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How to Effectively Scale a Professional Services Firm Beyond 150 People

How to Effectively Scale a Professional Services Firm Beyond 150 People

UPDATEDOct 31, 2023

By Moira Alexander, Founder of PMWorld 360 Magazine and Lead-Her-Ship Group

In small to mid-sized professional services (PS) firms, it’s not unusual for everyone to know each other. Team members understand what role everyone plays in overall success and how to efficiently work together. But there’s a limit to how much information people can hold in their heads—and how many relationships they can reasonably sustain.

British anthropologist Robin Dunbar theorized that humans can only maintain stable social relationships, in which they know who everyone is and how each person relates to every other person, with around 150 people. This theory has gained traction in the business world, too—for example, in Malcolm Gladwell’s book The Tipping Point, he discusses the Gore-Tex company’s discovery that social problems arose when more than 150 employees were working together in the same building.

Also known as the Rule of 150, Dunbar’s number is something smaller firms should keep in mind when they embark on any growth initiative. 

A Professional Services Dilemma: The Power of Small, the Potential for Growth.

Sustained growth is a fundamental goal for most PS firms, and effectively scaling your operation is essential to realizing that growth, particularly if you have 50 employees or fewer. However, making the leap from being a “watercooler business,” where everyone has a good idea who everyone else is, to operating at a larger scale means you may lose that personal connectivity both within and between teams and clients.

Expanding beyond Dunbar’s number will not only require a significant mindset shift across the organization, it will also require new systems and processes to ensure your growing staff adheres to best practices and to replicate the connections that used to occur through mutual understanding and shared knowledge. Technology can play an important role in fostering the right connections as you grow.

With careful planning and thoughtful navigation, firms can successfully scale and maintain the relationships that are central to people-powered businesses. Exceeding 150 people while still allowing for future growth requires close consideration of how people, processes, and technology will work together. Follow these steps to navigate change without negatively impacting employee satisfaction, performance, or connectivity.

7 Strategic Steps for Scaling Successfully

1. Make the Decision and Create a Plan

When choosing to launch a growth initiative, be sure to include key stakeholders in your decision-making process. Give careful consideration to what’s driving the push to expand, in what areas you need to scale your resources, and the optimal operating model for your new, larger-scale business. You should also plan for sustained growth and factor in how scaling will impact profitability—for example, are your margins high enough to cover the labor costs of scaling your services?

2. Establish Best Practices and Processes

In smaller firms, information about “how we do things here” is often passed directly from one employee to another. Before you outgrow that watercooler culture (even if it’s virtual), it’s important to establish standard procedures and workflows that will ensure consistency in both service delivery and project outcomes. Anchoring best practices in technology will help to keep everyone on the same page as you expand. Having a consistent, repeatable decision-making process will also ensure decisions don’t get bogged down in red tape, which can be an issue in maturing organizations where a once sustainable reliance on executives to intervene in daily project and customer decisions becomes a barrier to success.

3. Elevate Your Technology Tools

Speaking of technology, you’ll also want to invest in a modern platform to elevate performance across the professional services project lifecycle. Smaller PS firms often rely on disparate point solutions or even spreadsheets for project and resource management and execution. But these traditional tools simply aren’t up to scratch when you’re trying to field the best possible team for every project and client at a larger scale. To make sure you can effectively manage both the activities and talent needed to hit your agreed-upon milestones, look for a platform that’s purpose-built for people-powered businesses and has everything you need in one place.

4. Enable More Sophisticated Resource Planning

In smaller professional services firms, resource management often takes place by reputation, with resource managers instinctively knowing who the right person is for an assignment. As organizations approach Dunbar’s number and the resource pool grows, however, informal resource allocation and resource planning methods become less effective. As you expand your talent pool and take on more projects, you’ll also need to level up your resource planning abilities. Accurate forecasting is an essential first step, setting you up for success when it comes to execution as well as managing client expectations. Effective planning on the fly requires visibility both into and across projects, so you can manage schedules realistically, anticipate potential conflicts, and resolve them proactively. With so many moving parts, it’s critical to track time and costs in real time to ensure on-schedule and on-budget delivery while also safeguarding profitability.

5. Add More Managers

A recent Atomik Research report found that 61% of senior leaders spend at least a third of their time each day trying to solve employee turnover issues. This pulls focus from core responsibilities like business development and ensuring exceptional client experiences, making it necessary to re-evaluate leadership resourcing to identify gaps. This is especially true in middle management. When you expand your staff, be sure to hire or promote the right people to manage new or growing teams and departments.

6. Build Collaboration into How You Work

As your firm expands, you’ll need to make it easy for employees to work together, no matter where they are. The conference-room collaboration that’s easy with a small team can be replicated with built-in collaboration tools that keep everyone on the same page. Give employees a single workspace for communication, task assignment, and time tracking to streamline operations and boost efficiency as you scale as well as maintain personal connectivity. To make the most of your existing tech stack, choose a platform that allows for seamless integration of the collaboration tools your team is already using—such as Slack, Hubspot, or your CRM.

7. Integrate Client-facing Tools That Strengthen Relationships

Clients today crave visibility and transparency, so it’s important to keep this in mind as you grow. Adopting a robust client portal facilitates a higher level of collaboration, building trust and bolstering the relationship. Technology can also keep the lines of communication open. Choose a resource planning solution with an open API framework so you can integrate other client-facing tools into your tech stack seamlessly and keep clients up to date with project progress and milestones. Fostering stronger client relationships will also help with retention and expansion, driving sustained growth.

Purpose-Built for Scale

In addition to cultivating a mindset shift, successfully overcoming challenges to well-managed growth and consistent scaling requires a purpose-built software solution that enhances visibility and collaboration across scaled business operations. The right solution will also help to guide people towards best practices as you take your operation to the next level.

The Kantata Professional Services Cloud is designed to give companies the insights and control they need to maintain positive relationships leading to loyal customers, more informed decisions, and maximized profits—at any scale.

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