PSF Strategies

Professor Bente R Lowendahl, author of Strategic Management of Professional Service Firms – this excellent book is now in a 3rd edition, but can be hard to find, suggests there are 3 generic PSF strategies. (PSF = professional service firm.)

A)   The individually based firm, primarily focusing on individual expertise, individual reputation, individual client networks. Very often a small partnership firm.

B)   The “professional bureaucracy”(Mintzberg, 1983), primarily focusing on firm level expertise, firm reputation, routines and methodologies. Well established practices for client project deliveries as well as for professional career development.

C)   The expert firm delivering unique solutions to complex problems

*Source presentation by Professor Lowendahl to ServiceForum 07, Tampere,   Finland, October 29-30

From my own experience I would agree with this analysis. I trained with a Type A firm, then I went to work for what was essentially a Type B firm with elements of Type C.

Indeed as Lowendahl notes Type C firms can have elements of both A and B. Consequently in the longer term they maybe fissiparous due to the inherent tensions.

I think that when looking at your firm, or when contemplating future plans it is desirable to decide what type of firm you wish to build. To some extent depending on the services sector one is in the answer might be self selecting.

Apart from anything else knowing what type of firm you are is important as it helps with informed decision making. The consideration of this issue can help as well in clarifying just what the founders of the firm wish to achieve.

I would be interested in readers comments, from their experience.

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