Member Firm Organizations are a form of strategic alliances, situated on a continuum somewhere between a subsidiary and a purely commercial agreement. The member firms within the organization have chosen to be part of the group, and have been vetted by the organization as qualified and desirable to the others and to the organization as a whole.
Member Firm Organizations can be very tightly knit, almost like a franchise model, or rather loosely aligned in a network of common interests. Issues such as sales & marketing, operations and support functions are dealt with in a manner in which there is a common approach or each member firm has its own processes and systems. There is no right or wrong way to design and build a Member Firm Organization. But there are some common denominators to all successful organizations which strive to be united in a membership group.
Typically, all Member Firm Organizations would have similar characteristics, such as:
- there is a charter or agreement or contract document which is shared and signed by all the member firms
- this formal document provides the guidelines, roles and responsibilities of the member firms and the governance structure
- there are common goals and unity of interests and approaches to achieve these objectives together as a group and individually
- there is a life cycle management which details the way member firms join, engage and are eventually retired from the organization
- there is a “give-get” value proposition which can be the same for everyone or worked out individually by each member firm
- there is an oversight authority (Board), an executive management team to run the organization, and member firm engagement in actions and projects as deeply and frequently as required to make sure the “give-get” model is equitable and fairly applied over time
“If the string of the lute is pulled too tightly it will snap, too loosely and it will not play.” This beautiful expression is attributed to the Buddha at the moment of enlightenment to illustrate the middle way as the path to a higher truth.
The same can be said of Member Firm Organizations. If the alliance is so tightly woven that it leaves little of no individual identity, then it might as well be a corporation or a franchise operation. If the alliance is so loosely aligned that the member firms do not even know each other, or care about the other one’s business, then it is more a commercial arrangement than a Member Firm Organization.
The principal of collaboration among equals in a non-competitive framework is a good starting point and one which private companies can return to in order to re-center their shared goals and objectives. In professional service companies, respect for individual brands and cultures while at the same time taking advantage of shared, complementary skills and capabilities are one of the very attractive features of Member Firm Organizations.
Member Firm Organizations are a dynamic and increasingly popular form of strategic alliances, especially for small to mid-tier consulting firms who want to have global coverage and capabilities but maintain their local identity.