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Are
you on your way from good to great?
Most accounting
firms have good management, good goals, good clients and produce a good
income for their owners, but not great.
That’s the biggest part of the problem I see in most accounting
firms where their performance does not meet its potential. They settle
for good rather than strive to be great.
If ever a business book has had a profound effect on me, I’d say
there were two or three key books that every practitioner should read.
‘Good to Great’ by Jim Collins, ‘The Professional’s
Guide to Value Billing’ by Ron Baker, and ‘The E-Myth’
by Michael Gerber.
I could add several other to that list, including the works of David
Maister, Paul Dunn, Alan Weiss and more, but ‘Good to Great’
would be the one book that has had the biggest impact.
Now, I’m not going to regurgitate the content of the book here,
the space permitted for my article would not be able to do it justice,
just invest $30 and read the book.
But what I do want to cover in this article is seven key elements any
public accounting firm should take to heart and implement.
1. Client selection and retention.
When
the economy was booming, everyone could look like a marketing superstar.
One only had to wander into the wrong building and one could walk out
with a new client, it was akin to shooting fish in a barrel.
But with the economy being what it has been in the last couple of years,
things have changed. New business has been more difficult to come by
for many, and even then, firms have taken on clients who maybe they
should not have, but did so knowing that it was better to have the fee
income they would generate than not.
To their cost, many of these firms have discovered that client selection
criteria, in hindsight – which is always 20/20 - might have been
set a little higher. Raising the bar and actually saying ‘thanks,
but no thanks’ to a number of potential clients that they took
on instead of taking a pass on.
It’s difficult to say no to people who want to pay you money to
do a job you know you can do, but this is the first step towards becoming
great – only working with clients who you know you can add value
to and who are looking for what you can provide and, and this is key,
see the value in working with you.
2.
Firing bad clients
Yes, I have ranted on about letting bad clients go in these pages before,
but having the strength to show bad clients the door is, and always
will be, key to creating the time needed to do the other things that
are going to help you to move from ‘good’ to ‘great’.
3. Measuring KPIs
Key performance indicators should be decided upon firm-wide and used
to measure partner performance, and be a key element in setting partner
compensation.
Partners need to decide on common goals, set performance levels, and
monitor their progress towards their achievement; otherwise the firm
will simply drift from one mediocre quarter to another.
Linking a partner’s profit share to their day to day activities
will focus each partner’s mind on firm objectives and encourage
some partners to change what they do each day.
For example, many partners still open their own post and bank cheques.
This is one of the ‘administrivia’ items that Partners often
get so attached to that it is difficult to break the habit, but surely
there is someone else within the firm who could do that!
Others show poor leadership and do not manage their team as well as
they might. Human resources is not something we’re taught at the
School of Accountancy, but when one becomes a partner, you are looked
upon as a leader of the firm and your ‘people management’
skills need to be sharpened.
4. Stop setting a bad example
Many practitioners set a bad example to their people. They arrive early,
leave late, have no life outside of their work, are probably suffering
from some stress-related health issue and their personal relationships
might be somewhat strained.
Then they turn around to their best people and say ‘one day all
of this could be yours!’
And so it continues that some of our best people turn to industry for
their next career move instead of being inspired to work towards earning
a partnership in the firm.
5. Adding value to clients
Clients come to us initially to buy something they don’t really
want – their year-end financial statements and tax returns. But
we have a wonderful opportunity to give them what they really want from
us – help to build a better business.
We even have an ideal opportunity every year, and the year end review
meeting, to offer these services to them, but most fail to see the opportunity,
or are too busy with too many clients (of the ‘C’ and ‘D’
variety) to even think about ‘what else could I do for this client?’
Clients may moan about the fees for services they don’t really
want, but have to have, but if you could show them how to achieve a
higher level of performance in the future, if you can truly add value,
then fees no longer become much of an issue.
Instead
you could be talking to some of your high potential clients about fine-tuning
their business to produce better financial results going forward.
Ask a client how they plan to exit their business and when they plan
to do so, and you’ll often create an opportunity to get involved
at much better fee levels than the year-end stuff produces.
6. Leadership
One of the key ingredients any successful firm needs is good leadership.
Collins, in ‘Good to great’ talks extensively about level
five leadership, and that is one thing that is sorely missing in our
profession. Read the book and you’ll see what I mean.
With sound leadership, everyone in the firm should know the goals of
the practice and how what they do day to day ties in with the concept.
Collins describes it as developing a ‘cult-like culture’.
Gerber (in the E-Myth) calls it working ON the business as opposed to
working IN the business.
The general public still has the misconception that accounting is boring,
often because the people they come across in the profession are perceived
as being boring, but you and I know better. Accounting can be a fast-paced,
exciting career, where practitioners see a whole range of businesses
and situations, and from that exposure to such a variety of work, become
great business advisors if they rise to the challenge and embrace all
that this great career has to offer.
7. Bench strength
Developing a strong team is the final key element to moving from good
to great.
Hiring great people who share common goals for the practice, who are
enthusiastic with each client, who see opportunities where others see
threats and who are prepared to sit down with clients, really get to
know them and then take action to help them achieve their goals, that’s
where to good stuff happens and the firm moves one step closer to being
great.
So, as we march into ‘partner retreat season’, I hope you
have some food for thought and will take action to move towards becoming
the great firm you so richly deserve to run.
© 2003-2011,
Steve McIntyre-Smith. All Rights Reserved. |
