The global consulting firm, McKinsey and Company, recently released a number of articles related to research they have done on transforming businesses. One in particular, Why your next transformation should be ‘all in’, resonated with me.
In summary, the article presents a persuasive argument suggesting“all in” transformations— initiatives that address both services (or products) delivered as well as how they are delivered are much more successful than piece-meal transformations.
Specifically, McKinsey attributes the majority of transformation-driven success to five primary initiatives, categorized in two areas:
- Resource allocation
- Capital investment
Generally speaking, every business — including law firms — approaches the future in one of four ways:
- doing substantially what has always been done (standing still);
- Investing in performance related changes;
- investing in portfolio related improvements; or,
- investing in both performance and portfolio-based improvements.
What the Data Says
A multi-year McKinsey study of more than 2,000 of the world’s largest companies yields interesting insights into the relative results associated with each approach to addressing challenges and opportunities of the future. And the statistics associated with companies that operated in the middle third of their market is especially telling.
The Table below indicates the probability of a medium performing business moving into the top 20% of competitor set, depending on the strategy chosen.
|Approach to Future||Probability of Moving Into Top 20% of Competition|
|Remain static||4% probability|
|Focus on Transforming Performance||8%|
|Focus on Transforming Portfolio||11%|
|Transform both Performance & Portfolio||20%|
The Clear Message
For law firm leaders, there are numerous take-aways. One that is impossible to miss is that middle (or worse) performing law firms examining options to turn-around their organization will avoid standing still — doing the same things the same way — and will embrace performance and portfolio-based improvement strategies.
One other item of note from the study is that industries that are in decline (many believe that the traditional law firm model is one) are at the most risk and are in the greatest need of a combined transformation strategy.
How is your law firm transforming?