Transcript:

Welcome to the PS Insights Podcast Series sponsored by Kimble Applications.  Professional services organizations strive for efficiency, success and growth.  This series is intended to provide key insights on how to achieve this from industry leaders.

Steve:  Hello.  My name is Steve Brooks and today I’m talking to Dom Moorehouse about creating high performance teams.  Dom’s worked in professional services for 17 years.  He founded Moorehouse, a successful consultancy firm growing it over a five year period until its sale for around 20 million in 2008.  He continued to run the firm growing it into a 40 million pound revenue business by the time he left in 2011.  He is now an advisor and non-executive to a number of professional services firms.  From his website dommoorehouse.com he organizes annual retreats for ambitious professional services firm owners and his guides on the topic are also available there.  Hi Dom.

Dom:   Hi.

Steve:  Why are you so interested in high performance teams?

Dom:   Good question.  I’ve always had a background fascination but in recent years that has grown as a function of a couple of things.  So firstly when I wrote the guides you mentioned, it probably took a good part of a year and essentially I put the pen down and I basically got back out into the world again and started working with other businesses.  But at a certain point I called all the readers of the books I’ve written thus far and said when I do eventually find time to write another, what’s the next one?  And the one that came back loudly and clearly was a book I’d talked about writing next which was building high performing teams.

So that was kind of factor one.  As a result of leaving my own business and getting back out and working with many many others – which probably now is getting close to a hundred – something really dawned and me and that is I tend to have conversations with many about the levers of value and how you find value in a professional services firm and therefore how you go about building it and the capabilities that you need to build.  And invariably you are chatting to very intelligent owners and executives of such firms.  And so very quickly that translates into plans and objectives and then it’s kind of where the world bifurcates.  I kind of note that some of those firms immediately get going, immediately start building those capabilities, start building value and others just meander along.  And actually it’s a probably a 20 80 split and unfortunately only 20 per cent in the positive direction.  And it just increasingly dawned on me that the real nub sometimes is not strategy, it’s not the plan, it’s not the positioning in the market as critical as all those things are, it’s have you got the team to actually prosecute your plan and move that forward?  And it just really hit me that for many they just don’t have a reference point on what a high performing team looks like and it really is the success determinate.

It’s always been a background interest but I think in recent years it occurred to me that there’s something that does need unpacking a bit more and hence why I’ve been slowly writing my book on high performing teams.

Steve:  I understand you’ve just completed a degree recently and did a thesis on high performing teams.  What was it on?

Dom:   As background I did a second degree with the Open University recently and it’s funny how it came about.  I didn’t actually set out with the intent of getting a degree, just sort of reading around topics I’m interested in.  Started off in philosophy but ended up in microeconomics and it gave me the ability to maneuver it into that topics because I am interested in that area.  So my final thesis was essentially on what motivates people to work.  I picked up from where existing theory lies but essentially wanted to test the hypothesis I had that it was a lot more about working in high performing teams and maybe conventional theory would tell you.

Steve:  What about wages?  Surely they must be important too.

Dom:   Of course.  Near classical economics would say wages were pretty much it’s all about and all things being equal you pay people more they work harder would be the simple summary.  I think a number of more contemporary behavioral theories would clearly soften that.  So what I was interested in was essentially what’s the relative mix.  Maybe there’s a bit on extrinsic, there’s a bit about wages but I also specifically set out to look at how important was being a member of a high performing team in that instance.

Steve:  If being a member of a high performing team is important to the motivation of employees, was that the sole main factor or were there some others?

Dom:   It’s probably worth taking a step back.  So very quickly what I set out to do was to look at the different components of employee motivation and put in the conventional ones, wages, extrinsic bonus but also looked at intrinsic motivation.  Just how fundamentally motivated as an individual and finally how important is being a member of a high performing team.

Steve:  You’ve mentioned that wages were less important in terms of creating employee motivation and high performing teams are more important.  Where did your research lead you and what were the key factors and what were maybe the factors that people expect to be there but didn’t appear?

Dom:   Yeah that’s a good question.  Actually what it kicked out was that wages had no role to play in explaining employee motivation which clearly would be against conventional theory.  No role at all, no statistical significance whatsoever.  But intrinsic motivation absolutely and also being a member of a high performing team absolutely and by some margin the most significant factor.

And then to be honest I just tinkered with this set of data that I’d been fortunate enough to bring together.  And almost by accident I asked a follow up question which was along the lines of how intellectually stimulating do you find your work?  And when I plugged that one in again I was able to take up the explanatory value of the overall model that I had built.  Essentially it completely kicked out wages, it kicked out the role of extrinsic contingent benefits, bonuses etc and it all came down to those three.  How intrinsically motivated is the individual, to what degree is the work intellectually stimulating and to what degree are they a member of a high performing team.  And that latter one was absolutely key.

Steve:  When you say survey, was this a big survey or just about 50 people?

Dom:   To my tutor’s surprise because he was skeptical I would get enough, it was close to 400 responses which was fantastic.  I managed to push it out on my professional network.  It was both US and UK based.  Certainly way beyond the sort of the statistically significant level.  I would say that with a caveat.  It was very much, although it was my network it was very much a primary sector, it was very much professional services orientated so I don’t know if those findings would translate so easily into other sectors.

Steve:  You mentioned intrinsic motivation; could you expand on that and what should a business leader be looking for in a potential employee to identify what that is?

Dom:   Effectively what it looked at was the two sides of intrinsic motivation both that which is absolutely fixed, completely unmalleable and therefore there’s nothing that an employer can actually do to change it by definition.  And then intrinsic motivation which is a function of being a member of a high performing team which of course a business owner can do everything about determining.  So in relation to the former it is critical and I’m sort of wary of jumping too much into the survey math of this ‘cause clearly building high performing teams is not a function of an equation but proportionality of the intrinsic motivation is contributed in about 30 per cent of employees overall motivation.  What that means and what that says is before you gatekeep anybody into your firm, into your team you have absolutely got to know what kind of intrinsic motivation they have.  And for me that’s about things like really scrutinizing what that person does outside of work I would say first and foremost.  I mean we used to often spend more time talking about what somebody was most proud of achieving outside of their profession.  It used to speak volumes about what kind of individual they are.  I think it would also say to be make probation periods pretty intense.  Fortunately I spent my 20’s in the Royal Marines and that was 15 months of testing before we got anywhere near doing our job for real.  So clearly that doesn’t translate too well into professional services funds but the more rigorous you can take a view on an employee, a colleague in those early months the better.  And clearly the bigger you build your own brand and your own culture I guess the more it signals to people that this is a great place to come and work and therefore by definition you start attracting more intrinsically motivated folk.

Steve:  Culture in terms of firm culture is very important then to stimulating that employee motivation.

Dom:   Clearly there is a lot to unpack in the world culture but if you now turn more to the aspect of membership of a high performing team, large components of that and an assessment of that will be about to what degree is there a values based culture in that business.  In terms of the model for high performing teams that I reference and what I use to do the survey there are more foundational elements but as it moves into the higher strata it very much is all about building that genuine, values-based culture that gets beyond the cliché that’s caught up in that expression and sort of unpacks it in a very meaningful way.

Steve:  If you’re looking at building a high performance team you’re talking about motivation as being important are there other factors as well?  Things like talent.

Dom:   If you start now to look at what makes up a high performing team, I mean I pushed out a very simple model which has got six dimensions to it and there is a structure, a hierarchy to that if you like.  And I would say dimension number one is, I’m not sure about the word talent by the way.  I started that and I called it talent myself and I think at the time I’ve moved away from that word.  I struggle sometimes to pin it down but I think the right stuff is probably a better description.  There’s a bit of a talent myth I think in my mind that talent can get slightly overplayed.  It’s much more about the attitudes.  It’s much more about whether that individual applies effort, it’s applied effort that turns talent into skill and it’s applied effort that turns skill into achievement.  So in my mind applied effort is the real force multiplier not talent.  But if you treat talent in the right way, you’re essentially looking for people that can do the job you’re seeking to do or have certainly got the potential to do the job that you do well, but more importantly it’s a can do can do.  That attitude is key.

And I think if you scrutinize that right and have people that carry the same values as the firm as well then you’ve got at least the starting point, I think it’s the classic get the right people on the bus and exciting things will happen from there.

Steve:  Get the right people on the bus in the right seats I think isn’t it?

Dom:   Less so in some ways.  I think some people would say, it’s “Good to Great” isn’t it.  If you can get the right people on the bus sometimes it doesn’t even matter which way the bus is pointing.  You’ll work out which way you need to go and you’ll actually work out who needs to sit where.  It really is in the first instance just get the right stuff in the team.  We used to say with a degree of light heartedness but I actually with some sort of semi-seriousness as well, the team that came together at Moorehouse it truly was, and particularly with reflection, remarkable.  It was an unbelievably gifted collective.  And we used to say, hopefully with humor, is getting that balance right is key.  But we felt that if you’d have just moved us out of that particular sector and put us into a completely different profession, give us a few months to learn the ropes and the dynamics of that sector but we would have been competitive pretty quickly.  It was that dynamic a group.

Steve:  You say you’ve worked for quite a few professional services firms I’m assuming you’ve seen some where they’ve got it wrong.  Is there an example you can give naming no names of where someone’s got it wrong or gone in the wrong direction?

Dom:   I’m not sure it’s fair to say got it wrong, I would say if I’m honest, I had many conversations with many businesses as opposed to the ones I’m necessarily working directly with but there are many that are just in that meandering mass of mediocrity, they just essentially bob along.  And they will take one step forward and one a half steps back and essentially not move forward with any particular direction.  And there are many many reasons for that.  That comes back to first and foremost possibly haven’t got the right set of members in that team.  But even beyond that the next level would be well even if you’ve got a great group, the next level would be clarity.  Is there real clarity as to where that firm is heading as a clear plan?  Well communicated plan would be next.  And there are firms that still don’t.  And then I’d say to be fair there any many firms that are very talented and have got a very clear plan but are really challenging places to work.  There’s too much bureaucracy.  The team they’re just not empowered to get on, be unleashed and bring out all the flare that’s in that group.

So I think it’s not really what’s wrong it’s more that there’s a layer on that model where they’ve just stopped at.

Steve:  In terms of that empowerment piece do you see that in firms that are trying to grow and maybe fancy keeping the power not delegating authority?

Dom:   That is very common.  It’s either the firms got too complicated too quickly and multiple layers and decision making sign off and it’s amazing how quickly that sort of complication can creep in.  And people almost forget the genesis of it and cease to challenge why it came about.  The owner manager who feels like she has to be integral to everything is quite a common dynamic and it so fetters flair and huge amounts of creativity I think when that happens.

Steve:  There is a balance though in terms of creating a hierarchy underneath you and keeping a flat organization.  The hierarchy you can actually get to a point where you lose control of the business as well.  How does an owner ensure that he’s still got high performing teams even when he’s got a large organization?

Dom:   Like everything management is a balancing act.  But for me it’s far more of a proclivity to overcomplicate, to move away from the simple.  And I think there are owners that don’t take enough risks in that regard.  So I would far rather it would be flatter structure, that junior colleagues have got wider remits than you might feel comfortable with but they are therefore powered to do things that will genuinely on occasion hugely surprise you.  I’m going to give you an example.  We ran a piece of work internally to improve everybody’s business development capabilities to sell work.  It’s clearly a pretty critical aspect of growing a professional service firm.  And I deliberately wanted that to be gradeless ie everybody in the firm had equal access to that training and was therefore empowered to go out and give it a go.  And that was complete antithesis as to what you’d find in a bigger firm.  Very much the sort of sacred ground of the partner group and for understandable reasons because when you let everybody get out there into the market there’s going to be a few mistakes made.  My view deliberately was I’ll take those mistakes because the net effect was a massively beneficial one and I had a much much wider cohort of people business developing.

And I’ll tell you what, I was hugely surprised by some of these were the most junior in the firm and actually some of my seniors who were great at doing their core job were pretty woeful.  You can be really surprised where talent lies.

Steve:  You can hire great talent and talent in the wider sense you’ve talked about but that’s an individual.  How can you make sure that those individuals work as a high performing team?

Dom:   That’s a big question.  Clearly just start with the right stuff again.  If you’ve hired the right folk into the right values based culture after a while it almost happens by osmosis.  I was really interested in how Moorehouse evolved.  Clearly it had my personality written large over the early days and went from a singleton start up and I had the luxury of putting down on a piece of paper what values I felt important.  But clearly others carried that as the firm.  What was really interesting to see when we got to a certain size is almost how it self-refereed.  And if you bring people in who have very much been attracted to a loud set of values, and I think there’s something there actually.  I think you’ve got to really stand for something when you pick your values.  One level it’s just a completely glib conversation and it’s a random poster above the coffee machine that no one particularly remembers and on another level they are genuinely held values and they are loud values and potentially differentiating ones.

If you’re a bit strident on that point then you put off as many people as you attract rightly because they need to be aligned.  And I think it’s amazing when you start then building that firm up how it can self-referee.  A new member will have not just the leaders of the firm telling them that they’ve not quite lived the values but colleagues who will make it clear that it’s not in step with everyone else.  It’s worth touching on actually just a couple of values we held that I felt did differentiate and created that mild edge in a way.  One was almost an expression we had which was we will take our profession unbelievably seriously but not ourselves.  And deliberately introduced humor into the equation.  And I think some say well that’s a bit odd.  You’re dealing with serious stuff here and you’re out in the world doing some meaningful engagements with big firms.  It seems a strange point to make.  For us it was a really important point to make is we always wanted to be devoid of ego and one of the best ways of ensuring that is to make sure that humor still always plays a part.  And it’s not to the detriment of professionalism in my mind it often goes hand in hand.

Steve:  It’s interesting you’ve talked a lot about emotional words and not in a sense organizational words.  You talk about humor and your model has got passion in there as a word as well.  Do you think more organizations ought to treat people as resources and not as the capital and bring more emotion into the workplace?  And bring more emotion into the values.

Dom:   Yeah ultimately treating people as respected colleagues.  I think where I work best is company’s where it’s still very much a very human dynamic and there’s an interesting side point about is there a certain size where that just becomes fundamentally impossible to do because just the function of numbers.  But certainly when you’re talking about SME, talking about building a professional service firm up to say whatever, 100, 150, fundamentally that’s the only way you can manage it is as a group of real respected others.  But I do think touching on the emotional point is to the model I have put forward is when that gets to the upper echelons effectively you’re working with people that you genuinely value as friends.  And there’s no disjunction in that with, again, professionalism.  You get to a sense, and this is really difficult to articulate or model in a way, but you get to a sense where I think when you work in a true high performing team that the collective vibe you have, the people, the colleagues you have on your shoulder, not only do you count them as good friends but there’s a sense of anything’s achievable.  And it’s achievable because I have got these people on my shoulder.  Clearly the Royal Marines was operating in a slightly different domain but that would be the best way of describing the collective sense we had there.  And I think similarly with my firm at Moorehouse we would go into very very complex engagements knowing that if anyone was able to do this we would be able to do it because again just the collective.

Steve:  What place do politics have in a high performing team?

Dom:   In my mind none.  I think as soon as you start to have corporate politics it starts to become the beginning of the end really if that’s what you mean by politics or power games.  You bring in people who are not of that predisposition and you build a culture and a set of values that makes such games absolutely antithesis of what you stand for.  And I think that kind of politics is invariably caught up with ego.  So if you’ve built a value based culture that doesn’t enjoy egos hopefully DNA reject that kind of behavior.

Steve:  If you’ve built a couple of high performing teams how can you measure which team is performing better?  Gamification or what kinds of measures can you use to identify which teams are performing better than others?

Dom:   Depends how you’re coming at that question.  So in my mind I think there can be somewhat overly academic debate about when’s a team no longer a team and what’s the sort of maximum size a team can be and isn’t a team dah dah dah dah.  Without wanting to dismiss that somewhat academic point completely in the context of I think anybody that’s looking to build a professional service firm and we’re still talking about a firm that’s south of 200 people it makes no sense to talk about sub-teams.  In fact actually when you start to emphasis sub-teams you’ve started to dilute that fact that as a company you are no longer that one team firm.  And the absolute for me nub of this is that you build a company which is a company where everyone perceives and views themselves as being in a single team.  And uses that language.  And that’s really key.  And the nature of professional services is quite often matrix and clearly it’s often project orientated so you’re moving people around into different project constructs all the time, that’s useful as well because you just want to keep the primary construct in place which is the company is one team.

Steve:  You mentioned that intellectually stimulating work is really important for the motivation of an individual.  However, within organizations there is often work that is mundane, that isn’t that stimulating.  Are there any secrets to making that more stimulating or maybe even removing it?

Dom:   Yeah I guess it’s a case where if there’s mundane work then systems have a role to play.  There’s some very good PSA ERP packages now that certainly takes some of that away.  Time sheeting would be the bane of most consultants’ lives.  The more you can just reduce that admin clutter on the side then the more time there is in the day for the more intellectually stimulating work.  So I guess that point is saying germane to the environment and the job you do owners, managers should make the work as intellectually vibrant as they can and as much as you can remove clutter and the mundane look for intelligent tools and systems that can help.

Steve:  Comes back to that fairness point really.

Dom:   Yeah fairness and lack of ego.  Deep hierarchies often get a little bit caught up in ego.  They often get caught up in the world politic you introduced earlier.  A good team leader would vellicate it out and share the burden aren’t you where there’s something that’s just complete, sort of mundane piece then everybody’s in together.  And I think a kind of key point there would be in a way that is completely flat again the one really erodes peoples motivation is when an unpleasant job just gets passed down and ends up with the junior member each time.  Just everybody mucking in would be the answer to that.

Steve:  You’ve talked about your model, you’ve talked about the underpinning piece is you’ve got to have the right talent, you’ve got to have a clear communication about it.  Is that a linear progression over time or do you build a higher performing team over time or is it something you can almost create on day one?

Dom:   That’s a good question.  I don’t think it’s necessarily a chronological linear journey but I think the layers of the model do have some hierarchy in that there’s no point moving too far on the one above if you haven’t really nailed the one below as it were.  So first and foremost back to the point of you’ve got to get the right people on the bus and you’ve got to maintain that set.  And there’s little point in kind of worrying about much else until you’ve done that.  But of course when you’ve done that well where’s the bus heading and you’ve got a clear plan and it’s well communicated.  Just to touch on this practically, my firm we used to have a whole firm exercise that annually reappraised our business plan.  We would go away oversees for three, five days every year to really bring it together.  Even when the firm got very large we held to that practice.  This wasn’t idle soundbite.  We genuinely wanted everybody to be involved in the development and communication of a plan.  And by definition everybody then had it in their hand.  So there was no point doing that until we got the right people in the firm.  But then once you’ve done that, and as I mentioned earlier you’ve got clarity and lots of firms do have, they just have such a challenging environment in which to deliver it.  It’s like wading through treacle trying to get any decisions made or to get any collective project work done.  So that’s all about the empowerment, keeping things simple.

And then only then I think when you’ve got the right staff, you’ve got clarity, you’ve got empowerment only then really are you turning towards the more ferial nuanced challenge of building a values based culture.  And that’s got layers in it as well.  But whilst it’s not necessarily linear, you’re not doing one in week one and one in week two, there is a sort of structural build that is taking place.  It’s a very rarefied upper strata when you get to that point where it is such a strong culture, you have that what I call togetherness that you genuinely feel mutual invincibility but without the collective arrogance or hubris.

In fact another thing I would say that for me has marked high performing teams in my experience is that they seek excellence but have the humility to recognize they never ever get there.  And that has always been the function of the high performing teams I’ve worked in.  So it’s not like you’re all punching the air and yee ha’ing saying look aren’t we great, it’s just that sense of collective talent that’s on your shoulder.

Steve:  Do you have any practical examples where you’ve looked at a company then you’ve looked at the same company in two years’ time with a high performing team within it or who have become a high performing team?  What’s the difference that you can see in that company, their performance or the feel of the place?

Dom:   That’s a good question.  I would say I’m very lucky, a number of examples of working into companies where I would say they are very high performing teams and certainly on that road.  First and foremost what you see is progress.  You see demonstrable growth.  Not just in commercial success and revenues gone up and more client’s etc, which of course is an important indicator but also fundamentally in the development of the capabilities with that business and what I’d call the architecture of that firm.  It’s not built on sand, it’s not just built on fast growth and flimsy foundations.

So first and foremost progress.  I would say there’s always, it’s difficult to quantify but there’s always a buzz about those types of places.  You step into them and there’s a vibrate intensity, an intellectual intensity about it but without being too earnest, back to the humor point.  I reinforce the point I always see humor and professionalism in close couplet.  And finally what you would typically see is great leaders.  We’re spending a lot of time talking about leadership but clearly it’s a hand in glove conversation with the leaders of the firm as well.

Steve:  You obviously created high performing teams in Moorehouse and you’ve gone through the first layers of your model, you talked about the top layer as being a bit more fuzzy but when you got to that point what did you do to try and push yourselves up into that upper echelon of high performing teams?

Dom:   Without being premeditated or deliberate about it I think what we felt was the natural order of things.  For me it starts to get into the realm of, you build almost an internal brand.  Clearly you’ve got a brand that faces out to your client’s and to the market but almost as important is you’re building a brand internally that, fundamentally it’s all about stories tell together and the collective shared experiences and shared adversity.  So there’s no one thing but it’s the collective of all the traditions and totems and language points that develop.  So for example quarterly retreats we used to hold were very key and that became a real sort of heartbeat to keeping us all engaged and together and that was when we’d have a lot of fun as well as work.  We had a whole industry of branded kit internally from pajamas to mugs with our baby faces on.  We even developed a set of trump cards, we could play each other with our own trump cards and everybody had scores on the card.  There was a tradition, so we did the annual wind up, it became a big thing.  And it fed into the Christmas party.  The Christmas party had a Moorehouse band made up of the musicians in the company.

So I think what you do is you just secrete all of these very esoteric, genuinely kind of random things that come together.  And as a leader what you need to do is just encourage people to spend time with each other.  Not only in adverse client situations which clearly forges trust and all of that but outside of work.  And if you’re involved in a consultancy that’s building spreadsheets you’re not going to do that in the office.  So get everybody out, climb some mountains together.  Do an annual charity event where you’re running across the country.  That’s where a lot of that higher echelon is built.

Steve:         Thank you Dom.  You’ve been listening to one of a series of podcasts dedicating to sharing best practices of professional services organizations and these can be found on www.kimbleapps.com