Vision, Values, and Culture The anchor and core of every successful firm
“For a professional service firm, vision, values, and culture are really 99 percent of the equation.” Damien O’Brien, CEO, Egon Zehnder
In a profession that sells a promise of performance versus a tangible product or service, a firm’s vision, values, and culture lie at the heart of that promise. Vision is where the firm is headed. Values are the behaviors the firm holds important, and culture is the feel, the energy, the society within the organization. Collectively, they form the core around which the business is built. The most successful professional service firms treat this interconnected trio as strategic assets and powerful growth drivers. Who you are and what you value and seek to preserve as an organization affects every aspect of your firm’s performance and growth: how your firm is structured; how it governs and shares profits; how it recruits, trains, and manages people; and, ultimately, how it positions and brands itself in the marketplace.
Each firm that I’ve belonged to or consulted for has had a distinct look and feel, personality, and work ethic — its own signature style and organizational DNA. And like the interwoven strands of DNA, each organization has been shaped by a myriad of factors: internally by its history, the type of people it hires, and how it acculturates them, and externally by how it interacts with clients and the markets it serves. Taken together, all these factors create a unique and potent mix or, as one managing partner described it, “that secret sauce that defines the firm.”
Interestingly, although all organizations have distinct DNA, the over 100 professional service firms that we researched for my book, The Art of Managing Professional Services, have amazingly similar core values — even to the point of using the exact same words on their value statements. The top values mentioned — integrity, collaboration, client focus, professionalism, and respect — speak to a collective passion for and dedication to their respective professions, colleagues, and clients. Achieving a high degree of professionalism, quality, and excellence in their work is the primary motivator for most professionals.
It’s easy to say that collaboration and teamwork are important, but it’s quite another thing to truly live by and enforce these values. The ability to embed and preserve values over time is one of the distinguishing characteristics of a successful firm. During our interviews, we found that leading firms share common qualities when it comes to reinforcing their values and expectations:
Commit the time and resources to identifying core principles and drivers
"If you don't get this stuff right, you might as well forget the rest of it. You are going to be just another organization." Anonymous
In a nutshell, successful firms have clearly defined visions, well-articulated values, and shared ways of behaving that bind their professionals across geographies and disciplines. Such clarity is no accident, but the product of commitment at all levels. Agreeing on vision and values is a highly collaborative, inclusive process; all partners typically weigh in. Vision and values are periodically reviewed and updated to reflect changes in firm dynamics and to reinvigorate the firm’s commitment to its direction and ethos.
Align strategy with vision and values
In the top firms, all major decisions around structure, governance, compensation, talent, services, and clients are aligned with the firm’s vision and values. Strategic planning — both long-term and annual — is viewed as the execution tool that drives the firm toward its vision and aspirational goals. The close linkage among vision, values, and strategic planning ensures that the firm “walks the talk” and remains true to its core principles, however they are defined — even under enormous external pressure.
Ensure that expansion doesn’t destroy or dilute values and culture
As firms grow larger and more globally complex, core values and culture can be put at risk. Organic growth, mergers and acquisitions, new service offerings, and surges in staff size can all test a firm’s organizational resiliency and affect its behavioral norms and day-to-day operating environment. The best firms ensure that expansion has a positive rather than negative impact on core drivers. They use teaming, training, and mentoring to infuse cultural norms and values, promote consistent client service standards, and embed their core principles and behavioral expectations throughout the firm (see Teaming at Cravath for an example of the power of teams).
Cultivate and reinforce their culture
"Many people think of culture as a soft thing. I see it as a very hard, strategic asset." Anonymous
Savvy firms spend impressive amounts of time, money, and resources embedding their values and reinforcing their cultures using a variety of channels, tools, policies, and procedures. It is a constant, repetitive process to inculcate the values and culture — “the water dripping on stone approach,” as one managing partner put it. The instilling process typically begins with recruiting and is reaffirmed formally and informally through orientation and ongoing training, teaming, meetings and events, and prolific communications. Adherence to values and culture is often publicly rewarded and celebrated, while failure to follow the rules is critiqued and punished. And yes, some firms do have their values emblazoned on cubes and walls and “in thirty to forty languages on our screensavers.” But for most, such public displays are just the beginning. It’s not about showcasing core values and culture. It’s about making them work.
Teaming at Cravath
Two-hundred-year-old New York based law firm Cravath, Swaine & Moore has consistently ranked as one of the most prestigious U.S. law firms on Vault’s Annual Top 100 Law Firms list. According to Presiding Partner Evan Chesler, Cravath’s values have remained solidly intact throughout the firm’s history. Chesler, who started with the firm as a summer associate in 1974, says the culture and values of the organization have been passed from attorney to attorney over the years through a philosophy of “learning by living and doing.”
New recruits are absorbed into the environment by a process referred to as the Cravath System. The system is designed to provide a training ground for attorneys to develop substantive technical and client relationship skills and become immersed in the firm’s values and traditions by doing hands on work on client engagement teams. “As a young lawyer”, Chesler explains, “I learned how to do things the right way, and I mean right in the sense of doing the right thing ethically and morally as a lawyer, by working closely with and for people dedicated to the firm’s principles.”
All associates of the firm are organized into teams led by a partner. When a new associate joins the firm, they choose to participate in one of four departments: corporate, litigation, tax and trusts and estates. Within the selected department, each associate is assigned to work with a partner or small group of partners. After an appropriate interval — 12 to 18 months — the associate rotates to work with a different team and partner. Associates continue to rotate throughout their tenure so that by the time they are eligible for partner they are immersed in all facets of the department’s practice.
The teams are small — usually from three to twelve people depending on the matter — and are typically composed of a mix of seniority levels from peers to senior partners. The close knit, fast-paced team environment provides a day-to-day indoctrination into the firm’s values and ethics for conducting business. As Chesler explains, “You're all working in close quarters and you're dealing with situations that put the values under a spotlight — for example, what do you do about sharing the work responsibility but not taking credit for the work of others? What do you do about telling people the truth even when the truth hurts? Those are part of the value system that drives this place.”
The teams provide the structure through which the firm conducts performance evaluations and ultimately selects new partners. To encourage and support their professional development, Cravath associates receive formal reviews from the partners with whom they work, typically at the midpoint and conclusion of their rotations, as well as real time feedback provided on a regular basis.
In addition to providing apprenticeship-based training in its team settings, the Cravath System incorporates a formal classroom-driven program taught exclusively by the firm’s partners. As Chesler sums up, “The whole infrastructure of the way we train our people, the way we socialize them with the values of the institution, the way we evaluate their performance and ultimately select the partners who join us is all centered on the Cravath System.”
Monitor and measure adherence to values and cultural drivers
“We place a lot of weight on shaping, nurturing, and enforcing our values and culture.” Bob Dell, Chairman and Managing Partner, Latham & Watkins
In successful firms, adherence to values is firmly rooted and rewarded; failure to embrace them can lead to expulsion. Performance criteria clearly establish expectations around values, and professionals are evaluated and compensated based on performance against goals.
Most successful professional service firms continue to embody the spirit of their original founders. However, the world does change, and many firms periodically review and fine-tune their vision, values, and culture. The goal is to ensure that their core principles and operating style continue to reflect both the evolution of their partnerships and changing client needs.
Such renewal initiatives usually are driven by some inflection point within the firm or a disruption or change in the competitive landscape or in the marketplace. Traditional ways of working may become obsolete, and significant changes to governance, services, and culture are required to ensure continued viability. Intense mergers and acquisitions activity over a prolonged period may result in cultural misalignments that require radical adjustment. Or, as frequently happens, growth surges and the drive to globalize may strain and dilute a firm’s existing culture.
Whatever the trigger, the process that firms undertake to revisit their fundamentals is typically intense, involving the entire firm and an enormous amount of management time. Collaboration and consensus are important components, and many leaders agree that the process of coming together to establish or reaffirm the vision and values is often as important as the result. It is an opportunity to unite and focus the organization on a common path.
Although each firm has its own signature operating style, an initiative to revisit a firm’s core values and path typically includes five major components:
- Solicit feedback from the partnership and clients
- Envision how you want the firm to be
- Scope the changes required to achieve the vision
- Map an action strategy
- Promote buy-in
Culture change is rooted in changes in behavior. To encourage the new behaviors you want, be sure that your rewards-and-recognition system reinforces them at all levels. Reassuring everyone that their contributions count invites them to think of themselves as creative change agents who matter. Treat change as the key to thriving and heightening performance — and as a journey rather than a destination.
About the Author
Maureen Broderick is founder and CEO of Broderick & Company (www.broderickco.com), a consulting firm specializing in strategy, research, and training for professional services. The Art of Managing Professional Services (www.theartofmanagingprofessionalservices.com) was published in November 2010 by Wharton School Publishing.
President & CEO of Broderick & Company