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Initial Q & A with Jay Lorsch and Thomas Tierney 1. Your book centers on star performers. How do you define “star”? Stars are those men and women in critical jobs whose performance is crucial to an organization’s success. In PSFs, their ranks include younger professionals as well as seasoned executives, and their titles—such as managing director, vice president, and partner—are as various as their organizations. What stars have in common is not only a record of past accomplishments but also, and more importantly, the potential to continue contributing to their firm’s success. This means that they are also the individuals who have the highest future value to their organization. How much of this value is realized—or whether it is realized at all—ultimately depends on the degree of alignment between the stars and their organizations. 2. What do you mean by alignment? Alignment means creating organizational practices and structures that simultaneously fit the strategic requirements of a business and the needs of its key employees, especially these stars. Academics and consultants have been familiar with the concept of alignment for decades, and field research (including ours) has demonstrated its contribution to organizational success many times over. Moreover, it is intuitively appealing: It makes sense that the more the people in a company are motivated to perform in ways that achieve the company’s strategic goals, the greater the likelihood that the company will succeed. Yet despite alignment’s familiarity and common-sense appeal, for many business people the concept remains just that - a concept. Alignment is much easier to conceptualize, and to describe after the fact, than it is to create. Achieving alignment involves understanding that your organization is a system in which every decision influences—and is influenced by—every other decision, and then making choices that will reinforce its strategy and values. Its inherent difficulty creates a powerful competitive barrier. 3.  How do you define professional service firms? We consider PSFs to be those companies that provide professional assistance to the business community: Advertising, management consultants, accounting, executive search firms, investment banks, information technology consulting firms and, most numerous of all, law firms. 4.  Your research indicates significant growth in the professional service industries. What impact will this have for the business world in general? Already, PSFs of all sorts are gaining scale. More and more, corporations are deciding to buy from others what they are unable to make themselves at a similar price and quality. For example, law firms already provide the vast majority of legal services despite the existence of corporate legal staffs. This is particularly significant for PSF clients—businesses whose success will depend heavily on the firms they hire and the quality of the services those firms’ professionals provide. 5.  What can businesses competing in other industries learn from PSF's? Peter Drucker (and many others) have asserted that business in the 21st Century will be driven by relatively independent “knowledge workers”. On average, this is certainly true. However, it will be more true in some industries (e.g. technology) than others (e.g. agriculture). In those situations where such talent matters, stars and their degree of alignment will likely determine the success or failure of an enterprise. After decades of confronting this challenge, successful professional service firms offer an array of proven insights that can help other types of businesses.