Partnership: If you can't beat them, join them: Can trust forge a competitive edge beyond corporate bodies? Neasa MacErlean reports

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UNDER the popular view that traditional partnerships are outdated and that a corporate structure is best suited to the running of a commercial enterprise, many partnerships - including large accountancy and management consultancy firms - have superimposed a corporate structure on their businesses. But there are signs that the partnership structure is back in vogue.

In particular, several of the larger law firms are working hard to retain their characteristics as partnerships, and they may be on the right track, according to Hodgart Temporal, the management consultancy. It argues that the partnership ethos can deliver a competitive edge that eludes most corporate hierarchies.

'If you can build a sense of partnership throughout an organisation, you've got a very powerful organisation,' says Alan Hodgart, former head of Spicers Consulting Group.

He believes a successful partnership is one that creates a sense of common purpose across the firm. By contrast, the leadership of a corporate hierarchy doesn't have to persuade anyone else of the appropriateness of the company's goals - its employees can be forced to implement management policy even if they do not agree with it.

In short, he feels that a corporate structure might encourage managerial 'coercion' within a company, while a partnership is more likely to develop a sense of genuine co-operation among its employees.

In its bulletin Turning Mountains into Molehills, Hodgart Temporal says: 'The corporate world is littered with examples of ineffective change programmes which were well researched and designed, but which fell apart at the implementation stage because people were unwilling to change their behaviour.' While their actions would comply with management dicta, their underlying attitudes might oppose them. Many partnerships are like this, Hodgart Temporal believes, particularly those which manage by coercion and dispense with consensus.

It feels that this goes some way towards explaining the general lack of success that has greeted professional firms that have tried to encourage partners to cross-sell. Mr Hodgart says: 'If you change the way you want to manage your clients, then you've got to change the structure of the organisation. You've got to work on the systems by putting new processes in place, and you've got to change the behaviour of partners.'

But changing the attitudes, and therefore the behaviour, of partners or employees is the most difficult part of a manager's role. Hodgart Temporal believes it can take three years to introduce a culture of trust and common purpose to a business organisation. What such consultants offer is not so much an analysis of the systems and structures, but a kind of corporate psychotherapy, which recognises the ambitions, emotions, resentments and habits of those involved in the business. In theory, businesses are run with the same logic that drives their business plans. In practice, they are propelled backwards and forwards by the conflicting emotions of staff or partners.

In its work with professional firms, Hodgart Temporal has seen cases of partners physically fighting each other, and many instances of mutual distrust.

Partnerships have to recognise their potential for conflict and irrationality. Hierarchical corporate structures can pretend it does not exist. A partnership is ultimately far more complex than a company, but also a more appropriate response to a complex world.

Instead of ditching partnership structure, professional firms should use it to their advantage, Hodgart Temporal says. Indeed, many large corporations could benefit from mimicking the dynamics of a partnership.

(Photograph omitted)