How boards make better decisions: Data
In Today’s Q&A on Research.Reveal. George Beaton talks with Tony Crawford, business and professional services leader extraordinaire [1] about his views on how data is used to inform Board decisions.
This is part of an on-going series exploring how professional services firms are future-proofing and innovating their firms.
Tony, in light of your experience as both a chairman and CEO of major professional services firms, let’s talk about how you use information and intelligence to inform Board discourse and decisions.
Q: To what extent do you subscribe to the view put by many that a good Board has its nose in, and its hands off the business?
A: This is a great expression of the balance an effective Board needs to achieve. Mind you, it’s not always easy in a professional services environment. Unlike most other corporate structures, partnership-based firms face the unique circumstance where Board members can wear as many as four hats at the one time, namely business owner/shareholder, producer/fee-earner, manager/team leader, and elected executive director.
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Q: The well-known balanced scorecard of metrics on financials, customers, learning & growth, and internal business processes typically provides a Board with facts to inform its deliberations and decisions. Is any one of these perspectives more important than the others?
A: They are all important and while the weighting a Board may give to each may vary, depending on where the firm’s strategic priorities are at the time, I am a strong believer that an organisation’s intangible assets, e.g. human capital, information capital and capacity for change, are the most important source of sustainable value creation for professional services firms.
Financial data is easy to collect and report, but how do you view the validity and reliability of the data you get on the other three perspectives? The most reliable data with respect to the first two (clients and people) comes from independent sources which in my experience as a chairman are best accessed on a periodic basis, approximately every two years. These are supplemented with data from internal surveys conducted annually. Reasonable consistency between the two underpins confidence in the integrity of approach which, I am pleased to say, has been my experience for several years now.
The answer with respect to internal business processes is a more complex question because it usually involves an internal environment that is changing very quickly, underpinned by significant cultural change and technological innovation. One of the firms I have chaired is in the process of substantial upgrade of its technology, including CRM, practice management and financial management systems. The people are now connecting through Skype for Business, a new sales system, and a new document management system – iManage. While this ‘digital first’ approach has been led from the top there has been huge bottom-up input to ensure these changes are properly embedded in the workplace culture.
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Q: Reflecting on your time as a chair, what stands out for you as a market or client insight?
A: In addition to my earlier comments on the importance of developing a firm’s so-called intangible assets, a major component of strategy has been to position the firm as the growth advisor to mid-size business by 2020. Pleasingly, three years in, there has been significant progress in achieving this ambition. Brand awareness has risen significantly in the mid-sized business segment and is now comparable to that of its top-tier competitors and this has put some distance between the firm’s mid-tier competitors. Also, the past year has seen the firm’s consideration rise by over 33%! This progress would not have been possible without a relentless focus on implementation and is something of which the whole Firm can be proud.
[1] Tony’s C-suite and Board experience includes Chairman of Grant Thornton Australia, CEO of DLA Phillips Fox, Chairman of HBF Health, Chairman of Heart Research Australia, and President of one his passions – Northern Suburbs Rugby Football Club
In coming months Today’s Q&A on Research.Reveal. will feature the views of other prominent thought-leaders from a cross-section of professional services firms. Each will be asked to explore their views in areas of strategic interest. This month we focus on how they are future-proofing their firms and engaging in innovation.