The Role of the International HQ
In professional service networks the international HQ is primarily administrative. While it does need to encourage strong communication links across the network, it does not usually have a fee-earning responsibility; this is left to member firms. In return for its services, member firms pay the HQ a joining fee and an annual fee to finance the international office. The location of an international office in a particular country may depend on the relative local fee income; as such, many firms establish an international headquarters in the country with the highest income level. This location can also be rotated over time among the larger firms in the network so that an international perspective is really encouraged and not dominated by one country. Most of the larger global firms convene annual international conferences. Each year a different country acts as host and usually presents highlights from its operations, followed by examples from other members. Member firms enjoy the opportunity to meet their peers and compare programmes, cultures and results. Such annual events become important when encouraging participation in new initiatives, such as establishing the Net Promoter Score in each member firm. Most globally minded firms operate weekly news intranets and monthly conference calls in time zone groups so that everyone can keep up with developments, such as new Clients acquisitions, members, changes in policy, awards won and other matters of interest.
HOW RSM MANAGES ITS GLOBAL NETWORK
Jean Stephens has been CEO of RSM International (RSM) since 2006, a network of audit, tax and advisory firms in over 100 countries, with 700 offices and over 32,000 people. RSM ranks 7th in global fee income and positions itself as having 'global reach with local perspective'.
Selection of Member Firms
When admitting new member firms, Jean and her team have strict selection criteria. In the first stage they conduct desk research to select firms that match their target market; some firms also contact RSM with a view to joining the network. If an exploratory meeting is held, RSM looks at the potential member's vision and strategic direction; where the firm is going, how they are building their business. RSM is also interested in how the potential member would use the network and work with other members.
The second stage involves reviewing the firm's quality infrastructure, and how leadership - the 'tone from the top' - is established. Essentially RSM looks for well-managed firms to join their network. The existing Client base is reviewed along with the firm's ambitions and its match with the existing network in terms of sectors, international reach and size. Although fees and referred work are often discussed, the synergy between firms and the network is considered more important. In prospecting meetings, RSM looks for firms that have the right fit and with which it can build strong, long-term collaborative relationships.
A third stage involves technical due diligence; procedures and processes are reviewed and compared with both internationally accepted norms and RSM standards. Any gaps are reviewed and may make or break the potential firm's chances of joining.
RSM has many policies to ensure that consistency is maintained throughout the network of member firms. RSM emphasises high quality of Client service in all its communications. A monthly managing partner bulletin is distributed to all member firms along with an internal news bulletin for RSM staff. A global leader for quality and risk was appointed recently to underpin the RSM commitment and focus on quality and service as 'second to none'. RSM also has a global audit methodology along with standards for tax and risk assurance. It aims for consistent policies and application; it is also moving to a paperless methodology.
RSM runs the RSM Academy, now in its 8th year - a leadership and specialist training programme for managers and junior partners to increase their international Client skills and capabilities. It has also created global engagement leaders for management of multi-country Clients.
An annual inspection programme is in place for robust monitoring of member firms' plans, training and accountability. Member firms are expected to report on time and have the opportunity to critique each other on specific Client engagements. RSM holds annual conferences in all regions, as well as a three-day annual global conference. Aside from this, the regional operating groups, Centres of Excellence and other technical committees further encourage partners and internationally active staff to meet regularly to share best practices, develop an understanding of other cultures and build cross-border teams.
Impact of Mergers, Acquisitions and Departures from the Network
If a member firm decides to join or leave the network the situation is handled very sensitively by RSM management especially with regard to its impact on Clients. RSM aims to minimise this impact by agreeing an appropriate transition programme with affected firms. For the Clients there is always priority on continuity of service and changes in advisory teams in such periods of change and uncertainty.
Managing International Clients
RSM's international business development project - 'Connected for Growth' -provides member firms with the skills and tools needed to engage in cross-border business development strategies. As part of this initiative RSM has developed pricing and scoping tools to enhance value to Clients and project management tools to aid Client satisfaction. Connected for Growth also includes a skills development programme providing high value training to create Global Engagement Leaders.