So you’re a leader in your law firm. Or maybe your sights are set on becoming one soon. Whichever the case, if you’re business-minded, you know that business strategy is crucial.
But what happens after the aspirational strategising? When the corporate getaways are over – and you’re back in the daily operational grind?
How can you ensure your firm executes that strategy as intended?
To find out, we spoke to Kristen Podagiel, a Business Strategy Teaching Fellow with the College’s Legal Business Management program – and one of the AFR’s Top 100 Lawyers.
Business strategy: A quick recap
A business strategy is more than a fancy term tossed around in board meetings. According to Kristen Podagiel, it's the backbone of every successful law firm.
‘Think of it as a roadmap for your business journey, outlining the route you intend to take to reach your goals,’ she explains. ‘It’s typically created by leaders within the business and can take weeks, months and sometimes years to craft.’
But here's the kicker: A great strategy is nothing without implementation.
‘To be successful, every stakeholder, from the executive suite to front-line employees, must understand and buy into this roadmap.’
This is particularly true of law firms, where – with so many moving parts and new legal tech disruption – poor alignment can lead to missed opportunities or costly mistakes.
‘I see so many organisations struggling with this. They create glossy strategies that end up sitting on shelves. And it’s the same thing that gets in the way every time. I call it sludge.’
What is ‘sludge’ – and how does it affect strategy implementation?
Coined by Cass Sunstein and Nobelist Richard Thaler in their best-selling book, ‘Nudge’, sludge is the unnecessary processes and red tape that slow down (and sometimes stop) your progress.
Or – in Kristen’s words – it’s ‘all the things that get in the way of what you’re trying to do.’
‘These barriers may have built up over time. They may be part of your systems and processes. They may be things people think are important or were once important – but aren't anymore. Usually, such processes were created with good intentions but slipped into difficult terrain.’
For example, sludge could be in your client management process. Or you may have an ineffective technology solution that slows down your employees. Sludge is different in each organisation, but Kristen says the results are always the same.
‘You feel like you’re working in quicksand. Your business isn’t as nimble or agile as you’d like. And you likely have a hard time forging new initiatives.’
Worst of all? Sludge stops effective strategy implementation in its tracks.
So, how can you identify your business’s unique roadblocks? Kristen says you need to start with a sludge audit.
How and when to do a sludge audit
There are a few ways to do a sludge audit. Hiring an external consultant is one option. But Kristen recommends starting internally.
‘You want to use the brains of the whole organisation – not just the senior people who created the strategy. Ask them which processes are out of sync with your strategy. It's often easy to find the sludge. And you get some interesting ideas from across the business in the process.
‘While you’re at it, check to see if all employees understand your strategy. And if they don’t, consider spending some time and resources helping them understand where they fit into it. Regular check-ins can be a great way of doing so.’
And how often does Kristen advise for this audit to occur?
‘In an ideal world, you’d do this process daily in small steps,’ she says. ‘But realistically, it can be done whenever you roll out a new procedure or strategy. You don’t want to “set and forget”. So every few weeks is a good marker.
‘Think of sludge audits as a prioritisation tool. They help you and your team identify which activities are strategically aligned (and therefore important) and which ones can wait.’
The three Cs of effective implementation
Say you’ve completed a sludge audit and identified procedures needing change. The next question that arises is: How can you empower people to enact that change?
Kristen says this comes down to three key things: communication, collaboration and culture.
‘In some firms, especially larger ones, hierarchical structures can cause a command-and-control approach to strategy implementation. But this isn’t conducive to creating truly effective organisations.
‘After all, leaders are only one per cent of the organisation. And while they may have decided how they want the business to evolve, it takes a team to execute it. So, strategy implementation must be a conversation.
‘Invite feedback from your employees, ask them questions and exchange ideas. It empowers them to create systems, behaviours and processes that serve the strategy – and themselves.’
This two-way conversation style leads to collaboration, which, according to research from Stanford University, drives workplace performance – and improves the overall culture.
‘The real value of strategy is its connection to organisational purpose,’ explains Kristen. ‘When your strategy supports a higher mission, people want to work on it. That’s why there's a very strong correlation between staff retention and purpose.’
And besides employee retention, having a reputation as a purpose-driven and collaborative organisation can help you recruit top talent.
In other words, there’s lots to gain by getting your entire team onboard with strategy.
The big benefits of alignment
As you can see, strategy alignment and workplace culture dovetail. That’s because people are the engine of strategy implementation. Without them, you just have a nice document.
‘When you can align your entire law firm – no matter how big or small – to your strategy, your organisation will flourish. But achieving this can take a long time because you may need a whole cultural change.
‘You must take an honest look at your business. What behaviour does it support, reward and encourage?’
Kristen acknowledges this can be hard work. But it's well worth your time if you want your firm to thrive today – and into the future.
Ready to grow, innovate and lead with confidence? The College of Law’s Legal Business Management course will teach you how to create and execute business strategies – from the industry’s best.
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