MARSHALL SCHOOL OF BUSINESS

MANAGEMENT AND ORGANIZATION

MOR 599

SUCCEEDING IN PROFESSIONAL SERVICE FIRMS

SPRING 2008

Note: This syllabus is a preliminary draft and subject to change.

Professor Alexandra Michel

Office: 619 Hoffman Hall

E-mail: amichel@marshall.usc.edu

This course is designed to help graduate students understand the unique attributes of professional service firms (PSFs). It is meant to assist you in becoming an effective contributor to a thriving PSF by studying (1) the dynamic management practices, structures, and strategies of these firms, and (2) the skills you will need to succeed and manage your career. 

It is most relevant for students who want to work in a PSF, such as an investment bank, hedge fund, private equity firm, consulting firm, accounting firm, or law firm. Because these firms have designed management practices that are suited for turbulent environments, many other organizations are currently adopting these practices as they respond to globalization, rapid technological change, and unstable political environments. Therefore, this course is also relevant for students with an interest in learning about cutting-edge management practices.

PROFESSOR

Professor Michel has a Ph.D. from the Wharton School. Before she became an academic, she worked as an investment banker on Wall Street, in Goldman Sachs’s mergers and acquisitions department. She worked with Goldman’s Chief of Staff, helping the firm implement a new approach to executive education, with topics that included leadership, banker development, and building client relationships. She also held positions for international organizations in London, Paris, and Germany. Based on her research at over twenty Wall Street professional service firms, she writes and teaches about: (1) how employees are transformed as people through their engagement in these dynamic and complex settings, and (2) how organizations can steer these transformation processes to benefit both their employees and a larger collective, including the organization and society as a whole. This research is published in psychology, education, and organizational journals as well as in a forthcoming book: “Bullish on Uncertainty: How organizational cultures transform participants” (Cambridge University Press). 

COURSE CONTENT

This course examines the three interrelated levels of the new knowledge economy in which PSFs participate: (1) a high-velocity business environment, which requires (2) innovations in organizational strategies and processes to make firms more adaptable and innovative, which, in turn, (3) demands a different kind of skill set in professionals and shapes professional psychology in new ways. The dynamic and complex business environment in which PSFs operate will be the backdrop to all of our discussions of the other elements:

1. The New Psychology of Professionals: We start by discussing the new psychology of professionals because many of you are in conversations with potential employers at this stage in the semester. This module will help you understand the implications of entering a career in a PSF and also convey practical knowledge that can give you “a leg up” in the recruiting process.

This module discusses the special skills and psychological attributes that professionals need to operate in a high-velocity business environment. For example, instead of the analytic decision-making procedures of traditional companies, professionals use “real-time intelligence,” which is a faster and more improvisational decision-making style. Professionals also need to cultivate a distinct emotional profile, including an unusually high resilience to stress. They achieve this not through traditional stress management techniques in which stressors are eliminated to induce relaxation but through the opposite approach: exposure to extremely stressful situation with the goal to “inoculate” themselves against stress. We talk about how organizations select individuals who are likely to exhibit these skills, how they cultivate these skills through mentorship and development, and how they evaluate and reinforce these skills. We also practice some of these skills in class through debates, business solicitations (“pitches”), mock interviews (including client interviews), and role plays of “tough conversations,” such as feedback to colleagues.

2. Innovations in Organizational Strategy and Processes: This module discusses innovations in organizational design that allow PSFs to be highly adaptable and innovative. It contrasts these choices to traditional organizational designs. For example, in traditional companies, a top executive or top management team frequently devises long-term strategic plans, communicating them down the hierarchy. In contrast, PSFs often devise strategies in a “bottom-up” manner, based on information from client interactions of lower-level individuals. We discuss (1) what these design choices concretely look like in the form of key work processes such as recruiting, training, compensation, project staffing, review and feedback processes, and outplacement, (3) which types of choices are more and less effective, and (3) the extent to which such design choices can be adopted by other organizations.

There are two types of organizational processes that we discuss in particular detail: ethics and leadership.

3. Unique Ethical Challenges: This module discusses a dilemma unique to PSFs. On the one hand, ethical decision making in PSFs is highly ambiguous. Because of frequent changes in the business environment, professionals frequently encounter new situations for which there are no clear ethical norms. On the other hand, professionals need to answer to heightened ethical demands. Because of their specialized knowledge and training, society trusts them to regulate their own behavior. This module discusses the problems that ambiguity and under-regulation has caused and evaluates various proposals for remedying these problems. We analyze real-life situations of how PSFs experience this dilemma, for example, by looking at how banks deal with the relatively new issues of environmental responsibility.

4. Novel Forms of Leadership: Innovations in organizational design and a new type of work force require novel forms of leadership. Leaders do not articulate and champion strategies but help design processes that let strategies emerge from the “bottom” of the organization. Leadership is also relatively more distributed throughout the organization as each professional—from the most junior to the most senior—is at the same time producer and manager. This module articulates what specific behaviors this new leadership model encompasses, how it is different from traditional theories, how organizations develop it in their participants, and how and why leaders succeed and fail.

SPECIFIC COURSE OBJECTIVES

The primary course objectives are for you to

(1)   understand each of these three dimensions of the new knowledge economy;

(2)   gain insight into how they are related: how and why does the high-velocity business environment require more innovative organizational structures and a new professional psychology;

(3)   gain practice in key skills, most importantly in

a.       analyzing these environments rapidly with the goal to change organizational structures and individual behaviors and thus:

b.      practicing real-time intelligence and fast-decision making

GUEST LECTURERS

Guest lectures will be given by practicing professionals.

REQUIRED TEXTS

1. Course reader.

2. Surowiecki, J. (2005). The wisdom of crowds. New York, NY: Anchor.

This book is accessible online by following these steps:

1. Go to www.usc.edu/homer

2. Put “wisdom of crowds” in for your search term and hit the button, “title”
3. 2 results should come up. Click on the one that says “online” for location.
4. There will be a URL labeled Electronic Access. Click this and it will take you to the online book.

Please contact my teaching assistant Jaime Ucuzoglu with questions. You can reach her at ucuzoglu@usc.edu

3. Langer, E. (1989): Mindfulness. Reading, MA: Perseus. (I recommend ordering this book online, where you are more likely to find it at a discount.)

DELIVERABLES

Final grades will be determined by the following components and weighting:

There are no exams. Your grade on the team report is a team grade that will be assigned equally to all team members unless Team Member Evaluations (Appendix B) indicate otherwise.

REPORT AND IN-CLASS PRESENTATIONS

For the report, you will (1) research the strategies and management practices of one PSF in depth through secondary research (newsruns, company materials) and primary research (e-mail-, phone-, or personal interviews with existing or former employees of the focal PSF), (2) critically evaluate them in light of the principles we learn in class, and (3) make recommendations for improvement. For each report, you have to conduct at least 8 in-person or phone interviews with existing or former employees of a PSF. Each interview should be at least 30 minutes long. (All interviews must be taped and transcribed. Tapes and transcripts are due with your report.) This project serves three purposes. First, you will come to understand the innovative organizational practices of PSFs in more detail than case studies and lectures can convey. This is critical for your ability to implement such practices in an organization. Secondly, you will practice an important skill that professionals need to be successful, namely “real-time intelligence.” Real-time intelligence encompasses going out into the “real world” of your client (here: the PSF you are studying), rapidly gathering a large amount of complex information, and analyzing it with the help of general principles. This is precisely the kind of work you’ll be doing as a junior consultant or investment banker. The third purpose is practical and involves giving you a “leg-up” in the recruiting process. Completing your own research and listening to the research of other teams about leading PSFs will provide you with high-quality information that can inform your approach to recruiting. Also, the interviews you conduct will generate exposure to and, hopefully, relationships with decision-makers. The detailed project requirements and grading criteria will be discussed in class.

PARTICIPATION

Participation consists of any behavior that reflects the acceptance of personal responsibility for your learning as well as contributions that make the course a valuable learning experience for your classmates. This includes class attendance, punctuality, contributions to class discussions and activities, as well as overall commitment and involvement. Class discussions provide the opportunity to practice speaking and persuasive skills, as well as the ability to listen. Effective class comments may address questions raised by others, integrate material from this and other courses, draw on real-world experiences and observations, or pose new questions to the class. High-quality participation involves knowing when to speak and when to listen and allow others to speak. Comments that are repetitive unrelated to the current topic, disrespectful of others, or without sufficient foundation are discouraged and will be evaluated negatively. Appendix A consists of a behavioral anchor rating scale that lists the behaviors I will evaluate to determine your participation grade. You will evaluate your participation with this scale at the mid-point and the end of the course. In addition, you will identify those individuals who have made the strongest contributions to class discussion. The grade for participation will reflect my evaluation as well as peer evaluations. You will receive a mid-term and a final participation grade. The mid-term grade will include detailed feedback.

STRIKEFORCE

PSFs use “strikeforce” to monitor, communicate, and facilitate fast action on current market developments. Similarly, the strikeforce assignment involves that a student—after notifying me at least one day in advance—presents in class a current market development that is (1) of concern to PSFs and that (2) relates to our course topics. The presentation should not exceed five minutes. It should consist of: (1) a summary of the new developments, backed by press articles about the event and relevant background information, (2) an analysis of the implications for at least one of our course topics. For example, does this development confirm the models and dynamics we have been discussing? Does it challenge us to think in specified new ways? This project will help you get to know the PSF landscape—who the main organizational players are, what their practices are, what kinds of problems and opportunities they currently confront. It will also allow you to practice real-time intelligence.

COURSE SCHEDULE

APPENDIX A: BEHAVIORAL ANCHOR RATING SCALE

CLASSROOM PARTICIPATION

OUTSTANDING PERFORMANCE

• Repeatedly brings new, relevant, and interesting material to the class (e.g., on the firm that the team covers)
• Supports assertions with evidence
• Distinguishes between opinions and facts
• Demonstrates ability to apply, analyze, and synthesize course material
• Brings up questions that need to be explored further
• Clarifies points that others might not understand
• Offers relevant and succinct input to class
• Demonstrates excellent listening, as evidenced by follow-up comments/questions
• Demonstrates willingness to take risk in attempting to answer unpopular questions
• Is always punctual

VERY GOOD PERFORMANCE

• Regularly participates in class discussions
• Shares relevant feedback
• Consistently demonstrates knowledge of reading assignments
• Demonstrates ability to analyze and apply the course material
• Demonstrates willingness to attempt to answer questions
• Is always punctual

GOOD/AVERAGE PERFORMANCE

• Participates in group discussion when solicited
• Offers clear, concise, “good” information relative to class assignments
• Offers input in class or group, but tends to reiterate the intuitive
• Attends class regularly and is always punctual

LOW PERFORMANCE

• Confounds opinions and facts
• Fails to support assertions with evidence
• Occasional input, often irrelevant, unrelated to topic
• Reluctant to share information
• Does not follow flow of ideas
• Drains energy from class goals
• Is occasionally unpunctual

UNACCEPTABLE PERFORMANCE

• Fails to participate, even when solicited (in small or large groups)
• Shows up to class; does nothing
• Distracts the group or classroom discussion
• Is repeatedly unpunctual

1. Your name:
2. Please circle the section that best reflects your participation.
3. Please write the names of 5 students who you think consistently demonstrate “outstanding” level participation.

APPENDIX B: TEAM MEMBER EVALUATION FORM

Class:

Your name:

Team name:

Names of team members (include yourself):

Evaluation for: [name of team member to be evaluated]

Directions: Please evaluate yourself and each of your team members on their contributions to the team using the rating categories below. Submit one copy for each team member to me at the dates listed above. Submit another copy to each of your team members on those dates.

1 = outstanding performance, far exceeds expectations

2 = strong performance, consistently exceeds expectations

3 = competent performance, meets expectations

4 = low performance, falls short of expectations in some areas

5 = unacceptable performance, fails to meet expectations

Please summarize the person’s greatest strengths:

Please summarize areas for improvement: