MIT Sloan Management Review

Corporate Strategy

 

The One-Firm Firm: What Makes It Successful

By David H. Maister

October 15, 1985

In an effort to discover the principles of "good management" of the professional service sector, this author examines the inner workings of a few outstanding companies whose philosophy and management orientation make them what they are today — successful, profitable, and above all, well managed. In the course of identifying many organizational characteristics common to these firms, he also discovers that these firms share a common management approach, which he labels the "one-firm firm" system. The critical elements of this approach are management's emphasis on loyalty to the firm and group cooperation. By exploring how these elements interact to form a successful management system, the author proposes a model of professional firm success that he believes can be adopted by a variety of professions. Ed.

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What do investment bankers Goldman Sachs, management consultants McKinsey, accountants Arthur Andersen, compensation and benefits consultants Hewitt Associates, and lawyers Latham & Watkins have in common? Besides being among the most profitable firms (if not the most profitable) in their respective professions? Besides being considered by their peers among the best managed firms in their respective professions? The answer? They all share, to a greater or lesser extent, a common approach to management that I term the "one-firm firm" system.

In contrast to many of their competitors, one-firm firms have a remarkable degree of institutional loyalty and group effort that is clearly a critical ingredient in their success. The commonality of this organizational orientation and management approach among each of these firms suggests that there is indeed a "model" whose basic elements are transferable to other professions. The purpose of this article is to identify the elements of this model of professional firm success, and to explore how these elements interact to form a successful management system.

Methodology

The information on specific firms contained in this article has been gleaned from a variety of "public domain" sources, as well as selected interviews (on and off the record) at a number of professional service firms, including but not restricted to those named herein. However, none of the information presented here represents "official" statements by the firms involved. As... To read the complete article, login or sign-up using the form below.

 
 

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