Helping a couple of friends recently who are in the process of moving from one firm to another reminded me how passionately I feel about the subject of partner business plans.
True, it’s not the sort of subject which is likely to provoke lively debate at a dinner party (more like make sure you’re never invited again), but if everyone has one, trainspotterish obsession, then I guess that is probably mine.
I have waxed lyrical in the past about partner business plans – and will do again in a forthcoming publication from Ark, due out shortly, along with accompanying ‘Masterclass’ (link here: http://www.ark-group.com/mp_introduction.asp?ac=1092&nc=1&fc=167) – mainly because most of them are pretty woeful in first draft, and it simply boggles my mind that a group of highly intelligent people who are dependent on the commercial expression of their talent for their livelihoods find them difficult, confusing and downright painful to put together, often baulking completely.
The solution would seem to be to use a template, but my experience is that templates rarely allow or invite expression of what the plan is supposed to find out. Rather, they serve as a nice grid for the partner (or, often, their recruiter) to pour in figures relating to client income and chargeout rates, tweaking it here and there to make sure all the totals come out gratifyingly fit-for-purpose.
It may surprise some people – though not the hardy veterans of partner recruitment – that most sensible firms immediately discount the figures on a recruiter-submitted cv or business plan by 40%-50%, IBM-style (IBM’s standard business planning procedure being to halve the projected revenue and double the costs, and if it still made sense, to go ahead). Most recruiters know this, so the whole task becomes an elaborate game of smoke-and-mirrors designed to get the lateral ‘across the line’.
Often, the co-operative business plans concocted by a department in concert with the incoming lateral in order to convince management boards are, one HR professional wryly noted to me, “retrofitted”, working backwards from the figure they know will swing the appointment to the nuts-and-bolts, just in case anyone bothers to start drilling down.
Ultimately, firms still make their mind up on gut-feel. The best business plan in the world will not convince if the fit is not right, and many a sub-standard yet charming partner has been taken on in a conspiracy of optimism, as most firms know to their cost. But I do believe that poor business planning is responsible for a significant proportion of partner lateral hire ‘fails’ (see blogs, passim, or contact me for summary results of my research in pdf format).
I am convinced it can be done better, but it can only be done better when firms start taking their own, internal business plans more seriously and stop working backwards from a desired increase in turnover across the firm to a deemed-necessary, budget-approved increase in headcount which will fix all ills, with little real consideration of whether there is a market for what will be on offer, what the competition is doing, the relevant price-points and the depth of the recruitment ‘pools’ necessary to meet the planned hiring programme.
The template seems to me to be ‘dumbing down’ the business plan process and treating partners primarily as cash-generating machines. While this is fine for the firm – especially for calculation of remuneration – it is sometimes little use to a partner lacking even the basic tools to help them understand how to maximise their business, and, further, accents the partner’s individuality as a business unit and, ultimately, their disposability when the machine stops running at peak efficiency.
The template is, or was, a US introduction into the market, but seems to be being taken up by more and more UK firms too as US influence in the market grows. I may end up becoming a lone voice in the wilderness, but I would urge firms to think twice about introducing them as the sole manner of expression of a partner’s business case, whether internal or laterally-hired. I think you’ll find you lose something along the way.