Be the Firm You Want to Be.

Every organization is perfectly designed to produce the results it’s producing. If you want a different result – you must change something. The originator of this phrase is debatable. Its premise is not.


The business case for change is that firms that continue to do things as they always have always at some point will be forced to react to what is happening outside of the firm. Often those changes firms are forced to make aren’t ideal or in alignment with the firm’s goals. If they choose not to react to those market forces they risk becoming less relevant in their markets and marginalized in the M&A world.


Transforming your firm is, ideally, a proactive process. There are varying degrees of transformation based on where your firm is now and ultimately where you see your firm in the next five years.

Firms taking ownership of their own transformation are looking more closely at how the firm can reach its desired state by focusing on these five elements:


  1. Vision – Change begins with leaders and emerging leaders in the firm coming to agreement on the vision for the future. What will the firm look like? What kind of identity will you have? How big do you want to be? Firms eager to increase their value for the purpose of either remaining independent or making themselves attractive for an up-market merger often think about what will need change in order to meet their objectives.


  1. Leadership— This goes beyond just the number of leaders and emerging leaders, but the depth of those individuals’ leadership skills. Can they delegate? How are they at mentoring? Do they have the ability to think strategically? Are they skilled communicators? Will they cultivate followers? Are they willing to spend personal development time to improve their abilities?


  1. People – Transformation involves holding a mirror up to the firm’s culture and being honest about the reflection. Do you have a culture that aligns with your vison? Are you attracting and retaining the right people? Do your people all understand why you do what you do? Are they fanatical about client service? Do you have the right training and coaching in place to make your people successful? Does leadership’s version of success align with younger professionals’ version?


  1. Clients – Understanding the value of loyal clients and creating more processes and consistency around client service is another transformation element. Firms at the forefront of transformation are stepping back to evaluate the attributes of client service that are truly differentiating, and defining specific behaviors at all levels of professional that will create loyalty.


  1. Revenue –There is a necessary component of strategic thinking about the cash flow needed to deliver the desired income per partner as well as create capital to support investments in things like technology, people and office space. What top-line revenue do you need to produce given what’s happening with operating expenses? How much revenue can you generate from existing client relationships, and how much from new relationships? What is the mix of annuity and non-annuity work? What is the average lifetime value of a client relationship, and how do you maximize that? How do you focus our growth efforts to meet profitability objectives?


Finally, firms that are most successful continually assess and challenge the alignment of all these elements. Every opportunity should be tested against the firm’s vision. If it doesn’t align with the firm’s overall vision, why do it? With looming retirements on the horizon, emerging leaders waiting to step up and a new generation of workforce eager to make its contribution now is the time for firms to define who they want to be and take a proactive approach to getting there.


About the Author

Carrie_092_darker-SCALEDCarrie has 20 years of experience helping CPA firms grow. From setting the right goals to improving individual business development skills to encouraging employee participation in business development and measuring results—Carrie works with firms throughout North America to hone their competitive edge. Carrie Steffen is a Shareholder and President at The Whetstone Group.