3 ways to be a good leader in the Fourth Industrial Revolution

By Matt Dallisson, 14/01/2019

The world is seeing revolutionary advances in science and technology – artificial intelligence, gene editing, robotics, and so on – that have together been dubbed the “Fourth Industrial Revolution”. Success in this new era – whether that means corporate profits, macroeconomic growth, human welfare or solving the most intractable problems facing the world – will therefore require managing teams of highly specialised technical experts: “knowledge workers” such as scientists, engineers, data analysts.

Managing these teams of international knowledge workers requires a very different mindset to “standard” leadership and motivational models – it needs an approach that recognizes the heterogeneity, ambition and sophistication of such staff.

The global law firm I lead is built around our highly specialised knowledge workers – lawyers and the colleagues supporting them – based all over the world. Over the last two years, we’ve put in a new approach to motivate and manage them. It is early days, but we have already learned a lot.

The beginning of my tenure as Linklaters’ managing partner in 2016 was a logical time to refresh our thinking on how we managed our teams of knowledge workers. It was clear that the questions being asked by our colleagues now are very different to when I started in the industry. For instance, the question of Linklaters’ purpose in the world is not one I would not have thought much about even 20 years ago, but it is really important to today’s graduates and the environment we operate in. In addition, as our clients and employees are becoming ever more diverse, it is important that our business reflects and accommodates that spread of cultures and mindsets.

One aspect of our business that impacted our planning is that Linklaters is a partnership, owned and managed by its 490 partners. Our profits are shared by reference to partner seniority: the longer you are a partner, the higher the remuneration (up to a ceiling). This is a different model to the so-called “eat what you kill” model, where individual partner remuneration is set with reference to direct revenue brought in by an individual. What it means is that we do not have a culture where extraordinary contribution by partners can be rewarded with bonuses, or the promise of such bonuses in the future. We needed to find other ways to motivate and retain our partners, who are the engines of the firm’s growth.

Given the changing demands of our staff, as well as our partnership structure, we made three big changes to evolve the way we motivate our knowledge workers, and seek to boost our profits while enhancing the culture of the firm, which is so precious to us all. We sought to walk the tightrope of being a business and not a club, while maintaining the ethos and culture of a partnership – not a corporation.

Firstly, we built a refreshed strategy up from input received across the firm and from our clients, rather than from a set of top-down pronouncements. We asked our people what they thought via a set of surveys and face-to-face conversations. Nearly half of the firm, across all levels, contributed to the conversation. The collaborative process created a sense of shared values, ownership and excitement – but also reflected our clients’ varying needs and the diversity of cultures and mindsets across the firm.

A collaborative approach is great, but it is also important that the end product is seen to reflect the outputs from the discussions. However good the strategy is on paper, it will not succeed in a partnership environment if there is insufficient support for what is proposed. The team needs to feel excited by what is being asked of it. In that respect, the leadership should consider itself to be bound to the firm by a rubber band. If you pull too hard, or go in a direction that the rest of the firm doesn’t want to go, the rubber band snaps. But building strategy collaboratively with all your people helps you pull them along with you.

Knowledge workers are specialists. But our clients have many needs across many different specialisations. Our clients are also often multinational: they need to be able to talk to people in many countries to solve their problems. Solving our clients’ problems requires a truly collaborative approach across geographies and specialisms that transcends any particular individual’s expertise.

But the need to solve problems in a collaborative way, and bring different specialists into the team, is not helped by the way that law firms typically measure staff contribution: by looking at individual utilisation and billing statistics. Measuring these individual metrics can encourage narrow self-interest rather than firm interest or client satisfaction.

There was obviously a disconnect between telling our partners to focus on delivering the whole firm to our clients while measuring their contribution on an individual basis. We therefore decided to remove individual target and financial measurement for our partners. This represented a significant cultural change for us, and is at variance with many other professional service firms. However, we see it as a very sensible move if we are to deliver the best service for our clients’ specific needs.

What does this mean in practice? How do you remove these statistics and still ensure people are contributing to the firm’s goals? It means that our firm’s leaders can no longer rely on spreadsheets, or fall back on simple metrics such as the individual fees billed, to identify who is and who is not contributing to the greater good of the firm and its clients.

Our firm leaders must instead engage in constant dialogue with their teams and fellow partners to understand and communicate the full contribution that a partner and his or her team is making, both directly and indirectly – whether that be in servicing a client, building a new relationship or mentoring our people.

And in making our leaders and our partners speak in this way more regularly, we’re creating an environment where broader collaboration, rather than individual financial benefit, is at the heart of what we do. This will underpin our success and enable us to serve our clients in the very best way.

The changes we’ve made are not just at the partnership level. We have also instituted a new culture of continual feedback right across the firm: staff are now encouraged to offer praise and suggest improvements to each other throughout the year. We don’t want feedback to feel like a foreboding annual “examination”, where we wait in suspense for our results every year. We want it to work more like a Formula 1 racing team: any things that are working well, or need to be improved, are flagged early and we can tweak things continually in order to have a culture of constant improvement. F1 teams don’t wait until the end of the season to review what could have been done better – and neither should we.

Knowledge workers are experts in their area of focus, and they are also highly motivated. People like this don’t need management to tell them what to do. They need their leadership team to create a working environment that is supportive of their achieving their ambitions.

As the firm managing partner, I feel that I am a servant of the partnership, seeking to provide a working environment that is supportive of its ambitions and which enables us to outperform. And this service mindset helps set the tone: it is a perpetual reminder that my partners and colleagues are at the service of our clients.

Removing individual financial targets is also part of this “servant leadership” approach: it emphasises the desire to promote the whole team, and it stresses how much trust we have in their ability to choose and do the right thing.

These three big ideas – bottom-up strategy, holistic contribution and servant leadership – have helped us to evolve the firm’s culture. Each step has been an experiment to help us attract, motivate and retain the very best knowledge workers. We do not claim to have all of the answers, and it is still early days – but we are convinced that any firm seeking to take a role in the Fourth Industrial Revolution, or in the new globalisation, will need to find new ways to manage and motivate the international groups of knowledge workers that will be such a key component of their success.