Firm Summit – Top Ten Topics
As the season approaches for firm summits (or retreats if you focus on the past), the following top ten list of topics will or may appear on your agenda. Many firms use these meetings to focus on the results of the current year and plan for the coming year. While this sounds logical, it doesn’t always produce strategic results. The tendency generally is to gravitate toward tactical rather than strategic thinking.
Smart firms are managed with their future in mind. They don’t mind taking a current hit to financial performance if it involves investing in the long-term success of the firm. Smart firms also value their people and their involvement in the strategic planning process.
While strategic advantage is a momentary thing, exceptional firms are dynamic and constantly becoming something that is different. This thought scares many accountants. In 1942 economist and author Joseph Schumpeter wrote Capitalism, Socialism and Democracy where he coined the term creative destruction. Companies and products are driven out of business by the creative efforts of entrepreneurs. You are probably thinking “how does this apply to the CPA profession?” Are traditional accounting services exempt from creative destruction? My belief is they are not exempt; due to regulation, innovation, technology and most recently, reductions in the skilled labor force. Thus we are currently faced with a period of commoditization of services, pressure on fees, and increased regulations. This can either be a period of decline or a period of expansion depending upon the approach your firm chooses to take. Some will advise you to “get back to the basics and focus on core businesses”. However, the problem is that both the core businesses and basics have changed.
In order to save you time during your firm summit, we have built a table listing the top ten topics, common obstacles related to those topics, sample strategies to overcome the obstacles and then columns for you to assign due dates and responsible parties. Without this tool you will probably spend too much time on the obstacles and not enough on the strategies to overcome the obstacles. Identifying obstacles comes from most accountants’ training and conative skills (fact finding and organization of the information). The most difficult tasks are to build consensus and make decisions in a timely manner. Many firms get caught in the paralysis through the analysis trap. Many partners get caught in the trap that, if I provide good client service and focus on client issues, the firm will take care of itself. Client service is important, but so it the firm. Take a look at the top ten topics, and then review the obstacles and strategies.
Attraction and retention of people
| Obstacles | Strategies |
| Leadership doesn’t value existing personnel Lack of a HR plan Lack of a training/learning program Staff are working too many hours Insufficient supply of candidates
| Develop an HR plan Develop a training/learning culture Utilize outsourcing Utilize part-time employees during busy season Train existing staff and improve efficiency through better processes & technology
|
Governance and organization
| Obstacles | Strategies |
| Currently using the partner form of governance Lack of a designated leader who is focused on the firm and its success Slow to make decisions Lack of vision
| Develop a job description of a CEO Determine firm leaders who meet the requirements of the job description Elect a CEO for a 3-5 year term Evaluate performance based upon the CEO’s balanced score card
|
Revenue per Full-Time-Equivalent
| Obstacles | Strategies |
| Too many people outside of busy season Inadequate multiplier used for billing rates Billing by hour rather than value
| Benchmark existing revenue per FTE (2,080 hours per FTE) Establish goals for revenue per FTE & manage to those goals Move toward value billing Use time sheets for accountability and cost analysis – not as a pricing table Use a value task force Establish written billing policies & procedures Hold partners accountable – tie to compensation
|
Partner Compensation
| Obstacles | Strategies |
| Only focused on production Current system doesn’t drive one-firm concept Current system creates jealousy among owners rather than an incentive
| Develop a strategic plan for the firm Evaluate the balanced score card approach Prepare a balanced scorecard for the firm and all partners Hold partners accountable Use quarterly game plans and review progress quarterly
|
The Paperless Transition
| Obstacles | Strategies |
| Lack of a plan Lack of clearly defined objectives Lack of integration with other applications Resistance from some partners and staff
| Develop a paperless transition plan including objectives Select integrated applications to meet the firm’s requirements Develop a timeline with responsible parties Hold people accountable
|
Outsourcing
| Obstacles | Strategies |
| Lack of knowledge about capabilities and economics Political views Existing systems and processes are inefficient Resistance to change
| Identify a champion and task force Learn more about the vendors and their capabilities – view with an open mind Visit with peer firms who are successfully utilizing outsourcing Contract with a vendor and provide a privacy notice to all clients Re-engineer policies and procedures to take advantage of workflow and vendor resources Establish the relationship and then look for additional opportunities
|
Developing a training/learning culture
| Obstacles | Strategies |
| Lack of a champion or leader Lack of training facilities Lack of an assessment, curriculum and training ladders Lack of educational skills on staff Focus on CPE rather than training/learning
| Develop a job description for a Learning Coordinator Hire a full-time learning coordinator Assess training requirements Develop training ladders & curriculum Conduct training sessions Managing Partner must enforce commitment Hold people accountable Integrate training/learning with balanced score card Focus training on administrative staff and partners as well as accountants Integrate soft skills and process training into curriculum Be proactive rather than reactive Use your training/learning program as a differentiator in recruiting and retention
|
Standards, policies and procedures
| Obstacles | Strategies |
| Lack of written S,P & P Failure to re-engineer based upon current capabilities Lack of enforcement Lack of adherence by partners Lack of training to S,P&P Lack of accountability
| Initially focus on tax return preparation, financial statement preparation and time entry and billing processes Document and re-engineer as appropriate Train to standards, policies and procedures Hold everyone, including partners accountable Tie to compensation through the balanced score card approach
|
IT strategies and budgets
| Obstacles | Strategies |
| Lack of IT skills Lack of integrated systems Use of Peanut Butter accounting – spread it thin and no one knows Resistance to change
| Develop an IT plan and budget Hire people with IT skills Provide IT training to partners, staff and administrative personnel Assess inventory of current hardware and software Develop an integration strategy Hold people accountable
|
Marketing and Sales
| Obstacles | Strategies |
| Lack of a marketing/sales plan Lack of resources
| Develop a marketing and sales plan Identify rainmakers and potential rainmakers Hire a professional sales person Provide training such as the Rainmaker Academy Hold people accountable through the balanced score card
|
The ability to transform your firm is the key to sustainability and increased profitability. Long-term sustainability is about strategy, the ability to deal with change and values. Your firm’s strategy must fit the competitive environment you are in and your values must be unquestionable. The greater the competition, the more your deficiencies will show to clients and employees. In order to overcome this challenge, your priorities of strategies, organizational structure and values must stay at the top of the list. Success is a choice, therefore the decisions you make now about the direction your firm takes is vital to the future firm and its employees. You have a choice… what will the response be for your firm’s future - success or complacency?