Career development systems in a consultancy firm have some nasty streaks in it. First I’ll explain how it works and then why I think we should abolish it in this form asap.
The career development in many partnership firms is a variation on a children’s game called musical chairs: every level in the organization has less seats than the level below. By and large all recruitment is done in the lowest ranks. Universities graduates are hired to start as a trainee or junior advisor working their way up the corporate ladder. After some years they loose the label junior and move on to consultant, senior consultant, director and finally: partner. Being invited to become a partner is one thing, joining the ranks of the equity partners is the ultimate goal. Becoming one of the shareholders of a successful firm is a career goal for many in the industry.
Up or out
Obviously not everyone joining as a trainee will make it to become a partner. And since the number of recruits exceeds the healthy growth of the company, employees have to leave the company at various levels. We typically refer to this principle as ‘up or out’. After a predefined number of years at a certain level you either go to the next level or someone will ask you to leave.
Those in favour of such a system call this a meritocracy. Everybody has equal opportunity and if you don’t succeed you only have yourself to blame. There are financial motives for the continuous replacement of senior staff by juniors. Selling essentially the same services with more junior staff keeps cost down and increases profitability.
As a result of an acquisition I joined one of the Big4 firms a couple of years ago. Since then I have seen the up or out system at work and all the disadvantages that come with it. I think it is a destructive, perverted system that inhibits diversity. It ignores experience, causes a lack of internal reflection and quite possibly kills cooperation especially at the higher levels. The forced attrition causes a steady drain of experience and knowledge which is particularly harmful on the consultancy side of the organization.
Collaboration is the key to success
I fully believe that the key to successful collaboration is a safe environment in which colleagues have similar goals aimed at providing optimal services to clients (1). A career development system where every co-worker is a competitor can never be a safe environment. It will therefore not foster a culture of cooperation but create a lot of negative energy focused on internal processes. And I see the evidence for this on a daily basis.
As I joined my current employer as a result of an acquisition I have the advantage of an outside perspective. Since the vast majority of the employees has never seen any other system, they probably consider the type of behavior associated with up or out as normal. This limits the opportunity for change and for me is the only explanation why the industry didn’t terminate the model years ago. It is difficult for me to judge whether up or out is beneficial at the audit side of the firm. I am absolutely sure there is no reason to keep it implemented on the consultancy side.
(1) Simon Sinek explains the need for a safe environment better than I can in his recent TED talk: Why good leaders make you feel safe