Measuring the four Ps – how this move can add up to long-term success

Law firms need to communicate clearly with their ‘corporate athletes’ to understand what performance factors they should measure as part of a goal of producing high-achieving employees, writes Leonie Green.

If what gets measured gets done (as the adage goes), then it pays to question, deeply, what we measure. And why.

Firms will always need to measure profitability; failing to do so will result in an unsustainable business model. We should never shy away from conversations about what profitability means for our business, and profitability measures should be part of all performance conversations.

For law firms, the easiest model to follow is ‘performance against budget’, as the budget is set with profitability as the core aim. However, performance against budget should not be where the conversation starts or ends because profitability does not happen, sustainably, on its own.

People power

In law firms today, even with significant technology changes in recent times, we cannot get anything done without people power. The brains of our people (and their ability to use them) are the lifeblood of our businesses. We do not make money without them.

So how do we measure the performance of our people in a way that is a better measure of their value to the firm and their likely sustained value over time? What measurements matter?

Measuring performance based on budget performance alone is a little like measuring the performance of an athlete based purely on how many times they meet or beat their personal best, rather than measuring the key parts that make it possible for them to lift above their personal best.

Would it assist the performance of our people if we took a more holistic view of measuring performance? What data do we have available to us, and what data matters to us as a firm? What behaviours do we want to foster in our people? Where do we want them spending their time when they are not focused on billable work?

It is time to think about performance beyond financial contribution. We need to take a leaf out the book of high-performance athletes who realise that the only way to stay competitive is to look at performance in a holistic way. Jim Loehr and Tony Schwartz translated this into the ‘corporate athlete’ a number of years ago, but it is still only part of the picture. The area of performance measures for humans is really in its infancy in so many ways. As big data takes hold, we are all increasingly looking for ways to measure what we can and get feedback on where we need to improve next. We need to ride this wave in a way that serves us and serves our firms. And critically, it should serve and drive our people in a positive way.

The four Ps

Focusing on performance against budget as a core area for improvement, encouragement or celebration does not give a corporate athlete much to work on when it comes to the underlying components that will make them successful in achieving budget in a sustainable way. Similarly, meeting the corporate athlete needs is not enough either – it is a balancing act of core elements that enable our people to lift their performance to where we need it, each day, each week, each year.

Start small, and trial new measures. Consult with your teams about what measures matter most. Have the conversations and find measurements that match your needs. Here is some food for thought on key areas that might be worth measuring:

• People (team leadership and development, and self-management)
• Positioning (thought leadership, expertise, continuous learning)
• Pipeline (targeted business development activity)
• Profit (what was – ultimately – generated by the above activities)

Firms can come up with their own approach and mantra, but the four Ps above are a good place to start.  Be brave. Measure what matters most. If you are readying yourselves for performance conversations (as often happens this time of year) think about approaching these conversations in a more holistic way.

Talk to your people about what measurements matter – how you want to see their time spread beyond billable work, and how they can perform as an elite corporate athlete for your business. Then support them to do so – incorporate measurements that engage them, and drive them to succeed – for both the individual and the firm’s benefit.

Leonie Green is a co-founder and director of the Corvus Group, a workplace and legal advisory firm with more than 20 years of senior legal and HR experience working in Australian and international companies. She practised as an employment and industrial relations lawyer for a number of years prior to moving into management roles in industrial relations, shared services and human resources. She can be contacted via email at leonie@corvusga.com.au.