we asked be pubs if to say how good are you at leadership we asked them firstly what are the most important things within leadership those are the rose 1 2 3 and not surprisingly most people in self-assessment thought they were pretty good they didn’t disagree with the assessment they were effective four percent three percent quite small numbers however when it came to my boss the numbers got a bit bigger so obviously leaders haven’t really got that one completely sussed yet we also said well actually clients quite like a direct relationship CEO to see you because often the partners can get a bit narrow in their focus especially if they go through factories so maybe the CEO can come along up and say for that and if they helicopter view so how well is that doing well again not too good because what we’re finding here is that the things that the clients want to talk about which is all around regulatory and sector-specific and how’s it going external stuff touching me whereas the managing partners want to come in and talk about internal stuff about France satisfaction and business development opportunities it has had can you spend more money with me doesn’t really work so you’ve got a gap there which again is something that i think you know you’ve you’re going for a conversation and then you end up talking about the wrong agenda you’ll get them outcome a sickly it’s pretty straightforward for that one isn’t working very well then come into team team leader and this is where they probably one of the worst gaps emerges I call them unprofessional behavior from allure to use that term and this is around the role model because what they said is that the thing that is most important far right ceived importance of collaboration the number one item out of the nine capabilities that Harvard come up with is that you are a role model as the leader of your group and it’s pretty hard for a leadership as well now when you do the self-assessment is the thing that people think they are the best at and when they assess their boss it’s the thing they are worse that now the sting in the tail of this one is that actually the demographics of that sample in terms of seniority were pretty much the same across the board it s there’s a lot of delusion going on here people think they’re brilliant at it but the reality is that there but that the people who work for them know better now if you’ve got this sort of beam in your eye a lot of the other stuff we were talking about today might seem difficult to move

because you can’t see the point so that one if we think is a pretty major issue around people really not recognizing that they’re not very good role models up to your people you recall my quick notes about inclusive culture well basically the way that we find it works best is going back to some of the things I think we’ve been said by Roderick you know let’s have some clarity around the strategy collectively where’s the organization going let’s then try and sit down with the partners and it’s almost like Luther and the sort of nail and the door and Wittenberg in other words the leader says the three things i will do are these one two three and then open the conversation reciprocity to the partner so guys what are you going to do because the one thing that I’ve noticed through the years is the thing that really really turns professionals on is when somebody else makes a commitment that they can audit it’s what I call I want to see my client I’m going back next week to see how they’re getting on wonderful they just love it so how do you build that same Conte Conte excuse me conversation internally well the answer is shared commitments reciprocity and then a tracking system so that nobody can take the proverbial now the last one is where most people don’t make you because if somebody feels they’re not going to be that we’re all coming into this honestly using a tumblers use a lot today and making these commitments but then nobody is making sure that everybody who’s made that commitment is being transparent Lee observed you’re not going to get that so there’s a lot of work that can be done there we talked a little bit today about incentives this one I think is probably the worst eighty-seven percent of firm said they need to develop a more commercial skill set if you look at this one called business and commercial issues you’ve got a bat well 30-something being trained in it little bit less being appraised in it and even less being rewarded in it I’m not saying here that money drives everything but I think this is probably taking it to phone the other extreme I think basically what the message is coming through from this is the f2 so they say yeah actually this if you want some behavior change then you’d at least some alignment that’s just too far adrift and then lastly maybe in terms of running around deliver your clients to light your clients through messaging pretty important that living the values and that’s really about being commercial it’s about saying we don’t really want you to stand your sweets your comfort zone it being current technical that’s not really very good value for our business we want you to be commercial we want you to be thinking into the future ideally we want you to going out to the client with the knowledge of the firm in your head not three three doors down the corridor when you go back to the office so think about the commercial ax t takes all the way around except I set a set agenda be seen as a well-managed firm let’s talk a bit about what that agenda might be and what there’s agendas and their two agendas I think there’s the agenda for the leaders which is some four or five items make sure you actually get some clarity and get some alignment internally over what those girls are collective and personal find daily reasons to praise people have somebody doing something right occasionally it’s quite a good way to do help people really respond to that positively be fairly clear how the messaging hierarchy works someone once said the role of internal comms is to prevent messages getting to the top I sort of think about it’s true understand the personal values of your people and the cultural impact and this one’s run along with just so lovely practice open transparent sharing direct challenging regular intensive to a internal communication that builds trust and the sense of community if you can take that one everybody want to work for you believe me and what about for the people side what are the clients actually saying well align your align your priorities look over the horizon ask them about what’s going on once you get some knowledge share it internally don’t sit on it don’t be a vacuum cleaner make sure that your clients know what you’re up to they don’t always believe me and invest in the training tools diagnostic and frameworks to get you there and lastly MOT wall just remember that the decision take it isn’t necessarily the person you think it is somebody else may actually be holding the purse strings my sort of four or five takeaways just come to the end here so again don’t allow a regulatory expertise and ethics based definition to supplant what I call an inclusive transparent and collaborative client-facing definition nothing changes unless your people believe they’re working for such a firm a lot of what I’ve been talking about is be careful you don’t create a strategic vacuum with otherwise all that your people do are saying right we are doing segmentation we are doing differentiation and we’re doing low-cost all at the same time so let’s throw some jelly at the wall and hope some bit sticks and your poor marketing and calm speed but I just completely you’ve given an impossible job you can’t it’s just not possible Michael Porter said as much 30 years ago so just trying to avoid a little bit clarity what’s needed what’s your contribution you’re more likely to get the outcomes you want as individuals develop your personal leadership capabilities remember the critical importance of role models if you want to get an effective team don’t destroy your culture because the key point of sa the

key function of ethics in moment sustained trust facilitating growth and if you and I think a lot of a natural services sector have done this if you move away from inclusiveness and got babji’s can’t get back there quickly enough at the moment then you run the risk of what the Spanish would call the the frontier how many politicians do n decrease the palm in order to be able to exploit the rainforest not a good place to be and la plante perceptions and reality are usually out of sync we’ll hear from government minute so that messaging is actually quite important if you’re taking your clients on this journey tell them about it don’t expect them to notice because they won’t and for those that are interested that’s worth we’ve that’s really where the quote certain gaps to come from Harvard Financial Times and something we do with all our leaders every year and if you want to know more you’ll find stuff on the piece of paper which is on the desk together with that diagram which I’ve gone through it in about 20 minutes so it was a bit of a tour de force but there was some quite good insights hopefully