October 3, 2007
Your Law Firm Can Have an Above Average Margin
A recent McKinsey research project proves it—measurement alone improves performance!
The November 2007 McKinsey Quarterly reported that their researchers had found that organizations, who effectively measure and report performance, are 2.7 times more likely to have above average financial performance.
Their study was aimed at determining the link between profits and “soft” management issues. Does it pay for management to pursue efforts to achieve “organizational quality”? According to the study the answer is yes and firms that fail to pay attention to these “soft” issues pay a price.
I listed below the nine key areas McKinsey describes as the underpinning for organizational excellence and added an explanatory question for each:
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Accountability: Are people held accountable?
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Capabilities: Do your people have the skills and talents needed given your goals?
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Coordination, control: Are you measuring and reporting key performance metrics
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Direction: Is everyone moving in the same direction— do they understand where the firm is heading and how you are going to get there?
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Environment, values: Is Teamwork fostered by the firm's core values and working environment?
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External orientation: Is constant communication and networking with clients, peers, referrers, etc. a firm wide priority?
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Innovation: Is it a “fix it before it breaks” culture?
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Leadership: Are firm leaders “leading” individuals by encouraging constant improvement at all levels?
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Motivation: Is performance rewarded and is the growth and development of the individual a priority?
According to McKinsey’s message that “companies pay a financial penalty for weak organizational performance…”, it is clearly worth the money in your pocket to pay attention to these nine “soft” performance metrics.
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Filed under Management by Tom Collins
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